Thomas McGowan

Control as economics: the new preferred equity playbook

Market conditions have forced a fundamental shift in how preferred equity is structured and priced. Investors now price governance rights alongside yield, require minimum cash-pay components, and negotiate aggressive anti-priming protections. This article examines how preferred equity has evolved from a convenient financing tool to an instrument designed to perform in difficult conditions, with a focus on enforcement leverage, regulatory developments affecting different investor types, and striking a balance between control rights and economic returns in recent infrastructure and energy transition transactions.