Refinancing that increases portfolio-company leverage to distribute cash to equity holders without selling the asset — distinct from a primary LBO in that the sponsor remains as owner. Typically executed in Years 2-4 post-close once EBITDA growth or debt paydown has created leverage headroom. Mechanically identical to a dividend recap. Modern credit agreements pre-authorize some dividend capacity through restricted-payments baskets; larger leveraged recaps often require amendment or refinancing. De-risks the deal by returning sponsor capital pre-exit at the cost of higher post-recap leverage.