what is pe & vc
TRANSCRIPT
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Module 1:
What is private equity
and venture capital?
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Contents
About the author iv
Getting the most out of this module 5
The evolution of venture capital and private equity 5
Introduction 5
Evolution of the US market 5
Europe 6
Asia 7
The 1990s 8
The dot com bubble 8
Private equity today 8
Types of private equity 9
The private equity cycle – connecting institutionalinvestors and entrepreneurs 10
The limited partnership 11
Fund manager remuneration 12
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About the author
Garry Sharp – independent practitioner, consultant, writer and trainer
Garry Sharp has 22 years’ experience as a practitioner, consultant, writer and trainer in the private
equity and venture capital markets. He joined independent venture capital company Baronsmead in
1985, becoming a director and shareholder following Baronsmead’s own management buyout in1989. During the early 1990s the company grew to become one of the UK’s largest independent pri-
vate equity firms and was acquired by fund manager Ivory & Sime in 1996. Shortly thereafter Garry
left to co-found Independent Direction, a specialist consultancy to the private equity industry. He sold
Independent Direction in 2005 to concentrate on training and writing, and continues to work in an
advisory capacity in private equity.
Garry has trained newcomers to private equity since 1990, and delivers courses in Western and
Eastern Europe, the Middle East and a wide range of African countries. His first book, The Insider’sGuide to Venture Capital, was published in 1990, followed by five more on private equity, M&A and
corporate finance.
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The evolution of venture capital
and private equity Introduction
In 1957, American Research and Develop-
ment (ARD) – the world’s first ever investment
fund to specialise in backing start-up companies –
invested $70,000 for a 77 percent equity stake in a
new company created by four students with no
the basis that those who fail to learn from history
are condemned to repeat it – and there are partsof this story it would be better not to repeat – a
brief summary of the high and low lights will
bring perspective to all that follows.
Evolution of the US market
The early US venture capitalists were not invest-
ment managers in the conventional sense; rather
GETTING THE MOST OUT OF THIS MODULEWelcome to Module 1 in the Fundamentals of private equity series. This moduleintroduces the core principles of private equity and venture capital, examineshow they evolved and provides a broad introduction to today’s markets. It is
designed to work both as a stand alone section and as part of the whole series.For the benefit of the stand alone reader, a comprehensive glossary has beenincorporated, which explains the background and use of private equity terminol-
ogy. All terms which may require explanation or expansion are printed in bold,to indicate that there is a glossary entry for them.
Private equity – the provision of risk and reward sharing ( equity ) capital to a com- pany whose shares are not freely traded on a recognised stock exchange ( private ).
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after deciding to become part of a start-up, and was introduced through mutual friends. But it
soon became apparent that the company would need a heavyweight, experienced CEO with cred-
ibility on Wall Street.
The first attempts to recruit a CEO highlighted a serious issue – eBay had no VC backing. The fact
that with monthly profits of some $200,000 by early 1997 it did not need external funds was irrel-
evant; in Silicon Valley (eBay was based in San Jose, California) it was regarded as an essential
seal of approval for a company to have raised venture capital, to have been vetted and appraised
and to have passed the test. Without this, eBay couldn’t even get an executive search firm to work
for them.
The rule of thumb for a venture capital firm appraising an early stage investment was that there
had to be a clear route to making 10 times the original investment within three years. Benchmark
Partners, a venture capital manager itself only two years old, saw this potential in eBay and in July
1997 invested $6.7 million for a 25 percent equity stake on terms which valued the company at
$20 million before its investment (the pre-money valuation – see Module 4). eBay never spent
these funds – the money was left untouched in the bank – but capitalised on the contacts, credi-
bility and experience of Benchmark’s partners. It was Benchmark who recommended a search
firm to find a CEO, who instructed that firm to pursue a candidate who had declined their first
approach, and ultimately played a key role in persuading that candidate – Meg Whitman – that
she should leave her high profile, secure role at a major corporation, move her family to California
and join a tiny internet start-up.
In September 1998 eBay went public, achieving a listing at a market valuation of $2 billion; this
h d t $21 billi b th i f 1999 d i t f B h k it $6 7 il
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Module 2:Private equity as an
asset class
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Contents
About the author iv
Getting the most out of this module 5
Introduction 5
Terminology 5
Returns – and risk 5
Analysing risk in quoted markets 6
Risk in private equity 7
Assymetric risk and return 7
Using statistics in measuring private equity performance 7
Managing risk 8
Private equity performance 10
Measuring returns 10
Comparing private and quoted equity returns 11
R f ll i f d i i 14
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About the author
Garry Sharp – independent practitioner, consultant, writer and trainer
Garry Sharp has 22 years’ experience as a practitioner, consultant, writer and trainer in the private
equity and venture capital markets. He joined independent venture capital company Baronsmead in
1985, becoming a director and shareholder following Baronsmead’s own management buyout in
1989. During the early 1990s the company grew to become one of the UK’s largest independent pri-
vate equity firms and was acquired by fund manager Ivory & Sime in 1996. Shortly thereafter Garry
left to co-found Independent Direction, a specialist consultancy to the private equity industry. He sold
Independent Direction in 2005 to concentrate on training and writing, and continues to work in an
advisory capacity in private equity.
Garry has trained newcomers to private equity since 1990, and delivers courses in Western and
Eastern Europe, the Middle East and a wide range of African countries. His first book, The Insider’s
Guide to Venture Capital, was published in 1990, followed by five more on private equity, M&A and
corporate finance.
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GETTING THE MOST OUT OF THIS MODULEWelcome to Module 2 in the Fundamentals of private equity series. This modulefocuses on private equity as an asset class. It is designed to work both as a standalone section and as part of the whole series. It necessarily draws upon topics
reviewed in Module 1, and seeks to avoid repetition of their content. However, forthe benefit of the stand alone reader, a comprehensive glossary has been incor-porated, which explains the background and use of private equity terminology.
All terms which may require explanation or expansion are printed in bold, toindicate that there is a glossary entry for them.
Introduction
This module focuses on the private equity industry from the viewpoint of theinstitutional investors – pension funds, endowment funds, insurance companies
and banks – who provide its raw material – capital.
The emphasis here, unlike other modules in this series, is on performance issuesnot at the individual investment level but across funds, portfolios of funds and
the private equity industry as a whole. We are concerned with:
• How does private equity behave as an asset class – what are its characteristicsand how do they differ from quoted equities?
Wh d i tit ti l i t ll t it l t i t it ?
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Exhibit 3: Distribution when one fund is chosen at random 100,000 times
Fund of funds multiple
Source: Capital Dynamics simulation of 1,755 US funds as at 31 December 2004.
P r o b a b i l i t y ( % )
0
5
10
15
20
25
30
5.04.54.03.53.02.52.01.51.00.50
Exhibit 4: Distribution when one, three, 10 and 30 funds are chosen at random 100,000 times
y ( % )
40
60
70
50
30 funds
10 funds
3 funds
One fund
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mean that they are highly restricted in terms of the
information they can share with their investors.
The problem with governance in this environ-
ment is that it is required to protect a huge array
of interests – from shareholders, through
employees to much more broadly defined inter-
ests such as the environment and the broader
community – and to do so with a universally
applied set of rules and procedures.
By contrast a private equity backed management
team has a tightly defined shareholder group and
a governance structure tailored to a specific and
explicitly agreed set of objectives (explored fur-
ther in Module 8). The team can share detailed
information with its investors, discuss and obtain
specific consent for its strategies and plans, and
essentially operates in an unregulated environ-
ment where shareholders are assumed to be
sophisticated, able to look after their own inter-
ests and in need of no further protection than that
afforded by the tenets of corporate law.
Beyond the regulatory and governance issues,
h b d i l i h
Finally, of course, private equity not only offers
managers the prospect of significant financial
gain, but actively incorporates the generation of
wealth in its fundamental principles. This
approach centres on shared motivation between
shareholder and manager and represents a clear
solution to the perennial corporate management
challenge – the agency issue.
The agency issue
Managers act as agents for their shareholders,
and are required to make decisions in the best
interests of those shareholders. But in the quoted
company environment management may often
have vastly differing motivations from those
shareholders and, more importantly, different
means of achieving rewards.
Options to purchase shares, short-term perform-
ance related bonuses, golden parachutes, hand-
cuffs and hellos, large salaries, plus access to
corporate jets, properties, entertainment and
various other perks are all designed to attract
and motivate the highest performers to run
major companies. However no matter how care-
f ll h d i d d h i l
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Module 3:
Structuring and raising
a fund
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Published in September 2007 by:
PEI Media
Second Floor
Sycamore House
Sycamore Street
London EC1Y 0SG
United Kingdom
Telephone: +44 20 7566 5444
© 2007 PEI Media Ltd.
ISBN 1-904696-45-7 978-1-904696-45-2
This publication is not included in the CLA Licence so you must not copy any portion of it without the
permission of the publisher.
All rights reserved. No parts of this publication may be reproduced, stored in a retrieval system or
transmitted, in any form or by any means, electronic, mechanical, photocopy, recording or otherwise,
without the prior written permission of the publisher.
The views and opinions expressed in the book are solely those of the authors and need not reflect
those of their employing institutions.
Al h h bl ff h b d h f hi bli i h b
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Contents
About the author iv
Getting the most out of this module 5
Terminology 5
Fundraising – making the case 5
The GP 6
Investment strategy and fund categories 6
Refining the proposal 7
Size and type of investment 7
Geography 7Sector focus 7
The management team 7
Investment track record 8
Dealflow generation strategy 8
Use of debt/financial structuring 8
Syndication 8
Due diligence processes 9
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About the author
Garry Sharp – independent practitioner, consultant, writer and trainer
Garry Sharp has 22 years’ experience as a practitioner, consultant, writer and trainer in the private
equity and venture capital markets. He joined independent venture capital company Baronsmead in
1985, becoming a director and shareholder following Baronsmead’s own management buyout in
1989. During the early 1990s the company grew to become one of the UK’s largest independent pri-
vate equity firms and was acquired by fund manager Ivory & Sime in 1996. Shortly thereafter Garry
left to co-found Independent Direction, a specialist consultancy to the private equity industry. He sold
Independent Direction in 2005 to concentrate on training and writing, and continues to work in an
advisory capacity in private equity.
Garry has trained newcomers to private equity since 1990, and delivers courses in Western and
Eastern Europe, the Middle East and a wide range of African countries. His first book, The Insider’s
Guide to Venture Capital, was published in 1990, followed by five more on private equity, M&A and
corporate finance.
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GETTING THE MOST OUT OF THIS MODULEWelcome to Module 3 in the Fundamentals of private equity series. This modulefocuses on structuring and raising a fund. It is designed to work both as a standalone section and as part of the whole series. It necessarily draws upon topics
reviewed in earlier modules, and seeks to avoid repetition of their content.However, for the benefit of the stand alone reader, a comprehensive glossary hasbeen incorporated, which explains the background and use of private equity ter-
minology. All terms which may require explanation or expansion are printed inbold, to indicate that there is a glossary entry for them.
Terminology It is difficult to avoid confusion in the use of generic terms such as management,investor and investment when discussing private equity at the fundraising level.The private equity fund is the core part of the process. It raises money from
investors (who in turn are themselves managers of investment funds), and is man-aged by a private equity firm, often referred to as a general partner, but also as amanager or a management team. It then makes investments (hence becoming aninvestor) in private companies which in turn have their own management teams.
We therefore need to be careful in our choice of terms for the various partici-pants. By institutional investors, investors or limited partners, we mean the
i f d i i d h lik h ll i l i
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not facilitate a tranched drawdown of commit-
ted capital. The Luxembourg SICAF is a simi-
lar vehicle to the SICAV but with fixed rather
than variable capital; SICAFs may issue partly
paid-in shares (provided a minimum of 25
percent of their par value is paid-up at the
date of issue) but a capital increase or
decrease requires a change of the articles of
incorporation by decision of an extraordinary
general meeting of shareholders.
The limited partnership is commonly viewed as
the vehicle of choice for private equity fund man-
agers and is the vehicle most often used for pri-
vate equity funds with an international investor
base. The other vehicles described above tend to
be used where a more limited range of investors
is targeted and/or where the manager's activity is
concentrated in particular jurisdictions, where a
non-partnership vehicle may be more appropri-
ate. The features of limited partnerships are con-
sidered in more detail below.
Limited partnerships
A limited partnership comprises a general partner,
h i ibl f h i d
• tax transparency;
• contractual flexibility;
• manager's autonomy (the limited liability of
each limited partner generally depends on it
not becoming involved in management);
• no/minimal regulatory requirements in
respect of the vehicle itself;
• potential for tax efficient management and
performance fee structuring; and
• no requirement for public disclosure of the
partnership agreement or the partnership's
accounts.
Meanwhile, the potential drawbacks of limited
partnerships may include the following:
• certain countries do not regard limited part-
nership vehicles as tax transparent, which
may necessitate establishing a separate paral-
lel vehicle for investors in such jurisdictions;
• it will not be possible for a limited partnership
to take advantage of the EU Parent/Subsidiary
directive (exempting dividends paid by sub-
sidiaries to their parents from tax), although
subsidiary companies owned by the limited
hi d i di id l i i h
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Module 4:Venture and
development capital
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Published in September 2007 by:
PEI Media
Second Floor
Sycamore House
Sycamore Street
London EC1Y 0SG
United Kingdom
Telephone: +44 20 7566 5444
© 2007 PEI Media Ltd.
ISBN 1-904696-46-5 978-1-904696-46-9
This publication is not included in the CLA Licence so you must not copy any portion of it without the
permission of the publisher.
All rights reserved. No parts of this publication may be reproduced, stored in a retrieval system or
transmitted, in any form or by any means, electronic, mechanical, photocopy, recording or otherwise,
without the prior written permission of the publisher.
The views and opinions expressed in the book are solely those of the authors and need not reflect
those of their employing institutions.
Al h h bl ff h b d h f hi bli i h b
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Contents
About the author iv
Getting the most out of this module 5
Introduction 5
Identifying the opportunities – venture fund strategy 7
A dose of reality 9
Making investments 9
Generating dealflow 9
Early appraisal 9
Structuring investments 11
The principles of investment structuring 12
Assumptions and targets 12
Preference 13
Preferred shares in practice 13
Xytrak proposed terms 15
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About the author
Garry Sharp – independent practitioner, consultant, writer and trainer
Garry Sharp has 22 years’ experience as a practitioner, consultant, writer and trainer in the private
equity and venture capital markets. He joined independent venture capital company Baronsmead in
1985, becoming a director and shareholder following Baronsmead’s own management buyout in
1989. During the early 1990s the company grew to become one of the UK’s largest independent pri-
vate equity firms and was acquired by fund manager Ivory & Sime in 1996. Shortly thereafter Garry
left to co-found Independent Direction, a specialist consultancy to the private equity industry. He sold
Independent Direction in 2005 to concentrate on training and writing, and continues to work in an
advisory capacity in private equity.
Garry has trained newcomers to private equity since 1990, and delivers courses in Western and
Eastern Europe, the Middle East and a wide range of African countries. His first book, The Insider’s
Guide to Venture Capital, was published in 1990, followed by five more on private equity, M&A and
corporate finance.
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IntroductionWe define early stage investing as the provision
of equity capital to companies that have not
yet achieved stable, profitable trading. Exhibit 1
quickly recaps (from Module 1) the definitions of
specific types of investment within this
broad category.
The factor which unites all investments of this
type is the significantly higher level of risk
attached to unproven companies, markets, prod-
ucts, technologies and management teams.
Uncertainty about future outcomes is endemic in
all forms of investment, but applies to nascent or
very young companies not only in every possible
GETTING THE MOST OUT OF THIS MODULEWelcome to Module 4 in the Fundamentals of private equity series. This modulefocuses on venture and early stage investing. It is designed to work both as a
stand alone section and as part of the whole series. It necessarily draws upon top-ics reviewed in earlier modules, and seeks to avoid repetition of their content.However, for the benefit of the stand alone reader, a comprehensive glossary hasbeen incorporated, which explains the background and use of private equity ter-
minology. All terms which may require explanation or expansion are printed inbold, to indicate that there is a glossary entry for them.
Exhibit 1: Classifications of investment types
Investmenttype
Purpose offunding
Investee companyCharacteristics
Keyobjectives
Typical exithorizon
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exercise, without the danger of the company
agreeing a deal with a different investor.
In addition to the financial aspects we have
already discussed, the major commercial points
addressed in a term sheet are:
• preconditions to investment;
• representations and warranties;
• board structure and membership;
• provision of information;
• consent matters;
• share rights;
• service agreements;
• confidentiality;
• payment of costs;
• arrangement and monitoring fees; and
• exclusivity.
Preconditions to investment
Completion of the investment will always be
subject to the satisfactory completion of due
diligence, agreement of legal documents and
final approval from the investor’s investment
committee. In addition to these generic condi-
i h h ill l ll ifi
accurate, complete and not misleading. The prin-
cipal areas covered by warranties are:
• historic accounts;
• current trading and management accounts;
• financial projections and forecasts;
• the business plan;
• due diligence reports;
• ownership of assets including IP; and
• no litigation or contractual breaches
outstanding.
Board structure and membership
One of the major changes that accompanies rais-
ing venture capital for the first time is the intro-
duction of a formalised reporting and decision
making process, which will be centred around
the board of directors. The board acts as both the
primary decision making body and the maininterface between management and investor. It is
essential that board meetings are a forum for
open debate and discussion, and that the man-
agement team does not attempt this to circum-
vent this by making decisions in private and
presenting the board with fait accompli.
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Module 5:Management and
leveraged buyouts
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Published in September 2007 by:
PEI Media
Second Floor
Sycamore House
Sycamore Street
London EC1Y 0SG
United Kingdom
Telephone: +44 20 7566 5444
© 2007 PEI Media Ltd.
ISBN 1-904696-47-3 978-1-904696-47-6
This publication is not included in the CLA Licence so you must not copy any portion of it without the
permission of the publisher.
All rights reserved. No parts of this publication may be reproduced, stored in a retrieval system ortransmitted, in any form or by any means, electronic, mechanical, photocopy, recording or otherwise,
without the prior written permission of the publisher.
The views and opinions expressed in the book are solely those of the authors and need not reflect
those of their employing institutions.
Al h h bl ff h b d h f hi bli i h b
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Contents
About the author iv
Getting the most out of this module 5
The buyout principle – three different routes to value creation 5Creating value in buyouts 5
The consequences of leverage 7
The future for value creation 7
Evolution of the buyout markets 8
Management buyouts 9
Failures 9
Investment criteria – characteristics of a buyout company 11Strategy and market positioning 11
The company 11
The management team 11
The buyout process 12
Auctions 12
Th t l i b t d fli t f i t t 12
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About the author
Garry Sharp – independent practitioner, consultant, writer and trainer
Garry Sharp has 22 years’ experience as a practitioner, consultant, writer and trainer in the private
equity and venture capital markets. He joined independent venture capital company Baronsmead in
1985, becoming a director and shareholder following Baronsmead’s own management buyout in
1989. During the early 1990s the company grew to become one of the UK’s largest independent pri- vate equity firms and was acquired by fund manager Ivory & Sime in 1996. Shortly thereafter Garry
left to co-found Independent Direction, a specialist consultancy to the private equity industry. He sold
Independent Direction in 2005 to concentrate on training and writing, and continues to work in an
advisory capacity in private equity.
Garry has trained newcomers to private equity since 1990, and delivers courses in Western and
Eastern Europe, the Middle East and a wide range of African countries. His first book, The Insider’s
Guide to Venture Capital, was published in 1990, followed by five more on private equity, M&A andcorporate finance.
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The explosive growth in buyouts over the last
three decades is a direct result of the natural,
inherent strengths of the buyout model. The
essential elements of this model are:
• a close partnership between the management
team of a buyout company and the investors
and lenders who finance its acquisition;
• precise and careful tailoring of the buyout’s
financial structure to the cash and profit gen-
eration characteristics of the company;
l bj i h d b
est and tax (EBIT) of €10 million. Adding back non
cash expenses – depreciation and amortisation – of
€4 million per year gives us an EBITDA , which is a
rough proxy for the company’s surplus operating
cashflow, of €14 million. This clearly provides thecapacity to service debt, and for this example we
assume that equity investors provide €30 million
of the acquisition cost, with the balance, €70 mil-
lion, coming as a combination of loans with an
overall interest cost of seven percent.
B i h i h i h f
GETTING THE MOST OUT OF THIS MODULEWelcome to Module 5 in the Fundamentals of private equity series. This modulefocuses on management and leveraged buyouts. It is designed to work both as astand alone section and as part of the whole series. It necessarily draws upon top-
ics reviewed in earlier modules, and seeks to avoid repetition of their content.However, for the benefit of the stand alone reader, a comprehensive glossary hasbeen incorporated, which explains the background and use of private equity ter-
minology. All terms which may require explanation or expansion are printed inbold, to indicate that there is a glossary entry for them.
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Exhibit 4: Trends of buyouts/buy-ins, 1981–2006
Sources: CMBOR, Barclays Private Equity, Deloitte.
N u m b e r
V al u e ( € mi l l i on s )
0 0
2,000
4,000
6,000
8,000
10,000
12,000
100
200
300
400
500
700
800
600
2 0 0 6
2 0 0 4
1 9 9 7
1 9 8 9
1 9 8 1
2 0 0 2
2 0 0 1
1 9 9 3
1 9 8 5
2 0 0 5
1 9 9 9
1 9 9 1
1 9 8 3
2 0 0 3
1 9 9 5
1 9 8 7
1 9 9 8
1 9 9 0
1 9 8 2
1 9 9 4
1 9 8 6
2 0 0 0
1 9 9 2
1 9 8 4
1 9 9 6
1 9 8 8
Number
Value
Exhibit 5: Growing sponsor involvement in global M&A volume, 1999–2006
u m e
20
25
Volume ($ billions)
% of global M&A
519
356
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Module 6:Private equity real estateand infrastructure
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Published in September 2007 by:
PEI MediaSecond Floor
Sycamore House
Sycamore Street
London EC1Y 0SG
United Kingdom
Telephone: +44 20 7566 5444
© 2007 PEI Media Ltd.
ISBN 1-904696-48-1 978-1-904696-48-3
This publication is not included in the CLA Licence so you must not copy any portion of it without the
permission of the publisher.
All rights reserved. No parts of this publication may be reproduced, stored in a retrieval system ortransmitted, in any form or by any means, electronic, mechanical, photocopy, recording or otherwise,
without the prior written permission of the publisher.
The views and opinions expressed in the book are solely those of the authors and need not reflect
those of their employing institutions.
Al h h bl ff h b d h f hi bli i h b
-
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Contents
About the author iv
Getting the most out of this module 5
Growth of the private equity real estate market 5
Real estate investment categories 6
Value added activities 7
Opportunistic 7
Real estate asset types 7
Infrastructure investments 8
Privatisations and buyouts 9Public private partnerships, concessions and new projects 10
Types of PPP 11
Private equity and infrastructure 14
Appendix 1: 20 landmark transactions in private equity real estate history 15
di h f hi
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About the author
Garry Sharp – independent practitioner, consultant, writer and trainer
Garry Sharp has 22 years’ experience as a practitioner, consultant, writer and trainer in the private
equity and venture capital markets. He joined independent venture capital company Baronsmead in
1985, becoming a director and shareholder following Baronsmead’s own management buyout in
1989. During the early 1990s the company grew to become one of the UK’s largest independent pri- vate equity firms and was acquired by fund manager Ivory & Sime in 1996. Shortly thereafter Garry
left to co-found Independent Direction, a specialist consultancy to the private equity industry. He sold
Independent Direction in 2005 to concentrate on training and writing, and continues to work in an
advisory capacity in private equity.
Garry has trained newcomers to private equity since 1990, and delivers courses in Western and
Eastern Europe, the Middle East and a wide range of African countries. His first book, The Insider’s
Guide to Venture Capital, was published in 1990, followed by five more on private equity, M&A andcorporate finance.
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preceded the private equity hotel craze by a
good seven years.
In a transaction valued at more than $980 mil-
lion, the private equity groups acquired the
hotel portfolio from a 100-year-old publicly
held company that was controlled by a family
trust. Once the dust settled, Blackstone and
Colony had a clutch of luxury UK lodging
assets: The Savoy, Claridge’s, The Berkeley andThe Connaught. In addition to owning four of
the seven “superluxury” hotels in London, the
investor group walked away with The Lygon
Arms, a country-house hotel in the Cotswolds
region, and the quintessentially English restau-
rant Simpson’s-in-the-Strand.
In the buyer’s minds, the benefits of the trans-action were threefold. The firms held a major-
ity of London’s 1,250 luxury hotel rooms. In
addition, the hotels had recently seen a num-
ber of capital improvements that, according to
Blackstone, had affected annual numbers
without being seen in operating performance.
Fi ll h i b f
A gamble on Harvey’s
When Colony Capital spent $1.2 billion to buy
an additional four gambling parlours from
Harrah’s and Caesar’s last April, the firm
became the proud owner of the largest private-
ly held casino company. Although those invest-
ments have had a shaky first year, there is no
denying Colony’s strength in the gaming sector.
All of this was set in motion by one purchase:
the firm’s 1999 acquisition of Harvey’s Casino
Resorts in Lake Tahoe for $405 million. The
firm later sold the company, which also owns
hotels and casinos in Iowa, to Harrah’s for $625
million two years later.
“When Colony bought Harvey’s, we saw an
industry with only big, strategic players and no
one to sell to except each other,” Colony chief
executive officer Tom Barrack told sister publi-
cation Private Equity International last year.
“We thought we could act as a liaison to all
these larger companies Now the consolidation
1999 Colony’s first casino acquisition launchesan empire
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Or, as Chuck Leitner, the global head of
RREEF, the real estate and infrastructure arm
of Deutsche Bank, puts it: “Just about every-
body that talks about infrastructure has
Australian accents.”
Contrasted with the mature infrastructure
ments with robust financing for public infra-
structure projects. In recent years, however, as
the country’s infrastructure has aged and the
ability to raise capital via taxes has dimin-
ished, more and more public entities are look-
ing to the private sector.
Exhibit A2.3: Private equity restructures – breakdown of global infrastructure deal volumes
by acquirer, 1998–2006 YTD
Source: Thomson Financial.
$ ( b i l l i o n s )
0
25
50
75
100
150
125
2006YTD
2000 2002 20041998 2001 2003 20051999
Private equity
Non-private equity
Year
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Module 7:
Due diligence
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Published in September 2007 by:
PEI MediaSecond Floor
Sycamore House
Sycamore Street
London EC1Y 0SG
United Kingdom
Telephone: +44 20 7566 5444
© 2007 PEI Media Ltd.
ISBN 1-904696-49-X 978-1-904696-49-0
This publication is not included in the CLA Licence so you must not copy any portion of it without the
permission of the publisher.
All rights reserved. No parts of this publication may be reproduced, stored in a retrieval system ortransmitted, in any form or by any means, electronic, mechanical, photocopy, recording or otherwise,
without the prior written permission of the publisher.
The views and opinions expressed in the book are solely those of the authors and need not reflect
those of their employing institutions.
Al h h bl ff h b d h f hi bli i h b
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Contents
About the author iv
Getting the most out of this module 5
What is due diligence? 5
Types of due diligence 5Commercial due diligence 5Financial due diligence 5Management due diligence 6Legal and regulatory due diligence 6IT due diligence 6Technology or product due diligence 6Environmental due diligence 6Forensic due diligence 6
Other specialist due diligence 7 Vendor due diligence 7
The due diligence process 7Professionalism 7Clear focus 7Careful planning 7
Allocation of resources 8
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About the author
Garry Sharp – independent practitioner, consultant, writer and trainer
Garry Sharp has 22 years’ experience as a practitioner, consultant, writer and trainer in the private
equity and venture capital markets. He joined independent venture capital company Baronsmead in
1985, becoming a director and shareholder following Baronsmead’s own management buyout in
1989. During the early 1990s the company grew to become one of the UK’s largest independent pri- vate equity firms and was acquired by fund manager Ivory & Sime in 1996. Shortly thereafter Garry
left to co-found Independent Direction, a specialist consultancy to the private equity industry. He sold
Independent Direction in 2005 to concentrate on training and writing, and continues to work in an
advisory capacity in private equity.
Garry has trained newcomers to private equity since 1990, and delivers courses in Western and
Eastern Europe, the Middle East and a wide range of African countries. His first book, The Insider’s
Guide to Venture Capital, was published in 1990, followed by five more on private equity, M&A andcorporate finance.
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What is due diligence?In its simplest terms, we can define due diligence
as the process of assuring that all the assumptions
on which an investment or acquisition decisionare based do, in fact, hold true; an exercise in val-
idation or verification. In modern practice, how-
ever, it goes further than this, as the results of a
thorough, detailed and focused series of reviews
into a company’s markets, processes, finances,
management, technologies, assets, intellectual
d ill i id i
and sophistication, and in modern practice is
broken down into a series of different disciplines.
Commercial due diligenceCommercial due diligence (CDD), also referred to
as market, or strategic due diligence, is focused on:
• establishing the credibility of the revenue pro-
jections in the investee company’s business plan;
• providing an objective, impartial assessment
f h ’ k d i i i i
GETTING THE MOST OUT OF THIS MODULEWelcome to Module 7 in the Fundamentals of private equity series. This modulefocuses on the due diligence process. It is designed to work both as a stand alone
section and as part of the whole series. The module necessarily draws upon top-ics reviewed in earlier modules, and seeks to avoid repetition of their content.However, for the benefit of the stand alone reader, a comprehensive glossary has
been incorporated, which explains the background and use of private equity ter-minology. All terms which may require explanation or expansion are printed inbold, to indicate that there is a glossary entry for them.
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Manufacturing due diligence expertise is supported by our dedicated manufacturing team whose
expertise has developed working on high profile strategy and operational engagements for majorinternational blue-chip manufacturers.
We also back our own market insights via the PA Ventures programme, as evidenced by the suc-
cessful spin-off of Ubinetics, the innovative 3G equipment supplier.
Recent examples of where PA has applied this specialised knowledge in strategic due diligence
assignments include:
A major European private equity deal where PA Consulting Group worked with an equity sponsor
on the due diligence of a specialist manufacturer of chemicals. By mapping the underlying man-
ufacturing technology to the changes in demands for various polymer and substitute products, PA
were able to greatly enhance the financial sponsors’ view of the key capital investment priorities.
For a 2006 deal, involving a major European PE house, PA Consulting Group were able to apply a
strategic due diligence team of manufacturing specialists to evaluate the real competitive advan-
tage of the core technologies, identifying potential market applications, and uncovering specific
high risk areas such as product warranty, all issues that materially impacted on the deal value.
A best practice approach to strategic due diligence
These cases illustrate how strategic due diligence, based on an ability to add value well beyond a
cursory market examination, has yielded significant deal value to our clients.
As the private equity mid-market becomes more competitive expect to see more financial sponsors
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Module 8:
Aftercare and exits
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Published in September 2007 by:
PEI MediaSecond Floor
Sycamore House
Sycamore Street
London EC1Y 0SG
United Kingdom
Telephone: +44 20 7566 5444
© 2007 PEI Media Ltd.
ISBN 1-904696-50-3 978-1-904696-50-6
This publication is not included in the CLA Licence so you must not copy any portion of it without the
permission of the publisher.
All rights reserved. No parts of this publication may be reproduced, stored in a retrieval system ortransmitted, in any form or by any means, electronic, mechanical, photocopy, recording or otherwise,
without the prior written permission of the publisher.
The views and opinions expressed in the book are solely those of the authors and need not reflect
those of their employing institutions.
Al h h bl ff h b d h f hi bli i h b
-
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Contents
About the author iv
Getting the most out of this module 5
Introduction 5
Aftercare 5
Protecting value 5Reporting structure 6Modern trends in reporting 6Informal reporting 6Board structure and composition 7Executive directors 7
Non-executive directors 7Representing the investor 7Monitoring progress and performance 7Contributing to growth and development 8Characteristics of the effective non-executive 8Board committees 8The chairman and board meetings 8Operating partners 9
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About the author
Garry Sharp – independent practitioner, consultant, writer and trainer
Garry Sharp has 22 years’ experience as a practitioner, consultant, writer and trainer in the private
equity and venture capital markets. He joined independent venture capital company Baronsmead in
1985, becoming a director and shareholder following Baronsmead’s own management buyout in
1989. During the early 1990s the company grew to become one of the UK’s largest independent pri- vate equity firms and was acquired by fund manager Ivory & Sime in 1996. Shortly thereafter Garry
left to co-found Independent Direction, a specialist consultancy to the private equity industry. He sold
Independent Direction in 2005 to concentrate on training and writing, and continues to work in an
advisory capacity in private equity.
Garry has trained newcomers to private equity since 1990, and delivers courses in Western and
Eastern Europe, the Middle East and a wide range of African countries. His first book, The Insider’s
Guide to Venture Capital, was published in 1990, followed by five more on private equity, M&A andcorporate finance.
-
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IntroductionThe culmination of the investment process –
dealflow generation, appraisal, negotiation, duediligence, legal documentation and, finally,
completion of the investment – marks the begin-
ning, and not the end, of the investment cycle.
Whilst selection and structuring are critical to
private equity success, it is once the investment
has been made that the creation and realisation
f l b i Th i ’ ib i
AftercareThe aftercare function is driven by two key
objectives:
• protecting the value of the investment; and
• adding and realising value.
Exhibit 1 summarises the key aspects of the
investor’s role during the life of the investment.
GETTING THE MOST OUT OF THIS MODULEWelcome to Module 8 in the Fundamentals of private equity series. This module
focuses on the aftercare and exit aspects of the private equity cycle. It isdesigned to work both as a stand alone section and as part of the whole series.The module necessarily draws upon topics reviewed in earlier modules, and
seeks to avoid repetition of their content. However, for the benefit of the standalone reader, a comprehensive glossary has been incorporated, which explainsthe background and use of private equity terminology. All terms which may
require explanation or expansion are printed in bold, to indicate that there is aglossary entry for them.
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Operating partners
Earlier modules – Module 5 in particular – iden-
tified the growing requirements for privateequity firms to add operational value to their
investee companies. This has led in many cases
to a significant change in the make up of many
firm’s executive teams, which have broadened
to include individuals with significant, senior
level operational experience and a deep under-
standing of a particular sector or market.
Although investors have always used externalconsultants and expertise to help them appraise
and develop companies, the incorporation of
operating partners into the team brings this
expertise into the equity ownership and carried
interest return pool, making them an integral
part of the team with a reward structure better
aligned to the creation of value. Specific mod-
els of operating partner involvement vary between firms.
At one extreme, major industry names are hired;
for example Louis Gerstner (former IBM chair-
man, currently chairman of Carlyle), Jack Welch
(former CEO of General Electric, at Clayton,
D bili d Ri ) d P l O’N ill (f US
potential for disruption and discord it can bring.
The risks it can entail include:
• friction caused by imposing a senior industry
figure on top of an existing management team;
• a lack of understanding of the private equity
approach by operating partners who come
from a major corporate background; and
• the added degree of risk entailed in backing a
company with an incomplete team, and rely-
ing on an operating partner’s input.
Aftercare – who does it
The question of where, and to whom, a private
equity firm should allocate responsibility for
aftercare is a source of perennial debate within
the industry. Broadly speaking, there are three
approaches:
• the original deal team retains responsibility
for the investment;
• responsibility is immediately passed to a dedi-
cated, specialist aftercare team; and
• there is a phased transition, with the original
deal team retaining the relationship for a peri-
d f i b f h
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Module 9:
Secondaries andtheir alternatives
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Published in September 2007 by:
PEI MediaSecond Floor
Sycamore House
Sycamore Street
London EC1Y 0SG
United Kingdom
Telephone: +44 20 7566 5444
© 2007 PEI Media Ltd.
ISBN 1-904696-51-1 978-1-904696-51-3
This publication is not included in the CLA Licence so you must not copy any portion of it without the
permission of the publisher.
All rights reserved. No parts of this publication may be reproduced, stored in a retrieval system ortransmitted, in any form or by any means, electronic, mechanical, photocopy, recording or otherwise,
without the prior written permission of the publisher.
The views and opinions expressed in the book are solely those of the authors and need not reflect
those of their employing institutions.
Al h h bl ff h b d h f hi bli i h b
-
8/18/2019 What is PE & VC
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Contents
About the author iv
Getting the most out of this module 5
What drives the need for liquidity? 5
History – overview of the primary private equity market 6
The structural issue and transparency 7
The rise of specialised secondary funds 8
Secondary sales and purchases: practical issues 10
Difficulties in execution 10
Motivations of institutional investors: portfolio management 10
Recent variations: primary secondaries 11
More recent variations: direct secondaries 11
The fund managers’ perspective: investor relationships and stapled secondaries 12
The role of intermediaries 12
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About the author
Kelly DePonte – Probitas Partners
Kelly DePonte is a partner and head of research and due diligence for Probitas Partners’ alternative
fund placement activities. Prior to joining Probitas Partners, Kelly was Managing Director at Pacific
Corporate Group, a leading provider of alternative investment advisory, managing and consulting
services to institutional clients, where he oversaw the partnership investment program. Before join-ing PCG, Kelly held various positions at First Interstate Bancorp in private equity, asset liability man-
agement and derivatives. He earned an MBA from the Anderson Graduate School of Management at
UCLA, and a BA in communications from Stanford University.
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In any market, secondary activity is driven by
three major factors: volume in the primary mar-
ket, investment structure, and transparency.
Issues with all of these factors mitigated againstthe development of a strong secondary market
in private equity until the last decade, when the
growth of straight secondary sales and the cre-
ation of liquidity alternatives exploded. Even
though institutional private equity vehicles
have existed since the 1940s, the volume of
i i i h i k did
seller motivations. While some circles may still
stigmatise fund managers whose fund has been
sold, most transactions are driven by the strate-
gic needs of the seller. In fact, in dollar terms,most transactions have been driven by large
financial institutions – such as banks and insur-
ance companies – who have decided that pri-
vate equity is not a core business and who use
the secondary market to exit private equity
entirely, with the goal of redeploying capital
i b i li R l i i
GETTING THE MOST OUT OF THIS MODULEWelcome to Module 9 in the Fundamentals of private equity series. This modulefocuses on private equity secondaries and their alternatives. It is designed to
work both as a stand alone section and as part of the whole series. The modulenecessarily draws upon topics reviewed in earlier modules, and seeks to avoid
repetition of their content. However, for the benefit of the stand alone reader,a comprehensive glossary has been incorporated, which explains the back-ground and use of private equity terminology. All terms which may require
explanation or expansion are printed in bold, to indicate that there is a glos-sary entry for them.
-
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difficult to track, as the exact sub-allocations to
secondaries within fund-of-funds, or allocations
within institutional investors’ alternative pro-grams are not widely advertised and can also be
flexibly adjusted. In total, however, the amount
of money focused on secondary market investing
is in the range of two to three times the amount
raised for specialised secondary funds.
Secondary sales and purchases:
practical issuesDifficulties in execution
Though secondary sales have been around for a
long time, there are a number of issues that make
the execution of secondary transactions difficult.
Problems with the traditional sales process
include the following:
• The potential for deep discounts. Secondary
purchases are usually executed at a discount
to the fund manager’s carrying value though
the level of discount fluctuates with market
forces. (A more detailed primer on secondary
pricing dynamics is included in Appendix 3 on
25 26 ) Th h h 1990 h
which mandate that, before a position can be
transferred to another investor, current LPs in
the fund have the right to match the price.This clause can add to the complexity of the
sales process and affect details of the bidding
process.
• Due diligence can be intensive and disruptive.
The due diligence process that a buyer neces-
sarily performs in order to develop a firm bid,
especially in situations where the buyer is not
intimately familiar with the partnershipsbeing sold, is usually intensive and can be dis-
ruptive for both parties. This can result in
damaged relationships with the fund manager
– an important consideration for a buyer
whose interest in purchasing a position may
be driven by a desire to gain access to future
funds to be raised by that same GP.
• May impact the relationship with a fund man-ager and access to future funds. Selling a part-
nership, especially if it is part of a targeted
portfolio rebalancing effort as opposed to a
wholesale portfolio sale, may communicate
the message to a fund manager that its efforts
and the relationship are not valued. Just as the
h f hi i k
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Securitised vehicles
To date, most of the effort in producing struc-tured vehicles has been in the primary market as
structured fund-of-funds, but the technology
developed in this area is now being applied in the
secondary market. The primary goal of these
structures as applied to private equity portfolios
is to decrease the discount to NAV on secondary
i i d k h f li
ity facility. Private equity portfolios are different
from most ABS situations in that, even with a sea-soned portfolio, new funding is required as com-
mitments are drawn down. Though the early
return of capital on certain investments provides
a means of funding future draw-downs, it is pru-
dent to arrange a liquidity facility or line of cred-
it with a bank to ensure that future commitments
ill b i i l dl f h
Exhibit 7: Secondary private equity ABS structure
Bank or insurancecompany
Structuredbond buyers
Purchasers of residual risk
Undrawncommitments
Investments
outstanding
Note: The difference in size between the facilities is driven by the discount and the need to over collateralise thetop rated tranches.
Liquidity facility
Portfolio being securitisedFinancing structure
“AA” tranche
“A” tranche
“BBB” tranche
“BB” tranche
“B” tranche
Equity tranche
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Module 10:
Running a privateequity firm
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Published in September 2007 by:
PEI MediaSecond Floor
Sycamore House
Sycamore Street
London EC1Y 0SG
United Kingdom
Telephone: +44 20 7566 5444
© 2007 PEI Media Ltd.
ISBN 1-904696-52-X 978-1-904696-52-0
This publication is not included in the CLA Licence so you must not copy any portion of it without the
permission of the publisher.
All rights reserved. No parts of this publication may be reproduced, stored in a retrieval system or
transmitted, in any form or by any means, electronic, mechanical, photocopy, recording or otherwise,
without the prior written permission of the publisher.
The views and opinions expressed in the book are solely those of the authors and need not reflect
those of their employing institutions.
Al h h bl ff h b d h f hi bli i h b
-
8/18/2019 What is PE & VC
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Contents
About the author iv
Getting the most out of this module 5
The institutionalisation of private equity and its meaning for a general partner 5
Building the right structure: roles and responsibilities 6
Human capital: attracting and retaining talent 7
Human capital 7
Attracting talent 8
Retaining talent 8
Carried interest: meaning, uses and calculation 9
Meaning 9
Uses 9
Calculation 10
Effect of GP’s retirement on carried interest 11
i i h di l
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About the author
David Huckfield – Baring Private Equity International
David Huckfield has 20 years’ experience in the international private equity industry as a partner of
Baring Private Equity. In 2004 he played a leading role in coordinating and structuring the 8-way man-
agement buyout of the Group from ING Bank. Previously he was Group Chief Operations Officer,
based in London, responsible for operations and compliance worldwide. During his tenure funds
under management grew from $100 million to $2 billion as the Group expanded from a pan-European
partnership with four offices to an inter-continental institution with a network of 18 offices in 13
countries managing more than 20 funds. He held more than 60 directorships across the Group and is
now a non-executive director of Baring Private Equity International with a focus on corporate gover-
nance standards. In this capacity he continues to chair the General Partner Boards of most of the
Group’s $3.4 billion of private equity funds operating in Russia, Asia, India, Europe and Latin America.
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The institutionalisation of private
equity and its meaning for a
general partnerPrivate equity has long since ceased to be the nas-
cent industry it was when the first venture capi-
tal pioneers made it a recognisable business
more than quarter of a century ago.
Institutionalisation has been defined as “to make
part of a structured and usually well-established
” d h h hi d l h i
tions, to impose more and more regulation on
the private equity industry. Many of these regu-
lators now require practising professionals to
pass specialist tests and exams leading to GPs to
incur the expense of more formal training pro-
grammes before being licensed to operate.
Training programmes have also had to be
extended to include anti-money laundering pro-
cedures which can look like maddening bureau-
cracy to a GP dealing with world-renowned
institutional investors.
GETTING THE MOST OUT OF THIS MODULEWelcome to Module 10 in the Fundamentals of private equity series. This module
focuses on running a private equity firm. It is designed to work both as a stand
alone section and as part of the whole series. The module necessarily draws upon
topics reviewed in earlier modules, and seeks to avoid repetition of their content.
However, for the benefit of the stand alone reader, a comprehensive glossary has
been incorporated, which explains the background and use of private equity ter-
minology. All terms which may require explanation or expansion are printed in
bold, to indicate that there is a glossary entry for them.
-
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of members including representatives of certain
larger (for example: exceeding $X million or Y
percent), Investors in the fund and sometimes
individuals with no affiliation to the fund. The
advisory council will meet at least twice a year to
receive a report from the GP on matters falling
within the jurisdiction of the advisory council
which may include:
• consenting to, reviewing or waiving any mat-
ter requiring their consent under the partner-
ship agreement such as departures from the
main investment strategy, investments that
exceed specified limits;
• approving the budget for partnership expenses;
• approving changes in named key men who
have left the employment of the GP;
• reviewing and/or approving portfolio valua-
tions; and
• reviewing and/or resolving conflicts of interest.
Delivery methods
The annual financial statements and associated
reports due under the partnership agreement
will normally by distributed by post but may also
b b il h d I ddi i GP
the private equity industry. Alternatively they may
be content to develop “home-made solutions”
using standard off-the-shelf spreadsheet, database
and presentation software.
The main factors that influence their preferred
choice of solution are the scale of their business,
the financial cost of replacing legacy systems and
the human resources required to achieve the
transition. Least inclined to embark on signifi-
cant investment in custom applications are the
small firms operating entirely from a single site
without any outsourcing of fund administration.
They are likely to have developed their own in-
house systems using proprietary software tools.
Larger firms with a more complex business
model, for example, operating internationally
and using third-party administrators are most
likely to be attracted by the prospects of
installing an “all singing-all dancing” custom-
built solution.
The main tasks that private-equity specific soft-
ware has to do relate to the source and applica-
tion of funds under management and include
h f ll i
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Glossary
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Published in September 2007 by:
PEI Media
Second Floor
Sycamore House
Sycamore Street
London EC1Y 0SG
United Kingdom
Telephone: +44 20 7566 5444
© 2007 PEI Media Ltd.
ISBN 1-904696-53-8 978-1-904696-53-7
This publication is not included in the CLA Licence so you must not copy any portion of it without the
permission of the publisher.
All rights reserved. No parts of this publication may be reproduced, stored in a retrieval system or
transmitted, in any form or by any means, electronic, mechanical, photocopy, recording or otherwise,
without the prior written permission of the publisher.
The views and opinions expressed in the book are solely those of the authors and need not reflect
those of their employing institutions.
Al h h bl ff h b d h f hi bli i h b
-
8/18/2019 What is PE & VC
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LP See Limited partner.
Management buy-in (MBI) Where an outside manager or team purchases an ownership stake
in a company and replaces the existing management team.
Management buyout (MBO) The acquisition of a company by its management team, usually in
partnership with external lenders and/or private equity investors.
Management fee The fee paid by a private equity fund to the fund’s manager, gener-
ally in the range of 1.5 percent to 2.5 percent of the fund’s commit-
ted capital per annum. The fee is intended to cover the manager’s
overhead and salary costs in finding, making and monitoring
investments. It will scale down in later years as the fund’s portfolio,
and hence the associated workload, reduces.
Management ratchet See Ratchet.
Mandatory redemption The requirement for a company to purchase all of an investor’s
shares, at a set price on a certain date.
Market flex Changes made to the terms of a loan (principally the interest rate),
within limits pre-agreed with the borrower, in order to match them
to market conditions when selling parts of the loan onto other
lenders in a syndicate
M k bili di A di li d h l i f d
The Fundamentals of Private Equity and Venture Capital
As the private equity and venture capital industry continues to
expand and evolve globally it is crucial that professionals
Fundamentals is a must-have companion for any private
equity firm investment group investment bank or advisory firm
-
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expand and evolve globally it is crucial that professionals
entering the industry understand its many facets fully.The
Fundamentals of Private Equity and Venture Capital provides
a comprehensive manual to all those wanting an accessible,
informed and insightful guide to this dynamic asset class. This
unique series pulls together the ten most important topics on
private equity and venture capital and, as a set, delivers an all-encompassing guide to the subject. Whether a new entrant to
this market wanting to gain a clear understanding of the industry
or a professional needing to expand their knowledge on a
specific area, The Fundamentals of Private Equity and
Venture Capital is a vital resource to all those working in the
private equity or venture capital industry wherever you are
based in the world.
Brought to you by the team that publishes Private Equity Inter-
national and PrivateEquityOnline.com, The Fundamentals of
Private Equity and Venture Capital is split into ten modules anda detailed up-to-date glossary – essential for any professional in
need of an understanding of individual elements of the industry
or of the asset class as a whole.
These modules are:
What is Private Equity and Venture Capital?
Private Equity as an Asset Class
Structuring and Raising a Fund
Venture and Development Capital
Management and Leveraged Buyouts
Private Equity Real Estate and Infrastructure
Due diligence for Private Equity and Venture Capital Firms
Aftercare and ExitsSecondaries and their Alternatives
Running a Private Equity Firm
Glossary
1.
2.
3.
4.
5.
6.
7.
8.9.
10.
11.
equity firm, investment group, investment bank or advisory firm
engaged with the industry. It has been expressly written and
designed to deliver concise guidance and analysis, drawing
on the real-world expertise of its authors and editor.
KEY FEATURES
Fundamentals has been written and edited by threeestablished authors and professionals in the field of private
equity and venture capital: Garry Sharp, Kelly DePonte and
David Huckfield.
Modules include real world examples and case studies from
leading firms involved with private equity and venture capital.
Key articles from Private Equity International supply
relevant commentary and context.
The layout of every module has been designed to optimise
ease of use and comprehension, including valuable data in
charts and tables, boxed checklists and valuable sect ion
summaries.The language is accessible and friendly and delivers
important knowledge in a digestible way.
A list of recommended reading is included to enhance your
knowledge further.
A comprehensive and up-to-date glossary of industry terms
is included.
•
•
•
•
•
•
•