Guy Fraser-Sampson

Private Equity as an Asset Class (eBook, PDF)

• Format: PDF

Produktbeschreibung

Unfairly reviled, and much misunderstood, private equity differs from all other asset classes in various important respects, not least the way in which its fund mechanisms operate, and the way in which its returns are recorded and analysed. Sadly, high level asset allocation decisions are frequently made on the basis of prejudice and misinformation, rather than a proper appreciation of the facts. Guy Fraser-Sampson draws upon more than twenty years of experience of the private equity industry to provide a practical guide to mastering the intricacies of this highly specialist asset class. Aimed equally at investors, professionals and business school students, it starts with such fundamental questions as 'what is private equity?' and progresses to detailed consideration of different types of private equity activity such as venture capital and buyout. Rapid and significant changes in the environment during the recent financial crisis have prompted the need for a new edition. Separate chapters have been added on growth and development capital, as well as secondary investing. Newly emergent issues are considered, such as lengthening holding periods and the possible threat of declining returns. Particular problems, such as the need to distinguish between private equity and hedge funds, are addressed. The glossary has also been expanded. In short, readers will find that this new edition takes their understanding of the asset class to new heights. Key points include: * A glossary of private equity terms * Venture capital * Buyout * Growth capital * Development capital * Secondary investing * Understanding private equity returns * Analysing funds and returns * How to plan a fund investment programme * Detailed discussion of industry performance figures

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Produktdetails

• Verlag: John Wiley & Sons
• Seitenzahl: 280
• Erscheinungstermin: 21. November 2011
• Englisch
• ISBN-13: 9780470665060
• Artikelnr.: 38206966

Autorenporträt

About the author GUY FRASER-SAMPSON has over twenty years' experience of the private equity industry, most notably having set up and run for several years the European operations of Horsley Bridge. As a partner in the firm, and Managing Director of Horsley Bridge International, he had a unique opportunity to interact simultaneously with private equity managers from all over the world, including famous 'golden circle' venture firms based predominantly in California. He previously lived and worked in the Middle East as Investment Controller with the Abu Dhabi Investment Authority (ADIA). He has extensive experience of the evaluation of private equity managers, including having personally designed and developed a computer model for the evaluation of buyout performance, but is equally recognised as an expert on venture capital. In addition to his work with funds, he has also conducted direct, secondary and mezzanine transactions over the years. Guy teaches post-graduate modules on private equity and investment strategy at Cass Business School in the City of London, and is also recognised as an authority on all types of alternative assets. He performs consultancy and high level executive training assignments for clients around the world, and is also in demand as a provider of keynote addresses at investment conferences. He conducts regular investor workshops around the world based upon his books.

Inhaltsangabe

About the Author. Acknowledgements. Introduction. 1 What is Private Equity?
What is Private Equity? Fund investing versus direct investing.
Co-investment. Terminology. Different types of Private Equity investment.
Summary. 2. What are Private Equity Funds, and How do They Work? Capital:
Allocated, Committed, Drawn Down and Invested. How do Private Equity Funds
Work? Structure. Cash flow. Investment. Fundraising. Private Equity Funds
Distinguished from Other Fund Types. Hedge funds. Infrastructure. Private
(Equity) Real Estate. A Note on International Issues. Summary. 3. Private
Equity Returns - The Basics. Understanding the J-curve and Compound
Returns. Upper Quartile Figures. Median Returns. Average Returns. Pooled
Returns. Using Vintage Year Returns for Benchmarking Purposes.
Time-weighted Returns. Summary. 4 Private Equity Returns - Multiples and
Muddles. Multiples. Distributed over paid in (DPI). Paid in to committed
capital (PICC). Residual value to paid in (RVPI). Total value to paid in
(TVPI). Use of multiples in industry research. Muddles, Muggles and
Markowitz. Returns. Risk. Liquidity. Summary. 5 Buyout. Types of Buyout
Transaction. MBO. MBI. BIMBO. LBO. Take Private (P2P). Roll-up. Secondary
Buyouts. Other 'Buyout' Activity. PIPEs. How do Buyouts Work?
Characteristics of Buyout. Established businesses. Debt. Earnings. Size.
Control. Barriers to entry. Summary. 6 How to Analyse Buyouts. Earnings.
EBIT. EBITDA. Earnings Growth. Multiple. Multiple increase (sometimes
called multiple arbitrage). Leverage. Recapitalisation. Timing. Modelling
and Analysing Buyout Funds. Enterprise value. Summary. 7 Buyout Returns. US
versus European Buyout. Buyout skill bases. Imperfect markets. Earnings
multiples. Earnings growth. Leverage. Contribution of different drivers.
Fund size. Summary. 8 Venture Capital. What is Venture Capital? Backing New
Applications, Not New Technology. Classifi cation by Sector. IT. Telecoms.
Life Science. Classifi cation by Stage. Seed stage. Early stage. Mid and
late stages. Summary. 9 How to Analyse Venture. The Fundamentals (1) -
Money Multiples. The Fundamentals (2) - Valuation. Valuation as an element
of stated returns. Differences in valuation approach between Europe and the
US. Variability of Venture valuations. Pre-money and post-money valuations.
Share classes. The Fundamentals (3) - Cost and Value. IRRs and multiples.
Going in equity (GI%). Percentage of the holding within the fund. The
Impact of Home Runs. Summary. 10 Venture Returns. US Outperformance versus
Europe. Money multiples drive IRRs. Home runs and the golden circle. Market
conditions. European Venture - Is it as Bad as it Seems? Returns and Fund
Size. Venture returns by stage. What of the Future? Summary. 11. Growth and
Development Capital. The PLC and the BCG Growth Matrix. Development
Capital. Target companies. Money in deals. Money out deals. Objectives.
Growth Capital. Target companies. Objectives. Growth capital and late-stage
Venture. Common Issues. Minority protection. Exit protection. The Future.
Summary. 12. Secondary Private Equity Fund Investing. Why do People Buy
Secondaries? Time and the J-curve. Diversifi cation by time. Diversifi
cation by geography and sector. Treasury and Portfolio Secondaries. Why do
People Sell Secondaries? Change of strategy/leaving the asset class.
Overconcentration by time, sector or geography. Unexpected need for cash.
Housekeeping. Dissatisfaction with the GP. Restrictions on Transfer.
Stapled primaries. Secondary Methodology. Tails. Fees etc. Secondary
Buyouts - Warning. Summary. 13. Due Diligence. Buyout Funds. Venture Funds.
Co-investors. Cross-fund Investing. Buyout Companies. Venture Companies.
Funds of Funds. Growth and Development Capital. Monitoring Private Equity
Funds. The Changing Nature of Due Diligence. Summary. 14. Planning Your
Investment Programme. Cash Flow Planning. Allocated, Committed and Invested
Capital. Diversifi cation by Time. Proper Commitment Levels. Diversifi
cation by Sector and Geography. Total Return. How to deal with uninvested
capital. Towards a New World of Private Equity Programmes? Summary. 15.
Trends and Issues. Financial Crisis. Credit. Valuation. Holding periods.
Secondaries. Emerging Markets. Concluding Thoughts. Track record. Returns.
Fee structures. Private Equity at a Crossroads? Summary. Glossary of
Private Equity Terms. Index.