Fundamentals of Private Equity and Venture Capital - PEI Media

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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. Although every reasonable effort has been made to ensure the accuracy of this publication, the publisher accepts no responsibility for any errors or omissions within this publication or for any expense or other loss alleged to have arisen in any way in connection with a reader's use of this publication. This module is part of a series of 10 modules entitled The fundamentals of private equity. The modules in this series are: Module 1 Module 2 Module 3 Module 4 Module 5 Module 6 Module 7 Module 8 Module 9 Module 10 Glossary 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 Aftercare and exits Secondaries and their alternatives Running a private equity firm A comprehensive list of private equity terms and definitions To order any of the modules in this series, please contact Private Equity International on: +44 20 7566 5444. ii THE FUNDAMENTALS OF PRIVATE EQUITY COPYING WITHOUT PERMISSION IS UNLAWFUL
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 7 Sector 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 Added value/aftercare 9 Achieving exits 9 The “perfect” fund proposition 9 The fundraising process 9 Identifying potential investors 9 Pre-marketing 10 Consistency 10 The offering memorandum (or private placement memorandum) 10 Preparation of the investment pitch 11 Preparation of supporting information 11 Placement agents 11 Due diligence 12 Track record 12 The management team 13 Terms and conditions 14 Key commercial issues 14 Private equity fund structuring 17 by Nick Benson, Private Funds Group, Clifford Chance, February 2007 Introduction 17 Basic structuring considerations 17 Specific investor requirements 18 Multiple vehicle structures 19 Types of fund vehicle 19 Limited partnerships 20 Conclusion 21 COPYING WITHOUT PERMISSION IS UNLAWFUL THE FUNDAMENTALS OF PRIVATE EQUITY iii
Page 1 and 2: THE FUNDAMENTALS OF PRIVATE EQUITY
Page 3 and 4: Contents About the author iv Gettin
Page 5 and 6: GETTING THE MOST OUT OF THIS MODULE
Page 7 and 8: Module 2: Private equity as an asse
Page 9 and 10: About the author Garry Sharp - inde
Page 11 and 12: Exhibit 3: Distribution when one fu
Page 13: Module 3: Structuring and raising a
Page 19 and 20: Module 4: Venture and development c
Page 25 and 26: Module 5: Management and leveraged
Page 31 and 32: Module 6: Private equity real estat
Page 35 and 36: preceded the private equity hotel c
Page 37 and 38: Module 7: Due diligence COPYING WIT
Page 43 and 44: Module 8: Aftercare and exits COPYI
Page 49 and 50: Module 9: Secondaries and their alt
Page 55 and 56: Exhibit 7: Secondary private equity
Page 57 and 58: Published in September 2007 by: PEI
Page 59 and 60: About the author David Huckfield -
Page 61 and 62: of members including representative
Page 63 and 64: Published in September 2007 by: PEI
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The Fundamentals of Private Equity
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