Fundamentals of Private Equity and Venture Capital - PEI Media

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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 Reasons for allocating funds to private equity 14 Issues with private equity 16 Resource requirements 16 Illiquidity and timescale 16 Unpredictability 16 Lack of control 16 Difficulty of access 16 Routes to private equity 17 Direct/co-investment 17 Private equity funds 17 Fund of funds 17 Secondaries 17 Securitised/collateralised products 17 Publicly-traded private equity 17 Private equity market drivers 18 Availability of investment opportunities 18 Demand for private equity 18 Economic infrastructure for private equity 19 Exit opportunities 19 Summary 19 Appendix 1: Enter the Pantheon 20 Appendix 2: PEI 50 – Private Equity International’s ranking of the world’s largest private equity firms 29 COPYING WITHOUT PERMISSION IS UNLAWFUL THE FUNDAMENTALS OF PRIVATE EQUITY iii
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 private 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. iv THE FUNDAMENTALS OF PRIVATE EQUITY COPYING WITHOUT PERMISSION IS UNLAWFUL
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: Module 2: Private equity as an asse
Page 11 and 12: Exhibit 3: Distribution when one fu
Page 13 and 14: 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
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About the author David Huckfield -
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of members including representative
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Published in September 2007 by: PEI
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The Fundamentals of Private Equity
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Fundamentals of Private Equity and Venture Capital - PEI Media

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