vuosikirja / yearbook 2007 – 2008 - Suomen pääomasijoitusyhdistys ry

statictics54The number of investments is calculated basedon the number of investments made by eachinvestment vehicle, such as a fund, or the directinvestments of the captive organisation.Therefore, for example, if an independentcompany that manages three separate fundsinvests in a portfolio company using capitalfrom each of these funds, then this is countedin the market statistics as three investments.Similarly, if a private equity company investsin a company at different times of the year,the investments are counted separately.As with all investments, initial investmentsare also based on the number of investingfunds. For example, if a portfolio companyhas received funding from one private equityfund before and another private equity fundmakes further investment later, the latter investmentis also an initial investment fromthe point of view of the latter fund.Divestment information is used here tokeep track of what happens to the portfolioof Finnish private equity investments.Divestment amounts are reported at cost,rather than at the actual amounts realised byany sale. It does not reflect the returns or theamount that private equity companies actuallyreceive.With regards to the number of divestments,activity is measured in the same way as are investments.That is, each divestment is countedindividually. Therefore, a portfolio companycan have a number of divestments made fromit in any particular year.Capital Under ManagementThe capital under management is calculatedas a sum of following numbers:• the capital invested and not yet divested, atcost, in the portfolio companies• the capital committed to, but not yet investedin, portfolio companies• the capital not yet invested in or committedto portfolio companies (fund commitments)Regarding captive investors, assets in the balanceavailable for investment are not includedthe capital under management. If a privateequity company makes investments from itsbalance only, the capital under managementequals the sum of the first two items.DEFINITIONSInvesting stages / type of financingSeed: Financing provided to research, assessand develop an initial concept before a businesshas reached the start-up phase.Start-up: Financing provided to companiesfor the product development stage, and furtherfunds to are required in order to initiatecommercial manufacturing and sales. Thesecompanies do not generate profits yet.Other early stage: Financing provided tocompanies that have begun initial marketingand related development and that require financingto achieve full commercial productionand sales.Expansion: Financing provided for thegrowth and expansion of an operating company,which may or may not be breaking evenor trading profitably. The capital may be usedto finance increased production capacity, marketor product development and/or to provideadditional working capital.Bridge financing: Financing made availableto a company in the period of transitionfrom being privately owned to being publiclyquoted.Secondary financing: The purchase of existingshares in a company from another pri-