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Encyclopedia > Private equity
Financial market
participants

Investors
Hedge funds
Private equity
Venture capital
There are two basic financial market participant catagories, Investor vs. ... Image File history File linksMetadata Size of this preview: 800 × 600 pixelsFull resolution (2816 × 2112 pixel, file size: 2. ... An investor is any party that makes an investment. ... A hedge fund is a private investment fund charging a performance fee and typically open to only a limited range of qualified investors. ... Venture capital is a general term to describe financing for startup and early stage businesses as well as businesses in turn around situations. ...

Speculators
speculation
Speculation is the buying, holding, and selling of stocks, commodities, futures, currencies, collectibles, real estate, or any valuable thing to profit from fluctuations in its price as opposed to buying it for use or for income - dividends, rent etc. ... Speculation involves the buying, holding, and selling of stocks, bonds, commodities, currencies, collectibles, real estate, derivatives or any valuable financial instrument to profit from fluctuations in its price as opposed to buying it for use or for income via methods such as dividends or interest. ...

Institutional investors
Banks
Collective investment schemes
Credit Unions
Insurance companies
Investment banks
Pension funds
Prime Brokers
Trusts
An institutional investor is an investor who is an institution like a bank, insurance fund, retirement fund, or mutual fund manager. ... For other uses, see Bank (disambiguation). ... Funds financial information A collective investment scheme is a way of investing money with a large number of people to participate in a wider range of investments that may not be feasible for an individual investor hence many investors share the costs of doing so. ... A credit union is a cooperative financial institution that is owned and controlled by its members. ... Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. ... Investment banks help companies and governments (or their agencies) raise money by issuing and selling securities in the capital markets (both equity and debt). ... A pension (also known as superannuation) is a retirement plan intended to provide a person with a secure income for life. ... Prime Brokerage is the generic name for a bundled package of services offered by investment banks to hedge funds. ... A trust company is normally owned by one of three types of structures; an independent partnership, a bank, or a law firm, each of which specialize in being a trustee of various kinds of trusts, and managing estates. ...


Finance series
Financial market
Participants
Corporate finance
Personal finance
Public finance
Banks and Banking
Financial regulation
The field of finance refers to the concepts of time, money and risk and how they are interelated. ... This article does not cite any references or sources. ... There are two basic financial market participant catagories, Investor vs. ... Domestic credit to private sector in 2005 Corporate finance is an area of finance dealing with the financial decisions corporations make and the tools and analysis used to make these decisions. ... Personal finance is the application of the principles of finance to the monetary decisions of an individual or family unit. ... This article does not cite any references or sources. ... For other uses, see Bank (disambiguation). ... Financial supervision is government supervision of financial institutions by regulators. ...

 v  d  e 

In finance, private equity is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange. The field of finance refers to the concepts of time, money and risk and how they are interelated. ... Term used in the context of financial planning, referring to the method of diversifying an investment portfolio across a wide variety of asset classes. ... The Court of Chancery, London, early 19th century This article is about the concept of equity in the jurisprudence of common law countries. ... A publicly traded corporation often refers to a company whose shares are traded on the open market, such as a stock market. ...


There are a wide array of types and styles of private equity and the term private equity has different connotations in different countries.[1]

Contents

Types of Private Equity

Private equity investments can be divided into the following categories:

  • Leveraged buyout, LBO or Buyout: refers to a strategy of making equity investments as part of a transaction in which a company, business unit or business assets is acquired from the current shareholders typically with the use of financial leverage. The companies involved in these transactions are typically more mature and generate operating cash flows.
  • Venture capital: a broad subcategory of private equity that refers to equity investments made, typically in less mature companies, for the launch, early development, or expansion of a business. Venture Capital is often sub-divided by the stage of development of the company ranging from early stage capital used for the launch of start-up companies to late stage and growth capital that is often used to fund expansion of existing business that are generating revenue but may not yet be profitable or generating cash flow to fund future growth.[2]
  • Growth capital: refers to equity investments, most often minority investments, in more mature companies that are looking for capital to expand or restructure operations, enter new markets or finance a major acquisition without a change of control of the business.

A leveraged buyout (or LBO, or highly-leveraged transaction (HLT), or bootstrap transaction) occurs when a financial sponsor gains control of a majority of a target companys equity through the use of borrowed money or debt. ... A leveraged buyout (or LBO, or highly-leveraged transaction (HLT), or bootstrap transaction) occurs when a financial sponsor gains control of a majority of a target companys equity through the use of borrowed money or debt. ... Venture capital is a general term to describe financing for startup and early stage businesses as well as businesses in turn around situations. ... Venture capital is a general term to describe financing for startup and early stage businesses as well as businesses in turn around situations. ... A startup company is a company recently formed, usually until IPO or acquisition. ... Growth capital is a very flexible type of financing. ...

Other Strategies

Other strategies that can be considered private equity or a close adjacent market include:

  • Distressed or Special situations: can refer to investments in equity or debt securities of a distressed company, or a company where value can be unlocked as a result of a one-time opportunity (e.g., a change in government regulations or market dislocation). These categories can refer to a number of strategies, some of which straddle the definition of private equity.
  • Real Estate: in the context of private equity this will typically refer to the riskier end of the investment spectrum including "value added" and opportunity funds where the investments often more closely resemble leveraged buyouts than traditional real estate investments. Certain investors in private equity consider real estate to be a separate asset class.
  • Infrastructure: investments in various public works (e.g., bridges, tunnels, toll roads, airports, public transportation and other public works) that are made typically as part of a privatization initiative on the part of a government entity.[4][5][6]
  • Energy and Power: investments in a wide variety of companies (rather than assets) engaged in the production and sale of energy, including fuel extraction, manufacturing, refining and distribution (Energy) or companies engaged in the production or transmission of electrical power (Power).
  • Merchant banking: negotiated private equity investment by financial institutions in the unregistered securities of either privately or publicly held companies.[7]

Distressed securities are securities of companies that are either already in default, under bankruptcy protection, or in distress and heading toward such a condition. ... Mezzanine capital (or mezzanine debt) is a broad financial term that refers to unsecured, high-yield, subordinated debt or preferred stock that represents a claim on a companys assets that is senior only to that of a companys shareholders. ... A loan or security that, in the case of default, would only be paid out after other, more senior loans were paid in full. ... A preferred stock, also known as a preferred share or simply a preferred, is a share of stock carrying additional rights above and beyond those conferred by common stock. ... Gearing ratios redirects here. ... Common stock, also referred to as common shares, are, as the name implies, the most usual and commonly held form of stock in a corporation. ... Real estate is a legal term that encompasses land along with anything permanently affixed to the land, such as buildings. ... Real estate is a legal term that encompasses land along with anything permanently affixed to the land, such as buildings. ... In finance, the private equity secondary market (also often called private equity secondaries or secondaries) refers to the buying and selling of pre-existing investor commitments to private equity and other alternative investment funds. ... A private equity fund is a collaboration of funds that directs a private companys or individuals equity, either in the stock market or in real estate. ... An institutional investor is an investor who is an institution like a bank, insurance fund, retirement fund, or mutual fund manager. ... This article is in need of attention. ... Transmission lines in Lund, Sweden Electric company redirects here. ... In banking, a merchant bank is a traditional term for an Investment Bank. ...

History and evolution

The seeds of the private equity industry were planted in 1946 when the American Research and Development Corporation (ARD) decided to encourage private sector institutions to help provide funding for soldiers who were returning from World War II. While the ARD had difficulty stimulating any private interest in the enterprise and ended up disbanding, they are significant because this marked the first recognized time in financial history that an enterprise of this type had been formed. In addition, they had an operating philosophy that was to become significant in the development of both private equity and venture capital: they believed that by providing management with skills and funding, they could encourage companies to succeed and in doing so, make a profit themselves. During the course of their unsuccessful journey, ARD did succeed in raising approximately $7.4 million, and they did have one rousing success; they funded Digital Equipment Corporation (DEC). By the 1970s such private participation had permeated into the private enterprise formation, but until the late 1970s, the task was being largely carried out by investment arms of a few wealthy families, such as the Rockefellers and Whitneys.[8] In the 1980’s, FedEx and Apple were able to grow because of private equity or venture funding, as were Cisco, Genentech, Microsoft, Avis, Beatrice Foods, and Dr Pepper.[9]. Despite these successes, through a series of "debt-financed leveraged buy-outs (LBOs)" of established firms, the PE firms were being seen with acrimony and being casted as irresponsible corporate raiders- as a threat to the free capitalist structure. The extreme example of this phenomenon is described in the bestselling book,[10] where the two PE firms Forstmann Little and Kohlberg Kravis Roberts, were described as "Barbarians at the Gate" for their aggressive $25 billion pursuit for RJR Nabisco. Venture capital is a general term to describe financing for startup and early stage businesses as well as businesses in turn around situations. ... Federal Express redirects here. ... This article is about the fruit. ... Cisco may refer to: Cisco Systems, a computer networking company Cisco IOS, an internet router operating system CISCO Security Private Limited, a security company in Singapore Commercial and Industrial Security Corporation, a statutory board in Singapore Abbreviation for San Francisco, California Cisco (wine) The Cisco Kid, a fictional character created... Genentech, Inc. ... Microsoft Corporation, (NASDAQ: MSFT, HKSE: 4338) is a multinational computer technology corporation with global annual revenue of US$44. ... Avis can be: The car and truck rental firm Avis Rent A Car System Inc. ... The Beatrice Foods Company was a major American food processing company and household name, until it was taken over by Kohlberg Kravis Roberts & Co. ... For other uses, see Dr Pepper (disambiguation). ... A leveraged buyout (or LBO, or highly-leveraged transaction (HLT), or bootstrap transaction) occurs when a financial sponsor gains control of a majority of a target companys equity through the use of borrowed money or debt. ... Forstmann Little & Company is a private equity firm, specializing in leveraged buyouts (LBOs). ... Kohlberg Kravis Roberts & Co (commonly referred to as KKR) is a New York City-based private equity firm that focuses primarily on late-stage leveraged buyouts. ... RJR Nabisco, Inc. ...


Investments in Private Equity

Institutional investors provide private equity capital in the hopes of achieving risk adjusted returns that exceed those possible in the public equity markets and will typically include private equity as part of a broad asset allocation that includes traditional assets (e.g., public equity and bonds). Most institutional investors, do not invest directly in privately held companies, lacking the expertise and resources necessary to structure and monitor the investment. Instead, institutional investors will invest indirectly through a private equity fund. Certain institutional investors have the scale necessary to develop a diversified portfolio of private equity funds themselves, while others will invest through fund of funds to allow a more diversified portfolio than an investor could construct. An institutional investor is an investor who is an institution like a bank, insurance fund, retirement fund, or mutual fund manager. ... A stock market or (equity market) is a private or public market for the trading of company stock and derivatives of company stock at an agreed price; both of these are securities listed on a stock exchange as well as those only traded privately. ... For other uses, see Stock (disambiguation). ... Look up bond in Wiktionary, the free dictionary. ... An institutional investor is an investor who is an institution like a bank, insurance fund, retirement fund, or mutual fund manager. ... A private company is a company that is not a public company. ... An institutional investor is an investor who is an institution like a bank, insurance fund, retirement fund, or mutual fund manager. ... A private equity fund is a collaboration of funds that directs a private companys or individuals equity, either in the stock market or in real estate. ... An institutional investor is an investor who is an institution like a bank, insurance fund, retirement fund, or mutual fund manager. ... A private equity fund is a collaboration of funds that directs a private companys or individuals equity, either in the stock market or in real estate. ... This article is in need of attention. ...



Private equity firms generally receive a return on their investments through one of the following avenues: Private equity firms typically manage a family of funds vehicles that invest in companies or other assets. ...

  • an Initial Public Offering (IPO) - shares of the company are offered to the public, typically providing an partial immediate realization to the financial sponsor as well as a public market into which it can later sell additional shares;
  • a merger or acquisition - the company is sold for either cash or shares in another company;
  • a Recapitalization - cash is distributed to the shareholders (in this case the financial sponsor) and its private equity funds either from cash flow generated by the company or through raising debt or other securities to fund the distribution.

IPO redirects here. ... Wikipedia does not yet have an article with this exact name. ... The phrase mergers and acquisitions or M&A refers to the aspect of corporate finance strategy and management dealing with the merging and acquiring of different companies as well as assets. ... Look up acquisition in Wiktionary, the free dictionary. ... A private equity fund is a collaboration of funds that directs a private companys or individuals equity, either in the stock market or in real estate. ... For other uses, see Debt (disambiguation). ...

Features

Considerations for investing in private equity funds relative to other forms of investment include:

  • Substantial entry costs, with most private equity funds requiring significant initial investment (usually upwards of $1,000,000) plus further investment for the first few years of the fund.
  • Investments in limited partnership interests (which is the dominant legal form of private equity investments) are referred to as "illiquid" investments which should earn a premium over traditional securities, such as stocks and bonds. Once invested, it is very difficult to gain access to your money as it is locked-up in long-term investments which can last for as long as twelve years. Distributions are made only as investments are converted to cash; limited partners typically have no right to demand that sales be made.
  • If a private equity firm can't find suitable investment opportunities, it will not draw on an investor's commitment. Given the risks associated with private equity investments, an investor can lose all of its investment if the fund invests in failing companies. The risk of loss of capital is typically higher in venture capital funds, which invest in companies during the earliest phases of their development, and lower in mezzanine capital funds, which provide interim investments to companies which have already proven their viability but have yet to raise money from public markets.
  • Consistent with the risks outlined above, private equity can provide high returns, with the best private equity managers significantly outperforming the public markets.

For the above mentioned reasons, private equity fund investment is for those who can afford to have their capital locked in for long periods of time and who are able to risk losing significant amounts of money. This is balanced by the potential benefits of annual returns which range up to 30% for successful funds. Venture capital is a general term to describe financing for startup and early stage businesses as well as businesses in turn around situations. ... Mezzanine capital (or mezzanine debt) is a broad financial term that refers to unsecured, high-yield, subordinated debt or preferred stock that represents a claim on a companys assets that is senior only to that of a companys shareholders. ...


Private equity fundraising

Private equity fundraising refers to the action of private equity firms seeking capital from investors for their funds. Typically an investor will invest in a specific fund managed by a firm, becoming a limited partner in the fund, rather than an investor in the firm itself. As a result, an investor will only benefit from investments made by a firm where the investment is made from the specific fund that they have invested in.

  • Fund of funds. These are private equity funds that invest in other private equity funds in order to provide investors with a lower risk product through exposure to a large number of vehicles often of different type and regional focus. Fund of funds accounted for 14% of global commitments made to private equity funds in 2006 according to Private Equity Intelligence Ltd.
  • Individuals with substantial net worth. This is often required by the law as well, since private equity funds are generally less regulated than ordinary mutual funds. For example in the US, most funds require potential investors to qualify as accredited investors, which requires $1 million of net worth, $200,000 of individual income, or $300,000 of joint income (with spouse) for two documented years and an expectation that such income level will continue.

As fundraising has grown over the past few years, so too has the number of investors in the average fund. In 2004 there were 26 investors in the average private equity fund, this figure has now grown to 42 according to Private Equity Intelligence Ltd. The central idea of a mutual fund is to enable investors to pool their money and place it under professional investment management. ... This article does not cite any references or sources. ...


It is also worth noting that the managers of private equity funds themselves will also invest in their own vehicles, typically providing between 1–5% of the overall capital.


Often private equity fund managers will employ the services of external fundraising teams known as placement agents in order to raise capital for their vehicles. The use of placement agents has grown over the past few years, with 40% of funds closed in 2006 employing their services according to Private Equity Intelligence Ltd. Placement agents will approach potential investors on behalf of the fund manager, and will typically take a fee of around 1% of the commitments that they are able to garner.


The amount of time that a private equity firm spends raising capital varies depending on the level of interest amongst investors for the fund, which is defined by current market conditions and also the track record of previous funds raised by the firm in question. Firms can spend as little as one or two months raising capital where they are able to reach the target that they set for their funds relatively easily, often through gaining commitments from existing investors in their previous funds, or where strong past performance leads to strong levels of investor interest. Other managers may find fundraising taking considerably longer, with managers of less popular fund types (such as European venture fund managers in the current climate) finding the fundraising process more tough. It is not unheard of for funds to spend as long as two years on the road seeking capital, although the majority of fund managers will complete fundraising within nine months to fifteen months.


Once a fund has reached its fundraising target, it will have a final close. After this point it is not normally possible for a new investor to invest in the fund, unless they were to purchase an interest in the fund on the secondary market.


Size of industry

A record $365bn of private equity was invested globally in 2006 up nearly three times on the previous year. Private equity fund raising also surpassed prior years in 2006 and totalled $335bn, up a quarter on 2005. Improved market confidence and trading conditions and strong performance along with stable long-term returns have contributed to this growth. Buyouts have accounted for a growing portion of private equity investments by value in recent years, and increased their share of investments from a fifth to more than four-fifths between 2000 and 2006. By contrast, the share of early stage or venture capital investment has declined during this period.


The regional breakdown of private equity activity shows that in 2006, North America accounted for around 60% of global private equity investments (down from 67% in 2000) and 47% of funds raised (down from 69%). Between 2000 and 2006, Europe increased its share of investments (from 21% to 24%) and funds raised (from 21% to 44%). This was largely a result of strong buyout market activity in Europe. In recent years, there has been a rise in the importance of Asia-Pacific and emerging markets as investment destinations, particularly China, Singapore, South Korea and India. Asia-Pacific’s share of investments increased from 6% to 14% during this period while its share of funds raised remained unchanged at around 8%. [11]


The biggest fund type in terms of commitments garnered was buyout, with 188 funds raising an aggregate $212 billion. So-called mega buyout funds contributed a significant proportion of this amount, with the ten largest funds of 2006 raising $101 billion alone—23% of the global total for 2006. Other strong performers included real estate funds, which grew 30% from already strong 2005 levels, raising an aggregate $63 billion globally. The only fund type to not perform so well was venture, which saw a drop of 10% from 2005 levels.


In terms of the regional split of fundraising, the majority of funds raised in 2006 were focusing on the American market, with 62% of capital raised in 2006 focusing on the US. European focused funds account for 26% of the global total, whilst funds focusing on Asia and the Rest of World account for the remaining 11%.


Venture capital is considered a subset of private equity focused on investments in new and maturing companies. Venture capital is a general term to describe financing for startup and early stage businesses as well as businesses in turn around situations. ...


Mezzanine capital is similar class of alternative investment focused on structured debt securities in private companies. Mezzanine capital (or mezzanine debt) is a broad financial term that refers to unsecured, high-yield, subordinated debt or preferred stock that represents a claim on a companys assets that is senior only to that of a companys shareholders. ...


Private equity firms

According to an updated 2008 ranking created by industry magazine Private Equity International[12] (published by PEI Media called the PEI 50), the largest private equity firm in the world today is The Carlyle Group, based on the amount of private equity direct-investment capital raised over a five-year window. As ranked in this article, the largest 10 private equity firms in the world are:

  1. The Carlyle Group
  2. Goldman Sachs Principal Investment Area
  3. TPG
  4. Kohlberg Kravis Roberts
  5. CVC Capital Partners
  6. Apollo Management
  7. Bain Capital
  8. Permira
  9. Apax Partners
  10. The Blackstone Group

The full list is located here. The Carlyle Group is a Washington, DC based global private equity investment firm with more than $18 billion of equity capital. ... The Goldman Sachs Group, Inc. ... TPG Capital, L.P. (formerly Texas Pacific Group, commonly referred as TPG) is a private equity investment firm founded by David Bonderman, James Coulter and William S. Price III in 1992. ... Kohlberg Kravis Roberts & Co (commonly referred to as KKR) is a New York City-based private equity firm that focuses primarily on late-stage leveraged buyouts. ... CVC Capital Partners is a European private equity firm. ... This article does not cite any references or sources. ... Bain Capital LLC is a Boston, Massachusetts-based private equity firm founded in 1984 by Mitt Romney, the late Governor of Massachusetts, and two other partners from the consulting firm Bain & Company: T. Coleman Andrews III and Eric Kriss. ... Permira is an international, private equity firm based in the United Kingdom. ... Apax Partners is a private equity and venture capital firm based in the United Kingdom which operates in Hong Kong, China, India, United Kingdom, United States, Europe, and Israel. ... The Blackstone Group is a private investment and advisory firm founded in 1985 by Peter G. Peterson and Stephen A. Schwarzman. ...


Because private equity firms are continuously in the process of raising, investing and distributing their private equity funds, capital raised can often be the easiest to measure. Other metrics can include the total value of companies purchased by a firm or an estimate of the size of a firm's active portfolio plus capital available for new investments. As with any list that focuses on size, the list does not provide any indication as to relative investment performance of these funds or managers. A private equity fund is a collaboration of funds that directs a private companys or individuals equity, either in the stock market or in real estate. ...


Private equity fund performance

In the past the performance of private equity funds has been relatively difficult to track, as private equity firms are under no obligation to publicly reveal the returns that they have achieved from their investments. In the majority of cases the only groups with knowledge of fund performance were investors in the funds, academic institutes (as CEPRES Center of Private Equity Research) and the firms themselves, making comparisons between various different firms, and the establishment of market benchmarks to be a difficult challenge.


The application of the Freedom of Information Act (FOIA) in the certain states in the United States, the United Kingdom and other countries, has made certain performance data more readily available. Specifically, FOIA has required certain public agencies to disclose private equity performance data directly on the their websites[13]. Nearly sixty countries around the world have implemented some form of freedom of information legislation, which sets rules on governmental secrecy. ... Nearly sixty countries around the world have implemented some form of freedom of information legislation, which sets rules on governmental secrecy. ...


The performance of the private equity industry over the past few years differs between funds of different types. Buyout and real estate funds have both performed strongly in the past few years (i.e., from 2003-2007) in comparison with other asset classes such as public equities. In contrast other fund investment types, venture capital most notably, have not shown similarly robust performance. Year 2003 (MMIII) was a common year starting on Wednesday of the Gregorian calendar. ... Year 2007 (MMVII) was a common year starting on Monday of the Gregorian calendar in the 21st century. ... Venture capital is a general term to describe financing for startup and early stage businesses as well as businesses in turn around situations. ...


Within each investment type, manager selection (i.e., identifying private equity firms capable of generating above average performance) is a key determinant of an individual investor's performance. Historically, performance of the top and bottom quartile managers has varied dramatically and institutional investors conduct extensive due diligence in order to assess prospective performance of a new private equity fund. An institutional investor is an investor who is an institution like a bank, insurance fund, retirement fund, or mutual fund manager. ... A private equity fund is a collaboration of funds that directs a private companys or individuals equity, either in the stock market or in real estate. ...


It is challenging to compare private equity performance to public equity performance, in particular because private equity fund investments are drawn and returned over time as investments are made and subsequently realized. One method, first published in 1994, is the Long and Nickels Index Comparison Method (ICM). Another method which is gaining ground in academia is the public market equivalent or profitability index. The profitability index determines the investment in public market investments required to earn a target profit from a portfolio of private equity fund investments.[14] A private equity fund is a collaboration of funds that directs a private companys or individuals equity, either in the stock market or in real estate. ... Year 1994 (MCMXCIV) The year 1994 was designated as the International Year of the Family and the International Year of the Sport and the Olympic Ideal by the United Nations. ... A stock market or (equity market) is a private or public market for the trading of company stock and derivatives of company stock at an agreed price; both of these are securities listed on a stock exchange as well as those only traded privately. ... A private equity fund is a collaboration of funds that directs a private companys or individuals equity, either in the stock market or in real estate. ...


Liquidity in the private equity market

The private equity secondary market (also often called private equity secondaries) refers to the buying and selling of pre-existing investor commitments to private equity and other alternative investment funds. Sellers of private equity investments sell not only the investments in the fund but also their remaining unfunded commitments to the funds. By its nature, the private equity asset class is illiquid, intended to be a long-term investment for buy-and-hold investors. For the vast majority of private equity investments, there is no listed public market; however, there is a robust and maturing secondary market available for sellers of private equity assets. In finance, the private equity secondary market (also often called private equity secondaries or secondaries) refers to the buying and selling of pre-existing investor commitments to private equity and other alternative investment funds. ...


Increasingly, secondaries are considered a distinct asset class with a cash flow profile that is not correlated with other private equity investments. As a result, investors are allocating capital to secondary investments to diversify their private equity programs. Driven by strong demand for private equity exposure, a significant amount of capital has been committed to secondary investments from investors looking to increase and diversify their private equity exposure. In finance, the private equity secondary market (also often called private equity secondaries or secondaries) refers to the buying and selling of pre-existing investor commitments to private equity and other alternative investment funds. ... In finance, the private equity secondary market (also often called private equity secondaries or secondaries) refers to the buying and selling of pre-existing investor commitments to private equity and other alternative investment funds. ...


Further reading

  • Cendrowski, Harry (2008). Private Equity: Governance and Operations Assessment. Hoboken, NJ: John Wiley & Sons. ISBN 0-470-17846-1. 
  • Maxwell, Ray (2007). Private Equity Funds: A Practical Guide for Investors. New York: John Wiley & Sons. ISBN 0-470-02818-6. 
  • Leleux, Benoit; Hans van Swaay (2006). Growth at All Costs: Private Equity as Capitalism on Steroids. Basingstoke: Palgrave Macmillan. ISBN 1-403-98634-7. 
  • Fraser-Sampson, Guy (2007). Private Equity as an Asset Class. Hoboken, NJ: John Wiley & Sons. ISBN 0-470-06645-8. 
  • Bassi, Iggy; Jeremy Grant (2006). Structuring European Private Equity. London: Euromoney Books. ISBN 1-843-74262-4. 
  • Thorsten, Gröne (2005). Private Equity in Germany — Evaluation of the Value Creation Potential for German Mid-Cap Companies. Stuttgart: Ibidem-Verl. ISBN 3-898-21620-9. 
  • Lerner, Joshua (2000). Venture Capital and Private Equity: A Casebook. New York: John Wiley & Sons. ISBN 0-471-32286-5. 
  • Lerner, Joshua (2000). Venture Capital and Private Equity: A Casebook. New York: John Wiley & Sons. ISBN 0-471-32286-5. 
  • (2005) Exposed to the J Curve: Understanding and Managing Private Equity Fund Investments. London: Euromoney Institutional Investor. ISBN 1-84374-149-0. 

John Wiley & Sons, Inc. ... John Wiley & Sons, Inc. ... Macmillan Publishers Ltd, also known as The Macmillan Group, is a privately-held international publishing company owned by Georg von Holtzbrinck Publishing Group. ... John Wiley & Sons, Inc. ... John Wiley & Sons, Inc. ... John Wiley & Sons, Inc. ...

See also

A leveraged buyout (or LBO, or highly-leveraged transaction (HLT), or bootstrap transaction) occurs when a financial sponsor gains control of a majority of a target companys equity through the use of borrowed money or debt. ... A management buyout (MBO) is a form of acquisition where a companys existing managers acquire a large part or all of the company. ... A financial sponsor is another name commonly used to refer to private equity investment firms, particularly those private equity firms that engage in leveraged buyout or LBO transactions. ... Venture capital is a general term to describe financing for startup and early stage businesses as well as businesses in turn around situations. ... Mezzanine capital (or mezzanine debt) is a broad financial term that refers to unsecured, high-yield, subordinated debt or preferred stock that represents a claim on a companys assets that is senior only to that of a companys shareholders. ... In finance, the private equity secondary market (also often called private equity secondaries or secondaries) refers to the buying and selling of pre-existing investor commitments to private equity and other alternative investment funds. ... A private investment in public equity, often called a PIPE deal, involves the selling of publicly traded shares to private investors, rather than to the public through an offering registered with the Securities and Exchange Commission. ... Private equity funds and hedge funds are private investment vehicles used to pool investment capital, generally for a small group of large institutional or wealthy individual investors. ... Investment banks help companies and governments (or their agencies) raise money by issuing and selling securities in the capital markets (both equity and debt). ... Acquisition redirects here. ...

References

  1. ^ This article uses the American definitions for most terms. The British Venture Capital Association provides An Introduction to Private Equity, including differences in terminology.
  2. ^ In the United Kingdom, Venture Capital is often used instead of private equity to describe the overal asset class and investment strategy described here as private equity.
  3. ^ A Secondary Market for Private Equity is Born, The Industry Standard, 28 August 2001
  4. ^ Investors Scramble for Infrastructure (Fiancial News, 2008)
  5. ^ Is It Time to Add a Parking Lot to Your Portfolio? (New York Times, 2006
  6. ^ [Buyout firms put energy infrastructure in pipeline] (MSN Money, 2008)
  7. ^ Merchant Banking: Past and Present
  8. ^ The New Kings of Capitalism, Survey on the Private Equity industry
  9. ^ Private Equity: Past, Present, Future, by Sethi, Arjun May 2007, accessed October 20, 2007.
  10. ^ Barbarians at the Gate: The Fall of RJR Nabisco.
  11. ^ Private Equity 2007.pdf
  12. ^ Top 50 PE funds from Private equity international
  13. ^ In the United States, FOIA is individually legislated at the state level, and so disclosed private equity performance data will vary widely. Notable examples of agencies that are mandated to disclose private equity information include CalPERS, CalSTRS and Pennsylvania State Employees Retirement System and the Ohio Bureau of Workers' Compensation
  14. ^ See Phalippou and Gottschalg's 2007 paper, Performance of Private Equity Fundsfor an overview of the profitability index
Venture capital is a general term to describe financing for startup and early stage businesses as well as businesses in turn around situations. ... Arjun Charan Sethi (born 18 September 1941) is a member of the 14th Lok Sabha of India. ... Nearly sixty countries around the world have implemented some form of freedom of information legislation, which sets rules on governmental secrecy. ... The California Public Employees Retirement System (CalPERS) provides pension fund, healthcare and other retirement services for 1. ... Private equity is a broad term that refers to any type of equity investment in an asset in which the equity is not freely tradable on a public stock market. ... Venture capital is a general term to describe financing for startup and early stage businesses as well as businesses in turn around situations. ... A leveraged buyout (or LBO, or highly-leveraged transaction (HLT), or bootstrap transaction) occurs when a financial sponsor gains control of a majority of a target companys equity through the use of borrowed money or debt. ... Venture capital is a general term to describe financing for startup and early stage businesses as well as businesses in turn around situations. ... Growth capital is a very flexible type of financing. ... Mezzanine capital (or mezzanine debt) is a broad financial term that refers to unsecured, high-yield, subordinated debt or preferred stock that represents a claim on a companys assets that is senior only to that of a companys shareholders. ... In finance, the private equity secondary market (also often called private equity secondaries or secondaries) refers to the buying and selling of pre-existing investor commitments to private equity and other alternative investment funds. ... Image File history File links Download high-resolution version (726x744, 934 KB) Source United States Mint Date 2006-04-06 Author United States Mint Permission File links The following pages on the English Wikipedia link to this file (pages on other projects are not listed): Wikipedia:Featured picture candidates Lincoln... A leveraged buyout (or LBO, or highly-leveraged transaction (HLT), or bootstrap transaction) occurs when a financial sponsor gains control of a majority of a target companys equity through the use of borrowed money or debt. ... A financial sponsor is another name commonly used to refer to private equity investment firms, particularly those private equity firms that engage in leveraged buyout or LBO transactions. ... A management buyout (MBO) is a form of acquisition where a companys existing managers acquire a large part or all of the company. ... A divisional buyout is a leveraged buyout of a corporate division or unit. ... A private investment in public equity, often called a PIPE deal, involves the selling of publicly traded shares to private investors, rather than to the public through an offering registered with the Securities and Exchange Commission. ... Venture capital is a general term to describe financing for startup and early stage businesses as well as businesses in turn around situations. ... Seed money is money invested in a company to begin new projects, which it initially was not capable of creating. ... A startup company is a company with a limited operating history. ... An angel investor or business angel is an individual who provides capital for a business start-up, usually in exchange for ownership equity. ... A pre-money valuation is a term used in private equity or venture capital that refers to the valuation of a company or asset prior to an investment or financing. ... A post-money valuation is a term used in private equity or venture capital which refers to the valuation of a company or asset immediately after an investment or financing. ... A private equity fund is a collaboration of funds that directs a private companys or individuals equity, either in the stock market or in real estate. ... A limited partnership is a form of partnership similar to a general partnership, except that in addition to one or more general partners (GPs), there are one or more limited partners (LPs). ... This article is about a U.S.-specific corporate form; for a general discussion of entities with limited liability, see corporation. ... An institutional investor is an investor who is an institution like a bank, insurance fund, retirement fund, or mutual fund manager. ... A pension (also known as superannuation) is a retirement plan intended to provide a person with a secure income for life. ... Insurance is a system to alleviate financial losses by transferring risk of loss from one entity to another. ... A financial endowment is a transfer of money or property donated to an institution, with the stipulation that it be invested, and the principal remain intact. ... This article is in need of attention. ... IPO redirects here. ... Acquisition redirects here. ... In finance, leverage (or gearing) is using given resources in such a way that the potential positive or negative outcome is magnified. ... In finance, a high yield bond (non-investment grade bond, speculative grade bond or junk bond) is a bond that is rated below investment grade at the time of purchase. ... Gearing ratios redirects here. ... Topics in finance include: // Finance an overview Arbitrage Capital (economics) Capital asset pricing model Cash flow Cash flow matching Debt Default Consumer debt Debt consolidation Debt settlement Credit counseling Bankruptcy Debt diet Debt-snowball method Discounted cash flow Financial capital Funding Financial modeling Entrepreneur Entrepreneurship Fixed income analysis Gap financing... This list provides an alphabetical index of articles on finance related topics. ... Domestic credit to private sector in 2005 Corporate finance is an area of finance dealing with the financial decisions corporations make and the tools and analysis used to make these decisions. ... To meet Wikipedias quality standards, this article or section may require cleanup. ... Gearing ratios redirects here. ... A secured loan is a loan in which the borrower pledges some asset (e. ... A Second Lien Loan is a simple loan with a subordinated security (finance) structure or no security at all (unsecured debt), meaning that the borrower grants another provider of a finance instrument (eg. ... A loan or security that, in the case of default, would only be paid out after other, more senior loans were paid in full. ... Mezzanine capital (or mezzanine debt) is a broad financial term that refers to unsecured, high-yield, subordinated debt or preferred stock that represents a claim on a companys assets that is senior only to that of a companys shareholders. ... A convertible bond, or convertible debenture, is a type of bond that can be converted into shares of stock in the issuing company, usually at some pre-announced ratio. ... Preferred stock, also called preferred shares or preference shares, is typically a higher ranking stock than voting shares, and its terms are negotiated between the corporation and the investor. ... For other uses, see Stock (disambiguation). ... For other uses, see Stock (disambiguation). ... IPO redirects here. ... Acquisition redirects here. ... Acquisition redirects here. ... A takeover in business refers to one company (the acquirer, or bidder) purchasing another (the target). ... In finance, leverage (or gearing) is using given resources in such a way that the potential positive or negative outcome is magnified. ... A leveraged buyout (or LBO, or highly-leveraged transaction (HLT), or bootstrap transaction) occurs when a financial sponsor gains control of a majority of a target companys equity through the use of borrowed money or debt. ... A financial sponsor is another name commonly used to refer to private equity investment firms, particularly those private equity firms that engage in leveraged buyout or LBO transactions. ... For alternative meanings, see bond (a disambiguation page). ... In finance, valuation is the process of estimating the market value of a financial asset or liability. ... Computation of corporate finance problems, standard portfolio problems, option pricing and applications, and duration and immunization. ... In finance, the discounted cash flow (or DCF) approach describes a method to value a project, company, or financial asset using the concepts of the time value of money. ... It has been suggested that this article or section be merged with Discounted cash flow. ... The cost of capital for a firm is a weighted sum of the cost of equity and the cost of debt (see the financing decision). ... A method for determining the current value of a company by example ratio’s of relevant peer groups. ... The following is a list of investment banks // Large financial-services conglomerates combine commercial banking and investment banking, and sometimes insurance. ... Topics in finance include: // Finance an overview Arbitrage Capital (economics) Capital asset pricing model Cash flow Cash flow matching Debt Default Consumer debt Debt consolidation Debt settlement Credit counseling Bankruptcy Debt diet Debt-snowball method Discounted cash flow Financial capital Funding Financial modeling Entrepreneur Entrepreneurship Fixed income analysis Gap financing... This list provides an alphabetical index of articles on finance related topics. ...

  Results from FactBites:
 
The Blackstone Group - Corporate Private Equity (156 words)
Our corporate private equity operation, established in 1987, is a global business with 106 investment professionals and offices in New York, London, Mumbai and Hong Kong.
We are a world leader in private equity investing, having managed five general private equity funds as well as one specialized fund focusing on communications-related investments.
From 1987 through December 31, 2007, our corporate private equity funds have invested in approximately 123 companies in a variety of industries and geographies in pursuit of their investment objectives.
Private Equity Article (407 words)
Private equity investors (also called financial sponsors or buy-out firms) invest in non-public companies and typically hold their investments with the intent of realizing a return within 3 to 7 years.
While private equity firms employ various strategies to create value in their investments (such as the consolidation of a fragmented industry), a common strategy is to acquire a "platform" company and grow the platform through further "add-on" acquisitions.
Private equity groups typically use leverage (debt) to increase the return on the firm's invested capital.
  More results at FactBites »

 
 

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