Browsing: Private Equity

Los Angeles-based Cliffwater LLC has recently updated a report it prepared a year ago on how state pension systems have fared by way of their investments in private equity. The report as updated finds that PE created on average a 10.7% annualized return across 21 state pensions over its 16-yearRead More

The Emerging Markets Private Equity Association, in a new report, suggests that the “Africa Rising” narrative of a few years ago is behind us. Africa is seen still as having enormous potential. But the report also says, “the commodity downturn of the last several years has had a severe impactRead More

The Canadian Venture Capital and Private Equity Association (CVCA) has posted what it calls an “overview” of the VC and PE Markets in that country in 2017. It reports growth in both of those markets, although growth at distinct velocities. The report tells us that, on the VC side, CanadaRead More

Deloitte has recently posted the results of its survey of how private equity managers see central Europe. A very concise summary of the findings of the survey is this: the PE industry expects that it will be buying CE assets in the coming months, and that it will be borrowingRead More

Preqin has issued a report on the near term outlook for private equity based on a recent (November 2017) survey of more than 350 PE firms around the globe. Asked what is the biggest challenge facing them in the coming months, the most common response was: high company valuations. TheRead More

ARA Law, a firm based in Mumbai and Bangalore, India, has issued a paper on private equity and venture capital in that country. In a foreword, firm founder Rajesh N. Begur observes that there is a positive dynamic now at work in India’s economy, one that in his view “canRead More

A recent publication from Ceres, a nonprofit organization devoted to promoting sustainability as a goal in both investing and corporate governance, looks at the value that early-stage clean energy products offer venture capitalists. The publication is the work of a team of five “lead authors and key contributors,” including threeRead More

On December 29, 2017, the last business day of the expiring year, the Delaware Chancery Court, in a memorandum of opinion by Vice Chancellor Slights, upheld stockholders’ statutory books-and-records inspection rights against a defendant corporation that sought to invoke and considerably to widen the scope of the Delaware Supreme Court’sRead More

An October paper put out by Strategic Partners Fund Solutions, of Blackstone, argues that (despite risks and drawbacks) investing in the secondary private equity market  can still be a smart play, offering “accelerated returns with lower volatility, lower loss rates, and greater downside protection” than the primary market. The secondaryRead More

Bain & Co., a consultancy to the private equity industry, has issued its Global Private Equity Report 2017. One central theme of the report is that prices of desired assets aren’t merely high, they are “structurally high,” and thus likely to remain so. They are high because there is aRead More

By Alex Tarantino These are good times to be a private equity fund investor.  Returns have been strong with distributions on the rise, both in the U.S. and Europe. Limited partners, for their part, have voted with their wallets that the asset class will continue to outperform. Indeed, fundraising continuesRead More

Preqin has named its top 100 Venture Capital firms, ordered by the amount of capital each firm has raised in the last 10 years. The top 10, with their headquarters city, are as follows: Tiger Global Management, New York New Enterprise Associates, Menlo Park Sequoia Capital, Menlo Park DST Global,Read More

An increase in total buy-out investments proved a big factor in the growth through 2016 of the private equity and venture capital market in New Zealand. A new report looks at this growth and concludes that fund-raising activity there has reached a milestone, hitting again a levels not seen sinceRead More

New Strategies for Risk Management in Private Equity, a new book from Private Equity International, is an anthology of papers on the titular subject. It is edited by Dr. Ivan Herger to offer investors in PE new perspectives on the field. Herger, a managing director at Capital Dynamics, has aRead More

The number of public companies listed on U.S. exchanges peaked in 1996. Due to mergers on the one hand and de-listings on the other, factors far offsetting new initial public offerings, this number has fallen drastically since then, to less than half of peak. Part of the reason for thisRead More

Private equity investors have a distinctive cash management question: what do they do with the money that has yet to be drawn or called? Keeping cash in pillow cases is, here as always, less than the optimal solution. One of the defining features of a PE firm is that anRead More

A recent study by Franceso Cornelli and two associates indicates that there is a positive relationship, in the private equity industry, between managerial turnover and fund performance. Cornelli is Professor of Finance, London Business School, and a fellow at the Center for Economic Policy Research.  The other authors are: ElenaRead More

A new paper by G. Nathan Dong and two other scholars investigates private equity placements in China and their consequences for the issuing firms. The study works from a natural experiment that resulted from regulations created by the PRC ten years ago. In 2006, the China Securities Regulatory Commission issuedRead More

By John Czapla, Parag Patel and Shane Newell, Valuation Research Corporation As the demand for transparency rises for private equity and hedge funds, the spotlight is increasingly focusing on valuation practices. There are an important number of reasons why the valuation process has become important, and they are essential forRead More

Yale, in their 2015 annual report issued this month has broken out their private equity allocation into two distinct segments: Leveraged Buyouts and Venture Capital.  See: This is the first time in many years they’ve offered that level of detail.  And they’ve given the whole report a VC-and-entrepreneurial theme, supplementing theRead More

Guest columnist Charles Skorina looks at accusations of endowments "hoarding" money on one hand and paying "excessive" fees to private equity managers on the other. Is it time for an intervention?Read More

Guest columnist Andrew Smith, CAIA, provides an overview of real assets and their commensurate risks and rewards.Read More

Guest columnist Andre Boreas takes a look at the alternative investment universe year-to-date 2015 by the numbers.Read More

A recent SEC finding at the expense of KKR illustrates the risk inherent in non-allocation, or careless allocation, of broken-deal expenses, and illustrates that lawyers don't necessarily use the word "deceit" to mean what one might think it means. Read More

Managers who offer funds that provide shorter time frames to investment exits, greater liquidity through a hedge fund structure, and employ the event-driven skill set that identifies and manages an investment portfolio yielding private equity-like returns are finding increased interest from an investment community seeking returns married with reasonable liquidity. Read More

Brad Case, Ph.D., CFA, CAIA, looks at the relationships between public and private real estate.Read More

Over the weekend that began March, auditors in Austria found that the billions already invested in the wind-down of Heta, part of the nationalized Hypo Group, would not suffice for the orderly wind down of this "bad bank." A worse-and-worse bank, it appears. Read More

Activist investors usually aren't trying to take control of a company. And when they are, managers have strong existing tools to foil them. What activist investors can do is increase share value, over sustained periods.Read More

There are certain deals that banks don't want to touch with the longest lance in a joust. That doesn't mean the deals don't get done: it means they go by default to the non-bank financiers. We look at the divide. Read More

A legal donnybrook has begun for control of Caesar's assets. An important side issue involves bankruptcy court treatment of non-debtors seeking release from alleged liabilities of their own, and a split amongst the appeals court circuits over such treatment. Read More

Guest columnist Brad Case, Ph.D., CFA, CAIA, examines the effects of cash drag on open-end private equity funds.Read More

Guest columnist Brad Case, Ph.D., CFA, CAIA, explores the effects of leverage on private equity real estate investments.Read More

Guest columnist Andrew Smith, CAIA, traces the history of Business Development Companies.Read More

In 2012, [as the crude oil price was settling in to $110 and low vol,] the renewables’ infrastructure space for private funds reached an aggregate estimated deal value of $132 billion. In 2013, that fell to $95 billion. It now seems unlikely that 2014 will match last year. Read More

Yes, law firms that serve alpha hunters are consolidating. But don't take it personally, HF or PE managers. This isn't about you. It's about them. And it isn't necessarily a bad thing. Read More

Guest columnist Andrew Smith, CAIA, looks at the complications involved in accessing private equity funds.Read More

The 2013 performance of the private equity industry, given any of several metrics, was quite strong. Why? In part because the exit environment has been very good. Read More

Intralinks’ report suggests that “a handful of fundamental and positive shifts” are at work in the recent uptick in M&A activity. On a behavioral note: corporate confidence is returning, and presumably confident managements are more likely to seek out acquisition targets than are nervous managements. Read More

Guest columnist Donna Howe, CFA, looks at the different aspects of private equity and the associated risks.Read More

Investors need benchmarks, especially benchmarks of likely infrastructure return, because the long-term illiquid nature of that investment increases information asymmetry between investors and managers, whereas benchmarks keep this asymmetry bearable. So explains Frédéric Blanc-Brude of EDHEC. Read More

As always, government wants revenue, and by what is now a reflex action heads have turned to the issue of carried interest. Faille speculates that little, if anything, will happen at the federal level, but that we may soon see a shift in the location of the action. Read More

Yucaipa has filed a federal lawsuit that accuses OTK of deceiving the shareholders of Morgans Hotel by misrepresenting the recommendations of two shareholder advisory services. As a legal argument this is ... surprising. Read More

The holding in Kalisman v. Friedman says that there are limits to what the majority of the board can do to keep its dissident isolated and in the dark. That is the right way to grow mushrooms, not the right way to treat a fellow director. Read More

The pattern with respect to allocations by institutional investors to hedge funds since 2009 is somewhat different from that of allocations to private equity. As Preqin’s report explains, many institutions have long been familiar with hedge funds, their learning curve has flattened out so to speak, and they have established a target allocation for hedge funds considered as an asset class.Read More

Guest columnist John Bhakdi looks at the future of venture capital in this final segment of a three-part series.Read More

Guest columnist John Bhakdi looks at structured seed capitalRead More

Recent and ongoing transformations in the PE industry and its institutional contexts have created a demand for a more robust infrastructure: mid or back-office functions are the weight-bearing beams of PE firms.Read More

A new paper in the Journal of Investment Management claims that five sophisticated high-profile institutions could have made better use of the PE portion of their portfolios over the period 1999 to 2010 had they applied the insights of the founder of modern portfolio theory, Harry Markowitz. Read More

If PE managers want to raise money in the present environment, they have to be very clear with their potential investors about how their strategy will work, and they have to pay attention to what those investors are trying to tell them. Further, it might help if neither side in that equation pays too much attention to consultants.Read More

Acceptance of the higher levels of volatility as a fact of life means that careful ongoing attention to risk has become the means of operations. In the United States specifically, 31 percent of institutions say that they monitor their risk budget daily to keep the overall amount of risk in the portfolio under check: more than half (53 percent) say that they do such monitoring on a weekly or monthly basis.Read More