Browsing: Private Equity

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

There is good news to report about the renewal of PE activity in the Asia-Pacific region in 2011, and the new McKinsey paper reports it. One potential worrying sign, though, is that in some areas, notably Southeast Asia and India, businesses aren't exiting the PE market for the public world. Indeed, Southeast Asia recorded no initial public offerings at all in 2011.Read More

In a study of its own portfolio the Kauffman Foundation found that only twenty of 100 venture funds “beat a public-market equivalent by more than 3 percent annually”.Read More

The reason for the increased interest in alternatives, McKinsey says, isn’t that the alternatives’ managers are slashing the price of their services. It is, rather, a discontent with the return to be gained from traditional investment. “Even with downward pressure likely over the next few years, revenue yields for institutional alternative products should remain well above the 35 bps average earned on today’s traditional institutional products.” Read More

The survey also asked that the asset managers state where their total assets are invested, using four geographical categories: Europe; Central/North America; Asia Pacific; Other. Commodity funds were easily the most heavily invested in C/NA, to the extent of 94 percent of their portfolios. Private equity funds are 61 percent invested in C/NA, and PE FoFs also have the majority of their portfolios there, at 54 percent.Read More

A veteran of hedge funds and private equity, Jeff Joseph offers some comments to the U.S. Securities and Exchange Commission on the JOBS Act and what this legislation has the potential to mean to the global alternative investment community.Read More

A recent Kauffman Foundation Study draws daunting conclusions regarding their 20 year experience in the venture capital sector. AARM Founder, Gitanjali Swamy, believes Good Venture exists and shares a road map to help investors find attractive pockets of investment opportunities in venture. What do you think about the future of venture capital in the United States? Read More

AllAboutAlpha talks to Jalak Jobanputra, MD at RTP Ventures on the mobile payments market, which is set transact over US$1 trillion by 2016.Read More

A deeper look at alternatives with Dr. Bob Swarup, a world-renowned expert and commentator on alternatives and financial markets as well as being a visiting fellow at London School of Economics.Read More

Industry watchers are watching the tug of war between private equity GPs and LPs. Surprisingly, LPs don't want to dictate terms, if Canada offers any evidence. They want equality. And all the rest: a decent track record, a stable team and a successful strategy.Read More

It looks like the pension funds are worse off than if they had stuck to vanilla bonds and stocks, not least because of the management fees they pay to alternative investment managers.Read More

Consultants expect that managers' need to generate steady income in a low interest rate environment will drive a lot of portfolio turnover in 2012, inclusive of the movement of alternatives into core positions within portfolios, and it will drive one-time U.S. focused investors and managers to look abroad. Meanwhile, pensions are retreating toward passive mandates. Read More

The Grant Thornton paper maintains that the asset management industry achieved "performance and operational efficiencies" during 2011, and this sounds like the sort of marginal adaptation that play a large part in Charles Darwins' writings, to which GT's Winstoin Wilson alluded. But ... the report also treats the regulatory environment as a meteor, capable of wiping out even the best-adapted of pre-collision dinosaurs. So "the Darwinian process" is an odd label for what it describes. Read More

Lisa Suennen of Psilos Group discusses the new wave in healthcare venture capital: improved care quality while reducing costs.Read More

2011 was the year private equity managers learned to accept that what they got even if it wasn't always quite what they wanted. Investors talk about what they want and need in 2012.Read More

The second in a three-part series on private equity from SEI shows that alpha is a bit slippery these days.Read More

It is true by definition that the crowd is right in the midst of a trend, and wrong at the moment when that trend is about to reverse itself.  In the Asia Pacific region, broad confidence in opportunities for private equity surely constitutes by now, a trend, even a parade.Read More

Roughly half of the private equity limited partners questioned in a June 2011 survey said they plan to commit more capital to PE funds this year than they did last.Read More