Questionnaire for Private Equity Managers

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Questionnaire for Private Equity Managers

  1. 1. Leading Edge Investment Advisors, LLC Private Equity Partnership Questionnaire Date Completed      A. GENERAL INFORMATION FUND NAME                     Street Address                          City, State, Zip Code                     Web site URL                           CONTACT NAME                                Telephone                                          Facsimile                                          Relationship to Proposed Fund                           • Describe type of Proposed Fund (e.g., venture capital, corporate restructuring, special situation, etc.) and the type of investments planned for the Fund. • Describe the purpose of the Proposed Fund. • Dollar Size of Proposed Fund, including: total amount expected to be raised; total committed capital to date; total amount taken down to date; and total amount invested to date. • Name and address of General Partner(s). • List all prior and/or affiliated Funds currently managed by individuals or entities named above, including amount of assets under management and number of portfolio investments held by each Fund. • Legal structure of Proposed Fund; date and jurisdiction of formation. • Name, address, telephone and fax numbers of any placement agent(s) for the Proposed Fund. • Describe terms of placement agreement including, among other things, compensation for placement agent, responsibility for any such payments and when such compensation will be paid. LEIA PRIVATE EQUITY PARTNERSHIP QUESTIONNAIRE Page 1 of 7
  2. 2. B. INVESTMENT STRUCTURE AND TERMS • Describe the amount, nature and timing (e.g., at closing, and as scheduled thereafter) of the General Partner's original capital contribution, as well as those of the investors/limited partners. • State the General Partner's management fee (and any other fees payable to the General Partner) and describe how it is calculated (e.g., percentage on committed capital, invested capital, etc.). • State the General Partner's carried interest (participation in profits) and describe how it is calculated. • Specify the term of the Proposed Fund (and any ability to extend that time). • State the actual or anticipated first closing date; state the anticipated number of subsequent closings, and dates. Describe the terms of the investment agreement or other legal documentation which control the timing of the initial and subsequent closings, and investment by additional investors. • Specify any minimum and/or maximum investment amounts. • State the final date to invest in the Proposed Fund as specified in your legal documentation. • State whether profits will be reinvested or distributed to the investors. • Briefly describe the profit and loss allocation between the General Partner and the investors/limited partners in the Proposed Fund. • Identify which expenses of the Proposed Fund the General Partner will be responsible for and which will be paid by the Fund (e.g., organizational, legal and audit fees, administrative, overhead, etc.) and the estimated amounts of these expenses. Provide a detailed annual budget for the General Partner's operating expenses. • Describe the proposed allocation of investment interest in portfolio companies between the General Partners and limited partners. • Will the General Partners also invest as limited partners in the Proposed Fund? If so, describe. • Describe your provisions concerning admission of additional investors and transferability of partnership interests. LEIA PRIVATE EQUITY PARTNERSHIP QUESTIONNAIRE Page 2 of 7
  3. 3. • Describe your provisions for replacement of the General Partner. • Describe your policies concerning General Partners' and/or their employees' personal investments in portfolio companies. • Describe any potential conflicts of interest and your controls to protect the interests of the limited partners. C. ORGANIZATION • Describe the management organization for the General Partner. Include an organization chart and indicate the number of employees at each location. • Does the General Partner (or do the general partners) qualify as a Minority Business Enterprise or a Women Business Enterprise? Please provide documentation of your status. • Provide the names of the General Partners (or key individuals) of the Proposed Fund. Also attach complete resumes for each, including education and full prior employment history, with dates for each. • Provide three professional references for each principal and key employee of the General Partner. • Identify which of these General Partners (key individuals) have worked together in Prior Funds, and specify these Prior Funds, how long and in what capacities these General Partners (key individuals) worked together in each. (i) Briefly describe any Prior Funds which the General Partners (key individuals) have managed and which involved management of like assets to those of the Proposed Fund and indicate which are still active. (ii) For each Prior Fund, give the year formed, the original and final capitalization, the total amount invested, the total cash and equity currently held as well as distributed to investors, and the internal rates of return to the investors/limited partners only (excluding carried interests and management fees to the General Partner), including the underlying generally accepted valuation methodology used to determine the fair market value of portfolio companies/investments that are yet to be sold or do not have their securities publicly traded in an active market. • Briefly describe how the General Partner makes investment and management decisions. LEIA PRIVATE EQUITY PARTNERSHIP QUESTIONNAIRE Page 3 of 7
  4. 4. • Briefly describe your policies to share/allocate investment opportunities between concurrently active Funds under the same or affiliated management. • Briefly identify historical exit methods that have been used successfully by the General Partner in Prior Funds and what is anticipated for the Proposed Fund. • Identify which General Partners (key individuals) have together made at least two investments of the type intended to be made by the Proposed Fund that have gone from initial investment through to a successful exit; also name these investments and describe the Prior Funds and the circumstances involved. • Identify the total amount of venture capital, corporate restructuring, or special situation assets of like type to the Proposed Fund currently under management by the General Partner. • Identify the amounts invested by the General Partner in Prior Funds both as a General Partner and as a Limited Partner. • State the percentage of investments by number and by total dollar amount (identified by each Prior Fund) that have been written-off, sold at a loss or otherwise disposed of at less than cost. • Identify other institutional investors in the Proposed Fund and in each Prior Fund, together with their respective capital commitments. • Identify which investors from the most recent Prior Fund are not investing in the Proposed Fund. • Provide at least five partnership investor references from Prior Funds or similar entities managed by the General Partners. • Describe the type and application of any internal databases maintained by the General Partners. • Describe all advisory boards for the Proposed Fund or Prior Funds, including names of members and their professional affiliations. • Provide resumes for all consultants used for product, market or other evaluations related to the Proposed Fund or Prior Funds. LEIA PRIVATE EQUITY PARTNERSHIP QUESTIONNAIRE Page 4 of 7
  5. 5. D. INVESTMENT STRATEGY OF PROPOSED FUND • Describe your investment strategy for the Proposed Fund. Specify any geographical or industry investment preferences, and your Fund's policy regarding investments in non-traditional markets and/or minority and women-owned business enterprises. What factors differentiate your Proposed Fund's investment strategy? • Briefly outline the policies you will use (e.g., diversification, geographical and industry preferences, etc.) to implement your investment strategy. • Describe the preferred stage of development for portfolio company investments. How long will it take before your Fund is fully invested? • Describe how your investment strategy for Prior Funds differs (if it does) from the Proposed Fund strategy. • State the number, dollar amount per investment and what percent of your portfolio investments (identified by each Prior Fund) you have: (i) Originated (ii) Led (iii) Participated in, but not as a lead investor • State the number, dollar amount per investment and what percent of your investments (identified by each Prior Fund) have been in other limited partnerships and similar funds; also indicate what percentage is expected for the Proposed Fund. • State the current target dollar range of a portfolio investment for the Proposed Fund. • State the current target of equity or other ownership in a portfolio investment for the Proposed Fund. • State the maximum percentage of your portfolio to be invested in a single portfolio operating company • What are the most significant risk factors specific to your Proposed Fund's investment strategy and how will your strategy mitigate those risks? LEIA PRIVATE EQUITY PARTNERSHIP QUESTIONNAIRE Page 5 of 7
  6. 6. E. INVESTMENT EVALUATION • Describe the processes the General Partners will use for deal flow generation. Include your marketing plans. • Describe your process for preliminary review of investment opportunities. • Describe the due diligence processes you will use to evaluate investment opportunities. Include copies of any materials such as checklists, questionnaires, reports, etc. • How and by whom will final investment decisions be made? What processes will be used to facilitate General Partner (and advisory committee review, where appropriate) of proposed investments. • How will follow-on investments be handled? • Describe your process for terminating a portfolio investment. F. INVESTMENT PERFORMANCE • What are the expected gross and net investment rates of return for investors in the Proposed Fund? • Describe the methodology the Proposed Fund will use to determine investment return to limited partners. G. REPORTING • Describe the methodology you will use to value stock distributions. • Describe the format you will use and how often will you report to limited partners. • What accounting firm will be used for audits of the Proposed Fund? LEIA PRIVATE EQUITY PARTNERSHIP QUESTIONNAIRE Page 6 of 7
  7. 7. H. PORTFOLIO INFORMATION (PRIOR FUNDS) • Provide a schedule of all portfolio company investments made in each Prior Fund since its inception. Specify the date of initial and follow-on investments, the percentage of the company and of total fund assets represented by each investment at the time it was made, stage of development, industry sector, geographic location, current valuation at cost and market. • Describe the number of unsuccessful investments made. • Describe any commitments to portfolio companies not yet funded. Please return completed forms electronically or direct inquiries to: CLAYTON C. JUE Chief Executive Officer Leading Edge Investment Advisors, LLC 50 California Street Suite 2320 San Francisco, CA 94111 cjue@leia.net 415.217.7030 (Main) LEIA PRIVATE EQUITY PARTNERSHIP QUESTIONNAIRE Page 7 of 7

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