What Is Private Equity?
Private equity refers to firms that put big chunks of cash from sources such as pension funds or endowments into buying not publicly traded and (often) faltering businesses or assets and selling them for a profit. Private equity invests in a wide variety of industries. It is an asset class consisting of equity securities and debt in operating companies that are on a stock exchange. A private equity investment will generally be made by a private equity firm, a venture capital firm or an angel investor.
Just over six years after the Dodd-Frank Act became effective, private equity firms impacted by the law could get some relief if a bill they’ve championed makes it through an upcoming vote in the House of Representatives. (September, 2016).
After the 2008 financial crisis, private equity took a hit from federal regulators. Beforehand, they faced little oversight. Afterward, they suddenly found themselves with a bunch of new regulatory exams and reporting obligations. While they can play some risky games PEs aren’t as regulated as your normal bank.
PE firms make money off of deals by taking 2 percent of the money it manages and a 20 percent (commission) of the profits above a certain baseline.
What Is Dodd-Frank?
Dodd-Frank was a Wall Street reform bill that was thought up after the 2008 financial crisis to try and avoid a repeat of that disaster. It was the first major change to federal financial regulations in the United States since reforms that came just after the Great Depression.
While it had plenty of critics, it has been championed by many who point out that it succeeded in at least some ways. The SEC reportedly has been taking action against private equity firms lately, including at least one crack down on an adviser who decided not to register as a broker (brokers with more than 15 clients need to register). That case was settled.
Opponents of the House bill point to those successes as reason to keep the rules how they are and not to loosen them.
What Does This New Bill Do?
OK, so it isn’t a repeal of Dodd-Frank, but it does loosen requirements for private equity firms when it comes to what information they have to provide to the SEC. That includes, most importantly, loosened rules for reporting what types of commodities the firms are buying and who is running the show as an adviser.
Introduction to Venture Capital and Private Equityguest89b446
I was invited to speak at the HR College of Commerce in Mumbai today as part of their "Corporate Dialogue" lecture series. This deck introduces freshman and sophomore students in commerce, economics and finance to venture capital, private equity and entrepreneurship. It also presents a primer on career options in finance for college graduates in India.
Need to know more about private equity and hedge funds? Then you have come to the right place with this quick overview presentation. This is based on my book: "Figuring Out Wall Street". A part of a continuing series of on the financial services industry. We provide training, custom developed to your needs. Contact us to discuss your needs and get a quote.
What Is Private Equity?
Private equity refers to firms that put big chunks of cash from sources such as pension funds or endowments into buying not publicly traded and (often) faltering businesses or assets and selling them for a profit. Private equity invests in a wide variety of industries. It is an asset class consisting of equity securities and debt in operating companies that are on a stock exchange. A private equity investment will generally be made by a private equity firm, a venture capital firm or an angel investor.
Just over six years after the Dodd-Frank Act became effective, private equity firms impacted by the law could get some relief if a bill they’ve championed makes it through an upcoming vote in the House of Representatives. (September, 2016).
After the 2008 financial crisis, private equity took a hit from federal regulators. Beforehand, they faced little oversight. Afterward, they suddenly found themselves with a bunch of new regulatory exams and reporting obligations. While they can play some risky games PEs aren’t as regulated as your normal bank.
PE firms make money off of deals by taking 2 percent of the money it manages and a 20 percent (commission) of the profits above a certain baseline.
What Is Dodd-Frank?
Dodd-Frank was a Wall Street reform bill that was thought up after the 2008 financial crisis to try and avoid a repeat of that disaster. It was the first major change to federal financial regulations in the United States since reforms that came just after the Great Depression.
While it had plenty of critics, it has been championed by many who point out that it succeeded in at least some ways. The SEC reportedly has been taking action against private equity firms lately, including at least one crack down on an adviser who decided not to register as a broker (brokers with more than 15 clients need to register). That case was settled.
Opponents of the House bill point to those successes as reason to keep the rules how they are and not to loosen them.
What Does This New Bill Do?
OK, so it isn’t a repeal of Dodd-Frank, but it does loosen requirements for private equity firms when it comes to what information they have to provide to the SEC. That includes, most importantly, loosened rules for reporting what types of commodities the firms are buying and who is running the show as an adviser.
Introduction to Venture Capital and Private Equityguest89b446
I was invited to speak at the HR College of Commerce in Mumbai today as part of their "Corporate Dialogue" lecture series. This deck introduces freshman and sophomore students in commerce, economics and finance to venture capital, private equity and entrepreneurship. It also presents a primer on career options in finance for college graduates in India.
Need to know more about private equity and hedge funds? Then you have come to the right place with this quick overview presentation. This is based on my book: "Figuring Out Wall Street". A part of a continuing series of on the financial services industry. We provide training, custom developed to your needs. Contact us to discuss your needs and get a quote.
What is Private Equity?
Present the basic of Private Equity, its strategies, the way it works, the difference between passive versus active investors, exit strategies, its big players and highlight its difference versus other options. Finally, it presents the private equity jobs.
If your company needs to submit a Investment Advisory PowerPoint Presentation Slides look no further.Our researchers have analyzed thousands of proposals on this topic for effectiveness and conversion. Just download our template, add your company data and submit to your client for a positive response. http://bit.ly/2UCGDB8
Real Estate Investing 101: Private EquityPeerRealty
This is the presentation deck from Real Estate Investing 101: Private Equity, PeerRealty's second in a series of on-demand educational videos. In this series, PeerRealty Head of Investments Jeff Rothbart takes viewers through the fundamentals of real estate investing, and discusses some of the key metrics that real estate investors should consider. This first course, Private Equity, discusses the fundamentals of real estate private equity transactions, and covers concepts like private placement memorandums, the "promote," and preferred returns.
You can view this webinar at http://resources.peerrealty.com/real-estate-investing-101-private-equity
This helpful presentation takes an in depth look into the many issues surrounding this important topic in the hedge fund industry, clearing up misconceptions and offering a thorough explanation of the reasons behind offshore investing.
Included in this presentation among other topics, users will find information regarding:
How hedge funds are structured
The composition of hedge fund investors
Reasons why investors choose offshore hedge funds
The various domiciles in which hedge funds operate
How hedge funds accommodate the needs of various investors
Learn more about the global hedge fund industry at: www.hedgefundfundamentals.com.
Convertible notes are one of the most common ways investors invest in early-stage startups. And yet, even with their popularity, they are still quite confusing to many founders.
If you've looking for a greater understanding of convertible notes, check out this presentation from Kevin Smith from SEEDCHANGE (www.seedchange.com) and Gadiel Morantes from Early Growth Financial Services (www.egfs.co).
This presentation explores how convertible notes really work, including:
- Why convertible notes vs. shares of common or preferred stock
- Convertible note terms - and the terms that REALLY matter
- Conversion mechanics
- Valuation cap
- Safe alternatives to convertible notes
- and more....!
This presentation offers users a simple guide to learning the basic structure of hedge funds. Guiding users through hedge fund structures, covering topics such as:
• Hedge funds’ typical partnership structure
• Organizational structure at many hedge funds
• Due to their structure, only certain types of investors can invest with hedge funds
• The role of portfolio managers
• The typical role of general counsels, auditors, and administrators at hedge funds
• How prime brokers interact with hedge funds
• Executing brokers and their role in the hedge fund industry
• Fee structure at hedge funds
Learn more about the global hedge fund industry at: www.hedgefundfundamentals.com.
The Art & Science of Value Creation: 3 Traits of Great Value-creatorsJeremiah Gardner
See the talk live here: http://jeremiahgardner.com/blog/the-art-and-science-of-value-creation
In this talk I cover the "divide" between Design Thinking and Lean Startup by looking at 3 traits of great value-creators.
If you want spark innovation and value creation within your organization, check out 5 of the most effective ways we’ve seen here: http://www.movestheneedle.com/resources/5-ways-to-spark-innovation/
Executing value creation plans to maximize returnsEY
This slide deck was designed to accompany a video webcast that included an interactive discussion by a moderator and three panelists. To view that webcast, please go to: http://bit.ly/Xj4EIA
Executing value creation plans to maximize returns
Hosted by Ernst & Young LLP Transaction Advisory Services
Publication date: Tuesday, 2 April 2013
Leading private equity firms are maximizing investment returns by developing value creation insights before making a purchase, and executing a value creation plan from the beginning of the holding period through to exit.
Companies that faithfully execute their value creation plans throughout the investment lifecycle can enhance returns and outperform their peer group when they sell.
A panel of Ernst & Young LLP professionals and special guests discussed:
Value creation drivers
Possible steps for maximizing returns at exit
You are welcome to join the on-demand version of this interactive discussion by going to: http://bit.ly/Xj4EIA
This webcast is part an ongoing series. Register for any webcast and you will be asked if you want to receive invitations to future webcasts.
What is Private Equity?
Present the basic of Private Equity, its strategies, the way it works, the difference between passive versus active investors, exit strategies, its big players and highlight its difference versus other options. Finally, it presents the private equity jobs.
If your company needs to submit a Investment Advisory PowerPoint Presentation Slides look no further.Our researchers have analyzed thousands of proposals on this topic for effectiveness and conversion. Just download our template, add your company data and submit to your client for a positive response. http://bit.ly/2UCGDB8
Real Estate Investing 101: Private EquityPeerRealty
This is the presentation deck from Real Estate Investing 101: Private Equity, PeerRealty's second in a series of on-demand educational videos. In this series, PeerRealty Head of Investments Jeff Rothbart takes viewers through the fundamentals of real estate investing, and discusses some of the key metrics that real estate investors should consider. This first course, Private Equity, discusses the fundamentals of real estate private equity transactions, and covers concepts like private placement memorandums, the "promote," and preferred returns.
You can view this webinar at http://resources.peerrealty.com/real-estate-investing-101-private-equity
This helpful presentation takes an in depth look into the many issues surrounding this important topic in the hedge fund industry, clearing up misconceptions and offering a thorough explanation of the reasons behind offshore investing.
Included in this presentation among other topics, users will find information regarding:
How hedge funds are structured
The composition of hedge fund investors
Reasons why investors choose offshore hedge funds
The various domiciles in which hedge funds operate
How hedge funds accommodate the needs of various investors
Learn more about the global hedge fund industry at: www.hedgefundfundamentals.com.
Convertible notes are one of the most common ways investors invest in early-stage startups. And yet, even with their popularity, they are still quite confusing to many founders.
If you've looking for a greater understanding of convertible notes, check out this presentation from Kevin Smith from SEEDCHANGE (www.seedchange.com) and Gadiel Morantes from Early Growth Financial Services (www.egfs.co).
This presentation explores how convertible notes really work, including:
- Why convertible notes vs. shares of common or preferred stock
- Convertible note terms - and the terms that REALLY matter
- Conversion mechanics
- Valuation cap
- Safe alternatives to convertible notes
- and more....!
This presentation offers users a simple guide to learning the basic structure of hedge funds. Guiding users through hedge fund structures, covering topics such as:
• Hedge funds’ typical partnership structure
• Organizational structure at many hedge funds
• Due to their structure, only certain types of investors can invest with hedge funds
• The role of portfolio managers
• The typical role of general counsels, auditors, and administrators at hedge funds
• How prime brokers interact with hedge funds
• Executing brokers and their role in the hedge fund industry
• Fee structure at hedge funds
Learn more about the global hedge fund industry at: www.hedgefundfundamentals.com.
The Art & Science of Value Creation: 3 Traits of Great Value-creatorsJeremiah Gardner
See the talk live here: http://jeremiahgardner.com/blog/the-art-and-science-of-value-creation
In this talk I cover the "divide" between Design Thinking and Lean Startup by looking at 3 traits of great value-creators.
If you want spark innovation and value creation within your organization, check out 5 of the most effective ways we’ve seen here: http://www.movestheneedle.com/resources/5-ways-to-spark-innovation/
Executing value creation plans to maximize returnsEY
This slide deck was designed to accompany a video webcast that included an interactive discussion by a moderator and three panelists. To view that webcast, please go to: http://bit.ly/Xj4EIA
Executing value creation plans to maximize returns
Hosted by Ernst & Young LLP Transaction Advisory Services
Publication date: Tuesday, 2 April 2013
Leading private equity firms are maximizing investment returns by developing value creation insights before making a purchase, and executing a value creation plan from the beginning of the holding period through to exit.
Companies that faithfully execute their value creation plans throughout the investment lifecycle can enhance returns and outperform their peer group when they sell.
A panel of Ernst & Young LLP professionals and special guests discussed:
Value creation drivers
Possible steps for maximizing returns at exit
You are welcome to join the on-demand version of this interactive discussion by going to: http://bit.ly/Xj4EIA
This webcast is part an ongoing series. Register for any webcast and you will be asked if you want to receive invitations to future webcasts.
Private Equity Firms See Agriculture, Education, Renewable Energy and Services as Hottest Asian Investments for 2010 and beyond.
Private Equity (PE) leaders in Asia may differ in their growth expectations for 2010 and beyond, but they all agree that PE Investments will shift from traditionally attractive sectors such as Information Technology, Consumer and Retail, Financial Services and Real Estate. What are the fundamentals driving this trend and what strategies will PE firms pursue?
This presentation shows selected slides from a GIA white paper. To download the entire white paper that you are interested in, please visit http://bit.ly/GIAinsightWP
How to create value for your organization? Why TSR is the best metric for value creation? Why is it difficult to create sustainable value? How to build sustainable value creation strategy & create value for a longer period of time? Why CSR & brand value change not consider as a part of TSR? Why multiple compressions are so difficult to beat? Why investors & analyst discounts valuation multiple? How to transit majority investors without eroding TSR? How to create value in low growth economy? How to play your strategy with sustainable TSR matrix as per investors eye? Why investors communication is so important for value creation? Which strategy you should use for value creation? How to use value creation scenarios? Why cash strategy is so important in low growth economy?
If all these question bothers you before developing your company’s corporate strategy/value creation strategy then you must see your New Year’s
complimentary gift presentation
“A handy e-book on how to create sustainable shareholders value”
ACG European Capital Tour Pamela Hendrickson and Dominique GaillardACGEU
ACG European Capital Tour; views and perspectives on French and US private equity. Pamela Hendrickson COO the Riverside Company, Dominique Gaillard, Board member AXA Private Equity
Dr. Anil Makhija, Executive Director for the National Center for the Middle Market presented the results of the Q2 Middle Market Indicator at the Greater Cleveland Middle Market Forum on July 24, 2012.
1. PRIVATE EQUITY: THE BASICS
Long-term investing to build stronger, more
competitive companies.
2. WHAT IS PRIVATE EQUITY?
By definition, private equity is an asset class
in which financial buyers purchase stakes
in companies that are not publicly traded.
But in reality, private equity is much more…
5. PRIVATE EQUITY IS…
A job creator and
employer of millions of
Americans across the
country.
6. PRIVATE EQUITY IS…
A steady source of
income for its investors
such as public and private
pension funds, university
endowments and
charitable foundations.
7. Private equity firms seek out
underperforming or undervalued
companies.
By working with these companies
managers unlock significant value by:
• improving business strategy
• injecting managerial expertise
• advancing production technology
• expanding distribution
HOW PRIVATE EQUITY WORKS
8. The essence of private equity is the alignment of interests
between management and business owners. This structure
supports long-term planning without constant pressure
of delivering quarterly results to public shareholders
focused on short-term results.
There is one shared objective: increasing company value.
Together, management and owners make business
decisions to achieve this goal.
THE PRIVATE EQUITY ADVANTAGE
9. Private equity funds are typically structured as
partnerships:
Private Limited
Equity Fund Partner
Manager Investors
(GP) (LP)
Private Equity Fund
(Limited Partnership)
Portfolio Company 1 Portfolio Company 3
Portfolio Company 2
THE PRIVATE EQUITY MODEL
10. Private equity firms generally invest in
companies for several years or more. The goal
— in every case — is to work with
management to improve the company’s
performance and make it a stronger, more
competitive enterprise.
PRIVATE EQUITY IS A LONG-TERM INVESTMENT
11. The private equity industry…
• Includes more than 2,400 U.S. based private equity
firms, and 3,400 worldwide.
• Invests more than $1.6 trillion in 15,200 U.S. based
companies over the last ten years.
• Sponsors companies that employ more than 8 million
workers worldwide.
BASIC INDUSTRY FACTS
12. Pension funds are the largest investors in private equity.
Other, 13%
Public Pension
Sovereign Wealth Funds, 29%
Funds, 6%
Endowment Plans, 9%
Insurance
Companies, 9%
Private Sector Pension
Funds, 13%
Banks & Investment
Banks, 9%
Foundations, 12% (based on capital invested in 2010)
WHO INVESTS IN PRIVATE EQUITY?
13. Limited partner investors receive the lion’s share of
returns generated by private equity.
Limited Partner Investors Private Equity Fund Managers
Profit - $15.6 billion
Profit - $4.3 billion
Original Investment - $10 billion
Returns from $10 billion fund assuming a 3x multiple
WHO BENEFITS FROM PRIVATE EQUITY?
14. Private equity investing provides outsized returns to
help investors meet their retirement, educational and
charitable goals.
10-Year Annualized Return
50%
40%
39.6%
30%
20%
10%
11.3%
6.3%
0% 2.7%
U.S. Private Equity Index Top Quartile S&P 500 Index Russell 2000 Index
Private Equity Funds
(Vintage Year 2001)
PRIVATE EQUITY PROVIDES SUPERIOR RETURNS
15. Private equity-backed companies increase their net
earnings through:
revenue growth (40% of gains)
cost reductions (30%)
acquisitions (20%)
Private equity transactions have yielded as much as
$15 billion in additional output at manufacturing
firms.
CREATING VALUE
16. Private equity-backed companies that went public have
outperformed their competitors and the markets.
Average Return in 2010
30%
20% 23%
10% 12%
0%
Private Equity-Backed Companies Publicly Traded Competitors
Productivity at private equity-backed companies grows
2 percentage points faster than at their competitors.
IMPROVING COMPETITIVENESS
17. Private equity invests in a wide variety of industries.
Other, 2%
Energy, 5%
Industrials, 19%
Food & Agriculture, 10%
Telecoms & Media, 10%
Business Services, 18%
Information
Technology, 8%
Healthcare, 10%
Consumer, 18%
(based on capital invested in 2010)
DRIVING ECONOMIC GROWTH
18. Since the start of the Great Recession, private equity has
invested almost $8.6 billion in 59 bankrupt companies.
Deal Value (Mil.) Number of Deals
$6,000 30
Deal Value (Mil.) Number of Deals
$5,000 25
$4,000 20
$3,000 15
$2,000 10
$1,000 5
$0 0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 YTD
Private equity is a source of financing during periods of
tight credit.
AIDING ECONOMIC RECOVERY
19. Companies in the top ten states receiving private equity
investment employ more than 4.5 million people.
Capital Invested Number of Employees
$250,000 1,000,000
Capital Invested Number of Employees
$200,000 800,000
$150,000 600,000
$100,000 400,000
$50,000 200,000
$0 0
(based on capital invested 2000-2010)
INVESTING IN JOBS