Private_Equity-苏黎世大学

1EleonoraCalzavaraTheGlobalFinancialSystemandtheCreditCrisisZurich,1stApril2009UniversityofZurichPrivateEquityPrivateEquity2Agenda:1.WhatisPrivateEquity?2.HistoryofPrivateEquity3.Charts4.InvestmentsinPrivateEquity5.StructureofagenericPrivateEquityFund6.PrivateEquityInvestments6.1LeveragedBuyout6.2VentureCapital6.3GrowthCapital6.4DistressedandSpecialSituations6.5MezzanineCapital6.6Secondaries7.OtherStrategies8.LiquidityinthePrivateEquityMarket9.TypicalRisks10.PrivateEquityFirms3WhatisPrivateEquity?PrivateEquityisanassetclassconsistingofequitysecuritiesinoperatingcompaniesthatarenotpubliclytradedonastockexchange.InvestmentsinPrivateEquitycanbeinvestmentofcapitalintoanoperatingcompanyortheacquisitionofthecompany.CapitalsforPrivateEquityaregivenforalargepartfromInstitutionalInvestors.Thiskindofinvestmentsneedalongtime-horizon,usually10-15years.TherealotoftypeofPrivateEquityandthetermPrivateEquityhasdifferenttypeofconnotationsamongdifferentcounties.Usuallyreturnsinthefirstyearsareverylowbecausetherewillbealiquidityreturnlaterwhenthecompanythatistheobjectiveoftheinvestmentwillbesold.4HistoryofPrivateEquity(1)ThebeginningofPrivateEquityrisesagainin1946withtwoventurecapitalfirmsintheUSA:AmericanResearchandDevelopmentCorporation(ARDC)J.H.Whitney&CompanyARDCwasfoundedbyGeorgesDoriotwithcapitalraisedfrominstitutionalinvestorstoencourageprivatesectorinvestmentsinbusinessesrunbysoldierswhowerereturningfromWorldWarII.TheinvestmentinDigitalEquipmentCorporation(DEC)isitsmostimportantinvestmentbecausetheinitialpricewas70.000$in1957andin1968afterthecompany’sinitialpubblicofferingitwasvaluedatover$355million.5J.H.Whitney&CompanywasfoundedbyJohnWhitneyin1946aftertheWorldWarIItofinanceentrepreneurswithbusinessplanswhowereunwelcomeatbanks.ItsmostimportantinvestmentwasinFloridaFoodsCorporationwhichdevelopedaninnovativemethodfordeliveringnutritiontoAmericansoldiersthatwascalledMinuteMaidorangejuiceandwassoldtotheCoca-ColaCompanyin1960.HistoryofPrivateEquity(2)6ChartonEuropeanPrivateEquityThischartdescribesthedevelopmentofPrivateEquityinEurope:Source:CMBOREurope=Austria,Belgium,Denmark,France,Finland,Germany,Ireland(Eire),Italy,Netherlands,Norway,Portugal,Spain,Sweden,Switzerland,UK.Thelastcolumnregardsthefirsthalfof2008.7RegionorCountryofHeadquarters17%15%15%8%8%7%6%6%6%6%6%AustraliaJapanHongKongChinaSouthCoreaIndonesiaPhilippinesThailandSingaporeMalaysiaTaiwanSource:KPMGReportonCorporatePerceptionsofPrivateEquityinAsiaPacificArea2008ChartonAsiandislocationPrivateEquity8ChartonAsianoperationalsectorsOperationalSectors23%18%14%13%12%6%4%3%3%3%1%FinancialServicesIndustrialsConsumerEnergy,Mining&UtilitiesTelecom,Media&TecnologyPharma,Medical&BiotechInfrastructureTransportation&LogisticsLeisureRealEstateConstructionSource:KPMGReportonCorporatePerceptionsofPrivateEquityinAsiaPacificArea20089ChartsonUsMarketUsPrivateEquitybyDealType200787103861110Add-onCarveoutLBOManagementBuyoutPublic-to-PrivateUsPrivateEquitybyDealType2008182351831817Add-onCarveoutLBOManagementBuyoutPublic-to-PrivateUsPrivateEquitybyIndustry20071305685215697572Business&FinancialServicesConsumerGoodsConsumerServicesEnergyandUtilitiesHealthcareIndustrialGoods&MaterialsInformationTechnologyOtherUsPrivateEquitybyIndustry20081026181173480611Business&FinancialServicesConsumerGoodsConsumerServicesEnergyandUtilitiesHealthcareIndustrialGoods&MaterialsInformationTechnologyOtherSource:KPMGReportonCorporatePerceptionsofPrivateEquityinAsiaPacificArea200810InvestmentsinPrivateEquity(1)InstitutionalInvestorsprovideprivateequitycapitalbecausetheyhopetoachieveriskadjustreturnsthatarehigherthatthepossiblethattheycanobtainedinthepublicequitymarkets.Mostinstitutionalinvestorsdon’tinvestdirectlyinprivatelyheldcompaniesbuttheyinvestthroughaprivateequityfund.InsomecasestheinstitutionalinvestorsdevelopaPrivateEquityFund.11UsuallyPrivateEquityFirmsreceiveareturninoneofthisway:InitialPublicOffering(IPO):whensharesareofferedtothemarketthefinancialsponsorasthepublicmarkethaveanimmediatelyreturn.MergerorAcquisition:thecompanyissoldforeithercashorsharesinanothercompany.Recapitalization:cashisdistributedtotheshareholdersanditsprivateequityfundseitherfromcashflowgeneratedbythecompanyorthroughraisingdebtorothersecuritiestofundthedistribution.InvestmentsinPrivateEquity(2)12StructureofagenericPrivateEquityFund:13PrivateEquityInvestments(1)PrivateEquityInvestmentscanbe:LeveragedBuyoutVentureCapitalGrowthCapitalDistressedandSpecialSituationsMezzanineCapitalSecondaries14LeveragedBuyout(1):ItisastrategyofmakingEquityInvestmentsaspartofatransactioninwhichacompany,businessunitorbusinessassetisacquiredfromthecurrentshareholderstypicallywiththeuseoffinancialleverage.Usually,thecompaniesinvolvedinthesetransactionsaretypicallymatureandgenerateoperatingcashflows.Thereisusuallyafinancialsponsoragreeingtoanacquisitionwithoutitselfcommittingallthecapitalrequiredfortheacquisition.AcquisitiondebtinaLBOisoftennon-recoursetothefinancialsponsorandhasnoclaimonotherinvestmentmanagedbythefinancialsponsor;anLBOisa