By Thomas Meyer
In recent years, enterprise capital and personal fairness money became family names, yet to date little has been written for the traders in such cash, the so-called constrained companions. there's way more to the administration of a portfolio a bet capital and personal fairness money than frequently perceived. past the J Curve describes an cutting edge toolset for such restricted companions to layout and deal with portfolios adapted to the dynamics of this marketplace position, going some distance past the common and often-simplistic recipe to ‘go for high quartile funds’.Beyond the J Curve presents the solutions to key questions, including:Why ‘top-quartile’ provides can be fascinated about a massive pinch of salt and what it takes to choose stronger fund managers?What do constrained companions have to ponder whilst designing and handling portfolios?How you can ensure the cash’ financial price to aid addressing the questions of ‘fair price’ less than IAS 39 and ‘risk’ lower than Basel II or Solvency II?Why is tracking vital, and the way does a constrained associate deal with his portfolio?How the portfolio’s returns could be more desirable via right liquidity administration and what to think about whilst over-committing?And, why uncertainty instead of danger is a controversy and the way a restricted accomplice can deal with and enjoy the quickly altering deepest fairness environment?Beyond the J Curve takes the practitioner’s view and provides deepest fairness and enterprise capital pros a finished advisor making excessive go back pursuits extra lifelike and sustainable. This publication is a must-have for all events concerned about this marketplace, in addition to educational and scholars.
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Additional info for Beyond the J Curve: Managing a Portfolio of Venture Capital and Private Equity Funds (The Wiley Finance Series)
1 One private equity management company can act as a “group”, managing several such partnerships in parallel. Typically, limited partnership agreements do not allow follow-on funds by the same manager before the end of the investment period or before a high percentage (usually more than 70%) of the active fund is invested. The main documents of the fund offering are the private placement memorandum which, in general, describes the investment proposal, the subscription agreement, which contains the contractual capital commitment and securities law exemptions, and the limited partnership agreement, which defines the right and obligations of the parties involved.
But as it becomes accepted and matures, fund managers need to limit their fund sizes and become choosy about their limited partners. According to AltAssets (2003a), in Europe there are also examples of oversubscribed funds. This is expected to remain an important trend over the medium term that will reinforce the relationships of the leading fund managers. 2 Newcomers Private equity firms regularly lose experienced professionals who spin out to launch their new funds. These professionals have developed track records under the old fund’s “brand name” and can reference this investment track record while fund-raising.
We therefore believe that for private equity funds historical data can provide a yardstick, possibly with modifications to recognize structural changes and to compensate for anomalous periods, and assume that the available benchmark statistics for the entire private equity fund market—albeit stale—nevertheless can be seen as indicative. 1 FUNDS AS INTERMEDIARIES The organized private equity market is dominated by funds—generally structured as limited partnership—as principal financial intermediary.
Beyond the J Curve: Managing a Portfolio of Venture Capital and Private Equity Funds (The Wiley Finance Series) by Thomas Meyer