Private Equity Defined: Venture, Growth, and Buyouts Set PDF
Preview Private Equity Defined: Venture, Growth, and Buyouts Set
Private Equity in Action 2 Case Studies from Developed and Emerging Markets Claudia Zeisberger Michael Prahl Bowen White 3 This edition first published 2017 © 2017 Claudia Zeisberger, Michael Prahl and Bowen White Registered office John Wiley & Sons Ltd, The Atrium, Southern Gate, Chichester, West Sussex, PO19 8SQ, United Kingdom For details of our global editorial offices, for customer services and for information about how to apply for permission to reuse the copyright material in this book please see our website at www.wiley.com. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, except as permitted by the UK Copyright, Designs and Patents Act 1988, without the prior permission of the publisher. Wiley publishes in a variety of print and electronic formats and by print-on-demand. 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ISBN 978-1-119-32802-5 (hardback) ISBN 978-1-119-32800-1 (ebk) ISBN 978-1-119-32799-8 (ebk) Cover design: Wiley Cover image: Skyline image: © Leontura/iStockphoto; World Map image: © pop_jop/iStockphoto 4 CONTENTS Preface Section I GP–LP Relationships CASE 1 BERONI GROUP: MANAGING GP–LP RELATIONSHIPS SYNOPSIS PEDAGOGICAL OBJECTIVE OF THE CASE SUGGESTED ASSIGNMENT QUESTIONS ADDITIONAL RESOURCES Beroni Group: Managing GP-LP Relationships INTRODUCTION GROUP HISTORY KEY ISSUES APPENDIX A APPENDIX B CASE 2 GOING DIRECT: THE CASE OF TEACHERS’ PRIVATE CAPITAL SYNOPSIS PEDAGOGICAL OBJECTIVE OF THE CASE SUGGESTED ASSIGNMENT QUESTIONS ADDITIONAL RESOURCES Going Direct The Case of Teachers’ Private Capital INTRODUCTION BACKGROUND INVESTMENT OBJECTIVES AND ASSET POLICY MIX PHASE 1: THE ORIGINS OF TEACHERS’ PRIVATE CAPITAL JIM LEECH: TASKED WITH TAKING TEACHERS’ GLOBAL PHASE 2: GROWING AMBITION PHASE 3: THE PEAK – LEADING THE WORLD’S LARGEST LBO CHALLENGES EMERGE TO THE LARGEST LBO IN HISTORY PHASE 4: POST-GFC ERA EVALUATING THE SUCCESS OF TEACHERS’ APPROACH: ISSUES FOR TEACHERS’, PENSION FUNDS AND OTHER LPS THE WAY AHEAD NOTES CASE 3 PRO-INVEST GROUP: HOW TO LAUNCH A PRIVATE EQUITY REAL ESTATE FUND SYNOPSIS 5 PEDAGOGICAL OBJECTIVE OF THE CASE SUGGESTED ASSIGNMENT QUESTIONS ADDITIONAL RESOURCES Pro-invest: How to Launch a Private Equity Real Estate Fund APRIL 2015 BACKGROUND PRO-INVEST GROUP FINDING AN OPPORTUNITY, 2012: HOLIDAY INN EXPRESS – GOING ‘DOWN UNDER’? FIRST STEPS – BUILDING A TEAM WHICH STRUCTURE? ANCHOR INVESTOR – FIRST COMMITMENT THE SEARCH FOR FUNDING OPTIONS – LOOKING FOR THE RIGHT ‘FIT’ ADRIANA STAR CAPITAL APPEARS . . . AND FOLDS BACK TO THE DRAWING BOARD ONWARDS AND UPWARDS CHALLENGES APPENDIX 1 NOTES CASE 4 HITTING THE TARGET: OPTIMIZING A PRIVATE EQUITY PORTFOLIO WITH THE PARTNERS GROUP SYNOPSIS PEDAGOGICAL OBJECTIVE OF THE CASE SUGGESTED ASSIGNMENT QUESTIONS ADDITIONAL RESOURCES Hitting the Target Optimizing a Private Equity Portfolio with Partners Group FUTURE PLAN AND THE LEGACY PORTFOLIO, 2005–11 MAGNIFYING RETURNS – ALLOCATING TO ALTERNATIVES EVOLUTION OF FUTURE PLAN’S PE PORTFOLIO REPOSITIONING THE PE PORTFOLIO ENTER STAGE LEFT: PARTNERS GROUP AND THE PITCH THE TASK AT HAND Section II Venture Capital CASE 5 SULA VINEYARDS: INDIAN WINE – “CE N’EST PAS POSSIBLE !” SYNOPSIS PEDAGOGICAL OBJECTIVE OF THE CASE SUGGESTED ASSIGNMENT QUESTIONS 6 ADDITIONAL RESOURCES Sula Vineyards Indian Wine — “Ce n’est pas possible !” INTRODUCTION SULA WINES GEM INDIA ADVISORS THE INDIAN WINE INDUSTRY THE GLOBAL WINE INDUSTRY VALUATION CONCLUSION NOTES CASE 6 ADARA VENTURE PARTNERS: BUILDING A VENTURE CAPITAL FIRM SYNOPSIS PEDAGOGICAL OBJECTIVE OF THE CASE SUGGESTED ASSIGNMENT QUESTIONS ADDITIONAL RESOURCES Adara Venture Partners Building a Venture Capital Firm STARTING OUT: THE ORIGINS FIRST FUNDRAISING: TOUGH BUT STRAIGHTFORWARD INVESTING THE FIRST FUND: OFF TO THE RACES SECOND FUND: FIRST ATTEMPT THE ‘DARK AGES’ RENAISSANCE SECOND FUND: ALL OR NOTHING JUNE 2013: A TIME TO DECIDE NOTES CASE 7 SIRAJ CAPITAL: INVESTING IN SMEs IN THE MIDDLE EAST SYNOPSIS PEDAGOGICAL OBJECTIVE OF THE CASE SUGGESTED ASSIGNMENT QUESTIONS ADDITIONAL RESOURCES Siraj Capital Investing in SMEs in the Middle East PRIVATE EQUITY IN THE MIDDLE EAST NORTH AFRICA (MENA) REGION SIRAJ CAPITAL NETWORK & EXPERTISE THE INVESTMENT APPROACH TOWER 7 Section III Growth Equity CASE 8 PRIVATE EQUITY IN EMERGING MARKETS: CAN OPERATING ADVANTAGE BOOST VALUE IN EXITS? SYNOPSIS PEDAGOGICAL OBJECTIVE OF THE CASE SUGGESTED ASSIGNMENT QUESTIONS ADDITIONAL RESOURCES PE in Emerging Markets Can Mekong Capital’s Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? PRIVATE EQUITY IN ASIA BACKGROUND: MEKONG CAPITAL DEAL ORIGINATION GOLDEN GATE AND GROWTH MAXIMIZING VALUE AND CREATING A PROFITABLE PATHWAY FOR FUTURE OWNERS THE BOARD MEETING NOTES CASE 9 SLALOM TO THE FINISH: CARLYLE’S EXIT FROM MONCLER SYNOPSIS PEDAGOGICAL OBJECTIVE OF THE CASE SUGGESTED ASSIGNMENT QUESTIONS ADDITIONAL RESOURCES Slalom to the Finish Carlyle’s Exit from Moncler MONCLER: BACKGROUND CARLYLE’S INVESTMENT IN MONCLER: THE 2008 TRANSACTION CARLYLE’S INVESTMENT IN MONCLER: VALUE CREATION CARLYLE EXIT CONSIDERATIONS THE IPO OPTION THE TRADE SALE OPTION THE DUAL TRACK PROCESS DECISION TIME NOTES CASE 10 INVESTOR GROWTH CAPITAL: THE BREDBANDSBOLAGET INVESTMENT SYNOPSIS PEDAGOGICAL OBJECTIVE OF THE CASE SUGGESTED ASSIGNMENT QUESTIONS ADDITIONAL RESOURCES 8 Investor Growth Capital The Bredbandsbolaget Investment THE SWEDISH BROADBAND MARKET COMPETITORS THE OFFERING BUILDING THE COMPANY, 1998–2002 INVESTOR GROWTH CAPITAL SENTIMENTS AMONG INVESTORS ANTI-DILUTION PROVISIONS IN THE SHAREHOLDERS’ AGREEMENT OPTIONS FACING THE MAJORITY INVESTORS FURTHER ARTICLES ON BREDBANDSBOLAGET: NOTES Section IV Leveraged Buyouts (LBOs) CASE 11 CHIPS ON THE SIDE (A): THE BUYOUT OF AVAGO TECHNOLOGIES SYNOPSIS PEDAGOGICAL OBJECTIVE OF THE CASE SUGGESTED ASSIGNMENT QUESTIONS ADDITIONAL RESOURCES Chips on the Side (A) The Buyout of Avago Technologies CHIPS ON THE SIDE (A): THE BUYOUT OF AVAGO TECHNOLOGIES AGILENT TECHNOLOGIES THE SEMICONDUCTOR INDUSTRY THE SEMICONDUCTOR GROUP (SPG) AGILENT’S MANAGEMENT APPROACH APPENDIX 1 APPENDIX 2 NOTES CASE 12 CHIPS ON THE SIDE (B): THE BUYOUT OF AVAGO TECHNOLOGIES% SYNOPSIS PEDAGOGICAL OBJECTIVE OF THE CASE SUGGESTED ASSIGNMENT QUESTIONS ADDITIONAL RESOURCES Chips on the Side (B) The Buyout of Avago Technologies CHIPS ON THE SIDE (B): THE BUYOUT OF AVAGO TECHNOLOGIES THE BROAD SET-UP 9 THE FINANCING STRUCTURE NOTES CASE 13 GOING PLACES: THE BUYOUT OF AMADEUS GLOBAL TRAVEL DISTRIBUTION% SYNOPSIS PEDAGOGICAL OBJECTIVE OF THE CASE SUGGESTED ASSIGNMENT QUESTIONS ADDITIONAL RESOURCES Going Places The Buyout of Amadeus Global Travel Distribution THE TARGET: AMADEUS PRE-ACQUISITION CHALLENGES THE SUITOR: BC PARTNERS THE PROCESS THE STRATEGIC OPTIONS FOR AMADEUS OPTION B: DEVELOP THE IT SOLUTIONS DIVISION AND POSITION AMADEUS AS A FULLY-FLEDGED IT SUPPLIER TO TRAVEL PROVIDERS Section V Turnarounds and Distressed Investing CASE 14 CRISIS AT THE MILL: WEAVING AN INDIAN TURNAROUND*% SYNOPSIS PEDAGOGICAL OBJECTIVE OF THE CASE SUGGESTED ASSIGNMENT QUESTIONS ADDITIONAL RESOURCES Crisis at the Mill: Weaving an Indian Turnaround Alvarez & Marsal ALLEGATIONS… THE GROUNDWORK ACTION… THE TAKEOVER NEW DAY, NEW TEAM THE CHALLENGES AHEAD THE TEXTILE COMPANY SETTING THE STAGE FOR TURNAROUND APPENDIX 1 APPENDIX 2 APPENDIX 3 APPENDIX 4 APPENDIX 5 APPENDIX 6 10
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