Prahl Michael - Mastering private equity : transformation via venture capital, minority investments & buyouts

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. Some material included with standard print versions of this book may not be included in e-books or in print-on-demand. If this book refers to media such as a CD or DVD that is not included in the version you purchased, you may download this material at http://booksupport.wiley.com. For more information about Wiley products, visit www.wiley.com.

Designations used by companies to distinguish their products are often claimed as trademarks. All brand names and product names used in this book are trade names, service marks, trademarks or registered trademarks of their respective owners. The publisher is not associated with any product or vendor mentioned in this book.

Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. It is sold on the understanding that the publisher is not engaged in rendering professional services and neither the publisher nor the author shall be liable for damages arising herefrom. If professional advice or other expert assistance is required, the services of a competent professional should be sought.

Library of Congress Cataloging-in-Publication Data

Names: Zeisberger, Claudia, author. | Prahl, Michael, author. | White, Bowen, author.

Title: Mastering private equity : transformation via venture capital, minority investments
& buyouts / Claudia Zeisberger, Michael Prahl, Bowen White.

Description: Hoboken : Wiley, 2017. | Includes index. |

Identifiers: LCCN 2017013988 (print) | LCCN 2017014649 (ebook) | ISBN 9781119327943 (pdf) |
ISBN 9781119327981 (epub) | ISBN 9781119327974 (paperback) | ISBN 9781119327943 (ebk) |

ISBN 9781119327981 (ebk)

Subjects: LCSH: Private equity. | Venture capital. | Capital investments. |

Consolidation and merger of corporations. | BISAC: BUSINESS & ECONOMICS / Finance.

Classification: LCC HG4751 (ebook) | LCC HG4751 .Z42 2017 (print) | DDC

658.15/224dc23

LC record available at https://lccn.loc.gov/2017013988

ISBN 978-1-119-32797-4 (hardback) ISBN 978-1-119-32794-3 (epdf)

ISBN 978-1-119-32798-1 (epub)

Cover design: Wiley

Cover image: (c) jps/Shutterstock

Our distinguished Guest Authors made time to share their experiences and at times critical comments, thereby adding a practical perspective to our writing. We are grateful for their support and list them in order of appearance.

• A Look Back at the Last 45 Years
  

  T. Bondurant French, Executive Chairman, Adams Street Partners (page 15)

• What Is a Venture Capitalist?
  

  Brad Feld, Managing Director, Foundry Group (page 28)

• Creating Value Through Genuine Partnerships
  

  J. Frank Brown, Managing Director and Chief Operating Officer, General Atlantic (page 35)

• A Differentiated ApproachBuying Right and Creating Value Early
  

  Andrew Sillitoe, Co-CEO and a Partner in the Tech & Telco team, APAX Partners LLP (page 48)

• Distressed Investing: Why Europe is Different from the US
  

  Karim Khairallah, Managing Director, European Principal Group, Oaktree Capital Management (UK) LLP (page 61)

• Hunting for Deals in Emerging Markets
  

  Nicholas Bloy, Founding Partner, Navis Capital Partners (page 77)

• The Due Diligence Conspiracy
  

  Richard Foyston, Founding Partner, Navis Capital Partners (page 81)

• Understanding Enterprise Value
  

  Graham Oldroyd, Partner from 19902013, Bridgepoint Private Equity (page 92)

• Deal Pricing Dynamics Outside the Financial Model
  

  Veronica Eng, Retired Founding Partner, Permira (page 101)

• The Art of Deal Structuring
  

  Guy Hands, Chairman and Chief Investment Officer, Terra Firma (page 114)

• Deal DocumentationClean Exit vs. Purchaser Protection
  

  Heiner Braun, Partner, Freshfields Bruckhaus Deringer LLP (page 125)

• Govern a family as you would cook a small fishvery gently: About growth capital investments in family-owned SMEs in emerging markets
  

  Idsert Boersma and Martin Steindl, FMO (page 143)

• What Makes a Great Private Equity CEO?
  

  Tony DeNunzio CBE, Chairman of Pets at Home and formerly Chairman of Maxeda BV (page 156)

• More than Private Equity-Skilled Industrialists
  

  William L. Cornog, Member and Head of KKR Capstone (page 164)

• Responsible Investing: In Growth Markets, It's Common Sense
  

  Tom Speechley, Partner, The Abraaj Group (page 181)

• The Proof is in the Exit
  

  Marco De Benedetti, Managing Director and Co-Head of European Buyouts, The Carlyle Group (page 193)

• Not on the Side
  

  Andrew M. Ostrognai, Partner, Debevoise & Plimpton LLP (page 212)

• Raising a First-time Fund
  

  Javad Movsoumov, Managing Director, Head of APAC Private Funds Group, UBS (page 220)

• Relative Value Approach to Enhance Portfolio Returns
  

  Christoph Rubeli, Partner and Co-CEO, Partners Group (page 235)

• Performance Reporting 2.0
  

  Peter Freire, CEO, Institutional Limited Partners Association (ILPA) (page 245)

• GP-led Liquidity Solutions
  

  Francois Aguerre, Partner, Co-Head of Origination, Coller Capital (page 259)

• CPPIB's Partnership Centric Approach to Private Equity Investing
  

  Julie Gray, Senior PrincipalInvestment Partnerships (Funds, Secondaries and Co-Investments), Canada Pension Plan Investment Board (CPPIB) (page 275)

• Listed Private Equity Funds: Is the Market Missing an Opportunity?
  

  Emma Osborne, Head of Private Equity Fund Investments, Intermediate Capital Group plc; Mark Florman, Chairman, LPEQ (page 286)

• FX: Hedge or Hope?
  

  Rob Ryan, Market Risk Manager, Baring Private Equity Asia (page 297)

• The Importance of the Discount to Maximize Return: Myth or Reality?
  

  Daniel Dupont, Managing Director, Northleaf Capital Partners (page 304)

• Henry R. Kravis, Co-Chairman & Co-CEO of KKR kindly agreed to write the foreword for this book and we appreciate his thoughtful contribution on the evolution of private equity over the years.

The views expressed in the guest comments are the opinion of the respective author and not necessarily that of their firms and organizations.