1、 本科毕业论文外文原文 外文题目： Private Equity 出 处： Investment Banking,2010:19-43,DOI:10.1007/978-3-540-937 65-4-2 作 者： Professor Giuliano Iannotta 原 文： 1. Introduction One may wonder why a book about investment banking includes a chapter on private equity. I can provide two different answers. First, private equi
2、ty funds are increasingly important clients of investment banks. Fruhan (2006) reports that private equity firms account for about 25% of total revenues for major investment banks. In 2005 about 20% of total US M&As volume was related to private equity. In Germany the percentage was even higher (abo
3、ut 35%). In the 20012006 period out of the 701 US IPOs about 70% were private equity backed. Second, investment banks are increasingly important players of the private equity industry. Virtually all major investment banks manage some private equity funds. For example, Morrison and Wilhelm (2007) rep
4、orts that Goldman Sachs has more capital invested in private equity than any other private equity player. These two reasons also explain the increasing mobility of human resources from investment banks to the private equity industry. This chapter aims at analyzing the main technical aspects of the p
5、rivate equity business. The chapter proceeds as follows. Section 2.2 provides a classification of the private equity activity. Section 2.3 analyzes the agreement between the investors, who put the money, and the professionals who manage that money. Section 2.4 describes how to measure the performanc
6、e of private equity funds. Section 2.5 summarizes the main features of the term sheet that regulate private equity investments. Sections 2.6 and 2.7 illustrate the valuation methods used by private equity professionals to decide about their investments. Section 2.8 concludes. 2.Definitions Within th
7、e private equity industry it is possible to classify two main areas: (a)venture capital (VC) and (b) buy-out. The key feature defining VC is expected rapid “internal growth” of the backed companies: that is proceeds are used to build new business, not to acquire existing business. The VC industry ca
8、n be further broken down into: (a) early-stage, (b) expansion-stage, and (c) late-stage. Early-stage investments include everything through the initial commercialization of a product. A company might not even be existent yet. Within the early stage two kinds of investments are usually identified: (a
9、) seed investments through which a small amount of capital is provided to prove a concept and to qualify for start-up financing； (b) start-up investments, aimed at completing the product development, market studies, assembling key management, developing a business plan. Truly early stage investments
10、 are generally financed by “angels” rather than venture capitalist. Angels are wealthy individuals who, differently from venture capitalists, use their own money and are not formally organized. Megginson (2004) reports that less than 2% of VC investments are truly early-stage. Expansion investments
11、finance fixed and working capital. The company may or may not be showing a profit. Finally, at late stage, fairly stable growth should be reached. Again, it may or may not be profitable, but the likelihood of profit is higher than in previous stages. Moreover, at this stage a plausible exit should b
12、e visible on the horizon. Buy-out investing is the largest category of private equity in term of funds under management. Buy-out investors pursue a variety of strategies, but the key feature is that they almost always take the majority of their companies. In contrast VCs usually take minority stakes
13、. In large buy-outs of public companies investors usually put up an equity stake and borrow the rest from banks and public markets, hence the term leveraged buyout (LBO). Most buy-outs firms are engaged in purchasing “middle-market” firms. Usually buy-out firms have stable cash flows and limited pot
14、ential for internal growth, although this is not always true. Some buy-out funds focus on distressed companies. Notice that there is a definitional difference between Europe and the US. In the US the term venture capital refers to all kind of professionally-managed equity investments in growth firms
15、. In Europe the term venture capital tends to indicate just early and expansion investments. Also note that the private equity activity is often overlapping with hedge fund activity. Hedge funds are flexible investing vehicles that share many characteristics of private equity funds. The main differe
16、nce is that hedge funds tend to invest in public securities. Moreover, in contrast to other pooled investment vehicles, hedge funds make extensive use of short-selling, leverage, and derivatives. The greatest overlap with private equity is on the buy-out area, in particular distress investments. How
17、ever, while private equity funds tend to gain control of the distressed company,restructure it and resell, hedge funds usually trade securities of distressed companies with the intention of making a profit by quickly reselling these securities. 3.The Agreement Most private equity funds are organized
18、 as limited partnership sponsored by a private equity firm. Private equity firms are small organizations (averaging ten professionals) who serve as the general partners (GPs) for the private equity fund. A fund is a limited partnership with a finite lifetime (usually 10 years). The limited partners
19、(LPs) of the fund are the investors (pension funds, banks, endowments, high-net-worth-individuals, etc.). When a fund is raised the LPs promise to provide a given capital, either on a set schedule or at the discretion of the GP: the capital infusions are known as capital call, drawdown, or takedown.
20、 The total amount of promised capital is called committed capital: once the committed capital is raised, the fund is closed. The typical fund will draw down capital over its first five years (the investment period or commitment period). A successful private equity firm will raise a new fund every fe
21、w years and number its successive funds. The compensation of the GP is usually divided into: (a) management fee and (b) carried interest (or just carry). 3.1 Management Fee The typical arrangement is for LPs to pay a given percentage of committed capital every year, most commonly 2%. Sometimes the fee is constant over time, sometimes it drops after the first five years. Lifetime fees are the sum of the annual
