Private Equity Mathematics
Edited by Oliver Gottschalg of HEC Paris and PERACS Private Equity Track Record Analytics, Private Equity Mathematics, Second Edition, is a must-have publication for all professionals investing in private equity assets and funds. This book is a valuable and practical resource with topics ranging from performance measurement and benchmarking, cash flow patterns and risks of private equity investing, to the economic and legal aspects of operating a private equity firm or investment programme.
In addition to updated and expanded content, this guide features recent advancements in performance measurement, benchmarking and risk assessment.
This guide will help you to:
- Understand the fundamentals of private equity investing and value creation drivers
- Gain insight into the issues with inappropriate use of common performance measures
- Optimise the measurement, management and integration of risk in the portfolio
- Develop more sophisticated methods and benchmarks to assess investment performance
- Better understand how to measure volatility in private equity investing…and much more.
Private Equity Accounting
Private Equity Accounting provides essential guidance and advice in a single volume for all private equity practitioners and fund accountants around the world across all accounting standards.
Before now, if practitioners and accountants wanted to learn about and understand applied best practice of private equity accounting then the only way to unearth the professional secrets was by learning from peers. Mariya Stefanova and other leading accounting experts reveal how to succeed and avoid some costly pitfalls in this unique publication.
In the post-global financial crisis world increased regulation of private equity and investor activism mean greater pressure on general partners to accept increased reporting requirements although this reporting can be sensitive.
Primarily written by Mariya Stefanova, this professional guide anatomises every precise detail and required process that private equity firms and fund accountants should follow. It’s full of user-friendly examples on every aspect of accounting in all of the main jurisdictions.
Some of the key lessons you’ll learn from the title:
- Understand the precise workings of a private equity fund and its life cycle
- Find out what fund commercial terms and how they work
- All structures uncovered plus tax treatment information
- How to read a Limited Partnership Agreement (LPA) in detail
- Carried interest and carried interest modelling
- Drawdowns and distributions, and investment and investment revaluations
- Management fee versus priority profit share (PPS)
- Rebalancing, equalisations and partner transfers
- Performance measurement (IRRs and other performance metrics) and investor reporting
- Consolidation, valuations and an auditor’s perspective of private equity accounting
The package is ideal for:
- Fund managers
- Fund of fund managers
- Institutional investors
- Lawyers
- Consultants
- Bankers
- Academics
- Finance Directors
- Accountants / Chief Accountants
- Investor Relations
- Fund Administrators
- Portfolio Management
- Fund Placement Agents
- Tax Advisers
- Investors
===============================
Private Equity Mathematics
===============================
- Satyan Malhotra, Caspian Private Equity
- Ivan Herger, Capital Dynamics
- Fernando Vazquez, PERACS Private Equity Track Record Analytics
- Bernd Kreuter, Palladio Partners
- Elias Korosis, Hermes GPE and Roy Kuo, Church Commissioners
- Brian Gallagher, Twin Bridge Capital Partners
- Robert M. Ryan, PERACS Private Equity Track Record Analytics
- Alexander Peter Groh, EMLYON Business School
- Michael J. Album, Trevor J. Chaplick, and Joshua M. Miller, Proskauer Rose LLP
- Jenny Wheater and Pierfrancesco Carbone, Duane Morris LLP
- John Barber, Bridgepoint
- Leon Hadass, Pantheon and Arantxa Prado
- Michael J. Ryan, Hamilton Lane
- Griffith Norville, Hamilton Lane
===============================
Private Equity Accounting
===============================
- Angela Crawford-Ingle, Ambre Partners Limited
- Alistair Hamilton, Inflexion Private Equity Partners LLP
- Nat Harper, KPMG LLP
- David L. Larsen, Duff & Phelps LLC
- Gaurav Marwah, Augentius Fund Administration LLP
- Monika Nachyla
===============================
Private Equity Mathematics:
===============================
SECTION I: FUNDAMENTALS
1. Private equity as part of your portfolio
Satyan Malhotra, Caspian Private Equity
2. Measuring private equity performance: a closer look
Ludovic Phalippou, University of Oxford
3. The private equity J-curve: Cash flow considerations from primary and secondary points of view
Ivan Herger, Capital Dynamics
4. Evaluating the private equity risk profile for GPs and LPs
By Fernando Vazquez, PERACS Private Equity Track Record Analytics
5. A Monte Carlo approach for risk management in private equity portfolios
Bernd Kreuter, Palladio Partners and Oliver Gottschalg, HEC Paris and PERACS Private Equity Track Record Analytics
6. Adventures in risk budgeting: moving forward on private equity portfolio risk
Elias Korosis, Hermes GPE and Roy Kuo, Church Commissioners
SECTION II: INVESTING
7. Performance drivers in private equity investments
Oliver Gottschalg, HEC Paris and PERACS Private Equity Track Record Analytics
8. Valuing private equity buyouts
Brian Gallagher, Twin Bridge Capital Partners
9. Private equity performance benchmarking
Robert M. Ryan, PERACS Private Equity Track Record Analytics
10. Benchmarking leveraged buyouts against comparable public market investments
Alexander Peter Groh, EMLYON Business School
11. A pragmatic approach to estimating the relative performance of private equity investments
Oliver Gottschalg, HEC Paris and PERACS Private Equity Track Record Analytics
12. Measuring and interpreting performance persistence in private equity
Oliver Gottschalg, HEC Paris and PERACS Private Equity Track Record Analytics
SECTION III: FUND AND PORTFOLIO MANAGEMENT
13. Compensation issues for management in a US MBO
Michael J. Album, Trevor J. Chaplick, and Joshua M. Miller, Proskauer Rose LLP
14. Compensation issues for management in a European MBO
Jenny Wheater and Pierfrancesco Carbone, Duane Morris LLP
15. Management fee, carried interest and other economic terms of private equity funds
John Barber, Bridgepoint
16. Fund of funds portfolio perspective
By Leon Hadass, Pantheon and Arantxa Prado
17. Insights in assessing the performance of private equity service providers
Michael J. Ryan, Hamilton Lane
18 Measuring volatility in private equity
Griffith Norville, Hamilton Lane
Glossary
===============================
Private Equity Accounting:
===============================
1. Introduction to private equity for accountants
Mariya Stefanova
2. Private equity structures and types of funds
Mariya Stefanova
3. Why private equity accounting is different?
Mariya Stefanova
4. The Limited Partnership Agreement (LPA) explained
Mariya Stefanova
5. Fund lifecycle
Mariya Stefanova
6. Initial, subsequent and final closings, rebalancing and equalisation
Mariya Stefanova
7. Drawdowns
Mariya Stefanova
8. Partner transfers
Mariya Stefanova
9. Investments
Mariya Stefanova
10. Valuations,
David L. Larsen, Duff & Phelps LLC
11. Expenses and income
Mariya Stefanova
12. Management fee versus Priority Profit Share (PPS)
Mariya Stefanova
13. Distributions
Mariya Stefanova
14. Carried interest
Mariya Stefanova
15. Fund financial statements format and how they are different from other entities financial statements
Mariya Stefanova
16. More about allocations
Gaurav Marwah, Augentius Fund Administration LLP
17. Consolidation
Angela Crawford-Ingle, Ambre Partners Limited
18. Performance measurement – is it all about IRRs?
Alistair Hamilton, Inflexion Private Equity Partners LLP
19. Investor reporting - accounting support for Investor Relations
Monika Nachyla
20. Private equity accounting – an auditor’s perspective
Nat Harper, KPMG LLP
