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Business Knowledge for IT in Private Equity: A Complete Handbook for IT Professionals

Book Description

"Business Knowledge for IT in Private Equity" deals with the alignment of IT and business of Private Equity. The idea behind the publication is to introduce IT professionals to the concepts of the business of Private Equity. The chapters in the book cover the following topics: overview of the Private Equity industry; sources of funds for investing; types of funds; industry sectors in which Private Equity firms invest; investment to exit - the life cycle of a Private Equity investment; systems used in the private equity industry; the future of the private equity industry; and, much more.Innovations in Private Equity and IT to be discussed include: Fund Raising and Investing in developing economies; Private Equity Fund of Funds; Investing in Private Equity evergreen structures; Evolving IT requirements in the Private Equity firms. "Business knowledge for IT in Private Equity" is an invaluable reference handbook for IT professionals. It is also useful for both undergraduate and graduate students in Information Technology - related degree programmes

Table of Contents

  1. Copyright
  2. Preface
  3. Acknowledgements
  4. Introduction
  5. 1. Overview of Private Equity
    1. Introduction
    2. Definitions of Private Equity
    3. Private Equity Activities
    4. Major Types of Private Equity
      1. Other Strategies
    5. Private Equity Business Model
    6. Characteristics of a HPC
    7. Private Equity Controversy
    8. Brief History of the Development of the Industry
    9. Rationale for Investing in Private Equity
    10. What Attracts Private Equity Firms to Commit to Investments?
    11. Classes of Capital Used by Private Equity Firms
      1. Share Capital
      2. Ordinary Shares
      3. Preferred Ordinary Shares
      4. Preference Shares
      5. Loan Capital
    12. Some Facts about Private Equity
    13. Fee Structure
    14. Some Other Benefits of Private Equity
    15. Disadvantages of Private Equity
    16. Private Equity as an Alternative Investment
    17. The Advantages of Private Equity over Senior Debt
    18. Private Equity versus Alternative Forms of Financing
    19. Comparison of Private Equity to Hedge Funds
    20. Largest Private Equity Firms
    21. Other Notable Private Equity Firms
  6. 2. Types of Private Equity Investment Funds
    1. Introduction
    2. Primary Means of Private Equity Investment
    3. Different Types of Private Equity Investment Funds
    4. Risk Levels of Private Equity Investments
    5. Overview of How Private Equity Investments Work
      1. Fund Specialisation
    6. Phases of a Company’s Development
    7. The Investment Size Debate
    8. Size of the Investee Company
    9. Sector Specialisation
    10. Approach to Portfolio Construction
      1. Size of the Private Equity Allocation
      2. Allocation across Private Equity Funds
      3. Ways of Achieving Diversification
        1. Stage
        2. Geography
        3. Manager
        4. Vintage year
        5. Industry
    11. Liquidity through a Secondary Market
  7. 3. Structure and Global Market Size
    1. Introduction
    2. Structure of the Private Equity Market
      1. Investors in Private Equity
      2. Intermediaries
      3. Issuers
      4. Agents and Advisers
    3. Financing Stage and Industry Breakdown
    4. Size of the Global Private Equity Market
      1. Geographic Breakdown
      2. North America
      3. Europe
      4. Asia Pacific
  8. 4. The Business Environment
    1. Introduction
    2. Environmental Factors Affecting the Private Equity Industry
    3. Profiles of some Major Players
      1. KKR
      2. Carlyle
      3. TPG
      4. 3i
      5. Bain Capital Inc.
    4. Data Providers
      1. Private Equity International
      2. The Financial Times
      3. Reuters Professional Publishing
      4. European Venture Capital Journal (EVCJ)
      5. MoneyTreeTM Report
      6. AltAssets
      7. FINalternatives
      8. Library House Ltd.
      9. The Journal of Private Equity (JPE)
      10. Private Equity Insider
    5. Indices
      1. The Silicon Valley Venture Capital Confidence Index
      2. Private Equity Index (PRIVEX)
      3. Street Private Equity Index
  9. 5. Overview of Buyout
    1. Introduction
    2. Different Types of Buyout Transaction
      1. Management Buyout (MBO)
        1. Example of an MBO transaction
      2. Management Buy-in (MBI)
      3. Buy-In Management Buyout (BIMBO)
        1. Example of BIMBO transaction
      4. Take Private
        1. Why do corporations go private?
        2. Other commercial drivers for ‘take private’ deals
        3. External factors
        4. Internal factors
    3. Roll-up
    4. Leveraged Buyout (LBO)
      1. Overview
      2. History of LBO
      3. Theory of the Leveraged Buyout
    5. A Look behind Two Large Buyout Deals
      1. The Bain Buyout of KB Toys
      2. The Carlyle/Calyton Dubilier & Rice Buyout of Hertz Car Rental
    6. Brief Explanation of a Dividend Recapitalisation and its Risks
  10. 6. Venture Capital
    1. Introduction
    2. Definitions of Venture Capital
    3. Venture Capital Investing
    4. What is a Venture Capitalist?
    5. History of Venture Capital
    6. Venture Capital Firms and Funds
    7. Investment Focus
      1. Length of Investment
      2. Types of Firms
      3. Corporate Venturing
      4. Commitments and Fund-raising
      5. Capital Calls
      6. Illiquidity
      7. Other Types of Funds
      8. Advisers and Fund of Funds
      9. Disbursements
      10. Exits
      11. IPO
      12. Mergers and Acquisitions
      13. Valuations
      14. Management Fees
        1. Carried interest
    8. Differences between VCs and Banks
    9. Venture Capital Funding
    10. Sectors within which Venture Operates
      1. IT
      2. Telecoms
      3. Life Sciences and Biotechnology
    11. List of Notable Firms
  11. 7. Trends
    1. Introduction
    2. Rise of New Industry Players
    3. Popularity of Funds of Funds
      1. Definition of a Private Equity Fund of Funds
      2. Benefits of Funds of Funds
    4. Introduction of Private Equity ETFs
      1. What are ETFs?
      2. How Does an ETF Work?
      3. ETF versus Investment Trusts
    5. Popularity of Islamic Private Equity
      1. Underlying Asset
      2. Structure
    6. Fundamentals of Private Equity in the MENA Region
    7. Sovereign Wealth Funds and Private Equity
      1. Attractiveness of Private Equity Partnership
    8. Increasing Popularity of Private Equity Real-estate Funds
      1. Funds of Funds
    9. Private Equity Investing in Emerging Markets
    10. Private Equity Investment in Clean Energy
  12. 8. The Investment Process
    1. Introduction
    2. Investment Process – Target Company’s Perspective
      1. Introduction
      2. Writing of the Business Plan
      3. Selection of a Private Equity Firm
      4. The Negotiation Process
        1. The presentation of the business plan and first analysis
        2. Initial negotiations
        3. Due diligence
        4. Final negotiations
        5. Signing of the agreement
      5. Relations with the Private Equity Firm
      6. Biz Technologies and Esscapital seek to Achieve a Common Goal: Balanced Growth
      7. The Different Roles Played by Private Equity Firms
      8. Private Equity Exit and End of Investment Relationship
      9. Valuation of the Investment on Exit
    3. Investment Process – Investor in Private Equity Firm’s Perspective
      1. Summary of Key Skills
        1. Focus on business plans
        2. Selectivity and specialisation
        3. Ability to negotiate
        4. Strong management
        5. Value-added focus
        6. Governance and control
    4. Due Diligence
      1. From an Investor’s Perspective
      2. What Investors are looking for in a Potential Fund Investment?
      3. Fund Investment Due Diligence
        1. People
        2. Process
        3. Philosophy and investment strategy
    5. Monitoring
    6. A Viewpoint on the Importance of Due Diligence
  13. 9. Common Systems Used in Private Equity
    1. Introduction
    2. IT Requirements of Private Equity Funds
    3. Profile of a System
    4. Software as a Service Used for Portfolio Management Improvement
    5. List of Systems
  14. 10. IT Projects
    1. Introduction
    2. Implementation of Data Warehouse Appliances
      1. The Business Case
    3. The Advent of the Data Warehouse Appliance
    4. The Business is the Driver for Adoption
    5. Steps Involved in the Implementation
    6. Service-Oriented Architecture
      1. Benefits of SOA
      2. Comparison of SOA and Traditional Applications
      3. SOA and Web Services
      4. Challenges in Moving to SOA
      5. SOA and Web Services Security
    7. Adoption of Hardware-based Remote Management
  15. 11. Commonly Used Terminology
    1. Introduction
    2. List of Terminology
  16. 12. The Future
    1. The Future: What does it hold for the Private Equity Industry in Business and IT?
    2. Effects of the Credit Crunch on the Private Equity Industry
    3. The Growth of Private Equity in Africa
      1. Supply
      2. Demand
      3. Market Infrastructure
      4. Market Information and Transparency
    4. Convergence of Private Equity and Hedge Funds
      1. Where is the Overlap?
      2. Situation in Recent Times
      3. Hybrid Investing
      4. Will Hedge Funds be a Threat to Private Equity Funds in the Future?
      5. Conclusion
    5. Increased Investment in Clean Technology
    6. Increasing Role of Technology
    7. Conclusion
  17. Appendix
    1. Bibliography
  18. About the Bizle Brand
  19. Useful Websites