Glossary
Absolute return
The return that a private equity deal achieves over a certain period of time; it considers appreciation or depreciation (expressed as a percentage) of the deal’s value. Absolute return differs from relative return because it looks only at the deal’s return; it does not compare returns with any other measure or benchmark.
Accredited investor
See Certified investor
Acquisition facility
A loan, typically provided by a bank, to a private equity firm, the proceeds of which are utilized to finance the acquisition of a portfolio company.
Asset stripping
The process of buying an undervalued company with the intent to sell off its assets for a profit. The individual parts of the company, such as its equipment, property, or divisions, may be more valuable than the company as a whole due to poor management or economic conditions.
Alternative assets
This term describes non-traditional asset classes. They include private equity, hedge funds, infrastructure, and real estate. Alternative assets are generally more risky than traditional assets, but they should, in theory, generate higher returns for investors.
Angel
See Business angel
Asset allocation
The percentage breakdown of an investment portfolio, either from the perspective of a general partner or limited partner. This shows how the investment is divided among different investments/asset classes.
BIMBO (buyin management buyout)
A leveraged buyout transaction that is a combination of a management buyout and a management ...
