Talk:Private equity/Archive 1

Archive 1

prominent fir

The famous private equity firms are Permira, KKR, and Guy Hands' Terra Firma. 3i is Europe's leading private equity firm, which also happens to be publicly listed. —The preceding unsigned comment was added by 86.138.101.171 (talk • contribs) 19:13, 29 October 2005 (UTC)

Further information on private equity firms may be found at the privateequityinfo.com online database. —The preceding unsigned comment was added by Arjan1071 (talk • contribs) 05:12, 10 February 2006 (UTC)

Bain Capital, Blackstone Group, Carlyle Group, and Texas Pacific Group are prominent firms. Others include Ripplewood Holdings LLC, Silver Lake Partners, Warburg Pincus, Cerberus Capital Management, and Goldman Sachs (GS Capital Partners). —The preceding unsigned comment was added by 67.167.231.34 (talk • contribs) 08:36, 19 March 2006 (UTC)

Merge ?

• Support i support the proposed merging of the "Private Equity" and "private equity" articles. I have no idea why these exist as two separate articles and, to the best of my knowledge, there is no reason for these to remain as distinct entries. Furthermore, this merge will improve the quality of the (combined) article. Lesotho 12:47, 27 April 2006 (UTC)
• Support Hi Even I support the idea of merging these two articles for the reasons mentioned above. I would also request you to retain the name "Private Equity." Regards, Jatin —The preceding unsigned comment was added by 210.211.173.52 (talk • contribs) 09:30, 10 May 2006 (UTC)
• Support yes, they should be merged under "Private Equity" —The preceding unsigned comment was added by 4.42.224.75 (talk • contribs) 23:18, 17 May 2006 (UTC)
• Support Yes. Without question merge them. —The preceding unsigned comment was added by 68.164.55.223 (talk • contribs) 06:21, 26 May 2006 (UTC)
• Support yes, merge the two pages. Both pages discuss the same exact content. —The preceding unsigned comment was added by 65.174.172.166 (talk • contribs) 19:36, 5 June 2006 (UTC)
• Support yes. Please merge and keep the capitalized version. —The preceding unsigned comment was added by 203.125.111.50 (talk • contribs) 00:45, 6 July 2006 (UTC)
• Support I agree —The preceding unsigned comment was added by 200.225.90.10 (talk • contribs) 18:26, 12 July 2006 (UTC)
• Support I think we're all agreed then. We'll merge them. What fun! A. Facetious Git —The preceding unsigned comment was added by 55.201.35.50 (talk • contribs) 18:26, 28 July 2006 (UTC)
• Disagree While the "Private equity" article speaks exclusively about "private equity funds" the "Private Equity" one speaks about both "private equity shares" as opposed to "public shares" and at the same time about "private equity funds". In fact the "Private Equity" article may lead to confusion because it speaks about two different concepts without clearly diferentiating them. If they are merged, these two different meanings should be clarified. —The preceding unsigned comment was added by 193.145.59.26 (talk • contribs) 07:43, 27 July 2006 (UTC)

(The merge was duly carried out on 14 August 2006) Jheald 09:02, 21 September 2006 (UTC)

Note that there is an article Private equity fund that is barren and could use a lot of the information in this article on said subject. I'd suggest a copy & paste of the Private Equity Funds section but there's probably a more elegant way of doing it that I'm unaware of.

BeadDrop 5:42GMT, 2 November 2006 (UTC)

Signing comments

just a reminder... please, wikipedians, sign your comments...otherwise the votes "pro" and "anti" merging don't really have any meaning...4 tildes get the job done Lesotho 23:21, 17 August 2006 (UTC)

Largest firms

10 largest firms by capital under management, year to September 2005 (Source: Thomson Venture Economics / NVCA, from a survey of the industry by the Economist Intelligence Unit for Apax Partners).

1. Goldman, Sachs & Co. - $35,885m
2. Blackstone Group, L.P. - $30,892m
3. Carlyle Group, The - $28,878m
4. Warburg Pincus LLC - $21,810m
5. Kohlberg, Kravis, Roberts & Co. (AKA: KKR) - $20,467m
6. Apax Partners Worldwide - $20,106m
7. Apollo Management (FKA: Apollo Advisors L.P.) - $19,000m
8. HarbourVest Partners LLC - $17,673m
9. Oaktree Capital Management, LLC - $17,581m
10. CVC Capital Partners - $15,344m

This list may be useful in considering whether or not other firms should be included as worthy of note. Jheald 08:55, 21 September 2006 (UTC)

A comment on these numbers: When mentioning capital under management a specification of what that means may be advised. It should preferably be very precisely defined as the acquisiton cost of currently owned equity. No uninvested commitments, not the initial commitments of all open funds and not the current assessed value of the holdings. And the data may be double checked if possible. Sometimes several definitons of invested capital is mixed. -- Here's a couple of different possible meanings of capital under management. 1) When a fund has been raised and closed no money has ben invested at all (it takes a few months or year to invest the money), but it may still be called invested capital. So when Goldman Sachs has just finished raising commitments for a new PE fund and closed it and the guy from Thomson Venture Economics / NVCA calls and ask them how much capital under management they have they may answer the money invested plus the uninvested commitments. 2) Another problem is when investment is exited and sold, at that point the proceeds is returned to the investors, that may be a soon as a year after the investment. Then the invested capital is reduced, but the "$10bn fund" (if the fund is called by the size of it's initial commitments) is still open all the time to the last invsetment is sold after ten years or more. If the initial commitments in all open funds is called invested capital that may be confused with invested capital. 3) There's a difference between acqusitions cost of the investments and the current assesed value. Holdings are regularly reviewed and valued by the investors. So capital under management can be either at its acqusition cost (perhaps years ago) or a current estimate. (Since this is high risk β=2 or more equity its value is expected to vary with a σ of 100% or more during a year. And is expected to increase in value of maybe 20 % per year or more.)--JR, 18:22, 12 May 2007 (UTC)

A follow up to my comment: The investments of a company on the list Oaktree Capital may be another example of difficulty of definition. Almost all of their $35bn invested are in form of loans (High Yield, High Income, Convertibles, Distressed, Mezzanine) but Thomson Venture Economics / NVCA still found $17bn of private equity investments in that list. What Oaktree call $5bn of "Principal Activities (for control)" may be equity but the other investments are not really equity, even if they have close to β=1 risk (or more) and have an expected return of close to that of β=1 equity.--JR, 18:32, 12 May 2007 (UTC)

Another note: Blackstone has raised $32bn in six funds in total since its founding 1985 [1]. My guess is that maybe $20bn or less is currently invested.--JR, 18:59, 12 May 2007 (UTC)

While I do not disagree that defining "capital under management" is difficult in relation to private equity managers, I do have an issue with your preferred definition being the cost of acquisition of held assets. I believe this is far too simplistic and problematic for a number of reasons. One key difficulty is that private equity investments, private equity funds and private equity firms all have life stages and that capital under management at any given point at any of these levels takes on different characteristics depending on which point in time you select.

To illustrate, for a particular private equity fund, what if one asset has been (verifiably and in good faith) revalued significantly above its acquisition cost, another asset is being held at cost and a third has been written down substantially? To suggest that the manager is actively managing capital to the value of invested capital is misleading. What if an asset was bought from a distressed seller (fire sale) but the asset itself is sound? Stating the manager is managing a company worth the acquisition price when a basic DCF analysis could show that the value of the company is intrinsically higher is again misleading.

Most importantly though, I'd suggest that for the investor, the number on which the fee multiple is calculated is the most visible indication of the capital the manager is actively managing. This number is of course typically the committed capital. Josephus1972 (talk) 12:00, 27 August 2008 (UTC)Josephus1972

Growth capital

The article on Groth capital says it is a credit line, a way of borrowing.In that case, it cannot be equity of any sort and has nomplace in this article! - sredni-va htar

Discussion on advantages to investee company

A section featuring advantages of Private equity over other funds to the investee company would be helpful. —The preceding unsigned comment was added by Manojrana9 (talk • contribs) 06:56, 11 May 2007 (UTC).