Get the inside scoop on jobs and careers with Vault career guides. The Vault Guide to Private Equity, European Edition is your complete resource to jobs, careers, interviews and recruiting.
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The Vault Guide to Private Equity, European Edition Get the inside scoop on jobs and careers with Vault career guides. The Vault Guide to Private Equity, European Edition is your complete resource to jobs, careers, interviews and recruiting. |
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The Vault Guide to Private Equity, European Edition This guide covers late stage private equity funds only, excluding venture capital. Using the Candesic database of private equity firms, we have identified around 250 companies that meet the following criteria: a minimum of ?200-300 million of committed private equity investments in Europe. The list includes LBO, growth capital, distressed, mezzanine funds and, to an extent, funds of funds. The guide excludes sovereign funds, which are state owned pools of money, as well as most of the real estate and infrastructure funds. Together and excluding the funds of funds, the first 200 firms in our sample manage about ?400 billion in commitments and invested assets in Europe. (Including the assets outside of Europe and the funds of funds, our sample reaches ?900 billion in total commitments and investments in private equity.)
We selected 37 firms that we deemed representative of Europe, not necessarily the largest ones. This includes mostly direct LBO funds and a couple of examples in each of the other categories. Selecting the top firms was not necessarily clear cut considering the variety of situations occurring in an industry undergoing European convergence. All the other firms included in the analysis are listed at the end of the guide with key statistics and contact details. |
As its name implies, private equity investing refers to investments in nonpublicly traded assets. This encompasses a wide range of investments, from small equity stakes in new ventures by so-called angel investors to highly leveraged controlling equity investments in multi-nationals.
Who invests?
Most private equity funds are structured as limited partnerships with a life of between five and ten years, with a General Partner and a Manager. The direct investors, or ?limited partners?, are mostly institutional investors who want to diversify into alternative asset classes. This can also include funds of funds that allow smaller investors access to the asset class. One of the big strengths of private equity is that it closely aligns the interests of investors with those of the fund managers (the general partners) and the management of the companies they invest in, as they generally all have a substantial share of the equity.
How they make money
Private equity investors seek to recognise niches that offer attractive growth prospects, to ?buy or build? a well positioned player in that niche and to give that player the means to perform better than its peers. In addition, at least in mature markets, they attempt to multiply their return by leveraging their investment, aided in recent years by low interest rates. As a more difficult credit environment evolves and debtor protection increases, it is likely that some poorly performing funds won?t be able to survive much longer.
Types of PE?segmentation by stage and product
The wider private equity sector can be divided into four distinct types of investment: leveraged buyouts, venture capital, mezzanine financing and distressed debt. Some firms will specialise in a single type of investment, while larger firms will often provide a range of investment alternatives.
