guest lecture

Question 1

Fund lifecycle

Answer 1

Fundraising and start investing (1-2 years)

Investing and value creating (1-3 years)

Typical holding period (3-7 years)

Divesting and value creating

Extension operations

key terms:

Fund lifetime 10 + 1 + 1years

Historical fees 2% management fee 20% carry (but has been under pressure)

Hurdle rate typically -8%

Other fees for providing value added services

Question 2

How ca you find the next deal and position yourself?

Answer 2

define your target company (geography, sub-sector, size, operational status, structure (majority/minority), type (primary, carve-out, secondary, take-private)

Market mapping
(screen potentially interesting companies within your criteria)
(arrange meetings with management team/corporate development departments to understand the company and test appetite

Obtain market intelligence
(M&A advisors bring overview of upcoming auctions and sometimes ideas for of market deals
▪ Continuous dialogue with Management Teams, Private Equity companies, Industry experts)

How can you differentiate yourself vs other potential bidders (exact importance differs by situation)
(Relevant experience via (former) portfolio companies (incl. synergies?)
▪ Connection with seller and management team, local knowledge and presence
▪ Relevant sector knowledge by the deal team or (internal) experts that are respected in the PE firm
▪ Capabilities in-house (operational, digital, finance, procurement)
▪ Early engagement with external situation specific industry experts
▪ Do homework early on, so that you can get ahead of competition)