Private Equity Demystified: An Explanatory Guide

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Oxford University Press, Nov 5, 2020 - Business & Economics - 448 pages
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This book deals with risk capital provided for established firms outside the stock market, private equity, which has grown rapidly over the last three decades, yet is largely poorly understood. Although it has often been criticized in the public mind as being short termist and having adverse consequences for employment, in reality this is far from the case. Here, John Gilligan and Mike Wright dispel some of the biggest myths and misconceptions about private equity. The book provides a unique and authoritative source from a leading practitioner and academic for practitioners, policymakers, and researchers that explains in detail what private equity involves and reviews systematic evidence of what the impact of private equity has been. Written in a highly accessible style, the book takes the reader through what private equity means, the different actors involved, and issues concerning sourcing, checking out, valuing, and structuring deals. The various themes from the systematic academic evidence are highlighted in numerous summary vignettes placed alongside the text that discuss the practical aspects. The main part of the work concludes with an up-to-date discussion by the authors, informed commentators on the key issues in the lively debate about private equity. The book further contains summary tables of the academic research carried out over the past three decades across the private equity landscape including: the returns to investors, economic performance, impact on R&D and employees, and the longevity and life-cycle of private equity backed deals.
 

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Contents

The Private Equity Market
1
The Private Equity Fund
40
Measuring Private Equity Performance
107
Doing A Deal The Process of a Private Equity Transaction
135
inancial Markets Financial Instruments and Financial Engineering
171
A Detailed Worked Example of a Leveraged Buyout
256
The Private Equity Critics and the Research
282
Covid19 Crisis
295
Fee Offset Calculations
308
ProForma Term Sheet Sale to Private Equity Fund
310
Structure of the Standard LMA Leveraged Loan Contract at 2018
317
Summary of Academic Research by Area of Investigation
319
Glossary
359
Bibliography
373
Author Index
387
Subject Index
391

Largest UK Buyouts to Mid 2019
303
Largest UK LBO Failures to Mid 2019
306

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About the author (2020)


John Gilligan, Director of the Oxford Sa d Finance Lab, Sa d Business School, Mike Wright, Former Professor of Entrepreneurship, Imperial College Business School

John Gilligan has worked in the private equity and venture capital industry for over 30 years. He started his career in 1988 at 3i Group plc as a financial analyst. He was a Corporate Finance Partner of Deloitte and latterly BDO for over twenty years. He is the Director of the Oxford Sa d Finance Lab at Sa d Business School, a non-executive director and Investment Committee member of Big Issue Invest, one of the largest social impact investors in the UK. He is also a Visiting Professor at Imperial College Business school and has degrees from Southampton University, Nottingham University, and London Business School.


Mike Wright pioneered research into management buy-outs and private equity. He founded the Centre for Management Buy-out Research, CMBOR, in 1986. He was Professor of Entrepreneurship at Imperial College Business School and Chair of the Society for the Advancement of Management Studies. He published extensively on entrepreneurial ownership mobility and finance in leading academic journals and has over 75,000 Google Scholar citations. His books include Accelerators: Successful Venture Creation and Growth (2018), The Routledge Companion to Management Buy-outs (2018), Student Start-Ups: The New Landscape of Academic Entrepreneurship (2019), and How to Get Published in the Top Management Journals (2019). He was a member of the British Venture Capital Association Research Advisory Committee.

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