The formulas, tricks and trade secrets of Private Equity
Private Equity

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Private Equity Guide

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Analysis & Due Diligence

Analysis, accounting & due diligence are staple tasks in private equity investment. It's important to make your analysis count by applying a surgical focus to a few key investment hypotheses.

Top 3 Articles

  1. How Private Equity Makes a Good Return on Investment
  2. Drivers of Private Equity Investment Returns and Value Creation
  3. Working Capital Series: Drivers, Calculations, Valuation, Settlement + More!

Banks & Debt

The secret to private equity investment is receiving leveraged equity returns for debt risk. Banks & debt are therefore an important facet of private equity.

Top 3 Articles

  1. How to Get Equity Returns for Debt Risk?
  2. All About Vendor Finance in Private Equity with Example
  3. Debt Covenants in Private Equity Financing

Dealmaking

In venture capital, entrepreneurs flock to investors. It's the opposite in later stage private equity because entrepreneurs are already successful. So, dealmaking features heavily in private equity investment.

Top 3 Articles

  1. In-Depth: Private equity Deal KILLERS!
  2. How to Get the Best Price When Selling a Business
  3. Pros and Cons of Dealing with Investment Bankers

Entrepreneur

Most private equity pros have very little hands-on entrepreneurial experience. To really set yourself apart (and connect with portfolio companies), it helps to think, walk and live like a real entrepreneur.

Top 3 Articles

  1. Key to Success in Business: What Matters in Private Equity?
  2. Private Equity Failure: Where's the Entrepreneurial Blood?
  3. Tips to Become Private Equity Backed

Firm & Fund

Private equity is an investment methodology that is founded on the structure of private equity firms and funds. Day-to-day life in private equity investment is helped by an understanding of the bigger picture.

Top 3 Articles

  1. Stay Clear of Single-Owner Private Equity Firms
  2. The 2/20 rule for Private Equity Funds
  3. Working in Private Equity: Mega Fund vs. Mid-Market

Private Equiteers

As with every industry, it pays to understand the human factors in private equity to ensure your success. Since private equity is so "private", the human dynamics of investment are especially important.

Top 3 Articles

  1. In it For More Than the Carry (Carried Interest)?
  2. Where to Get a Job in Private Equity
  3. Working in Private Equity: How to Succeed?

Structuring

If there's one theme that underpins the entire concept of private equity investing it's structuring. The structure of an investment is what helps private equity funds achieve equity returns for debt risk.

Top 3 Articles

  1. ALL You Need to Know About Vendor Financing
  2. Ratchets Galore: In Practice, Examples and Pros & Cons
  3. Earnouts Galore: Bridging Value Gap, Tipsand Are They Fair?

Theories & Ideas

Private equity is full of 'conventional wisdom' and baseless platitudes. This section attempts to look at private equity investment concepts with a fresh viewpoint and minimal bias.

Top 3 Articles

  1. Warren Buffett's Version of Private Equity Carried Interest
  2. Bolt-On Acquisitions: The Investment Economics
  3. 'Boring' Businesses: Maybe Not the Post Crisis Answer

Valuation

On the surface, private equity valuations seem very simple: a market multiple multiplied by the latest earnings figure. But once you get your hands dirty, you'll find a lot of complexity, which I cover here.

Top 3 Articles

  1. ALL You Need to Know About Earnings Multiple Valuations
  2. Which Earnings Measure? EBITDA vs EBIT, EBITDAC vs NPAT vs NPAT and More!
  3. How Does a Trade Deal Measure Up To Private Equity on Paper?

Anti-Private Equity

Is private equity really magic? Or is it just one big con? Even the most active advocates of private equity have to ask themselves this question from time to time, at a minimum, to understand the criticism.

Top 3 Articles

  1. Limited Partners Constantly Deceived by General Partners
  2. Private Equity Returns are Misleading, Part I and Part II
  3. Bolt On Acquisitions: Or are they just Clip-On?