scholarly journals Creating value in investments with the use of private equity funds

2020 ◽  
pp. 9-20
Author(s):  
Olga Mikołajczyk ◽  
Bartosz Owedyk
Keyword(s):  
Literature Review ◽  
Foreign Language ◽  
Value Creation ◽  
Private Equity ◽  
Investment Value ◽  
Equity Funds ◽  
Private Equity Funds ◽  
Equity Investments ◽  
Language Literature ◽  
Private Equity Investments

The influence of the private equity sector on the contemporary economy is quite significant. This is why the present paper attempts to examine mechanisms private equity investors apply in order to increase the value of their investments. The literature review has identified the most fundamen- tal elements of creating value on the basis of empirical, academic studies that verified hypotheses regarding the influence of particular mechanisms on the process of value creation in private equity investments. This paper is divided into five parts that describe the elements of the investment pro- cess, research into value creation, financial arbitration, as well as direct and indirect mechanisms of creating investment value. The paper is mainly based on the review of foreign-language literature.

scholarly journals What Drives Private Equity Investments in Romania?

2015 ◽  
Vol 25 (4) ◽  
pp. 25-42
Author(s):  
Mihai Precup
Keyword(s):  
Economic Growth ◽  
Unemployment Rate ◽  
Private Equity ◽  
Market Capitalization ◽  
Equity Funds ◽  
Corruption Index ◽  
Private Equity Funds ◽  
Equity Investments ◽  
New Variables ◽  
Private Equity Investments

Abstract This paper aims at presenting the determinants of private equity investments in Romania over the period 2000 - 2013. Additionally, this paper presents the main highlights in terms of evolution, source of funding and activities in which the private equity funds invested during the crisis. Starting from the existing literature, this paper extends the analysis of private equity drivers to Romanian market by including variables such as: economic growth, market capitalization, interest rate, unemployment rate and public R&D expenditure which were already tested in previous papers. In addition, this paper introduces new variables such us productivity and corruption index which we consider important factors in explaining the evolution of private equity investments in Romania. The results of our empirical model confirmed existing hypothesis regarding the importance of some determinants such as: unemployment rate, economic growth, market capitalization and corruption. Based on our empirical results, we have pointed several strategic directions that are meant to support the development of the private equity market in Romania. Keywords: private equity; economic growth; market capitalization; unemployment rate; corruption; private equity determinants; Romania.

Determinants of Private Equity Investments across the BRICS Countries

2018 ◽  
Keyword(s):  
Private Equity ◽  
Capital Investments ◽  
Explanatory Variables ◽  
Developed Economies ◽  
Brics Countries ◽  
Equity Funds ◽  
Private Equity Funds ◽  
Equity Investments ◽  
Venture Capital Investments ◽  
Private Equity Investments

The determinants of private equity investments (particularly venture capital investments) have been studied extensively across developed economies, but this is not the case across emerging markets. This study primarily focuses on the determinants of private equity (inclusive of all sub-classes) among the BRICS countries. Six macroeconomic and market-related explanatory variables, including the Corruption Perception Index, are examined. Private equity funds raised across BRICS serve as the proxy for private equity investments. The study reveals that GDP growth and real interest rate are both statistically significant and positively related to private equity investments across the BRICS countries. Furthermore, market capitalization growth and corporate tax rates are statistically significant, and both are found to be negatively related to the dependent variable.

MODELING PRIVATE EQUITY FUNDS AND PRIVATE EQUITY COLLATERALISED FUND OBLIGATIONS

2004 ◽  
Vol 07 (03) ◽  
pp. 193-230 ◽  
Author(s):  
Etienne de Malherbe
Keyword(s):  
Private Equity ◽  
Investment Horizon ◽  
Bessel Processes ◽  
Fund Managers ◽  
Investment Value ◽  
Equity Funds ◽  
Private Equity Funds ◽  
Three Stages ◽  
The Individual ◽  
Managed Funds

The recent development of the securitisation of funds of private equity funds poses the question of the individual and joint modelling of the underlying funds. Private equity funds are different from other managed funds because of their particular bounded life cycle: when the fund starts, the investment partners make an initial capital commitment, the fund managers gradually draw down the committed capital into investments, returns and proceeds are distributed as the investments are realised and the fund is eventually liquidated as the final investment horizon is reached. Modelling private equity funds therefore requires three stages: the modelling of the commitment drawdowns, the modelling of the investment value and the modelling of the return repayments. A standard lognormal process is utilised for the dynamics of the investment value. Squared Bessel processes are utilised for the dynamics of the rates of drawdowns and repayments. Résumé: Le récent développement de la titrisation de fonds de fonds de placements privés pose la question de la modélisation individuelle et jointe des fonds sous-jacents. Les fonds de placements privés sont différents des autres sociétés d'investissement à cause de leur cycle de vie particulier et limité: au démarrage du fonds, les associés s'engagent sur un apport initial en capital; puis les gérants du fonds opèrent des tirages progressifs sur le capital apporté pour procéder à des investissements; les revenus et les profits sont distribués à mesure que les investissements sont réalisés; enfin, le fonds est liquidé lorsque l'horizon d'investissement est atteint. La modélisation d'un fonds doit donc se faire en trois étapes: la modélisation des tirages sur l'apport en capital, la modélisation de la valeur des investissements et enfin la modélisation des paiements et remboursements des dividendes et retours sur investissements. Un processus lognormal standard est utilisé pour la dynamique de la valeur des investissements. Des processus de Bessel carré sont utilisés pour la dynamique des taux de tirage et de remboursement.

A Survey on Enterprise Opportunities and Analysis of Technological Startups and Valuation

2020 ◽  
pp. 84-91
Author(s):  
Anandakumar Haldorai ◽  
Arulmurugan Ramu
Keyword(s):  
Venture Capital ◽  
Private Equity ◽  
Darwinian Selection ◽  
Know How ◽  
Investment Value ◽  
Finance Development ◽  
Equity Funds ◽  
Private Equity Funds ◽  
Traditional Approaches ◽  
Start Ups

Enterprise technological start-ups represent the newly created firms with the possibility to rapidly develop and assume liquidity in the next few decades. The main purpose of this mode of expansion is to enhance finance development over considerably limited collateralizable fiscal assets. However, this is considered unattractive from the ancient banking corporations which have now been replaced by more sophisticated and specialized intermediaries such as the private equity funds or the venture capital that diversify business portfolios in reference to their strategies on multi-annual exit with firm projected increment in investment value that endured the Darwinian selection. In that regard, this paper conducts evaluation of firms and reviews their technological start-ups following traditional approaches, flanked based on certain elements derived from multiple-exit methods and varied probabilistic scenarios. The technological footprints showcase the evaluation analogies with know-how, intangibles and patents that are connected to certain sectors.

scholarly journals Professional Investment Standards in the Private Equity Sector: Selected Aspects

2019 ◽  
pp. 67-76
Author(s):  
Olga Mikołajczyk
Keyword(s):  
Best Practices ◽  
Value Creation ◽  
Private Equity ◽  
Conflicts Of Interest ◽  
Professional Standards ◽  
Ethical Standards ◽  
Substantial Impact ◽  
Equity Funds ◽  
Sustainable Investment ◽  
Private Equity Funds

Investments made by private equity funds must abide by the highest ethical standards as the framework within which their stakeholders operate is very much based on broadly understood trust. The paper discusses selected professional standards especially important for private equity transactions. It is based on the Professional Standards Handbook, a set of principles focusing on integrity and acting with fairness, keeping one’s promises, disclosing conflicts of interest, maintaining confidentiality, and promoting best practices for the benefit of sustainable investment and value creation. We also address the ESG issues which – besides financial aspects – exert substantial impact upon sustainable development of the private equity market. Ethical standards have gained in importance especially with the adoption of the AIFM Directive designed to regulate the operations of alternativeinvestment funds.

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