Private Equity Fund Investments

This book presents new, advanced, evidence-based guidance on investing in private equity funds: first by assessing the investor's environment and motivations, then by looking into the risks, returns and overall performance of funds and finally, by offering practical solutions to the illiquidity conundrum.

"Thanks to the exhaustiveness of its references and the rigor of its analysis, this new publication is a must-read for both practitioners and researchers."

Noël Amenc, PhD, Professor of Finance, Director of the EDHEC Risk Institute, CEO ERI Scientific Beta

"The author delivers a variety of interesting topics and look-outs in the area of Private Equity (PE) investing. One particular interesting topic is the predictive power of the J-Curve. The author is pointing out interesting aspects which are useful for managing the risks associated with the illiquidity in PE portfolios also supporting a more active management and benchmarking of existing portfolios of PE funds. On the other hand, regulators would get the tools at hand to reduce the cost of capital associated with investing in PE. The illiquidity in PE is not necessarily more risky per se than investing in more liquid investments and the ability to estimate the risk of the PE fund portfolios in terms of VaR or Expected Shortfall of cash flows would allow to get rid of some misconceptions in the risk measurement of illiquid private equity investments."

Ivan Popovic, Partner, Aeris Capital AG

'There appears to be a vicious circle: the perception that private equity (PE) is highly risky results in small allocations to this asset class. The immaterial exposure to PE does not make it worth for institutional investors to look at it specifically. So the industry works with too pessimisticassumptions and over-simplifications. This book bridges the worlds of academia and practical application and addresses a significant gap. It is a treasure trove of facts and insights, demonstrating the thorough research and the wide range of perspectives through which the author has looked at the PE market. In many ways, it challenges conventional wisdom and, most importantly, might shake limited partners out of their complacency, by pointing to various levers that they can usefully employ and make more out of the data they actually have at hand as demonstrated through the analysis on 'the predictive power of the J-curve'. Cyril writes an insightful book that deals effectively and convincingly with the many contradictions of the industry. Private Equity Fund Investments is one of the very few books relevant for institutions investing as limited partners'.

Thomas Meyer, Founder and Director of LDS Partners

"Doctor Demaria is a now long-time friend who, since we were colleagues in 2001-2002, has continued to demonstrate the sustained high level of discipline, academic rigor and focus that are required to achieve both his multiple academic successes, as well as his deep level of understanding of the private equity and venture capital businesses and the companies, technologies, services and new industries that they help to create, nurture, grow and ultimately succeed. His focus is the critically important world where the sole true source of net new job creation, massive economic disruption and logarithmic productivity increases meet the heavy burden of returns required to meet the future liability needs of the world's many and diverse institutional pension, foundation and endowment investors. We are all lucky to have the opportunity to benefit from his dozen plus years of research, thought and analysis."

Michael S. Battey, Co-Founder of Emerald Bay Wealth Management LLC

Autorentext

Cyril Demaria specializes in private equity and combines practical and entrepreneurial experience, academic knowledge, and lecturing experience. Prior to founding and managing Pilot Fish, a series of private equity funds, he was Chief Investment Officer of Tiaré Investment Management AG (Zurich). He previously created a multi-strategy fund of funds focused on environment (Pionat Viable Investments). Prior to that, he was an Investment Associate in a Swiss private equity fund of funds; a Portfolio Manager responsible for private equity funds investments for a French insurance group; and Head of Corporate Development of a French IT firm in charge of acquisitions and financing. He started his career in an American hybrid venture capital and fund of funds firm.

A French citizen, Cyril holds a BA in Political Sciences from the Institut d'Etudes Politiques (Lyon), a Masters in Geopolitics applied to Money and Finance (Paris); a Masters in European Business Law (Paris); and is a graduate from HEC (Paris, specialized in Entrepreneurship). He is a doctoral candidate at University Sankt-Gallen and an Associate Professor at EDHEC (Nice, Lille, London), ESCP-Europe (London), ESCE (Paris), EADA (Barcelona), Fipecafi (Sao Paulo), USP (Sao Paulo) and IFP Business School (Paris). He lectures on "Private Equity", "LBO", "Money and Finance", and "International Finance". He notably holds executive training sessions at the Association Françaisedes Investisseurs en Capital (Paris) and the Société Française des Analystes Financiers (Paris). Cyril collaborates regularly as an expert with the SECA, AFIC, and EVCA.

Inhalt

1. Introduction 2. Sub-Optimal Risk-Return Profiles in Private Equity 3. Fee Levels, Performance and Alignment of Interests in Private Equity 4. The Predictive Power of the J-Curve 5. Conclusion