Table Of ContentPrivate Equity in Action
2
Case Studies from Developed and Emerging Markets
Claudia Zeisberger
Michael Prahl
Bowen White
3
This edition first published 2017
© 2017 Claudia Zeisberger, Michael Prahl and Bowen White
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CONTENTS
Preface
Section I GP–LP Relationships
CASE 1 BERONI GROUP: MANAGING GP–LP RELATIONSHIPS
SYNOPSIS
PEDAGOGICAL OBJECTIVE OF THE CASE
SUGGESTED ASSIGNMENT QUESTIONS
ADDITIONAL RESOURCES
Beroni Group: Managing GP-LP Relationships
INTRODUCTION
GROUP HISTORY
KEY ISSUES
APPENDIX A
APPENDIX B
CASE 2 GOING DIRECT: THE CASE OF TEACHERS’ PRIVATE
CAPITAL
SYNOPSIS
PEDAGOGICAL OBJECTIVE OF THE CASE
SUGGESTED ASSIGNMENT QUESTIONS
ADDITIONAL RESOURCES
Going Direct The Case of Teachers’ Private Capital
INTRODUCTION
BACKGROUND
INVESTMENT OBJECTIVES AND ASSET POLICY MIX
PHASE 1: THE ORIGINS OF TEACHERS’ PRIVATE CAPITAL
JIM LEECH: TASKED WITH TAKING TEACHERS’ GLOBAL
PHASE 2: GROWING AMBITION
PHASE 3: THE PEAK – LEADING THE WORLD’S LARGEST LBO
CHALLENGES EMERGE TO THE LARGEST LBO IN HISTORY
PHASE 4: POST-GFC ERA
EVALUATING THE SUCCESS OF TEACHERS’ APPROACH: ISSUES
FOR TEACHERS’, PENSION FUNDS AND OTHER LPS
THE WAY AHEAD
NOTES
CASE 3 PRO-INVEST GROUP: HOW TO LAUNCH A PRIVATE EQUITY
REAL ESTATE FUND
SYNOPSIS
5
PEDAGOGICAL OBJECTIVE OF THE CASE
SUGGESTED ASSIGNMENT QUESTIONS
ADDITIONAL RESOURCES
Pro-invest: How to Launch a Private Equity Real Estate Fund
APRIL 2015
BACKGROUND PRO-INVEST GROUP
FINDING AN OPPORTUNITY, 2012: HOLIDAY INN EXPRESS –
GOING ‘DOWN UNDER’?
FIRST STEPS – BUILDING A TEAM
WHICH STRUCTURE?
ANCHOR INVESTOR – FIRST COMMITMENT
THE SEARCH FOR FUNDING OPTIONS – LOOKING FOR THE
RIGHT ‘FIT’
ADRIANA STAR CAPITAL APPEARS . . . AND FOLDS
BACK TO THE DRAWING BOARD
ONWARDS AND UPWARDS
CHALLENGES
APPENDIX 1
NOTES
CASE 4 HITTING THE TARGET: OPTIMIZING A PRIVATE EQUITY
PORTFOLIO WITH THE PARTNERS GROUP
SYNOPSIS
PEDAGOGICAL OBJECTIVE OF THE CASE
SUGGESTED ASSIGNMENT QUESTIONS
ADDITIONAL RESOURCES
Hitting the Target Optimizing a Private Equity Portfolio with Partners
Group
FUTURE PLAN AND THE LEGACY PORTFOLIO, 2005–11
MAGNIFYING RETURNS – ALLOCATING TO ALTERNATIVES
EVOLUTION OF FUTURE PLAN’S PE PORTFOLIO
REPOSITIONING THE PE PORTFOLIO
ENTER STAGE LEFT: PARTNERS GROUP AND THE PITCH
THE TASK AT HAND
Section II Venture Capital
CASE 5 SULA VINEYARDS: INDIAN WINE – “CE N’EST PAS
POSSIBLE !”
SYNOPSIS
PEDAGOGICAL OBJECTIVE OF THE CASE
SUGGESTED ASSIGNMENT QUESTIONS
6
ADDITIONAL RESOURCES
Sula Vineyards Indian Wine — “Ce n’est pas possible !”
INTRODUCTION
SULA WINES
GEM INDIA ADVISORS
THE INDIAN WINE INDUSTRY
THE GLOBAL WINE INDUSTRY
VALUATION
CONCLUSION
NOTES
CASE 6 ADARA VENTURE PARTNERS: BUILDING A VENTURE
CAPITAL FIRM
SYNOPSIS
PEDAGOGICAL OBJECTIVE OF THE CASE
SUGGESTED ASSIGNMENT QUESTIONS
ADDITIONAL RESOURCES
Adara Venture Partners Building a Venture Capital Firm
STARTING OUT: THE ORIGINS
FIRST FUNDRAISING: TOUGH BUT STRAIGHTFORWARD
INVESTING THE FIRST FUND: OFF TO THE RACES
SECOND FUND: FIRST ATTEMPT
THE ‘DARK AGES’
RENAISSANCE
SECOND FUND: ALL OR NOTHING
JUNE 2013: A TIME TO DECIDE
NOTES
CASE 7 SIRAJ CAPITAL: INVESTING IN SMEs IN THE MIDDLE EAST
SYNOPSIS
PEDAGOGICAL OBJECTIVE OF THE CASE
SUGGESTED ASSIGNMENT QUESTIONS
ADDITIONAL RESOURCES
Siraj Capital Investing in SMEs in the Middle East
PRIVATE EQUITY IN THE MIDDLE EAST NORTH AFRICA (MENA)
REGION
SIRAJ CAPITAL
NETWORK & EXPERTISE
THE INVESTMENT APPROACH
TOWER
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Section III Growth Equity
CASE 8 PRIVATE EQUITY IN EMERGING MARKETS: CAN
OPERATING ADVANTAGE BOOST VALUE IN EXITS?
SYNOPSIS
PEDAGOGICAL OBJECTIVE OF THE CASE
SUGGESTED ASSIGNMENT QUESTIONS
ADDITIONAL RESOURCES
PE in Emerging Markets Can Mekong Capital’s Operating Advantage
Boost the Value in its Exit from Golden Gate Restaurants?
PRIVATE EQUITY IN ASIA
BACKGROUND: MEKONG CAPITAL
DEAL ORIGINATION
GOLDEN GATE AND GROWTH
MAXIMIZING VALUE AND CREATING A PROFITABLE PATHWAY
FOR FUTURE OWNERS
THE BOARD MEETING
NOTES
CASE 9 SLALOM TO THE FINISH: CARLYLE’S EXIT FROM MONCLER
SYNOPSIS
PEDAGOGICAL OBJECTIVE OF THE CASE
SUGGESTED ASSIGNMENT QUESTIONS
ADDITIONAL RESOURCES
Slalom to the Finish Carlyle’s Exit from Moncler
MONCLER: BACKGROUND
CARLYLE’S INVESTMENT IN MONCLER: THE 2008
TRANSACTION
CARLYLE’S INVESTMENT IN MONCLER: VALUE CREATION
CARLYLE EXIT CONSIDERATIONS
THE IPO OPTION
THE TRADE SALE OPTION
THE DUAL TRACK PROCESS
DECISION TIME
NOTES
CASE 10 INVESTOR GROWTH CAPITAL: THE BREDBANDSBOLAGET
INVESTMENT
SYNOPSIS
PEDAGOGICAL OBJECTIVE OF THE CASE
SUGGESTED ASSIGNMENT QUESTIONS
ADDITIONAL RESOURCES
8
Investor Growth Capital The Bredbandsbolaget Investment
THE SWEDISH BROADBAND MARKET
COMPETITORS
THE OFFERING
BUILDING THE COMPANY, 1998–2002
INVESTOR GROWTH CAPITAL
SENTIMENTS AMONG INVESTORS
ANTI-DILUTION PROVISIONS IN THE SHAREHOLDERS’
AGREEMENT
OPTIONS FACING THE MAJORITY INVESTORS
FURTHER ARTICLES ON BREDBANDSBOLAGET:
NOTES
Section IV Leveraged Buyouts (LBOs)
CASE 11 CHIPS ON THE SIDE (A): THE BUYOUT OF AVAGO
TECHNOLOGIES
SYNOPSIS
PEDAGOGICAL OBJECTIVE OF THE CASE
SUGGESTED ASSIGNMENT QUESTIONS
ADDITIONAL RESOURCES
Chips on the Side (A) The Buyout of Avago Technologies
CHIPS ON THE SIDE (A): THE BUYOUT OF AVAGO
TECHNOLOGIES
AGILENT TECHNOLOGIES
THE SEMICONDUCTOR INDUSTRY
THE SEMICONDUCTOR GROUP (SPG)
AGILENT’S MANAGEMENT APPROACH
APPENDIX 1
APPENDIX 2
NOTES
CASE 12 CHIPS ON THE SIDE (B): THE BUYOUT OF AVAGO
TECHNOLOGIES%
SYNOPSIS
PEDAGOGICAL OBJECTIVE OF THE CASE
SUGGESTED ASSIGNMENT QUESTIONS
ADDITIONAL RESOURCES
Chips on the Side (B) The Buyout of Avago Technologies
CHIPS ON THE SIDE (B): THE BUYOUT OF AVAGO
TECHNOLOGIES
THE BROAD SET-UP
9
THE FINANCING STRUCTURE
NOTES
CASE 13 GOING PLACES: THE BUYOUT OF AMADEUS GLOBAL
TRAVEL DISTRIBUTION%
SYNOPSIS
PEDAGOGICAL OBJECTIVE OF THE CASE
SUGGESTED ASSIGNMENT QUESTIONS
ADDITIONAL RESOURCES
Going Places The Buyout of Amadeus Global Travel Distribution
THE TARGET: AMADEUS
PRE-ACQUISITION CHALLENGES
THE SUITOR: BC PARTNERS
THE PROCESS
THE STRATEGIC OPTIONS FOR AMADEUS
OPTION B: DEVELOP THE IT SOLUTIONS DIVISION AND
POSITION AMADEUS AS A FULLY-FLEDGED IT SUPPLIER TO
TRAVEL PROVIDERS
Section V Turnarounds and Distressed Investing
CASE 14 CRISIS AT THE MILL: WEAVING AN INDIAN
TURNAROUND*%
SYNOPSIS
PEDAGOGICAL OBJECTIVE OF THE CASE
SUGGESTED ASSIGNMENT QUESTIONS
ADDITIONAL RESOURCES
Crisis at the Mill: Weaving an Indian Turnaround Alvarez & Marsal
ALLEGATIONS…
THE GROUNDWORK
ACTION…
THE TAKEOVER
NEW DAY, NEW TEAM
THE CHALLENGES AHEAD
THE TEXTILE COMPANY
SETTING THE STAGE FOR TURNAROUND
APPENDIX 1
APPENDIX 2
APPENDIX 3
APPENDIX 4
APPENDIX 5
APPENDIX 6
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