Claudia Zeisberger, a professor at INSEAD, and two INSEAD alumni, Michael Prahl and Bowen Whtie, joined forces to write Mastering Private Equity: Transformation via Venture Capital, Minority Investments & Buyouts and its companion case study volume Private Equity in Action-Case Studies from Developed and Emerging Markets (Wiley, 2017). Industry professionals added their thoughts to each chapter of Mastering Private Equity.

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Claudia Zeisberger, Mastering Private Equity

Mastering Private Equity: Transformation via Venture Capital, Minority Investments & Buyouts by Claudia Zeisberger, Michael Prahl and Bowen Whtie

The core book, written for both graduate students and professionals, is structured like a textbook (including lots of color). It is divided into five sections: private equity overview, doing deals in PE, managing PE investments, fund management and the GP-LP relationship, and the evolution of PE.

Mastering Private Equity is a model of clarity. For instance, in a table the authors summarize the advantages and disadvantages of various exit options. The advantages of a sale to a strategic buyer are: full exit, often pay a premium (synergies), pay in cash. The disadvantages are: less sophisticated buyers prolonging process, strategics require a majority stake. The advantages of a sale to a PE fund are: ample dry powder in market, can ‘warehouse’ company until eventual IPO. The disadvantages are: sophisticated and demanding buyers, minority stake may reduce pool of potential investors. As for an IPO, the advantages are: potential for high returns, access to future liquidity, often preferred by management, high profile exit. The disadvantages are: lock-up, risks of going to market, uncertainty of returns, strain on management time. The last alternative is a dividend recapitalization. Here the advantages are: returns cash to limited partners, no new shareholders, does not dilute equity stake. The disadvantages are: partial exit, value of investment unknown, not a high profile exit.

All of the cases covered in Private Equity in Action are taught in INSEAD’s various business programs. They span the globe, from an Indian vineyard and rice farming in Tanzania to creating a private equity fund in Georgia.

Anyone who wants to better understand private equity, especially PE with a global reach, would do well to read these books.

Article by Brenda Jubin, Reading The Markets