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An Analysis of Private Equity of Investment
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Transcript of An Analysis of Private Equity of Investment
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An Analysis of Private Equity of
Investment
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MD Raihanul HasanSenior LecturerSchool of BusinessState University of Bangladesh
Sanjida Sayed BarshaID: UG01-24-10-045
School of BusinessState University of Bangladesh
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Overview of
InvestAsia Capital & Asset Management Ltd
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Name of the Company InvestAsia Capital & Asset Management Ltd.Legal Form
Technical collaboration with Financial Intelligence Services Ltd (FISL) of Hong Kong
Date of Incorporation July, 2009
Date of getting License
15th February, 2012
Date of Commencement
October, 2012
Operation Structure
InvestAsia has appeared in the market horizon to offer innovative solutions to satisfy all asset management and financial services needs, and to deliver tangible results for clients through full service access to our capital market & MF Management, Diversified Portfolio Management, PE Management and other innovative capital market products.
Office Address
1/A D.I.T Extension Road (3rd floor), Fakirapool, Motijheel, Dhaka-1000, Bangladesh.
Web Site
http://www.investasia.com.bd
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# Mission:We aspire the best chosen and most admired financial institution.
That offers an array of lucrative products.
Vision:
To be the most respected, trusted and prominent Asset Management Company in Bangladesh.
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Private Equity
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DefinitionMoney invested in firms which have not ‘gone public’.
Private equity consists of investors and funds
Capital for private equity is raised from retail and institutional investors
Capital can be used to fund new technologies, expand working capital within an owned company, make acquisitions, or to strengthen a balance sheet.
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CharacteristicsHighly illiquid
Long holding periods
High risk-return
Asset class
Grouped into a broader category called private capital
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Types of Private Equity Funds
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Buyout: funds provide equity capital to mature firms in need of capital or ownership transition.
Venture Capital: funds provide equity capital to start-ups and companies in the early stages of growth.
Growth Capital: funds provide expansion capital to enable a company to scale a business.
Special Situations: funds tend to invest in mezzanine or mid-layer debt capital, which provides more protection than equity financing in the event of default.
Generalists: funds invest in a variety of different stages.
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Investment sectors of Private EquityBusiness Services
Healthcare
Consumer
Industrial
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Lifespan of Private Equity
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Private Equity’s Impact on the Global Economy
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Private equity-owned firms are generally better managed than counterparts and have strong operational management practices
Firms acquired by private equity groups experience higher productivity growth than firms of the same age, size and industry
The globalization of private equity by investigating its impact in France and emerging markets
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Rank Name of firms Headquarter Capital Raised as May 2013(billion
of USD)1 TPG Capital Fort Worth $ 35.73
2 Carlyle Group Washington, D.C. $ 32.823 The Blackstone Group New York $ 29.564 CVC Capital Partners London $ 17.99
5 CPP Investment Board Toronto $ 9.126 Nordic Capital Stockholm $ 7.747 PAI Partners Paris $ 7.55
8 China Investment Corporation
Beijing $ 7.00
9 CDH Investments Hong Kong $ 6.5110 RRJ Capital Hong Kong $ 5.8011 Hitec Vision AS Stavanger $ 5.73
12 Energy Capital Partners Short Hills, NJ $ 5.70
Largest Private Equity Firms
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Private Equity practice in Bangladesh
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IFC, a member of the World Bank Group
CDC Group, the UK’s development finance institution
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Investment Opportunities ICT
Energy and Power sector
Ship building
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Benefits
&Challenges
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BenefitsAllow entrepreneurs to build their company with OPM
Private equity provides the funding that a company needs to expand its business.
Offers a number of value added services.
Company increases it value and ultimately has a liquidity event (e.g. IPO or sells to another company).
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ChallengesLengthy and complex process
In the deal negotiation stage, you will have to pay for legal and accounting fees.
Investors become part owners of business - founder loss of autonomy or control.
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Recommendations
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Provide more infrastructure facilities.
The company involved should be in charge of the technical project management, while local staff can do the administrative part.
Need to ensure that governments and regulators around the world do not take actions that inhibit private equity firms from achieving superior returns for their investors.
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The industry needs to continue to expand its post-investment, value-add capabilities
The current low market values also offer opportunities for Venture Capital and Expansion Capital funds
PE players need to intensify their work on generating appropriate returns
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Thank You