GPEI leverages INSEAD's existing global PE activities to serve specific industry needs through research and educational programmes. We offer the private equity community an opportunity to collaborate with a leading academic institution to develop relevant and targeted studies on private equity. Pre-defined with our partners, the output takes different forms: white papers, case studies, or articles and thought pieces.
In Phase 3 of our research series to understand how institutionalisation can help a family firm achieve sustainable growth, the geographical focus shifts to Europe where family firms represent 70-80% of all business enterprises and account for 40-50% of employment. We surveyed 121 family businesses and interviewed 7 leading PE firms to examine the level of institutionalisation of family firms in Europe. The report includes individual case studies that can help family firms understand their own strengths and weaknesses and learn from their peers, as well as explores partnership opportunities between family firms and PE investors.
Southeast Asia (SEA) has a young and vibrant technology startup ecosystem. An ecosystem that is maturing at a rapid pace with capital increasingly allocated to up and coming tech startups. With the rise of unicorns, foreign venture capital and corporates, Golden Gate Ventures in partnership with INSEAD felt it was time to revisit earlier research relating to the exit landscape. In the analysis we're taking a deeper look at the historical exits (strategic acquisitions, IPOs and trade sales) and make a forecast of potential exits for the next 6 years.
Family owned and controlled firms form the backbone of Latin American economies, accounting for 75% of all $1 billion-plus businesses in the region and 60 percent of its aggregate GNP. It follows that family businesses must create value and thrive for the economic well-being of their home countries. So how can family firms ensure long-term value creation? In Phase 2 of our research series on the institutionalisation of family firms, we surveyed 131 family firms and interviewed select PE experts to understand the dynamics of how institutionalisation can help family-backed enterprises in LATAM secure its long-term survival and unlock growth.
This report explains the various metrics employed by General Partners ( GPs) and Limited Partners ( LPs) to arrive at a meaningful assessment of a funds success. Performance in private equity investing is traditionally measured via the internal rate of return (IRR) and multiple of money (MoM) which captures return on invested capital. Once all investments have been exited and the capital returned to limited partners, the final return determines the fund’s standing amongst its peers. However, IRR and MoM, merely provide a first layer of insight into private equity fund performance. Other metrics offer a more nuanced view of performance over the life of the fund, and by various adjustments offer a return picture that is more comparable to the performance of public equity markets and other liquid asset classes.
China’s venture capital (VC) sector has moved into the fast lane. For the first time, Chinese start-ups have attracted more funding than their US counterparts. Is China on its way to becoming the world’s largest VC market? Can its growth rate be sustained? What challenges lie ahead – and what will it take for China to move into pole position in the race for global venture capital?
This report explores the level of institutionalisation at family firms in Asia-Pacific and the Middle East, featuring survey output and insight from interviews with 123 family firms and 14 experienced private equity firms. While an entrepreneurial spirit and close relationships are key elements at the start of a family's business journey, introducing formal policies and procedures to institutionalise the firm's mission and values is critical to preserve competitive advantage and enable sustainable growth over the generations. The report also highlights settings in which family firms and PE investors can partner to unlock value.
This report focuses on the question of value creation in private equity and presents a framework that identifies the sources of return and operational value creation in PE investment. The framework - IVC 2.0 - deconstructs value creation across various financial and operational drivers and isolates value created through capital structure re-engineering, industry operating performance, and company-specific Alpha.
Monisha Varadan, Kamal Hassan and Claudia Zeisberger
Alexandra von Stauffenberg
How the VC Pitch Process Is Failing Female Entrepreneurs
Kamal Hassan, Monisha Varadan, Claudia Zeisberger
Y Combinator Accelerates the Hunt for Unicorns
Y Combinator will open a 10-week, free-of-charge massive open online course (MOOC), supplemented with virtual office hours and access to 15,000 founders worldwide as it's part of their goal to maximise the amount of entrepreneurship and innovation in the world
Alexandra Albers Schoenberg and Claudia Zeisberger
This article highlights the practical issues and implications of a limited partner in a private equity fund, suggests factors to consider for investor when setting up a PE fund, focuses on the behavioural elements of being a limited partner, discusses the balance of GP & LP relationship.
Kamal Hassan and Claudia Zeisberger
Sam Garg and Nathan Furr
The main purpose of this report is to outline how non-financial factors such as ESG considerations can be incorporated by General Partners (GPs) to drive their risk-adjusted returns. The report also provides a perspective on how GPs should act in the short-term to avoid pitfalls and leverage opportunities connected with the ongoing COVID-19 crisis.
This project provides a macro overview of family offices as well as key global trends within the industry and offers key learnings from selected best in class family offices.
Chinese companies are widely regarded as pushing the technological and innovation frontier as well as successfully introducing and scaling new business models . In many regions across the world and, in particular, South East Asia (SEA), similar technologies and business models seem to be adapted. There appears to be a time lag between the successful adoption in China and elsewhere , as, for example, significant time lags between China and South East Asia in the founding dates of successful startups can be observed. In order to obtain a comprehensive and unbiased perspective on this phenomenon , this project analyses past investments across industries in China and SEA.
This project examines private equity opportunities in promising industries in Indonesia, Vietnam and Thailand. The following three markets are analyzed in detail: Fintech opportunities in Indonesia, Consumer Retail in Vietnam and Food Manufacturing in Thailand.
Climate change is a worldwide risk that generally impacts emerging countries more than developed countries. Climate risks can have a material impact on both the real economy and the financial system. The overall finance industry is moving towards ESG and institutional investors towards “green” impact investing. This study represents INSEAD team’s own independent recommendations to CDC and its Financial Institutions (FI) team and is expected to inform CDC’s own strategy which is being developed independently.
Rated as top 3 in class, this project analyses important drivers and aspects in Tech Logistics Eco-system in SEA - warehousing and fulfillment centres, transportation, last-mile, and cross-border logistics and also discusses the trends, market overview , challenges, growth/investment investment oppurtunities.
The primary purpose of this paper is to explore innovative solutions in finance, primarily in sub-Saharan Africa, through conversations with founders of businesses and practitioners. The paper draws on conversations between the author and different stakeholders (including entrepreneurs, consultants and academics) during his time at INSEAD and his travels to the region, and concludes with an appendix containing management summaries written on different innovations in finance that have broadly had or seek to have significant developmental impact on the continent.
Value Creation – As Seen from Asia and Ride-Sharing
The purpose of this study is to understand Value Creation from the perspectives of selected technology sectors and Asia. The study takes a global view first, before zooming in to Asia, followed by exploring the value creation definition and understanding how this could play out within venture-backed growth companies in transportation (ride-sharing) through Uber and Grab. The study concludes with some reflections on value creation based on these cases.
WeWork has seen a decade of growth with a disruptive new service business model in a rapidly transforming industry: shared office space for start-ups (and increasingly for big companies) thanks to its understanding of workplace trends. The case allows discussion of customer-centricity in a B2B service context, and of how companies optimize – digitalize – the customer experiences by leveraging data.
The Sula case series focuses on the risks and rewards of early-stage investing in a successful emerging market consumer start-up (i.e. non-tech), from seed funding in 2004 to raising expansion capital in 2019. Case C discusses Sula at a later stage where the founder faces the decision of either keeping the company private or taking it public, and the potential impact on governance in transferring a majority stake to a single investor.
The Sula case series focuses on the risks and rewards of early-stage investing in a successful emerging market consumer start-up (i.e. non-tech), from seed funding in 2004 to raising expansion capital in 2019. Case B discusses Sula at growth stage where we look at how the company raise a subsequent round of funding to scale up and its associated market and implementation risks. It also examines the entrepreneur’s choice of subsequent partners after the exit of seed investors. .
Can 3G Capital Make Burger King Cool Again?
When 3G Capital bought Burger King from TPG, Bain Capital and Goldman in 2010, the fastfood chain was losing momentum. By 2014, the business was back in growth mode but the Burger King brand was still lacking lustre and it was unclear if the celebrity-heavy ad campaign would work. Could new CEO Daniel Schwartz and his team make the brand cool again – on the cheap? Drawing on data from a brand audit, the challenge is to (i) define the brand’s identity and choose among five positioning ideas; (ii) allocate expenses between television, digital and PR, and brand and restaurant redesign. For the digital and PR components, for example, students have to evaluate eight mock-ups created by Burger King’s agency, and come up with their own ideas for Burger King to evaluate.
Private equity firm Clayton, Dubilier & Rice (CD&R) is preparing a bid for leading US car rental agency Hertz. By replacing Hertz’s top managers, improving capital management and driving down operating costs, CD&R sees an opportunity to nearly double EBITDA. However, the turnaround involves significant risks, which CD&R must weigh in preparing its bidding strategy. Students are required to assess and value the business, evaluate a post-acquisition operating turnaround plan requiring new leadership, select a financial structure to mitigate significant cyclicality, and craft a winning bidding strategy in the context of a competitive auction.
In 2010, ACTIS embarked on an ambitious project to build a pan-Middle East and Africa (MEA) payments platform. It had purchased Mediterranean Smart Cards Company (MSCC), a bankcard issuer with operations across Africa, and had identified a follow-on target, Visa Jordan Card Services as part of its buy-and-build strategy, and another potential acquisition in South Africa. These could enable the ACTIS platform to capture the entire value chain in the payments business in the MEA region. However, not long after the purchase of MSCC, political turmoil engulfed the Arab world, prompting the ACTIS investment committee in London to question the viability of creating a payments platform in MEA.
Careem, a Dubai-based ride-hailing company, was founded in 2012 in the United Arab Emirates (UAE) by two ex-McKinsey consultants who saw a gap in the transport market. Started as a web-based car booking service for corporate clients, Careem had evolved into a leading application-based booking service in the Middle East and North Africa (MENA) region, with a differentiated business model tailored to the tastes and preferences of Middle Eastern consumers. Fuelled by venture capital funding rounds in September 2013 and December 2014, Careem was again on the fundraising trail in 2015 for a Series C investment round to further scale its existing business and continue its roll-out across MENA. The Abraaj Group, a leading emerging markets private equity investor, was interested, but with Uber competing fiercely in the MENA region, it had to decide whether Careem could compete with its well-funded global competitor.
In May 2012, private equity firm KKR is considering the buyout of WMF group (WMF), a diversified kitchenware and professional coffee machine manufacturer headquartered in Geislingen, Germany. The deal seems a potentially compelling investment opportunity, with various options for value creation – expanding WMF's well-established brand to other geographies as well as reducing costs. Priorities must be set, however, to generate an attractive return by the end of the investment period. The deal team has to decide which business segments are worth putting more resources into and which to divest, which brands should be kept and which to trim off, and how to take up any operational slack without affecting the overall strategy.
In 2011, Partners Group is nearing the end of a year-long quest for a new mandate from a European pension fund, Future Plan. The fund has struggled with its 6-year old PE programme, consistently falling short of its target allocation to the asset class and generating poor returns, seemingly always one step behind the opportunity in the market. Future Plan has built its PE programme by investing in closed-end funds of PE products managed by two executives, one focused on European markets, the other on global markets. But the fallout from the global economic crisis wreaked havoc with Future Plan's PE programme and something has to change. With an interest in expanding its PE activity to include secondary and direct investment strategies, Future Plan begins a manager search process with one goal in mind: to achieve the target return to the asset class by 2014.
The eleventh edition of INSEAD’s Private Equity Navigator focuses exclusively on the recent publications and articles from the Global Private Equity Initiative (GPEI) and its stakeholders.
The ninth edition of the INSEAD-Pevara Private Equity Navigator presents a geography-by-geography comparison of PE and public equity performance to test the commonly-held belief that PE consistently outperforms its public market peers, expanding on research first presented six months ago.
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