Global Private Equity Initiative

The team at GPEI are currently undertaking research to understand the nature of collaboration between corporations and startups, more specifically with the Corporate Venture Capital (CVC) arm of large multinationals and their ability to attract startups into their portfolio.

We are currently looking for both CVCs and startups to offer their insight and opinions on partnering with each other. If you are interested in being part of the research study, click here to fill up a questionnaire.

Investors and companies have expressed a growing appreciation of the impact that nonfinancial factors can have on value creation, long-term company performance, and the health of society at large. Over the past half-decade, this rising level of awareness has been spurred on by several organisations and industry bodies – such as the United Nations and the Private Equity Growth Capital Council (PEGCC) – that have developed best practice guidelines. GPEI explores the full spectrum of responsible investment, with a particular focus on two streams: impact investing and ESG in private equity.

Impact investing is an element or sector within the spectrum of socially responsible investing that seeks to deploy capital for an acceptable level of risk-adjusted return while concurrently incurring benefits in environmental and/or social terms. Put another way, impact investing marries the effect of an investment dollar on measurable, socially beneficial goals or metrics and the deployment of capital for an expected positive return.

For GPs executing growth capital and layout strategies, the ability to manage environmental, social and governance (ESG) investment considerations is increasingly viewed by leading GPs as lever for value creation. Private equity firms on the fundraising trail are not the only GPs cognizant of this trend; cost-savings potential, competitor activity and regulation all contribute to the rising awareness of ESG factors in investment committee decision making.

Work in this area is led by Ian Potter, Distinguished Fellow at GPEI.

Corporations are in a race to stay ahead and relevant as new technologies and business models upend their businesses. While internal R&D is still the main source of innovation, Global 2000 companies have turned increasingly to strategic acquisitions and venture capital investments to drive top-line growth, accelerate time to market and exploit windows of opportunity, and to test the waters before entering new markets. By the end of 2017, three-quarters of Fortune 100 companies were actively deploying venture capital and CVC represented approximately 23% of all venture capital invested in 2017.

GPEI’s work in corporate venture capital seeks to illuminate the issues and questions that are driving interest and growth in this critical source of innovation funding. We will update this site regularly with insightful articles that highlight the role that CVC plays in driving innovation in corporations.

Work in this area is led by Deepak Natarajan – INSEAD Adjunct Professor of Entrepreneurship and Family Enterprise – who established Intel Capital's (Intel's CVC arm) SEA and ANZ operations in 2008.

Family businesses and family wealth play a powerful role in economies around the world. Our research focuses on two specific interactions between families and the private equity industry: the opportunity for private equity funds to partner with family businesses to catalyse growth and families' activity as investors in the PE asset class.

For family businesses looking to transform their operations, private equity can help catalyse change. In addition to an infusion of capital, a PE firm's process-driven approach to investing and the network of professionals can help a family business rapidly evolve its business. However, private equity's short investment horizon and different business model poses challenges to a successful partnership.

To share insight into the activities and attitudes of family investors, GPEI draws on its network of private equity LPs to engage with global family offices. In our publication on The Institutionalization of Asian Family Offices, we explore the growth and institutionalisation of family offices in Asia. The dominant role played by first generation wealth creators is a defining characteristic of our study. It places the family office industry in Asia at an earlier stage of institutionalization than Europe and North America. As regional wealth ages and the priorities of subsequent generations grow, we expect Asian family offices to increasingly mirror their Western counterparts.

Work in this area is led by Britta Pfister – Distinguished Fellow at GPEI.

It is widely documented that infrastructure drives economic growth, creates jobs, and improves quality of life. However, there's a chronic underinvestment in infrastructure due to historical underinvestment and explosion in demand. A 2016 McKinsey study placed the gap in infrastructure spending at $800 billion annually through 2030 while the World Bank estimates that as of 2018, there is a $1.3 trillion annual funding gap for infrastructure projects for emerging economies.

From a public policy standpoint, in order to finance infrastructure development, how investors and financiers should approach infrastructure assets becomes critical. From the investor standpoint, it is equally critical to form a complete understanding of this asset class, which bears a number of differences from traditional equity or debt assets. In addition to investors, infrastructure development typically involves a large number of other parties, including government entities, project sponsors, contractors, financial/technical/legal advisors, multilaterals, etc. How investors interact and collaborate with these public and private sector players to best identify, de-risk and invest in infrastructure assets requires not only a good technical understanding, but a new mindset that recognises infrastructure as a brand new asset class. GPEI seeks to approach these key topics from a PE and project finance angle.

Work in this area is led by Kevin Lu – Distinguished Fellow at GPEI; Partner, Chairman of Asia and a Member of the Global Executive Board at Partners Group. 

Venture capital and VC-backed companies provide a glimpse into what our world might look like in the years to come. The disruptive technologies and business models funded through VC investment impact a wide range of industries, from consumer to healthcare to financial services. The steady growth of annual VC investment over the past decade and the global expansion of the industry have increased the capital available to fund new ideas across developed and emerging markets alike.

GPEI focuses on providing a link between industry experts and the INSEAD community, from case studies presented in the classroom to the centre’s support of the INSEADAlum Ventures seed fund. Funding mechanisms and participants continue to change almost as fast as the ideas seeking capital and GPEI seeks to illuminate the issues and questions in this dynamic area.

GPEI’s work in venture capital is led by R. Todd Ruppert.

Our work in Corporate Turnarounds is centred on the Managing Corporate Turnarounds MBA elective. The course focuses on giving participants the opportunity to experience what it takes to turn around a company in a variety of cases, ranging from strategic turnarounds to deep-distress situations. Turnaround situations are relevant to managers even if they never end up in distress, as putting pressure on a system brings weaknesses to the surface and forces managers to sail sharp into the wind. It is no surprise that this elective has evolved since its launch in 2009 into one of the most popular courses in the INSEAD’s MBA programme.

This course introduces students to the challenges of managing critical turnaround situations in corporations globally. To consistently preserve shareholder value through the ups and downs of a business cycle, it is vital to understand the reasons why companies slide into decline and what the mechanics of executing a successful turnaround are. Naturally, the course builds on the earlier classes in the MBA programme and is a logical follow-on to courses in Entrepreneurship and Private Equity. It is particularly relevant for those who are interested in working with investors in struggling companies, the management of distressed assets or would like to pursue a career in turnaround management.

Students start their journey with eight in-class sessions with case studies and guest speakers from the industry. Once the theoretical foundations are in place, they test their skills in an intense computer-based simulation taught over a full weekend. The task: Rescuing a distressed car manufacturer by drawing on the management, finance and operational skills acquired in earlier classes. Participants face increasingly complex decisions impacting both their short-term liquidity and long-term value creation (or preservation). The challenge is to survive in the short run by generating enough cash to buy time to restructure and create a new future for the company. Depending on how well cash is managed in the early stages of the simulation, participants have more freedom in deciding on long-term financial and operational issues. A thorough debrief presents the learnings from the “winning” team’s strategy.

Work in this area is led by Nicholas Ward – Distinguished Fellow at GPEI. 

PE Real Estate is a mature sector providing investors with a large spectrum of investment opportunities. By crossing multiple criteria: geography, asset types, size, risk return profile, investors get access to both main stream investment like core office in Manhattan or niches, like student housing in Central Europe or Data warehouse in Sweden.

Like the overall economy, Real Estate is not only affected by economic trends, like financial crisis, but also by structural trends, like uberization, digitalization. The recent Covid-19 pandemic seems to gather both. Like in recent past, with the first Gulf War, the TMT Bubble crash, the subprime, once again, following the global economy, the real estate markets are significantly affected by an external crisis. Talking about retail and Hospitality “affected” is an euphemism. But the second impact of the pandemic is an acceleration of major evolutions, Darwinian adaptation that will produce durable change: on-line shopping supremacy, teleworking, renting vs. owning and responsible and earth caring investment.

GPEI decided to launch a PE RE initiative, led by Lahlou Khelifi – Distinguished Fellow at GPEI.