PRIVATE EQUITY
BY: MAHA KHAN PHILLIPS • PROFILES BY: STUART NEWMAN
P
rivate equity is a broad term are all other examples of the types of company, writing off the investment or
that covers any type of equity private equity funds in the market. fl oating the company on a stock
investment that is not traded or Th e industry also has a buoyant market.
listed on a stock exchange. Like most secondary market, with players like According to IFSL estimates, a
of the investment business, private Coller Capital buying up assets that record $686 billion of private equity
equity is a diverse asset class. Th ere are other managers want to get rid of. was invested globally in 2007, up over
many diff erent types of investments. a third on the previous year. Private
Buyout funds typically look to take STAGES equity fund raising also surpassed prior
over a majority of a business, usually Private equity can be divided into three years in 2007 with $49 billion raised,
in developed, mature companies, and stages, according to International up 10% on 2006. Th e regional
normally change its ownership. Financial Services London (IFSL), the breakdown of private equity activity
Venture capital seeds companies that private sector organisation. Investments shows that in 2007, North America
are either underdeveloped, or in the represent the fi nancing of the accounted for 71% of global private
development process. Early stage businesses through venture capital, equity investments, and 65% of funds
capital is used to launch start up buyouts, and other forms of fi nancing. raised. Between 2000 and 2007,
companies, whilst late stage and Fund raising refers to the money Europe’s share of investments fell from
growth capital is often used to expand investors have committed to private 20% to 15% and funds raised from
existing businesses. Distressed debt, equity funds in any one year, and 25% to 22%. Th is was largely a result
mezzanine capital, real estate (on the divestments represent the realisation or of stronger buyout market activity in
more opportunistic side), exiting of a private equity investment. the US than in Europe, says IFSL.
infrastructure, and special situations Th is is generally done by selling the Industry participants say that the
DANIEL G KOPPELKAMM, CFA
Title: Associate can effectively, globally exploit the paradigm shift from fossil
Current employer: based energy to renewable energy. It is also crucial to stay
Man Investments
focused in the wide-ranging fi eld that is environmental fi nance.
Previous employer:
Credit Suisse
Are there certain skills you would consider useful for your job?
University: Universidad Complutense,
Madrid; Cass Business School
Motivation and good time management are essential. A fi rm
Degrees: Bachelors in Business
grasp of fi nancial analysis and quantitative fi nance are also
Studies; Masters in European Business
important. Other skills that are extremely useful include
Professional qualifi cations: CFA
communication skills, languages, an ability to think laterally and
general pro-activeness.
What attracted you to this career path?
How do you think the role you’re in now will change over time?
I have a strong interest in environmental fi nance and I was attracted
Environmental sectors are changing rapidly, as fi ttingly illustrated
by the wealth of investment opportunities surrounding the ‘green
by 2nd generation biofuels. It is crucial to stay on top of industry
revolution’. I also like the long term investment horizon inherent in
developments and adapt the investment focus accordingly.
private equity, which gives one suffi cient time to build valuable
assets.
Do you have advice for someone intending to pursue the same
career path?
What are the major challenges you face in your position?
It’s important to stay focused and, over time, to systematically
It’s not easy to identify the best renewable energy companies that
adopt the skills sets that are necessary to your position.
24
112-29 investment management.indd 242-29 investment management.indd 24 222/11/08 12:39:502/11/08 12:39:50
Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84  |  Page 85  |  Page 86  |  Page 87  |  Page 88  |  Page 89  |  Page 90  |  Page 91  |  Page 92  |  Page 93  |  Page 94  |  Page 95  |  Page 96  |  Page 97  |  Page 98  |  Page 99  |  Page 100