ILPA: Generally Accepted Accounting Principles. The common set of accounting principles, standards and procedures. GAAP is a combination of authoritative standards set by standard-setting bodies as well as accepted ways of doing accounting.

Esma: Generally Accepted Accounting Principles

Source: ILPA, Esma

Specialist advisers who assist institutional investors in their private equity allocation decisions. Institutional investors with little experience of the asset class or those with limited resources often use them to help manage their private equity allocation. Gatekeepers usually offer tailored services according to their clients' needs, including private equity fund sourcing and due diligence through to complete discretionary mandates. A professional advisor or intermediary operating in the private equity market on behalf of clients, such as institutional investors.

Source: ILPA

Global Depositary Receipt (GDR's). Receipts for shares in a foreign based corporation traded in capital markets around the world. While ADR's permit foreign corporations to offer shares to American citizens, GDR's allow companies in Europe, Asia and the US to offer shares in many markets around the world.

Source: ILPA

ILPA: The managing partner in a private equity management company who has unlimited personal liability for the debts and obligations of the limited partnership and the right to participate in its management. The General Partner is the intermediary between investors with capital and businesses seeking capital to grow. See: Limited Partnership.

GIPS: Typically, the manager of a limited partnership in which the limited partners are the other investors. The general partner earns an investment management fee that may include a percentage of the limited partnership’s profits. (See “carried interest.”)

Invest EUROPE: General Partner (GP) is the term typically used to refer to the different entities and professionals within a private equity firm which source, analyse, negotiate and advise on potential transactions as well as invest and manage the fund. It is this definition which is used for the purposes of this Handbook. More specifically, it means the general partner of a Limited Partnership. The term GP may also be used to refer to the manager or investment adviser of a fund, depending on the fund structure.

Source: ILPA

This is a common term of the private equity agreement. To the extent that the general partner receives more than its fair share of profits, as determined by the carried interest, the general partner clawback holds the individual partners responsible for paying back the limited partners what they are owed.

Source: ILPA

The amount of capital that the fund manager contributes to its own fund in the same way that a limited partner does. This is an important way in which limited partners can ensure that their interests are aligned with those of the general partner. While the U.S. Department of Treasury has removed the legal requirement of the general partner to contribute at least 1 percent of fund capital. A 1 percent general partner contribution remains standard practice, particularly among venture capital funds.

Source: ILPA

Funds investing in all stages of private equity.

Source: Invest Europe

Capital raised from an LP located in the same country as the fund it commits to is usually considered to be domestically raised according to the Invest Europe classification.

Source: Invest Europe

An advertisement by a GIPS-compliant firm that adheres to the requirements of the GIPS Advertising Guidelines.

Source: GIPS

The form required to be filed with CFA Institute to notify CFA Institute that the firm claims compliance with the GIPS standards.

Source: GIPS

A presentation for a composite that contains all the information required by the GIPS standards and may also include recommended information or supplemental information.

Source: GIPS

A presentation for a pooled fund that contains all the information required by the GIPS standards and may also include recommended information or supplemental information.

Source: GIPS

Either a GIPS composite report or a GIPS pooled fund report

Source: GIPS

This occurs when an employee is required to relinquish unvested stock when terminating his employment contract early.

Source: ILPA

Employment contract of upper management that provides a large payout upon the occurrence of certain control transactions, such as a certain percentage share purchase by an outside entity or when there is a tender offer for a certain percentage of a company's shares. Discussed in more detail at The Executive Employment Agreement.

Source: ILPA

Country, regional, governmental and European agencies or institutions for innovation and development.

Source: Invest Europe

A government-owned private equity fund, usually organized through a federal or provincial agency or crown corporation.

Source: ILPA

The IRR based upon the performance of the investments, not taking into account management fees or carried interest.

Source: ILPA

The total amount of management fees paid by a Limited Partner, excluding management fee offsets.

Source: ILPA

The return on investments reduced by any transaction costs.

Source: GIPS

A type of private equity investment (often a minority investment) in relatively mature companies that are looking for primary capital to expand and improve operations or enter new markets to accelerate the growth of the business.

Source: Invest Europe

Funds that make private equity investments (often minority investments) in relatively mature companies that are looking for primary capital to expand and improve operations or enter new markets to accelerate the growth of the business.

Source: Invest Europe