Mergers and Acquisitions

Source: esma

Market Abuse Directive

Source: esma

Capital provided to facilitate the takeover of all or part of a business entity by a team of managers. A private equity firm will often provide financing to enable current operating management to acquire or to buy at least 50 per cent of the business they manage. In return, the private equity firm usually receives a stake in the business. This is one of the least risky types of private equity investment because the company is already established and the managers running it know the business - and the market it operates in - extremely well.

Source: ILPA

The professional manager of a private equity fund or funds.

Source: ILPA

Invest EUROPE: These are the terms that are used to refer to the fee/profit share paid by the fund to the GP. For the GP to be able to employ and retain staff in order to invest and properly manage the fund until such time as profits are realised, it will typically receive, on a quarterly basis, an advance from LPs to cover the fund’s overhead costs. This management charge, generally funded out of LP commitments, is generally equal to a certain percentage of the committed capital of the fund during the investment period and thereafter a percentage of the cost of investments still held by the fund.

ILPA: The management fee is used to provide the partnership with resources such as investment and clerical personnel, office space and administrative services required by the partnership.

Source: Invest EUROPE, ILPA

The extent to which monitoring, transaction, and other portfolio company related expenses, paid to the General Partner are offset against management fees.

Source: ILPA

The persons who oversee the activities of a venture capital fund.

Source: ILPA

The buyer of the company is its management team.

Source: Invest Europe

A right of an investor to require the company to repurchase some or all of an investor's shares at a stated price at a given time in the future. The purchase price is usually the Issue Price, increased by Cumulative Dividends, if any. Mandatory Redemption may be automatic or may require a vote of the series of Preferred Stock having the redemption right.

Source: ILPA

The total dollar value of all of a company's outstanding shares. It is calculated by multiplying the number of outstanding shares times the current market share price and is often referred to as market cap. The total dollar value of all outstanding shares. Computed as shares multiplied by current price per share. Prior to an IPO, market capitalization is arrived at by estimating a company's future growth and by comparing a company with similar public or private corporations.

Source: ILPA

Buyers and sellers in the Principal (or Most Advantageous) Market for the asset that have the following characteristics:
a. They are independent of each other;
b. They are knowledgeable;
c. They are able to transact; and
d. They are willing to transact, that is, they are motivated but not forced or otherwise compelled to do so.

Source: IPEV

Similar to Lock-Up Agreements and prevents selling company stock for number of predetermined days after a previous stock offering by the company.

Source: ILPA

The price at which investors can buy or sell an investment at a given time multiplied by the quantity held, plus any accrued income.

Source: GIPS

The time required to complete a transaction or sell an Investment. Accounting standards dictate that the Marketability period begins sufficiently in advance of the Measurement Date such that the hypothetical transaction determining Fair Value occurs on the Measurement Date. Therefore, accounting standards do not allow a discount for Marketability when determining Fair Value.

Source: IPEV

The master-feeder fund structure allows fund managers to benefit from the efficiencies of larger pools of finances while providing the flexibility of designing smaller funds, which are tailor-made for different market situations. One or more investment vehicles pool their finances within another vehicle – i.e. there are several smaller feeder funds and one master to which they contribute. This master fund is then responsible for performing all the investments of the assets transferred to it from the feeders. Sometimes, especially when the feeders are hedge funds, this is a way of complying with the distinct legal systems of separate jurisdictions.

Source: europarl

An error in a gips composite report or gips pooled fund report that must be corrected and disclosed in a corrected gips composite report or gips pooled fund report.

Source: GIPS

The date for which the valuation is being prepared, which often equates to the reporting date.

Source: IPEV

An activity that includes corporate finance activities, such as advice on complex financings, merger and acquisition advice (international or domestic), and at times direct equity investments in corporations by the banks.

Source: ILPA

Combination of two or more corporations in which greater efficiency is supposed to be achieved by the elimination of duplicate plant, equipment, and staff, and the reallocation of capital assets to increase sales and profits in the enlarged company. The strategic combination of one business entity with another, often with the assistance of private equity.

Source: ILPA

A specialized form of private equity, characterized chiefly by use of Subordinated Debt, or preferred stock with an equity kicker, to invest largely in the same realm of companies and deals as buyout funds (see: Event Transaction, Middle Market).

Source: ILPA

Refers to the stage of venture financing for a company immediately prior to its IPO. Investors entering in this round have lower risk of loss than those investors who have invested in an earlier round. Mezzanine level financing can take the structure of preferred stock, convertible bonds or subordinated debt.

Source: ILPA

Funds using a hybrid of debt and equity financing, comprising equity-based options (such as warrants) and lower-priority (subordinated) debt.

Source: Invest Europe

A generic term used to describe the universe of well-established, and mostly private, companies in traditional sectors that form the demand side of much buyout and mezzanine activity.

Source: ILPA

Firms with growth prospects of more than 20 percent annually and five-year revenue projections between $10 million and $50 million. Less than 10 percent of all start-ups annually, these entrepreneurial firms are the backbone of the U.S. economy.

Source: ILPA

Markets in Financial Instruments Directive

Source: esma

The date after which a firm may present only GIPS-compliant performance. Real estate and private equity composites and pooled funds and wrap fee composites have a minimum effective compliance date of 1 January 2006. All other composites and pooled funds have a minimum effective compliance date of 1 January 2000.

Source: GIPS

The return for a period that reflects the change in value and the timing and size of external cash flows.

Source: GIPS

The market that maximises the amount that would be received to sell an asset after taking into account transaction costs and transportation costs.

Source: IPEV

The Most Favoured Nation (or “MFN”) clause is a common protection sought by LPs in which the GP assures the LP that it will also benefit from any provisions granted to other LPs. The MFN provision usually carves out specific provisions that relate to tax or regulatory considerations of individual LPs. The MFN may be found in the constitutional documents of the fund or in side letters agreed between an individual LP and the GP.

Source: Invest Europe

Memorandum of Understanding

Source: esma

Multilateral Trading Facility

Source: esma

A provision, task, or action that is mandatory or required to be followed or performed. (See “require/requirement”)

Source: GIPS

A task or action that is forbidden or prohibited.

Source: GIPS

A mutual fund, or an open-end fund, sells as many shares as investor demand requires. As money flows in, the fund grows. If money flows out of the fund the number of the fund's outstanding shares drops. Open-end funds are sometimes closed to new investors, but existing investors can still continue to invest money in the fund. In order to sell shares an investor usually sells the shares back to the fund. If an investor wishes to buy additional shares in a mutual fund, the investor must buy newly issued shares directly from the fund.

Source: ILPA