Private Equity at INSEAD - practitioner lecture by Antoine SAGE
•
9 gefällt mir•2,210 views
Private Equity practitioner lecture for the INSEAD MBA15J class on Feb 2015. MAACS course of Pr. Philipp MEYER-DOYLE. >Private Equity fund >Buyout focus >PE vs Trade Slides in PDF are available at http://bit.ly/1BWC7Jq Spreasheet illustration is available at http://bit.ly/1xo46iL Animated version is available at http://bit.ly/1LP7pu0 Enjoy.
Empfohlen
Weitere ähnliche Inhalte
Was ist angesagt?
Andere mochten auch
Andere mochten auch (12)
Ähnlich wie Private Equity at INSEAD - practitioner lecture by Antoine SAGE
Ähnlich wie Private Equity at INSEAD - practitioner lecture by Antoine SAGE (20)
Kürzlich hochgeladen
Kürzlich hochgeladen (20)
Private Equity at INSEAD - practitioner lecture by Antoine SAGE
- 1. Private Equity Antoine SAGE, AMP13, Food and Beverage Private Equity (FnB PE) MAACS course of Pr. Philipp MEYER-DOYLE Feb. 4th 2015, INSEAD, Fontainebleau
- 2. 39 y.o., married, 2 boys: Louis & Charles 15 years of Private Equity (PE) 2015: launching FnB PE Independant European PE focused on Food an Beverage | 150€m 2007: co-founding Cerea Capital Successfully focused on Food and Beverage in France | 130€m 2001: joined Astorg Partner Successful generalist PE fund | 185€m to 1000€m 10 years of IT: learning companies from inside fr.linkedin.com/in/antoinesage/en Who am I ?
- 3. FnB PEFood and Beverage Private Equity Food and Beverage Europe FnB Business Partners Sustainable in 2015150€m
- 4. Involvements United Nations - Principle for Responsible Investments | Member MEDEF (employers union) | Supervisory Board for Economy and Finance AFIC (Private Equity lobby) | Sustainable development Board member Lectures, coach and Jury at ESSEC Business School, HEC Paris Business School and MIT entrepreneurship Education Executive MBA from ESSEC Business School Valuation from Stern | New York University Advanced Management Programme from INSEAD fr.linkedin.com/in/antoinesage/en Who am I ?
- 5. Private Equity fund Buyout focus PE vs Trade QnA
- 8. fund parameters Investment period (years) 5 Fund duration (years) 10 Fund size (in m) 150 Management fees (per year) 2% Hurdle rate 7% Carried interest 20% GP commitment 2.00% Gross return (x) 2.00 Approach
- 9. in m Y0 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 -Investment (incl GP) 30 30 30 30 30 +Desinvestment 60 60 60 60 60 0 Flow gross 0 -30 -30 -30 -30 30 60 60 60 60 0 Internal Return Rate 6% 14% 19% 19% Multiple 1.25 1.75 2.25 2.25 -Management fees 0 3 3 3 3 3 2.4 1.8 1.2 0.6 0 Flow net 0 -33 -33 -33 -33 27 57.6 58.2 58.8 59.4 0 Internal Return Rate 2% 10% 16% 16% Multiple 1.08 1.53 1.98 1.98 GP Commitment 0 0.6 0.6 0.6 0.6 0.6 0 Carried interest (if hurdle) 0 13.92 11.88 0 GP Flow 0 -0.6 -0.6 -0.6 -0.6 -0.6 0 0 13.92 11.88 0 Internal Return Rate 34% 45% 45% Multiple 4.64 8.60 8.60 Flow net of fees and carried 0 -33 -33 -33 -33 27 57.6 58.2 44.88 47.52 0 Internal Return Rate 9% 13% 13% Multiple 1.42 1.78 1.78 In a spreadsheet…
- 10. -160 0 160 Y0 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Flow Cumulative J.curve: invest and sale
- 11. Investor’s perspective (cumulative) m -225 -150 -75 0 75 150 225 300 Years Y0 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Investment Fees Desinvestment Carried Interest Gross 19% / 2,25x Post fees 16% / 1,98x Post carried 13% / 1,78x
- 12. net IRR > hurdle ? “Skin in the game” 20% of value creation 1/2 to 2 years salary trigger at 7 to 8% c. 26m at 2x gross 2x salary (or more) within high entrepreneurial risks Carried interest
- 13. Buyout
- 14. x - =EBITDA EBITDA multiple net debt Equity value Equity value Turnover Margins Leadershi p Growth Innovate Risk Cash Leverage Incentives Governance CapEx 3-6 years mindset Acquire Value creation
- 15. @ acquisition 10% 10% 30% 5% 45% @ exit 15% 17% 13% 5%5% 45% PE Equity Management Equity Redeemable debt InFine Debt Mezzanine Loan Repaid debt Leverage effect : IRR 5,4% | 1,3x @5y Leverage
- 16. @ post incentive 16% 9% 7% 3% 8% 57% PE Equity Management Equity Redeemable debt InFine Debt Mezzanine Loan Incentive @ exit 9% 7% 3% 8% 73% Management Incentive if PE performance >3x then Management 9x
- 17. Deal flow Initial appetite Agreement on terms Sale and Purchase Agreement Comitee stage 1 Comitee stage 2 Due diligences stage 1 Due diligences stage 2 Transaction completion Comitee stage 2 3 to 6 weeks 3-5 people within same office with full mandate 3 months or more (6 months) Company Negotiation PE Fund Direct or MnA • Proprietary • MnA • Listed Acquisition process
- 18. PE vs Trade
- 19. PE Trade Goals cash & value creation limited term multiple agendas Value intrinsic value accounting based including short term (EPS, …) Financials focus EBITDA and cash GAAP: EPS, PER, … trade offs possible Risk aggressive risk taking with assets protection muted Leverage high limited Pace quick to decide, evaluate and reconsider prove first, act later hard to reorganise Incentives strong value oriented erratic accounting or stock related Acquire/divest value oriented decision bias: divesture = failure inspired by The Private Equity Edge Pt 2 Ch.10 fig. 10.1
- 20. Further readings