INSEAD the business school for the world

Case Studies by Claudia Zeisberger

29 case studies

published: 29 Jan 2018

  • Topic: Strategy
  • Industry: Financial Transactions Processing, Reserve and Clearing House Activities
  • Region: Middle-East

Show details ...

Abstract:
In 2010, ACTIS embarked on an ambitious project to build a pan-Middle East and Africa (MEA) payments platform. It had purchased Mediterranean Smart Cards Company (MSCC), a bankcard issuer with operations across Africa, and had identified a follow-on target, Visa Jordan Card Services (VJCS) as part of its buy-and-build strategy, and another potential acquisition in South Africa. These could enable the ACTIS platform to capture the entire value chain in the payments business in the MEA region. However, not long after the purchase of MSCC, political turmoil engulfed the Arab world, prompting the ACTIS investment committee in London to question the viability of creating a payments platform in MEA.

Pedagogical Objectives:
The case discusses the complexity and risks of investing in emerging markets, specifically “frontier markets”, which have the highest growth potential but involve the most uncertainty and risks. It enables students to understand the challenge of a goal-based investment thesis such as a buy-and-build within the context of emerging markets (i.e. Africa and the Middle East) and the options for mitigating risks.

Keywords:
Middle East, Payments Platform, Payments Processing, Roll Up, Buy and Build, Private Equity

published: 26 Jul 2010

  • Topic: Entrepreneurship
  • Industry: Private Equity and Family Offices
  • Region: Global

Show details ...

Abstract:
A European multi-family office is weighing whether and how to invest in Asian private equity. Part A moves from a discussion of the historical and current state of Asian private equity to the outlook and risks associated with such an investment. It also starts a discussion of returns on Asian private equity and whether they adequately compensate for the risks identified earlier. Part B deals with implementation questions on how to execute an investment strategy in this market from an asset manager perspective. It follows up on the returns discussion from Part A, focussing on the top performing funds and how to identify and access them.

Pedagogical Objectives:
1.To get an overview of the Asian private equity landscape in respect of its development, size and growth prospects 2.To understand private equity as an asset class a.with regard to the relationship between LPs and GPs b.with regard to opportunities/risks and returns c.To discuss similarities and differences between PE in Asia and developed markets and what they mean for expectations of returns.

Keywords:
Private Equity Returns in Asia, Lps and Gps, Investing in Emerging Markets, Growth Drivers in Asian Pe, Target Returns in Private Equity, Private Equity in Emerging Markets, Risk-Adjusted Returns in Emerging Markets, Gpei, Gpei-Case

published: 30 Jun 2009

  • Topic: Strategy
  • Industry: Banking & Financial Services
  • Region: Global

Show details ...

Abstract:
The case is set in the financial services industry during the financial crisis of 2008/09 and discusses issues when deciding on "fair" compensation packages for both senior management as well as risk managers. How can banks justify multimillion dollar bonuses to top management, when the institution is showing a loss/accepting government money to survive? Can compensation packages be competitive and please both employees and shareholders at different stages of the cycle? The case highlights the industry's soul-searching and attempts to appease an outraged public and manage possible future stress situations better.

Pedagogical Objectives:
- Set the stage to discuss compensation practices within the financial industry. - Understanding the risks (and un-intended consequences) when designing compensation packages to encourage/discourage risk taking. - Highlight the issues when trying to satisfy different stakeholders within listed companies.

Keywords:
Risk Management, Bonus and Incentive Payments, Best Practices in Compensation Packages, Incentivizing Employees, Aligning Shareholder Value with Company Interests, Regulatory Involvement in Banks, Incentivizing Risk Managers, Corporate Governance, Board Process and Remuneration at the Top

published: 30 Apr 2009

  • Topic: Entrepreneurship
  • Industry: Private Equity
  • Region: Global

Show details ...

Abstract:
The case describes the issues arising in Private Equity Partnerships once multiple funds have been raised and are being managed by the same set of partners. In addition, one LP is in financial distress and has asked to be given preferential treatment.

Pedagogical Objectives:
- Understand the importance of a professional relationship between LPs and GPs in a Private Equity partnership - Discuss possible solutions GPs can offer to LPsin financial difficulties - Satisfy LP expectations with regards to the time allocation of GPs to individual funds raised

Keywords:
Private Equity, Gp Lp Relationship, Lp Default, Financial Distress, Term Sheets, Gpei, Gpei-Case

published: 15 Dec 2017

  • Topic: Entrepreneurship
  • Industry: Local and Suburban Passenger Transportation
  • Region: Middle-East

Show details ...

Abstract:
Careem, a Dubai-based ride-hailing company, was founded in 2012 in the United Arab Emirates (UAE) by two ex-McKinsey consultants who saw a gap in the transport market. Started as a web-based car booking service for corporate clients, Careem had evolved into a leading application-based booking service in the Middle East and North Africa (MENA) region, with a differentiated business model tailored to the tastes and preferences of Middle Eastern consumers. Fuelled by venture capital funding rounds in September 2013 and December 2014, Careem was again on the fundraising trail in 2015 for a Series C investment round to further scale its existing business and continue its roll-out across MENA. The Abraaj Group, a leading emerging markets private equity investor, was interested, but with Uber competing fiercely in the MENA region, it had to decide whether Careem could compete with its well-funded global competitor.

Pedagogical Objectives:
This case helps students understand: • The evolution of a successful start-up, from concept to funding to scaling. • The challenges faced by operators of early-stage companies and the key questions and metrics considered by investors in early-stage companies. • The convergence of traditional venture capital and private equity roles in the late-stage venture capital market. • How private equity investors add value to their portfolio companies and differentiate themselves in the market. • How global business models in the “new economy” can be modified and refined to suit consumer preferences and provide a competitive advantage in emerging markets.

Keywords:
Ride-Hailing, Mena, Smart Devices, Digital Disruption, Smart Apps, Uber, Start-Up, Private Equity

published: 31 Jan 2012

Show details ...

Abstract:
A consortium of private equity firms (KKR and Silver Lake Partners) is in the process of acquiring the semi-conductor division of Agilent. To prepare for the signing of the acquisition agreement and the subsequent transfer of ownership, the deal team is revisiting their investment thesis with respect to upsides and risks.

Pedagogical Objectives:
To explore the complexities of a typical buy-out situation from the operational side. Specifically, what are the highest impact value creation levers and biggest risks, and how to mitigate them. To discuss why Agilent wanted to sell the business and why PE firms might be a better owner at the time of the transaction.

Keywords:
Private Equity, Buyout, Kkr, Silver Lake Partners, Semiconductors, Due Diligence, Risk, Avago Technologies, Corporate Governance, Auditing, Risk Control and Performance, Gpei, Gpei-Case

Related:

published: 27 Mar 2012

Show details ...

Abstract:
A consortium of private equity firms (KKR and Silver Lake Partners) is in the process of acquiring the semi-conductor division of Agilent. To prepare for the signing of the acquisition agreement and the subsequent transfer of ownership, the deal team is revisiting their investment thesis with respect to upsides and risks.

Pedagogical Objectives:
To develop a high-level understanding of the workings of leveraged buy-outs. To discuss the risk- return relationship in PE and the interplay of financial and operational risks in the deal structuring process. To understand the trade-offs involved in different debt instruments and financing structures.

Keywords:
Private Equity, Buy-Out, Kkr, Silver Lake Partners, Semiconductors, Financing, Risk, Avago Technologies, Corporate Governance, Auditing, Risk Control and Performance, Gpei, Gpei-Case

Related:

published: 24 Apr 2015

  • Topic: Entrepreneurship
  • Industry: Textile
  • Region: Asia

Show details ...

Abstract:
Emerging markets are challenging and require special expertise. India in particular is known to be a tricky business environment. The case follows two senior executives from Alvarez & Marsal’s India practice as they deal with an urgent request from one of their US private equity clients, Sapphire Capital. A former employee is claiming that irregular activities by senior management are at the root of the company’s financial difficulties. The turnaround team needs to act quickly yet must tread carefully in case the accusations prove unfounded. The second part of the case describes how the A&M team deals with the situation and the action they take to restore and restructure the ailing Indian company.

Pedagogical Objectives:
When times are good, (almost) anyone can lead; it is leading at difficult times that separates the wheat from the chaff. This case provides the opportunity for professionals to try their hand at a challenging turnaround situation in which financial distress is exacerbated by allegations of fraud. Add India, the setting, to the mix and it could be described as a 'perfect storm'.

Keywords:
Turnaround, Textile, Cash Flow Management, Emerging Markets, Corporate Governance, India, Distressed Companies, Fraud, Corporate Governance, Investors, Stakeholders and Accountability

Related:

published: 24 Apr 2015

Show details ...

Abstract:
Emerging markets are challenging and require special expertise. India in particular is known to be a tricky business environment. The case follows two senior executives from Alvarez & Marsal’s India practice as they deal with an urgent request from one of their US private equity clients, Sapphire Capital. A former employee is claiming that irregular activities by senior management are at the root of the company’s financial difficulties. The turnaround team needs to act quickly yet must tread carefully in case the accusations prove unfounded. The second part of the case describes how the A&M team deals with the situation and the action they take to restore and restructure the ailing Indian company.

Pedagogical Objectives:
When times are good, (almost) anyone can lead; it is leading at difficult times that separates the wheat from the chaff. This case provides the opportunity for professionals to try their hand at a challenging turnaround situation in which financial distress is exacerbated by allegations of fraud. Add India, the setting, to the mix and it could be described as a 'perfect storm'.

Keywords:
Turnaround, Textile, Cash Flow Management, Emerging Markets, Corporate Governance, India, Distressed Companies, Fraud, Corporate Governance, Investors, Stakeholders and Accountability, Gpei, Gpei-Case

Prizes won:
- Winner 2015 EFMD Case Writing Competition, Indian Management Issues and Opportunities Category

Related:

published: 30 Jan 2017

Show details ...

Abstract:
In 2011, Ingersoll-Rand (IR) decided to divest its refrigeration equipment subsidiary, Hussmann International. However, the routine auction process for the non-core asset went awry when both Hussmann’s performance and external finance markets weakened significantly during the due diligence period. IR’s agent, JP Morgan, sought interest from potential buyers and focused on a few leading buy-out firms that submitted bids. After not seeing eye-to-eye with the initial auction winner, Ingersoll-Rand engaged exclusively with a lower bidder, the private equity firm Clayton, Dubilier & Rice. The challenge for CD&R is to develop a deal structure that can meet both parties’ needs, offering enough value to Ingersoll-Rand to keep them from walking away, yet taking into account the increased riskiness of Hussmann’s recent performance to justify CD&R’s valuation. The student takes the perspective of CD&R.

Pedagogical Objectives:
This case aims to build students’ awareness of the challenging PE landscape and shows how one PE firm has found new ways to source and structure deals in order to maintain attractive returns in an overpriced acquisition atmosphere. Successful strategies to outperform in an overheated market are rare, but leading firms find ways to gain sourcing advantage and/or utilize skills to improve underperforming businesses to drive them to the top return quartile. The case examines both return strategies with an inside look at Clayton, Dubilier & Rice’s “recipe for bubbles”.

Keywords:
Private Equity, Auction, Auction, Carve Out, Structuring, Earnings Surprise, Management Change, Growth Capital, Corporate Carve Out, Restructuring, Due Diligence, Divestiture, Operational Improvements, Turnarounds, Gpei, Gpei-Case


Share