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Case Studies by Michael Prahl

9 case studies

by Publication Date
published: 26 Aug 2016

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

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Abstract:
George Bachiashvili, deputy CEO of the Partnership Fund, is asked by the Prime Minister of Georgia to create an investment vehicle funded entirely with private capital for local investments. The goal is to spur foreign investment and stimulate long-term economic growth in the country. Having no precedent for such a vehicle in Georgia, George has to identify best practice from other sources to get it off the ground. Georgia clearly needs capital but is not on the radar of most international investors. However, the US$1 billion anchor investment pledged by the PM with no strings attached gives it some serious chips in the game. Even so, “frontier markets” are among the most challenging contexts in which to raise private funding, as capital deployment is often hindered by an unstable political environment, weak institutions and corruption. The task is daunting but, if successful, could transform the economy. The case describes in detail the different options for finding investors.

Pedagogical Objectives:
Students should be able to address the following issues: 1. Identify the mission of the fund, and the strategic and financial goals behind it. 2. The type of additional investors to be targeted for this type of fund e.g., global or regional, pension funds, funds of funds, sovereign wealth funds, high net worth individuals, family offices, development finance institutions. 3. Draw up a comprehensive investment strategy for such a fund. 4. Identify which private equity fund structure would best enable George to fulfil the fund’s strategic and financial objectives, satisfy the needs of the LP base, and execute his investment strategy.

Keywords:
Private Equity, Georgia, Frontier Martkets, Funds, Gpei, Gpei-Case

published: 26 May 2015

  • Topic: Entrepreneurship
  • Industry: Activities of venture and development capital companies
  • Region: Europe

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Abstract:
In 2004, BC Partners is considering an investment in Amadeus, a major IT player in the global airlines and travel industry. In order to win in a very competitive auction BC Partners needs to evaluate two distinct business strategies as to their risk-return profile and impact on financing structure.

Pedagogical Objectives:
To evaluate different strategic options in an investment target and how they impact bidding structure and drive returns later on. Discuss how PE firms can position themselves in a competitive M&A process.

Keywords:
Buyout, Travel Industry, Repositioning, Delisting, Lbo, Airlines, Take Private, Leverage, Corporate Governance, Value Creation, Strategy and Implementation, Gpei, Gpei-Case

published: 24 Mar 2014

  • Topic: Entrepreneurship
  • Industry: Activities of venture and development capital companies
  • Region: Other Regions

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Abstract:
Duxton Asset Management, a specialist agro-business investor, is evaluating an investment in rice farming in Tanzania, Africa. Duxton has a business strategy of investing in operating farmland assets, many of which are in developing or even frontier markets. The case discusses the complexities of investing in an atypical multidimensional asset.

Pedagogical Objectives:
To examine the potential risks and rewards of a farmland investment with strong potential ESG impact in a frontier country. To present a strategically relevant question on the immediate actions available to the asset manager upon a change in circumstances on the financing side. To assess the implications of this decision on the business and operating strategy.

Keywords:
Private Equity, Africa, Agriculture, Responsible Investing, Impact Investing, Growth Capital, Farmland, Frontier Markets, Gpei, Gpei-Case

published: 24 Jun 2013

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Abstract:
Read a related Knowledge article "Going Direct: The Case of Teachers’ Private Capital" by Claudia Zeisberger.

The case traces the evolution of the private equity investment platform of the Ontario Teachers’ Pension Plan (Teachers’). Unlike the typical traditional pension fund, Teachers’ has forged a bold, pioneering approach to investing by making a concerted push towards direct investing. The case discusses the trade-offs involved in developing a direct investing platform.

Pedagogical Objectives:
The case discusses the advantages and limitations of the direct investing model, contrasts it with other approaches to investing in private equity, and raises important issues for institutional investors pursuing strong risk-adjusted returns. It requires students to think about the many challenges that arise in building and managing a comprehensive private equity programme.

Keywords:
Private Equity, Pension Fund, Limited Partner (lp), Buy-Out, Bce, Direct Investing, Ontario Teachers' Pension Plan, Co-Investment, Iaf, Gpei, Gpei-Case

published: 24 Jun 2013

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Abstract:
In 2011, Carlyle is considering an exit from its investment in the European fashion brand Moncler, in which it holds a minority stake. The case focuses on the complexities of preparing and executing an exit under rapidly changing market conditions taking varied interests and potential outcomes into consideration.

Pedagogical Objectives:
To evaluate various exit options for a PE firm and discuss how optionality and negotiation leverage in a sales process can be created and maintained. To demonstrate how PE firms make decisions under uncertainty and time constraints taking a variety of financial and non-financial factors into account.

Keywords:
Private Equity, Exit, Ipo, Dual Track, Buy-Out, Minority, Carlyle, Moncler, Gpei, Gpei-Case

published: 27 Mar 2012

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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

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published: 31 Jan 2012

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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: 25 May 2011

  • Topic: Entrepreneurship
  • Region: Global

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Abstract:
The topic of valuation and measurement of return (i.e. investment success) permeates the whole life cycle of private equity (PE). While the valuation part is in many ways similar to other direct investment strategies, the measuring of returns in private equity is a notoriously difficult business, mainly due to the absence of an efficient and transparent market for the asset class. So while theoretically not difficult, the wide range of practical approaches – often designed to produce a specific outcome – tend to be confusing to an outsider or new student of the field. This paper does not attempt to systematically explore all the variations that exist in the market but rather to give an overview of the most common approaches, highlighting their strengths and weaknesses and pointing to major alternative methods.

Pedagogical Objectives:
see abstract

Keywords:
Private Equity, Valuation Issues, Return Measurements, Portfolio Companies, Acquisition Targets, Iaf Gpei, Corporate Governance, Investors, Stakeholders and Accountability, Investors, Stakeholders and Accountability, Gpei, Gpei-Case

published: 26 Jul 2010

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

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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

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