private equity

Private Equity as an Asset Class (The Wiley Finance Series)
$70.00
This is a very good read for students and practitioners. It is easy to read, well laid out and a very useful reference document that you will consult regularly.

The Buyout of America: How Private Equity Will Cause the Next Great Credit Crisis
$26.95

In the Introduction, Josh Kosman offers what he calls a "little primer" on how private equity firms operate, explaining that they "buy businesses the way that homebuyers acquire houses. They make a down payment and finance the rest. The financings are structured like balloon mortgages, with big payments due at some point in the future. The critical difference, however, is that while homeowners pay the mortgages on their houses, PE firms have the businesses they buy take out the loans, making THEM responsible for repayment. They typically try to resell the company or take it public before the loans come due." It soon gets even more interesting. "As long as the PE firms could refinance, or turn around and sell off their holdings before the biggest loan payments came due, spectacular flameout bankruptcies could be avoided...PE firms would like to have us all think the reason they try so hard to raise earnings in their businesses [by `starving companies of operating and human capital'] is so that companies can use these profits to pay down the money they borrowed to finance their own acquisitions. But the records show that during the 2003-7 buyout rush, that wasn't generally the case. Instead, they used the profits s a basis to borrow more money. The new loans, which were piled in top of the original debt taken on to finance the LBO, were used to issue dividends" to the (you guessed it) PE firms. What if all, most, or even only some of the companies collapse? No problem. The PE firms have incurred no debt while receiving dividends as well as substantial management fees. "Despite the credit crisis in 2009," Kosman notes, "PE firms are sitting on roughly $450 billion in unspent capital and itching for more deals." Of course they are. Given their circumstances, would wouldn't?

Kosman explains how and why PE firms "put their companies into crippling debt and, unlike entrepreneurs, who manage their businesses to succeed in the marketplace and grow, they manage their companies largely for short-term gains." PE firms hurt their businesses competitively by limiting their growth, cutting jobs without reinvesting the savings, do not even generate good returns for their own investors. According to Kosman, they are "about to cause the Next Great Credit Crisis," one that could leave about two million of the 7.5 million Americans who work at PE-owned companies unemployed, and more than one thousand businesses bankrupt. "Leadership is needed to rally opposition to close the tax loopholes that make this very damaging activity possible."

In a book certain to generate controversy, Kosman provides a wealth of information (financial data and statistics as well as real-world situations) to support his observations, recommendations, and especially his accusations. After reading the book and then re-reading several key passages that I highlighted, I wish Kosman had included other perspectives on the issues he raises. For example, the thoughts of those who head the most active PE firms, of federal officials associated with relevant regulatory agencies, and of analysts who are best qualified to discuss PE firms. It seems that PE firms could play an important role in the process of what Charles Darwin characterizes as "natural selection," one from which some businesses survive (and perhaps even thrive) while others do not. Kosman asserts that these firms must not be allowed "unnatural" advantages that corrupt free market competition. Whether or not his call for action results in any significant reforms of what he calls "tax loopholes" remains to be seen.

Getting a Job in Private Equity: Behind the Scenes Insight into How Private Equity Funds Hire (Glocap Guide)
$45.00
If you're seriously considering a career in private equity, you have to become familiar with how firms hire. With Getting a Job in Private Equity, you'll gain invaluable insights that will allow you to stay one step ahead of other individuals looking to secure a position in this field. Here, you'll discover what it takes to make it in PE from different entry points, what experience is needed to set yourself up for a position, and what can be done to improve your chances of landing one of these limited opportunities.

Inside Private Equity: The Professional Investor's Handbook (Wiley Finance)
$70.00
"This handbook is essential reading for all investors in the private markets. It is especially helpful in understanding the mechanics of portfolio construction and challenges of performance measurement of private equity and venture capital investing."
?Susan J. Carter, President and CEO, Commonfund Capital, Inc. "An invaluable handbook."
?Sir Ronald Cohen, Chairman of The Portland Trust, Portland Capital LLP, and Bridges Ventures "Private equity fund investing is often viewed as more art than science, though in reality it requires an even blend of both skills. This book focuses on the science behind the art. It covers all the major concepts while introducing some great new ones, and must be required reading for serious private equity market participants."
?Chihtsung Lam, founder and Managing Director of Axiom Asia Private Capital "The authors have created a simple and pragmatic handbook for a very complex asset class. Their collective experience is invaluable. This is a fantastic read for new private equity investors as well as experienced portfolio managers looking for additional tools that can be used in monitoring their current investments and in the process of screening new opportunities. Inside Private Equity is a great foundation for investors looking to improve their analysis of an exciting asset class."
?Timothy B. Moore, Director of Alternative Investments, PERA of Colorado "A real practitioner-focused contribution bringing performance measurement down from the theoretical to the practical."
?Jesse E. Reyes, Reyes Analytics "Inside Private Equity clearly explains, without oversimplifying, the hard work of managing private equity portfolios. Full of cogent advice from an experienced team. Great work!"
?Lawrence M. Unrein, Managing Director and Head of the Private Equity Group for J.P. Morgan Asset Management "A handy guide to address the pitfalls and issues of investing in private equity that most institutional investors have wrongly ignored. Well done!"
?Dory Wiley, President and CEO of Commerce Street Capital and Trustee and Chairman of the Investment Committee at Teachers Retirement System of Texas