1 / 16

The Private Equity Value Proposition How Real Is It ?

The Private Equity Value Proposition How Real Is It ?. Moderator Peter Wolken Vice Chairman, Executive Advisory Board Thunderbird Private Equity Center (TPEC). Frog on the Golf Course. Panelists. Jonathan E. Cole, Partner Edwards Angell Palmer & Dodge LLP Frederic Sicre, Executive Director

marlow
Télécharger la présentation

The Private Equity Value Proposition How Real Is It ?

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. The Private Equity Value PropositionHow Real Is It ? Moderator Peter WolkenVice Chairman, Executive Advisory Board Thunderbird Private Equity Center (TPEC)

  2. Frog on the Golf Course

  3. Panelists • Jonathan E. Cole, Partner • Edwards Angell Palmer & Dodge LLP • Frederic Sicre, Executive Director • Abraaj Capital, LLC • John Vester, Partner • Transaction Advisory Services, Ernst & Young

  4. Jonathan E. Cole, Partner • Edwards Angell Palmer & Dodge LLP • 36 years experience • Leveraged buyouts • Emerging technology • Brown University • Harvard Law School

  5. Frederic Sicre, Executive DirectorAbraaj Capital, LLC, Dubai, UAE 16 years experience Established World Economic Forum in Africa & Middle East Managing Director of WEF MBA, IMD, Switzerland BS Villanova University Stanford University Fellow

  6. John Vester, Partner Transaction Advisory Services, Ernst & Young 20 years of experience Now at E & Y on US East Coast Former Head of Corporate Development at Xerox Management Consultant at McKinsey MBA Cornell University MS Electrical Engineering from Yale BS Industrial Engineering, Northwestern

  7. Topics of Discussion • Do VC and PE “Buyout” firms add value to their portfolio companies? • To Society? • Impact on labor, taxes, corporate governance and innovation • Does PE strengthen business?

  8. Venture Capital Firms • VC Firms clearly add value • Most of the job creation has been the result of VC funded entrepreneurial start-ups, especially in information technology • Over 10 million industrial jobs created in the past 30 years by VC funded start-ups • One new job in industry creates another ten in the service sectors, so the vast majority of new jobs are created by VCs.

  9. Do PE Buyouts add value? • The jury is still out on recent mega- buyout deals • However, the panelists will support the premise that significant value is being added • Over 85% of investment has gone into the buyout sector • Returns on buyouts can be much quicker than early-stage VC deals • And the risk is much lower when investing in established companies

  10. Market Cap of Recent US Venture Backed IPO’s • VM Ware VMW $ 16.4 Billion ! • NetSuite N $ 1.32 Billion • Data Domain DDVP $ 1.32 Billion • Cavium Networks CAVM $ 675 Million • eHealth EHTH $ 551 Million • CommVault CVLT $ 469 Million • Acme Packet APKT $ 463 Million • Mellanox MLNX $ 424 Million • DivX DIVX $ 248 Million March 31, 2008

  11. VM Ware VMW • Palo Alto, California firm • Started in 1998 • CEO is Diane Greene • Has 5,000 employees • Virtualization Software • Market Cap is $ 16 Billion • Was $ 40 Billion that at the peak, 3 months after the IPO

  12. Global IPO Activity at Record High in 2007 Over $ 255 Billion Raised in 1739 IPOs

  13. European Venture Backed IPOs in 2007 • 38 firms raised € 894 million • Down 49% from 2006 • Median amount raised was € 15.8 million • Median pre-valuation was € 59 million • Median time from initial financing to IPO was 6.9 years

  14. M & A Activity Robust in 2007 Cisco acquiring again • Signal Works $ 14 M Linksys $ 500 M • Arroyo Video $ 92 M Actona $ 82 M • Reactivity $ 135 M P-Cube $ 200 M • Navini Net $ 330 M Securent $ 100 M • NetSolve $ 128 M Fine Ground $ 70 M • DynamicsSoft $ 55 M IronPort Sys $ 830 M • Perfigo $ 74 M Meetinghouse $ 44 M • Orative $ 32 M Protego Net $ 65 M • Sheer Net $ 97 M Airespace $ 450 M • Scientific Atlanta $ 6.9 B Topspin $ 250 M • WebEx $ 3.2 B Total, 21 firms $ 13.6 Billion Source: PricewaterhouseCoopers/NVCA Money Tree Report, February 2008

  15. What This Means • So, VC and Buyouts both represent good opportunities if purchased right • We have seen the data and both asset classes have outperformed • I’ll kick off the discussion with a few questions for the panelists • Then we welcome your questions

  16. Next Steps • Please direct your questions to one of the panelists or to the group • e mail me if you wish to send questions after the session • < peterwolken@global.t-bird.edu >

More Related