Private Equity Findings
PRIVATE EQUITY FINDINGS | ISSUE 8 SUMMER 2013
Issue 8 of FINDINGS commences with an article discussing recent research about CEO contract features governing compensation and incentives. The underlying academic paper and comments by practitioners in this article highlight how salary and incentive components of CEO contracts differ between those applied at public companies and those implemented by major PE sponsors at their portfolio companies. It also touched upon how CEO performance is measured and how CEO talent retention features in contractual design. Given the currently articulated concerns about management compensation, what can public companies learn from private equity models and vice versa? THE RESEARCH PAPER
With the private equity industry maturing the number of secondary transactions has grown significantly. A broader range of investors has become active in the buying and selling of LP interests in an evolving private equity secondaries market. Professor Eli Talmor, Professor Anya Kleymenova and Professor Florin Vasvari extracted interesting academic research findings from a dataset representing the private equity secondaries activities. This article deals with the question: What are the incentives for supply and demand deepening the liquidity of the secondaries market and what are the key attributes impacting the liquidity of LP interests? THE RESEARCH PAPER
Next, Private Equity Findings explores the impact a large investor can have on the strategy and performance of a PE fund. The article questions whether major investors negotiate bespoke terms and impose influence on PE funds, what it means for the other portfolio investors and to what extend this influence has positive or negative effects on the fund. THE RESEARCH PAPER
Issue 8’s fourth article uncovers those factors that were critical to one of the most successful PE transactions in PE history. One of the Coller Institute’s latest case studies provides insights into how private equity facilitated the transformation of Nycomed from a pan-nordic specialty pharma company into a global leader in the pharmaceutical sector. The case will be taught in forthcoming PE Masterclass programmes at London Business School and demonstrates the importance of choosing a good management team and exploiting opportunities in underserved growth markets.
Our unique roundtable article panel, comprising two leading academics and three distinguished industry experts, debates risks affecting private equity investments, the liquidity risk element, the quantification of those risks and how investors manage them. Finally the discussion turns to whether PE investors benefit from diversification effects in their overall portfolios and the risk-return balance for investors. RESEARCH PAPER 1, RESEARCH PAPER 2, RESEARCH PAPER 3, RESEARCH PAPER4, RESEARCH PAPER 5
The research paper of the 2012 Coller Prize winner in the PhD category is the topic of the final article. It examines the impact of investment horizon on appetite for riskier and more innovative investments in the private equity portfolio context. Furthermore it investigates relevant impacts on PE fund performance. RESEARCH PAPER
As a leading forum for debate and exchange between private equity practitioners and academic researchers of the private equity subject matter we hope that this edition of PRIVATE EQUITY FINDINGS continues to invigorate thinking and discussion. We are looking forward to hearing your opinion, which you can email to firstname.lastname@example.org.
For downloading the research papers featuring in this issue or to read more about our activities and seminars, please visit our website at www.collerinstitute.com.
We thank all contributors to this issue.
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PRIVATE EQUITY FINDINGS | ISSUE 8 - SUMMER 2013
02 June 2013
Issue 8 of FINDINGS commences with an article discussing recent research about CEO contract features governing compensation and incentives. The underlying academic paper and comments by practitioners in this article highlight how salary and incentive components of CEO contracts differ between those ...
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