References and Bibliography

Books and monographs

Anson, M. (2006) Handbook of Alternative Assets , 2nd edn (John Wiley & Sons) Bachelier, L. (1964) Théorie de la spéculation, translated by A. J. Bones in P. H. Cootner (ed), The Random Character of Stock Market Prices (MIT Press) Blessing, S. (2011) Alternative Alternatives – Risk, Returns & Investment Strategy (John Wiley & Sons) Brealey, R., Myers, S., and Allen, F. (2008) Principles of Corporate Finance, 9th edn (McGraw Hill) Brooke, P., and Penrice, D. (2009) A Vision for Venture Capital – Realizing the Promise of Global Venture Capital and Private Equity (New Ventures) Capital Dynamics (2010) The Definitive Guide to Risk Management in Private Equity (PEI Media) Cendrowski, H., Martin, J., Petro, L., and Wadecki, A. (2008) Private Equity: History, Governance and Operations (John Wiley & Sons) Cornelius, P. (2011) International Investments in Private Equity (Academic Press) Cornelius, P., Diller, C., Guennoc, D., and Meyer, T. (2013) Mastering Illiquidity – Risk Management for Portfolios of Limited Partnership Funds (John Wiley & Sons) Demaria, C. (2004) Développement durable et finance (Maxima) Demaria, C. (2010) Introduction to Private Equity (John Wiley & Sons) Demaria, C. (2013) Introduction to Private Equity: Venture, Growth, LBO and Turn-Around Capital (John Wiley & Sons) Draper, W. (2011) The Startup Game – Inside the Partnership between Venture Capitalists and Entrepreneurs (Palgrave Macmillan) Fraser-Sampson, G. (2007) Private Equity as an Asset Class (John Wiley & Sons) Gompers, P., and Lerner, J. (2006) The Venture Capital Cycle, 2nd edn (MIT Press) Hilb, M. (2010) New Corporate Governance , 3rd edn (Springer) Hirschman, A. (1970) Exit, Voice and Loyalty: Responses to Decline in Firms, Organizations and States (Harvard University Press) Hobohm, D. (2010) Investors in Private Equity Funds: Theory, Preferences and Performances (Gabler Research) Kocis, J., Bachman, J., Long, A., and Nickels, C. (2009) Inside Private Equity: The Professional Investor’s Handbook (John Wiley & Sons) Lerner, J. (2009) Boulevard of Broken Dreams – Why Public Efforts to Boost Entrepreneurship and Venture Capital Have Failed – and What to Do About It (Princeton University Press) Lerner, J. (2012) The Architecture of Innovation: The Economics of Creative Organizations (Harvard Business Review Press) Mathonet, P.-Y., and Meyer, T. (2007) J-Curve Exposure: Managing a Portfolio of Venture Capital and Private Equity Funds (John Wiley & Sons) Meyer, T., and Mathonet, P.-Y. (2005) Beyond the J-Curve – Managing a Portfolio of Venture Capital and Private Equity Funds (John Wiley & Sons) Miles, M., and Huberman, M. (1994) Qualitative Data Analysis, An expanded Sourcebook ¸ 2nd edn (SAGE Publications) O’Brien, J. (2007) Private Equity, Corporate Governance and the Dynamics of Capital Markets Regulation (Imperial College Press)

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Perkins, T. (2008) Valley Boy – The Education of Tom Perkins (Gotham Books) Samuelson, P. and Nordhaus, W. (2009) Microeconomics , 19th edn (McGraw Hill) Shefrin, H. (2002) Beyond Greed and Fear (Oxford University Press) Thaler, R. (ed.) (1993) Advances in Behavioral Finance (Russell Sage Foundation) Thaler, R. (ed.) (2005) Advances in Behavioral Finance II (Russell Sage Foundation and Princeton University Press) Tirole, J. (2006) The Theory of Corporate Finance (Princeton University Press) Toll, D., and Oberfeld, L. (2014) PE/VC Partnership Agreements Study 2014–2015 , Investment Benchmark Report 2014 (Thomson Reuters)

Academic papers

Acharya, V., Hahn, M., and Kehoe, C. (2010) ‘Corporate Governance and Value Creation: Evidence from Private Equity’, NYU working paper No. Fin-08–032, 55 p. Achleitner, A.-K., Braun, R., Engel, N., Figge, C., and Tappeiner, F. (2010) ‘Value Creation Drivers in Private Equity Buyouts: Empirical Evidence from Europe’, Journal of Private Equity , Vol. 13, No. 2, 17–27 Achleitner, A.-K., Diller, C., and Lichtner, K. (2011) ‘Value Creation in Private Equity’, CEFS/Capital Dynamics, 6 p. Aigner, P., Albrecht, S., Beyschlag, G., Friederich, T., Kalepky M., and Zagst, R. (2008) ‘What Drives Private Equity? Analyses of Success Factors for Private Equity Funds’, Journal of Private Equity , Vol. 11, No. 4, 63–85 Allen, F. (2001) ‘Do Financial Institutions Matter?’, Journal of Finance, Vol. 56, No. 4, 1165–75 Amenc, N., and Le Sourd, V. Socially Responsible Investment Performance in France. EDHEC Risk and Asset Management Research Center, 2008. Ang, A., Chen, B., Goetzmann, W., and Phalippou, L. (2013) ‘Estimating Private Equity Returns from Limited Partners Cashflows’, SSRN Working Paper No. 2356553, 59 p. Ang, A., Rhodes-Kropf, M., and Zhao, R. (2008) ‘Do Funds-of-Funds Deserve their Fees- on-Fees?’, NBER Working Paper No. 13944, 48 p. Axelson, U., Strömberg, P., and Weisbach, M. (2009) ‘Why Are Buyouts Levered? The Financial Structure of Private Equity Funds’, Journal of Finance , Vol. 64, No. 4, 1549–82 Banal-Estañol, A., and Ippolito, F. (2012) ‘Contractual Terms and Conditions in Private Equity Partnership Agreements’, SSRN Working Paper No. 1022023, 45 p. Barnes, S., and Menzies, V. (2005) ‘Investment into Venture Capital Funds in Europe: An Explanatory Study’, Venture Capital , Vol. 7, No. 3, 209–26 Barrot, J. N. (2012) ‘Investor Horizon and Innovation: Evidence from Private Equity Funds’, Paris December 2012 Financial Meeting EUROFIDAI-AFFI Paper and AFA 2013 San Diego Meetings Paper , SSRN Working Paper No. 1014601, 51 p. Bartlett, J., and Swan, E. (2001) ‘Private Equity Funds: What Counts and What Doesn’t?’, The Journal Of Corporation Law , Vol. 26, No. 2, 393–412 Bernstein, S., Lerner, J., and Schoar, A. (2009) ‘The Investment Strategies of Sovereign Wealth Funds’, NBER Working Paper No. 14861 and Harvard Business School Working Paper No. 09–112, 53 p. Bernstein, S., Sorensen, M., Lerner, J., and Stromberg, P. (2008) ‘Private Equity and Industry Performance’, NBER Working Paper No. 15632 and Harvard Business School Working Paper No. 10–045, 40 p. Black, B., and Gilson, R., (1998) ‘Venture Capital and the Structure of Capital Markets: Banks Versus Stock Markets’, Journal of Financial Economics , Vol. 47, 243–77 Bortolotti, B., Fotak, V., Megginson, W., and Miracky, W. (2010) ‘Quiet Leviathans: Sovereign Wealth Fund Investment, Passivity and the Value of the Firm’, Working Paper, 51 p. Braun, A., Jenkinson, T., and Stoff, I. (2013) ‘How Persistent is Private Equity Performance? Evidence from Deal-Level Data’, SSRN Working Paper No. 2314400, 37 p. References and Bibliography 255

Braun, A., Schmeiser, H., and Siegel, C. (2014) ‘The Impact of Private Equity on a Life Insurer’s Capital Charges under Solvency II and the Swiss Solvency Test’, Journal of Risk and Insurances , Vol. 81, No. 1, 113–58 Brown, G., Gredil, O., and Kaplan, S. (2013) ‘Do Private Equity Funds Game Returns?’, SSRN Working Paper No. 2271690, 56 p. Cadogan, G. (2013) ‘The Risk Premium for Minority Banks Altruistic Portfolios in Underserved Communities’, SSRN Working Paper No. 2341178, 44 p. Cao, J., and Lerner, J. (2009) ‘The Performance of Reverse Leveraged Buyouts’, Journal of Financial Economics, Vol. 91, No. 2, 139–57 Caselli, S., Garcia-Appendini, E., and Ippolito, F. (2009) ‘Explaining Returns in Private Equity Investments’, CAREFIN Working Paper 15/2009, 32 p. Caselli, S., Gatti, S., and Querci, F. (2010) ‘Performance in Private Equity: Why Are General Partnerships’ Owners Important?’, CAREFIN Working Paper 05/2010, 28 p. Chaplinsky, S. (2004) ‘Calpers vs. Mercury News – Disclosure Comes to Private Equity’, Darden Business Publishing/University of Virginia, SSRN Working Paper No. 909754, 22 p. Chemmanur, T., Krishnan, K., and Nandy, D. (2011) ‘ How Does Venture Capital Financing Improve Efficiency in Private Firms? A Look Beneath the Surface’, Review of Financial Studies , Vol. 24, No. 12, 4037–90 Chen, H., Gompers, P., Kovner, A., and Lerner, J. (2009) ‘Buy Local? The Geography of Successful and Unsuccessful Venture Capital Expansion’, NBER Working Paper 15102, 41 p. Chung, J.-W., Sensoy, B., Stern, L., and Weisbach, M. (2012) ‘Pay for Performance from Future Fund Flows: the Case of Private Equity’, Review of Financial Studies, Vol. 25, No. 11, 3259–304 Coase, R. (1937) ‘The Nature of the Firm’, Economica , Vol. 4, No. 16, 386–405 Cochrane, J. (2005) ‘The Risk and Return of Venture Capital’, Journal of Financial Economics , Vol. 75, 3–52 Cornelli, F., Kominek, Z., and Ljungqvist, A. (2013) ‘Monitoring Managers: Does It Matter?’, Journal of Finance , Vol. 68, No. 2, 431–81 Cumming, D. (2008) ‘Contracts and Exits in Venture Capital Finance’, Review of Financial Studies , Vol. 21, No. 5, 1947–82 Cumming, D., and Johan, S. (2007) ‘Socially Responsible Institutional Investment in Private Equity’, Journal of Business Ethics , Vol. 75, 395–146 Cumming, D., and Johan, S. (2010) ‘Venture Capital Investment Duration’, Journal of Small Business Management , Vol. 48, No. 2, 228–57 Cumming, D., and MacIntosh, J. (2007) ‘Mutual Funds that Invest in Private Equity? An Analysis of Labour-Sponsored Investment Funds’, Cambridge Journal of Economics , Vol. 31, 445–87 Cumming, D., and Walz, U. (2010) ‘Private Equity Returns and Disclosure around the World’, Journal of International Business Studies , Vol. 41, 727–54 Cumming, D., Fleming, G. and Johan, S. (2011) ‘Institutional Investment in Listed Private Equity’, European Financial Management , Vol. 17, No. 3, 594–618 Cumming, D., Hass, L., and Schweizer, D. (2013) ‘Private Equity Benchmarks and Portfolio Optimization’, Journal of Banking and Finance , Vol. 37, 3515–28 D’Angelo, E. (2010) ‘Limited Partners’ Perception and Management of Risk in Private Equity Investing’, Kellogg School of Management, 62 p. Da Rin, M., and Phalippou, L. (2013) ‘Investor Heterogeneity: Evidence from a Survey of Private Equity Investors’, Working Paper, 55 p. Demiroglu, C., and James, C. (2010) ‘The Role of Private Equity Group Reputation in LBO Financing’, Journal of Financial Economics , Vol. 96, No. 2, 306–30 256 References and Bibliography

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Data sources

British Private Equity and Venture Capital Association (BVCA) (www.bvca.co.uk, accessed January 14, 2011) European Private Equity and Venture Capital Association (EVCA) (www.evca.eu, accessed February 14, 2014) Preqin, Private Equity database and publications (www.preqin.com, accessed January 30, 2014) Thomson Reuters, Thomson One corporate finance and private equity database (http:// banker.thomsonib.com/, accessed January 30, 2014)

Studies and empirical sources

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Index

3i, 28, 246 Auto-correlation, 113 Aversion to ambiguity, 4 Abu Dhabi Investment Authority, 45, 97 AXA Private Equity, see Ardian Accelerator, 2 Axelson, Stromberg and Weisbach, 26, Acharya, Hahn and Kehoe, 117, 123, 129 29 Achleitner et al., 123 Advent International, 138 Bain Capital, 77, 173 Adverse selection, 79, 138 Balance of power, 65, 246, 250 Advisors, 2, 9, 28, 39, 57, 58, 60, 100, 102 Banal-Estañol and Ippolito, 153, 192 Advisory, 132, 133, 192 Bank Holding Company Act, 57 Advisory board, 76, 79, 85 Bankruptcy, 23 AG, 27 Banks, 3, 13, 15, 27, 28, 30, 56, 57, 58, Agency problem, 65 59, 64, 94, 98, 107, 139, 243, 244, 245, Agency theory, vi, 20, 21, 105 250, 251 Agents, 2, 3, 14, 18, 29, 37, 41, 56, 63, 67, Banque Publique d’Investissement, 44 83, 102, 106, 109, 238, 259 Barberis and Thaler, 86 AIFMD, 13, xvii, 64, 80, 83, 87, 249, 250, Barnes and Menzies, 103, 104 261 Barrot, 114, 254 Aigner et al., 141 Bartlett and Swan, 67 Alignment of interests, vi, xv, 19, 67, 70, Basel II Agreements, 13 73, 76, 91, 97, 103, 117, 119, 129, 140, Basel III Agreements, 13, 57, 98, 237, 243 141, 143, 187, 239, 246 Bates, 123, 124, 126, 127, 128, 129, 132, Allen, 3, 92, 253, 254 133, 136, 258 Alpha, 19, 72, 106, 143, 153, 155, 185, Bates and Bradford, 120, 123, 124, 125, 186 126, 127, 128, 129, 130, 131, 132, 133, Alphonse, Hellmann and Wei, 118, 128, 134 129, 130 Behavioral biases, 3 Alternative assets, 35, 51, 108, 111, 262 Behavioral finance, 3, 251 Alternative Investment Fund Manager Behaviors, 3, 106, 164, 199, 210, 236 Directive, see AIFMD Benchmark, xiii, 135, 149, 150, 155, 157, Altruism, 66 170, 175, 177, 178, 184, 186, 187, 198 Amenc and Le Sourd, 117 Benchmarking, 25, 58, 150, 156, 235 Ang, Rhodes-Kropf and Zhao, 48 Benchmarks, 16, 175, 180, 182, 187, 194 Angel investors, 28 Bernstein et al., 2 Anglo-American, 61 Bernstein, Lerner and Schoar, 44, 45, 46, Anglo-Saxon, 27, 61 110 Anson, 10, 11, 56, 61, 63, 67, 91, 102, 253 Best in class, 117, 242 Apax, 97 Beta, 72, 106, 149, 153 Apollo, 97, 263 Biotechnologies, 2 Arbitrage, 96, 248 Black, 3, 254 Ardian, 77 Black and Gilson, 68 AS model, 61 BlackRock, 59 Asset managers, 30 Blackstone, 51, 92, 97, 132, 246, 263, 264 Asymmetry of information, 14, 20, 80, Blessing, 25, 253 81, 106, 131 Bloomberg, 97, 125, 262, 263, 264 Audit fees, 26 Board, 76, 81, 83, 91, 106, 153, 192 Australia, 12, 52 Bortolotti et al., 43, 45, 46

265 266 Index

Boston Consulting Group, 30, 260, 261 Carried interest, 25, 26, 47, 60, 63, 65, Bottom-up, 104, 105 68, 69, 70, 72, 73, 74, 87, 88, 89, 91, 97, Braun, Jenkinson and Stoff, 69 102, 105, 123, 135, 149, 153, 154, 162, Braun, Schmeiser and Siegel, 3, 13, 98 167, 172, 173, 174, 175, 176, 185, 186, Brazil, 52, 54 187, 192, 246, 247, 248 Brealy, Myers and Allen, 3, 62, 100 Caselli, Garcia-Appendini and Ippolito, Broken deal fees, 79 57, 67, 94 Brooke and Penrice, 1, 2, 57, 66, 137, Caselli, Gatti and Querci, 103 249 Cash-flow, 20, 21, 23, 63, 100, 115, 157, Brown, Gredil and Kaplan, 20, 68, 80 164, 186, 190, 192, 198, 199, 208, 210, Budget, 45, 70, 167, 185, 248, 250 215, 216, 217, 222, 223, 236, 240 Burgiss, 55, 143, 148, 191 Cash flow positive company, 22 Business angels, 28 Catch-up, 27 Buy and build, 22 Catterton, 132 BV, 27 CEIOPS, xvii, 99, 244 BVCA, 117, 257, 260 Cerberus Capital Management, 242 Change of focus, 22 CAD III, 13 Chemmanur, Krishnan and Nandy, 117 Cadogan, 138, 139, 255 Chen et al., 131 California, 134 Cherry picking, 127 CalPERS, 46, 54, 97, 113, 133, 135, 242, Chief Investment Officer, xvii, 1, 133 249 Chile, 54 CalPERS vs San Jose Mercury News, 190, Chung et al., 65, 68, 70, 82 249 CIO, xvii, 1, see Chief Investment Officer CalSTRS, 54, 113, 242 Cisco, 132 Cambridge Associates, 55, 113, 143, 144, Claw-back clause, 88 156, 191, 193, 194 Closed-end, 11, 25, 68, 76, 189 Canada, 12, 51, 52, 262 Closed-end funds, 12, 68 Capital, xviii, 3, 6, 9, 11, 13, 15, 16, 18, Closing, 2, 20, 26, 58, 249 20, 22, 25, 26, 28, 31, 35, 39, 41, 45, Cluster, 120, 245 46, 47, 52, 56, 58, 59, 64, 65, 68, 69, 70, Coase, 60, 255 73, 74, 75, 76, 77, 78, 82, 86, 88, 89, 93, Co-investments, 28, 46, 65, 93, 94, 96, 95, 97, 98, 101, 102, 103, 104, 106, 107, 133 108, 109, 112, 114, 115, 116, 119, 120, Collectible cars, 24 121, 123, 124, 126, 128, 130, 131, 132, Coller Capital, 81 133, 134, 135, 136, 137, 138, 142, 149, Collins and Banerjee, 51 154, 155, 157, 162, 163, 164, 167, 173, Columbia, 54, 260 174, 175, 176, 177, 180, 182, 184, 185, Commitments, 25, 26, 47, 52, 102, 116, 186, 187, 189, 192, 193, 198, 209, 210, 174 215, 235, 236, 238, 243, 244, 246, 247, Commodities, 24, 45, 244 249, 251, 257, 258, 262 Compensation, 25, 29, 47, 67, 76, 84, 87, Capital Asset Pricing Model, 62 89, 90, 92, 94, 106, 132, 140, 149, 162, Capital calls, 25, 74, 114, 157 167, 170, 172, 173, 174, 176, 178, 186, Capital Dynamics, 94, 115, 123, 125, 192, 248 253, 254, 260, 261 Competitive advantage, 120, 130 Capital for Enterprise, 44 Concentrated ownership, 61 Capital increase, 23 Conflicts of interest, 37, 76, 79 Capitalism, 2, 56 Conglomerates, 2 CAPM, 62, 111, 114, see Capital Asset Conroy and Harris, 113 Pricing Model Consultants, 2, 48, 102 Captive, 65, 74, 250 Conversion rights, 22 Carlyle, 51, 97, 262 Convertible debt, 123, 135 Carr, 54, 262 Corkery, 52, 262 Index 267

Cornelius et al., 1, 2, 12, 14, 20, 25, 28, Direct investments, 2, 28, 29, 35, 45, 46, 31, 37, 50, 57, 59, 72, 75, 77, 80, 111, 50, 57, 67, 94, 95, 96, 97 112, 113, 114, 176, 233, 235, 236, 238, Direct secondaries, 23, 74 245 Disclosure, 61, 68, 143, 191 Cornelli, Kominek and Ljungqvist, 81, Distressed debt, 2, 23, 24, 39, 41, 91, 118, 84, 102 250 Cornerstone investor, 74 Distribution to paid-in, xvii, 21, 149 Corporate governance, v, 3, 61, 62, 116 Distributions, 26, 68, 74, 88, 114, 116, Corporations, 29, 57, 61, 107, 109 144, 149, 153, 154, 155, 157, 162, 189, Cost of capital, 62, 150, 243 192, 193, 198, 246 Cottage industry, 1 Distributions in-kind, 26, 154, 193 Covenants, 67, 73, 78, 84, 164, 209 Diversification, 12, 22, 48, 50, 59, 112, Covitz and Liang, 29 131, 244, 245, 250 Crash, 7, 31, 115 Divestment period, 26, 70, 80, 123, 157, Credit scoring, 132 162, 167, 175, 246 Crédit Suisse, 121, 122, 124 Dividend recaps, 90, 155, 184, 185, 215, Cross-shareholding, 61 222 Cultural capital, 133 Dividends, 22, 155 Cumming, 29, 68, 155, 255 DLJ Merchant Banking Partners, 56 Cumming and Johan, 29, 155 Dobrauz, 13, 256 Cumming and MacIntosh, 29 Dodd-Frank Act, 13, 64 Cumming and Walz, 68 DPI, xvii, 149, 155, 157, 162, 163, 164, Current investors, 67, 81, 82 167, 175, 176, 177, 185, 186, 187, 189, Custodian fees, 26 199, 252, see Distributed to Paid-In Draper, 1, 249, 253 D’Angelo, 38, 52, 54, 60, 104, 105, 124, Draper, Gaither and Anderson, 11 255 Draw-down, 192, 215 Da Rin and Phalippou, 5, 6, 7, 14, 15, 68, Due diligence, 2, 12, 26, 58, 66, 81, 87, 78, 82, 85, 102, 103 104, 118, 129, 247 Davis and Steil, 30 Due diligence fees, 26 DB, x, xii, 9, 50, 51, 54, see Defined Dyck and Morese, 43 benefits Dyck and Pomorski, 9 DC, xii, 48, 50, 51, 56, 261, 264, see Defined contributions Early stage financing, 22 De Bondt and Thaler, 4 Easterbrook and Fischel, 86 De Long, Schleifer, Summers and EBRD, xvii, 43, see European Bank for Waldmann, 68, 103 Reconstruction and Development Debt, 18, 22, 31, 57, 59, 94, 123, 127, 129, Ecosystem, 2, 57 189, 242 EDHEC, 3, 98, 144, 189, 244 Declining marginal results, 10 Efficient market, 62 Defaulting LPs, 74 EIF, xvii, 43, see European Investment Defined benefits, 50 Fund Defined Contribution Institutional Eifert, 76, 256 Investment Association, xvii, 50, 261 EIOPA II, 54 Defined contributions, 48 Ekuinas, 44 Delegated management, 78 Emerging domestic markets, 119 Delegated monitors, 28 EMPEA, xvii, 262 Demaria, 10, 21, 22, 23, 60, 64, 79, 103, Employee Retirement Income Security 105, 117, 124, 141, 190, 240, 249, 253 Act, 12 Demiroglu and James, 4, 16, 29 End of life, 74 Denmark, 94 Endeavor, 137, 138 Diller, Herger and Wulff, 115 Endowments, 3, 9, 30, 37, 38, 39, 41, 58, Direct communication, 66 66, 108, 115, 118, 143, 191, 264 268 Index

Entrenched managers, 61 Family offices, 3, 28, 30, 31, 32, 33, 34, Entrenchment, 61 35, 36, 37, 59, 64, 109, 112, 263 Entrepreneur, 21, 25, 29, 60, 66, 93, 103, Fang, Ivashina and Lerner, 94, 95, 97 106, 118, 120, 123, 127, 128, 129, 131, FASB 820, 149, 189 134, 135, 137, 138 Fashions, 4 Environmental and social investment, FCPR, xvii, 27 117, see Socially responsible investing Fee offset mechanism, 80 Equity, viii, xvi, xvii, xviii, 1, 2, 3, 4, 6, Financial markets, 4, 16, 62, 63, 238 9, 10, 12, 13, 14, 15, 16, 17, 18, 19, 20, Financial returns, 139 21, 22, 23, 24, 25, 27, 28, 30, 31, 33, Fine art, 24 34, 35, 36, 37, 39, 41, 43, 45, 46, 48, 50, Finlombarda Gestioni Societa di 51, 52, 54, 55, 56, 57, 58, 59, 60, 61, 62, Gestione del Risparmio, 44 63, 64, 65, 67, 69, 70, 74, 77, 78, 79, 80, Finnish Industry Investment Fund, 44 81, 84, 87, 89, 92, 94, 95, 98, 100, 101, First-time funds, 5, 6, 143 102, 104, 105, 106, 107, 108, 110, 111, Fonds Commun de Placement à Risque, 112, 113, 114, 115, 116, 117, 118, 119, xvii, 27 120, 121, 122, 123, 124, 125, 126, 127, Form of efficiency, 62 128, 129, 131, 134, 135, 139, 141, 142, For-profit investing, 119 143, 145, 146, 148, 149, 151, 184, 185, Foundations, 2, 37, 38, 39, 41, 43, 59, 190, 239, 240, 243, 244, 245, 251, 256, 143, 191 260, 262, 263, 264 France, 27, 28, 44, 52, 91 ERISA, see Employee Retirement Income Freedom Group, 242 Security Act Frei and Studer, 38, 110, 112, 113, 114 ESG, see Socially responsible investing French and Poterba, 4 Eurazeo, 28, 246 Froot and Teo, 57 European Bank for Reconstruction and Fund administrator fees, 26, 143 Development, xvii, 43 Fund managers, 1, 5, 17, 22, 31, 58, 68, European Investment Fund, xvii, 43 77, 86, 99, 121, 184, 187, 246, see also European Private Equity and Venture General partners Capital Association, xvii, 243, 260, 261 Fund raising, 2, 9, 16, 20, 22, 25, 29, 34, EVCA, xvii, 27, 33, 34, 35, 36, 64, 80, 37, 59, 65, 68, 70, 72, 80, 81, 82, 84, 149, 150, 189, 243, 247, 258, 260, 261 87, 91, 94, 100, 102, 106, 114, 124, 137, Evergreen, 28 141, 173, 189, 239, 240, 244, 246, 247, Ewens, Jones and Rhodes-Kropf, 16, 106, 250 142, 247 Fund secondaries, 23 Exit, 19, 20, 29, 34, 63, 77, 81, 85, 86, 98, Fund size, 14, 25, 26, 60, 69, 70, 72, 87, 101, 102, 155, 237, 238, 239, 240, 242, 136, 154, 163, 164, 167, 172, 173, 174, 246 175, 177, 186, 192, 198, 209, 210, 236 Exiting, 14, 58 Funds-of-funds, xii, 2, 6, 9, 28, 30, 31, Expectations, 3, 17, 18, 19, 32, 35, 85, 34, 35, 39, 46, 47, 48, 50, 56, 59, 81, 96, 117, 121, 134, 138, 235, 239, 248 99, 102, 150 Experience, 5, 7, 9, 10, 14, 29, 30, 41, 55, 58, 66, 85, 102, 103, 105, 110, 111, 114, Galer, 12, 256 116, 121, 127, 136, 139, 143, 191, 238, Gambler’s fallacy, 87 250 Gatekeepers, v, 2, 9, 28, 46, 47, 48, 87, Expertise, 6, 12, 19, 24, 25, 46, 58, 94, 102 96, 101, 110, 129, 131, 136, 140 General partners, viii, ix, 1, 17, 24, 25, Extra-financial criteria, 66, 241, 242, 248 58, 100, 167, 174, 176, 238, 239, 246, 249 Fads, 4 Generational change, 16, 69, 142 Fair market value, 134, 184, 235 Germany, 27, 52, 61, 106, 107, 108, 109, Fama, 105, 256 259 Fama and Jensen, 105 GIC, 46, 97 Index 269

Giot, Hege and Schwienbacher, 5 Hedge funds, 24, 35, 40, 42, 48, 51, 85, GJ model, 61 110, 115, 244 Go to market, 22 Hellman, 29, 109, 257 Gompers and Lerner, 11, 12, 21, 26, 29, Hering, Wolters and Harris, 11 52, 56, 67, 73, 78, 102, 109, 129, 130, Hewitt EnnisKnupp, 110, 111 141, 248 Hidden action, 79 Gompers and Xuan, 131 High net worth individuals, 28, 31 Gottschalg, 117, 141, 144, 148, 189, 257, Higson and Stucke, 4, 15, 68, 141, 142, 259 143, 144, 148, 149, 150, 153, 154, 189, Gottschalg, Phalippou and Zollo, 141 190, 191 Gottschalg, Talmor and Vasvari, 117 Hilb, xvi, 61, 62, 63, 64, 83, 84, 89, 91, Governance, xvii, 13, 19, 21, 25, 29, 32, 100, 106, 116, 253 35, 45, 46, 60, 61, 62, 63, 64, 67, 68, 74, Hiring, 127, 132 77, 80, 81, 84, 86, 90, 97, 102, 116, 117, Hirschman, 81, 253 119, 129, 140, 240 HNWI, xvii, 28, 31, 37, see High net Government agencies, 30 worth individuals Government Pension Fund of Norway, Hobohm, xvi, 2, 7, 8, 9, 13, 14, 15, 27, 29, 45, 108 30, 31, 35, 37, 39, 41, 45, 46, 47, 48, 50, GP, xvii, 135, 136, 142, 153, 154, 155, 51, 52, 54, 56, 58, 78, 79, 93, 102, 104, 167, 172, 173, 174, 191, 192, 240, 106, 107, 108, 109, 110, 111, 112, 144, 241, 242, 246, 247, 248, see General 191, 253 partners Hochberg and Rauh, 45 GPs, 1, 2, 3, 4, 5, 9, 10, 13, 14, 15, 16, 17, Hochberg, Ljungqvist and Vissing- 18, 19, 20, 21, 24, 25, 26, 28, 29, 39, 45, Jorgensen, 14, 82, 87, 103 46, 47, 48, 51, 58, 60, 62, 63, 64, 65, Holding company, 28 66, 67, 68, 69, 72, 74, 75, 76, 77, 78, 79, Home investing bias, 4 80, 81, 82, 83, 84, 87, 88, 89, 90, 91, 92, Hsu, 100, 106, 131, 257 93, 94, 97, 99, 101, 102, 103, 104, 105, Human capital, 132 106, 108, 116, 135, 136, 137, 138, 140, Hurdle rate, 27, 67, 88, 89, 155, 176, 187, 149, 154, 162, 170, 172, 173, 174, 185, 247, 248 186, 187, 192, 235, 237, 239, 240, 241, 242, 246, 247, 248, 249, 250, 251, 261, IAS 39, 149, 189 264, see General partners Illiquid, 7, 24, 59, 62, 63, 80, 98, 116, Gramm-Leach-Bliley Act, 57 155 Gray, 59, 262 ILPA, xvii, 19, 77, 261 Greenwashing, 241 Incentives, 29, 65, 70, 71, 84, 85, 86, 87, Groenwold, 54 91, 105, 106, 120, 185 Groh and Liechtenstein, 103 Industry peers, 67 Gross, 20 Inefficiencies, 62 Grossman and Stiglitz, 63 Informal private equity, 23 Growth capital, 22, 118 Information asymmetries, 7, 9 Growth crisis, 22 Information technologies, 2, 156 Infrastructure, 23, 133, 134 Hamilton Lane, 135 Inner cities investing, 119 Harris, 14, 68, 81, 85, 100, 148, 149, 150, Institutional investors, 3, 11, 23, 28, 30, 246, 248, 249, 250, 251, 257 45, 55, 56, 94, 136, 139 Harris et al., 69, 190 Institutional Limited Partners Harris, Jenkinson and Kaplan, 15, 141, Association, see ILPA 142, 143, 144, 148, 149, 150 Institutions, xvi, 118, 133, 190, 237, 243, Harris, Jenkinson and Stucke, 5, 10 244 Harvard, 4, 38, 39, 75, 100, 113, 115, 253, Insurance groups, 3, 30, 52, 56, 98, 107, 254, 256, 264 189, 237, 243, 244, 245, 249 Hawley and Williams, 107 Internal agent, 37 270 Index

International Private Equity and Venture KKR, 51, 246, 262 Capital Valuation Guidelines, 149, 189, Know-how, 7, 93, 126, 129, 143, see also IPEV 191 Intrinsic motivation and interest in the Kocis et al., 144, 189 job, 65 KPMG, 134, 135, 261 Investment consultants, 12 Investment corporations, 30 Large institutions, 65 Investment period, 19, 25, 26, 69, 115, Later stage financing, 22, 107 123, 162, 167, 174, 175, 176, 185, 186, LAVCA, xviii 210, 236, 242, 246 LBO, 4, 9, 22, 24, 25, 26, 31, 34, 39, 40, Investment strategy, 1, 3, 5, 18, 33, 41, 41, 42, 46, 58, 66, 69, 70, 71, 72, 73, 43, 63, 103, 104, 113, 116, 199, 241, 75, 76, 77, 78, 79, 80, 88, 90, 91, 92, 93, 244 94, 95, 96, 99, 100, 101, 104, 109, 112, Investor protection, 45, 61 118, 121, 123, 124, 125, 126, 132, 134, Investor psychology, 3 136, 142, 144, 145, 146, 148, 150, 151, IPEV, 149, 189, see International Private 153, 154, 155, 156, 157, 158, 160, 162, Equity and Venture Capital Valuation 163, 164, 165, 167, 168, 170, 172, 174, Guidelines 175, 176, 177, 178, 180, 182, 184, 185, IPO, xvii, 4, 26, 34, 59, 93, 94, 98, 101, 186, 187, 189, 190, 192, 193, 194, 195, 155 197, 198, 199, 202, 203, 206, 207, 208, Ireland, 12, 52 209, 210, 211, 213, 215, 216, 217, 220, IRR, x, xi, xviii, 10, 15, 29, 30, 48, 58, 222, 223, 226, 228, 230, 235, 236, 250, 70, 72, 73, 96, 103, 123, 124, 125, 126, 253, 255, 259 138, 144, 148, 155, 156, 157, 162, 163, LBOs, xviii, 2, 22, 29, 34, 155, 249, 250, 174, 175, 176, 177, 185, 187, 193, 194, see Leveraged buy-Outs 197, 198, 257, 259 Leamon, Lerner and Garcia-Robles, 31, Irrational investors, 3 76 Israel, 106, 107, 108, 109, 259 Learning curve, 10, 130 Italy, 12, 44, 94 Leleux, Schwass and Diversé, 31, 32, 33, Ivashina and Kovner, 57 34, 35, 36 Lensner, 77, 263 Jackson and Bates, 134, 135, 136, 137 Lerner, 10, 29, 41, 53, 54, 65, 66, 70, 103, Japan, 12, 27, 51, 52, 61, 106, 107, 108, 113, 115, 131, 251, 253, 254, 255, 256, 109, 259, 262 257, 258, 261 J-Curve, 10, 20, 27, 56, 115, 125, 188, Lerner and Cao, 246 189, 190, 199, 215, 216, 222, 223, 237, Lerner and Schoar, 13, 14, 72, 73 240, 245, 247, 253, 256 Lerner et al., 191 Jegadeesh, Kräussl and Pollet, 150 Lerner, Leamon and Hardymon, Jelic, 155, 258 72, 73 Jenkinson et al., 189 Lerner, Schoar and Wang, 37, 41 Jenkinson, Jones and Martinez, 48, 102 Lerner, Schoar and Wongsunwai, 4, 10, Jensen and Meckling, 105 30, 37, 39, 41, 57, 110, 141, 143 Johan, Knill and Mauck, 43, 44, 45, 46 Leveraged buy-outs, 2, 22, 190 JP Morgan, 15, 102, 121 Limited partner, 28, 75 Limited partners, ix, 1, 3, 17, 18, 25, 29, Kahneman and Tversky, 4, 6 75, 79, 100, 104, 123, 124, 167, 174, Kaplan and Schoar, 5, 14, 69, 100, 101, 176, 238, 239, 250 102, 121, 141, 142, 144, 148, 149, 190, Limited partnership, 11, 27, 28, 54, 56, 247 60, 61, 68, 91, 93, 104, 105, 233 Kaplan and Strömberg, 80 Limited partnership agreement, 26, 67, Kaserer and Diller, 154, 192 68 Kemmerer et al., 81 Limited partnerships, 12, 21, 23, 24, 25, Key-man clause, 76, 247 27, 77, 80 Index 271

Liquidity, 31, 34, 50, 51, 56, 57, 74, 75, Managers, xv, xvi, 117, 119, 120, 121, 81, 90, 98, 99, 103, 107, 112, 114, 115, 123, 127, 128, 129, 130, 131, 132, 133, 116, 154, 193, 243, 245, 250 134, 138, 142, 143, 149, 150, 153, 155, Listed, 2, 4, 11, 21, 23, 25, 26, 27, 28, 54, 177, 184, 185, 187, 189, 236, 240, 244, 63, 65, 83, 93, 97, 99, 114, 117, 124, 246, 248, 250 127, 140, 150, 155, 157, 162, 244, 250 Mandates, 2, 46, 47, 56, 99, 101, Listed PEFs, 28 116 Litvak, 68, 258 Maretich and Bolton, 118 Ljungqvist and Richardson, 143, 144, Market inefficiencies, 62, 63, 116 148, 149, 154, 155, 164, 190, 191, 192, Markowitz, 111, 259 210 Marquez, Nanda and Yavuz, 14 Local investor, 131 Masulis and Thomas, 68 Lopes, 37, 105 Mathonet and Meyer, 111, 112 Low level of information, 64 Mayer, Schoors and Yafeh, 27, 51, 57, Loyalty, 19, 81, 85, 87, 98, 101, 102, 120, 106, 107, 108, 109 239 MBE, xii, 18, 20, 118, 121, 123, 124, 125, LP, xviii, 1, 2, 4, 5, 8, 9, 10, 14, 15, 16, 18, 126, 127, 129, 130, 131, 132, 133, 134, 19, 20, 23, 26, 27, 29, 30, 31, 33, 41, 43, 135, 136, 137, 138, 139, 140, 239, 241, 47, 56, 59, 60, 65, 66, 67, 68, 75, 76, 79, 242, see Minority business enterprise; 81, 82, 83, 85, 86, 89, 91, 93, 95, 97, 99, Minority-owned businesses 100, 106, 107, 108, 109, 110, 112, 114, Meerkatt et al., 117, 123, 129 135, 143, 144, 155, 167, 173, 185, 191, Memory, 67 239, 240, 242, 246, 247, 248, 261, see Metrick and Yasuda, 70, 71, 155 Limited partner Mexico, 54, 262 LP community, 7, 16, 19 Meyer and Mathonet, 19, 22, 23, 25, 29, LPA, 26, 60, 64, 67, 68, 69, 74, 75, 76, 78, 48, 63, 64, 68, 82, 84, 101, 102, 107, 79, 105, 153, 154, 167, 187, 236, 239, 108, 142, 187, 190, 233, 245 246, 248, 249, see Limited partnership Mezzanine, 22, 26, 40, 42, 104, 118, 119, agreement 123, 124, 125, 155, 156, 193 LPs, 1, 2, 3, 4, 5, 6, 8, 9, 10, 13, 14, 15, 16, MFN, xviii, 78, 79 17, 18, 19, 20, 21, 23, 25, 26, 28, 29, 30, MFO, xviii, 31, 35, 36 31, 33, 35, 37, 41, 43, 45, 46, 47, 48, 55, Michael Porter, 119 58, 59, 60, 62, 63, 64, 65, 66, 67, 68, Microsoft, 77 72, 74, 75, 76, 77, 78, 79, 80, 81, 82, 83, Minority business enterprise, 84, 85, 86, 87, 88, 89, 90, 91, 92, 93, 120 94, 95, 97, 99, 100, 101, 102, 103, 104, Minority Enterprise Small Business 105, 106, 110, 111, 113, 114, 115, 116, Investment Corporation, 133 118, 121, 134, 138, 139, 140, 141, 143, Minority-owned businesses, 6, 18, 118 153, 155, 162, 170, 172, 173, 174, 178, Modern private equity, 27 185, 186, 187, 191, 192, 193, 235, 237, Monitoring, 16, 28, 46, 58, 62, 65, 67, 77, 239, 240, 241, 244, 246, 247, 248, 249, 79, 80, 81, 82, 85, 86, 90, 91, 93, 95, 97, 250, 251, 262, 263, 264, see Limited 103, 106, 108, 116, 118, 131, 143, 191, partners 192, 247, 248, 249, 250, 255, 261 Luxemburg, 27 Monopolies, 2 Moral hazard, 64, 79, 86, 90 Mainstream private equity, 118, 131, 137, Morale, trust and self-esteem, 65 138 Morris and Phalippou, 87 Management fees, 25, 26, 47, 56, 60, 69, Morse, 29, 259 70, 72, 80, 87, 89, 90, 91, 97, 105, 123, Most favored nation, see MFN 132, 141, 149, 153, 154, 157, 162, 164, Motivations, 18, 28, 45, 59, 100, 110 167, 170, 172, 173, 174, 175, 176, 178, Mubadala Development, 97 185, 186, 187, 192, 193, 236, 246, 247, Mulcahy et al., 190 250, 263 Murray, 94, 263 272 Index

NACUBO, xviii, 38, 39, 40, 41, 42 PE investing guidelines, 120 Nahata, 4, 16, 100, 259 Peer group, 25, 235 NAIC, 118, 119, 123, 124, 134, 135, PEF, 15, 19, 20, 23, 25, 27, 28, 46, 48, 58, 136, 261, see National Association of 60, 63, 64, 65, 67, 68, 69, 74, 75, 77, 79, Investment Companies 80, 81, 82, 83, 90, 91, 93, 94, 95, 96, NASDAQ Composite, 156, 157, 162, 163, 98, 105, 106, 115, 116, 138, 141, 142, 167, 172, 174, 175, 176, 177, 185 143, 144, 149, 150, 153, 155, 157, 186, National Association of Investment 189, 190, 191, 192, 237, 239, 240, 244, Companies, 118 245, 248, see Private equity funds Natural resources, 24 PEFs, 3, 4, 18, 19, 20, 21, 22, 24, 25, NAV, xviii, 26, 68, 82, 83, 96, 149, 154, 26, 27, 28, 29, 43, 44, 45, 46, 47, 48, 157, 162, 167, 172, 173, 174, 175, 184, 52, 56, 57, 58, 60, 63, 64, 81, 82, 83, 189, 191, 245, 246, see Net Asset Value 84, 94, 99, 105, 106, 112, 114, 115, 116, Net Asset Value, 6, 26, 70, 87, 99 119, 130, 140, 141, 142, 143, 144, 149, Net invested capital, 26 150, 153, 154, 155, 157, 162, 163, 164, The Netherlands, 12, 27, 52 167, 175, 177, 184, 185, 187, 189, 190, Niche, 1, 127 191, 192, 193, 198, 234, 235, 236, 237, Nielsen, 94, 259 240, 244, 245, 247, see Private equity No fault divorce clause, 76 funds Noise, xvi, 3, 4, 68, 90, 101, 248, 251 PEGCC, 78 Non-listed, 58 Pension funds, 3, 9, 12, 15, 30, 31, 43, 45, NVCA, xviii 48, 50, 51, 52, 54, 56, 59, 66, 83, 86, 97, 102, 107, 108, 133, 136, 143, 144, 190, Opaque framing, 79 191, 237, 242, 243, 244, 245, 262 Open-ended, 28 Pension plans, x, 9, 12, 37, 50, 55, 56, 66, Operational improvements, 23, 24, 123, 98, 135, 243 131 Pensions Act, 12 Organizational expenses, 79 Pensions Security Act, 12 Organized private equity, 23 Performance, 3, 7, 10, 12, 15, 17, 18, 19, Outsourcing, 132 20, 21, 25, 26, 41, 46, 50, 55, 57, 58, Overconfidence, 5, 6 62, 64, 65, 68, 72, 74, 80, 81, 82, 84, Overseas Private Investment 86, 87, 88, 89, 90, 96, 97, 101, 102, 103, Corporation, 44 106, 107, 108, 110, 111, 115, 122, 123, Oversupply of capital, 7 124, 125, 129, 131, 134, 135, 136, 140, 141, 142, 144, 148, 154, 155, 157, 158, Pantheon, 51 160, 162, 163, 167, 174, 175, 176, 177, Parish Capital, 133, 135 180, 182, 184, 185, 187, 188, 189, 190, Partners Group, 246, 256, 260, 261 191, 197, 198, 199, 208, 209, 210, 215, Passive investing, 117 216, 217, 223, 230, 231, 234, 235, 236, Past performances, 3, 4, 65, 190, 235 237, 239, 240, 244, 246, 247, 248, 251, Payne and Wood, 76 252 PE, xviii, 1, 2, 3, 8, 10, 17, 18, 19, 20, 23, Performance fee, 73 24, 25, 29, 30, 33, 50, 59, 60, 61, 62, Periodic liquidation, 25 63, 65, 66, 67, 68, 72, 74, 78, 79, 82, Perkins, 1, 249, 254 94, 95, 98, 109, 112, 116, 117, 118, 119, Perryman, 245, 263 120, 121, 123, 124, 126, 127, 129, 130, Persistence of performance, 69 131, 132, 133, 134, 135, 136, 137, 138, Persistence of returns, 121, 142 139, 140, 141, 142, 143, 144, 149, 150, Personal connections, 1 153, 154, 155, 156, 157, 184, 185, 186, Peru, 54 187, 188, 189, 190, 191, 192, 193, 198, Petitt, 77, 263 233, 235, 236, 237, 238, 239, 240, 241, Phalippou, 9, 15, 26, 64, 78, 98, 102, 108, 242, 243, 244, 245, 246, 247, 248, 249, 248, 254, 255, 256, 257, 259 250, 251, 252, 254, see Private equity Phalippou and Gottschalg, 141, 144 Index 273

PICC, viii, xviii, 162, 163, 164, 167, 173, Prospect theory, 6 209, 210, 246 Prototype, 22 Pitchbook, 121 Proxy fights, 61 Placement agents, 2, 83, 91 Prudent person, 12 Placement fee, 2 Public Market Equivalent, 21, 260 PME, xviii, 144, 148, 149, 150, 157, 162, Public securities laws, 21 175, 185, 186, 187, 247, 248, 252, 260, see Public Market Equivalent Qatar Investment Authority, 46 Pooling interests, 28 Quasi-equity, 21, 22, 117, 127, 140 Poor information, 95 Quiry and Le Fur, 117, 123, 129 Porter, 119, 120, 121, 123, 127, 133, 139, see Michael Porter Rand and Weingarten, 74, 75 Portfolio, 117, 123, 127, 131, 132, 136, Rate of return, xviii, 27, 57, 62, 74, 123 143, 154, 155, 185, 189, 190, 210, 238, Real estate, 23 242, 244, 245, 246, 247, 250, 251 Reale, 37, 263 Portfolio companies, 21, 25, 63, 68, 77, Reardon, 31, 259 79, 82, 83, 91, 93, 105, 114, 115, 127, Recruitment, 22, 39 131, 132, 136, 210, 242, 246 Reference calls, 66 Portfolio company, 26, 29, 69, 79, 82, 131 Regulations, v, 3, 10, 13, 31, 54, 56, 57, Post-investment monitoring process, 118 60, 64, 75, 80, 86, 98, 102, 137, 238, Preferred return rate, 27, 88, see also 240, 243, 249, 250, 251 Hurdle rate Remaining value, 134 Preqin, 2, 30, 47, 50, 52, 54, 55, 56, 58, Rent, 79 59, 60, 91, 119, 121, 124, 143, 260, 261, Replacement capital, 34 262, 263 Reporting, 14, 16, 28, 34, 43, 107, 108, Princeton, 75, 253, 254, 264 109, 118, 144, 153, 192, 193, 250 Principal-agent relation, 79 Representativeness bias, 4 Principals, 3 Reputation, 1, 4, 7, 13, 14, 29, 41, 66, 67, Private equity, vi, vii, x, xi, xii, xv, xvi, 83, 84, 85, 86, 100, 101, 102, 103, 108, 1, 3, 4, 6, 7, 9, 10, 11, 12, 13, 15, 16, 17, 130, 238, 249 21, 22, 23, 25, 31, 34, 38, 39, 40, 41, Reputational penalty, 68, 75 43, 44, 45, 46, 47, 48, 51, 52, 54, 55, 56, Reputations, 4, 16, 248, 251 57, 61, 63, 64, 66, 71, 91, 98, 100, 102, Residual value to paid-in, 149, 189 106, 107, 108, 111, 113, 114, 116, 119, Restart, 23 126, see also PE Restructuring, 22, 48 Private equity funds, xvi, 17, 18, 21, 28, Retail investors, 28 47, 50, 57, 89, see also PEF Returns, 2, 3, 4, 7, 10, 15, 17, 18, 19, 20, Private Equity Growth Capital Council, 21, 23, 30, 35, 37, 41, 48, 51, 55, 56, 58, 78 62, 66, 72, 89, 96, 102, 105, 108, 110, Private Fund Investment Advisers 111, 112, 113, 114, 115, 116, 117, 118, Registration Act, 13 119, 120, 121, 122, 123, 124, 125, 126, Private pension plans, 66 127, 129, 132, 133, 135, 136, 137, 138, Private placement memorandum, 68 139, 140, 141, 142, 143, 144, 145, 146, Private placements, 57 149, 150, 153, 154, 157, 162, 173, 176, Privately held companies, 123, 135 187, 189, 190, 191, 192, 194, 197, 198, Proceeds, 19, 26, 27, 43, 64, 108, 115, 199, 200, 201, 202, 203, 204, 205, 206, 154, 155, 164, 172, 193, 239, 246, see 207, 208, 210, 215, 216, 217, 218, 220, Distributions 222, 223, 224, 226, 233, 234, 235, 236, Product-market competition, 65 237, 239, 240, 241, 245, 247, 248, 262 Progressive carried interest, 74, 87, 153, Re-up, 9, 14, 82, 103 187 Reuters, 97, 263, 264 Proparco, 44 Ribstein, 11, 259 Proprietary deal flow, 65 Rikato and Berk, 2 274 Index

Risk-adjusted, 12, 21, 62, 96, 117, 127, Shefrin, 4, 5, 6, 7, 13, 16, 20, 30, 31, 37, 129, 140, 149, 150 63, 76, 79, 85, 86, 87, 90, 99, 101, 103, Risk-return preferences, 6, 114 105, 114, 116, 254 Risk-return profile, 1, 104, 118, 121, 126, Shleifer and Vishny, 61 132, 133, 138, 244 Side letters, 78, 79 Risks, vii, viii, xi, 3, 13, 17, 23, 25, 37, 48, Signal, 9, 14, 21, 75, 86, 90, 138, 215, 217, 55, 56, 62, 68, 97, 110, 111, 112, 114, 222, 246, 248 116, 122, 124, 132, 133, 138, 139, 149, Signaling power, 66, 82 150, 241, 242, 243, 245, 247, 250, 256, Signals, 16, 19, 90, 127, 157 263 Silicon Valley, 128, 262 Robb, Fairlie and Robinson, 132 Single Family Office, see SFO Robinson and Sensoy, 4, 7, 25, 26, 142, Size, 4, 6, 7, 9, 12, 14, 25, 26, 29, 32, 33, 143, 148, 149, 154, 155, 175, 185, 190, 36, 39, 41, 46, 58, 60, 72, 73, 76, 83, 191, 192 92, 96, 103, 114, 117, 123, 125, 127, Rouvinez, 149 132, 136, 143, 150, 151, 157, 163, 167, Rubin, 118, 132 172, 177, 198, 199, 209, 238, 251, 263 Russell 2000, 150 Skills, 4, 39, 41, 58, 85, 103, 120, 127, 236 Russell 3000, 150 Skype, 77, 264 RVPI, 149, 189, see Residual Value to Small and medium size businesses, 117, Paid-In 238, 251 Social capital, 132 S&P 500, x, xii, 54, 142, 143, 144, 148, Social endeavors, 18 150, 153 Social impact bond, 132, 140, 242 S&P 600, 150 Social private equity, 118, 119, 129 SA, 27 Social responsibility, 65 Sahlman, 23, 260 Social returns, 118, 138, 139, 140 Salter, 264 Socially responsible investing, 117 Samuelson and Nordhaus, 15 Société d’Investissement en Capital- Schiller, 4 Risque, 27 Schmidt and Wahrenburg, 67 Solvency II Directive, 13, 98, 244 Schwienbacher, 6, 155, 256, 260 Solvency ratios, 56, 59, 98, 235, 243, SCM, 69, 70, 74, 76, 87, 88, 89, 91, 261 251 SEC, 13, 32, 80, 83, 262, 263 Sophisticated, 39, 41, 65, 118, 199 Secondary funds, 2, 59 Sophistication, 41, 83 Secondary investments, 23 Sovereign wealth funds, v, 4, 43, 46 Securities and Exchange Commission, SPAC, 26, see Special Purpose Acquisition see SEC Companies Seed investment, 22 Special Investment Fund, 27 Segregated accounts, 65, 78, 93, 99, 116 Special Purpose Acquisition Companies, SEIU, 77, 261 26 Selection, 6, 18, 21, 26, 28, 41, 48, 50, 58, Special situations, 134 62, 63, 94, 97, 99, 100, 102, 103, 104, Spencer, 77, 264 105, 106, 108, 116, 127, 130, 138, 139, Spindler, 21, 246, 260 235, 241, 242, 251, 263 Sponsored, 22 Sensoy, Wang and Weisbach, 1, 4, 15, SRI, see Socially responsible investing 41, 100 Stakeholder value, 61 Sequoia, 132 Standard & Poor’s, 36, 150 Setteboune, 11, 67, 75, 102, 260 Standardized contracts, 2 Set-up fees, 26 StepStone, 133 SFAS 157, 149, 189 Stereotypes, 4 SFO, xviii, 31, 35, 36 Stigma, 130, 131 Shareholder activism, 61 Stock exchange, 61 Shareholder value, 61 Stockholders, 28 Index 275

STOXX EU Total Market Index, 156 Turn-around capital, 23, 118 STOXX Europe TMI Healthcare, 156 TVPI, xviii, 96, 149, 157, 174, 189, 193, STOXX Europe TMI Technology, 156 194, 197, 198, see Total Value to Paid-In Strategic changes, 23 Strömberg, 155, 254, 258, 260 UK, 12, 13, 28, 38, 44, 48, 52, 54, 59, 61, Structuring, 57, 94 106, 107, 108, 109, 123, 155, 257, 258 Studer and Wicki, 3, 13, 98, 113, 189, 243 Underprivileged, 127, 128, 129, 132, 137, Sub-optimal private equity, 18 140 Subscription agreement, 68 Underserved markets, 119 Survivorship bias, 10 Uniform Limited Partnership Act, 11 Swensen, 37, 39, 41 Uniform Prudent Investor Act, 12 SWF, xviii, 29, 43, 44, 45, 46, 264, see United States, 61, 260 Sovereign wealth funds University St. Gallen, xv Switzerland, 27, 52 UNPRI, xviii, 65, 77 Unsponsored, 22 TA Associates, 138 Tacit incentive, 86 Valuation, 123, 131, 134, 184, 185, 235, Target allocations, 1 244 Tax breaks, 120, 121, 139 Value creation, 16, 20, 58, 63, 69, 101, Tax efficient, 155 137 Tax exempt, 37 Value-at-risk, 209, 237, 245 Temasek, 46 VC, xviii, 126, 131, 134, 135, 136, 137, Terrazas, 128 142, 144, 145, 146, 150, 153, 154, 155, Thaler, 3, 4, 5, 68, 95, 103, 254 156, 157, 158, 160, 162, 163, 164, 165, Thaler and Johnson, 6 167, 168, 170, 172, 173, 174, 175, 176, Thomson ONE, 124, 142, 144, 150, 156, 177, 178, 180, 182, 184, 185, 186, 187, 157, 158, 160, 162, 163, 164, 167, 175, 190, 192, 193, 194, 195, 197, 198, 200, 177, 185, 192, 193, 198, 199, 208, 209, 201, 204, 205, 208, 209, 210, 211, 213, 210, 216, 217, 222, 223 215, 216, 217, 218, 222, 223, 224, 228, Thomson Reuters, 50, 113, 135, 254, 260 230, 233, 235, 236, 254, 256, 260, 263, Threat of being replaced, 65 see Venture capital Timber, 24 VCTs, 28, see Venture capital trust Time horizon, 2, 29, 32, 99, 114, 237, 245 Venture capital, x, xii, 7, 11, 12, 22, 28, Time-lag, 4, 5, 102, 141, 142, 188, 189, 31, 64, 70, 71, 72, 77, 101, 109, 118, 237 121, 123, 124, 126, 127, 131, 132, 135, Timing, vii, 9, 177 138, 190, 199, 249, 262 Tirole, 25, 61, 63, 64, 67, 80, 81, 82, 85, Venture capital trust, 28 86, 87, 90, 92, 254, 256 Venture lending, 2, 44 Toll and Oberfeld, 2, 26, 75, 76, 78, 79, Venture Philanthropy, 118, 119 80, 83, 84, 88, 91, 99 Vintage year, 5, 25, 91, 142, 157, 172, Top quartile, vii, xii, xiii, 5, 100, 101, 190, 198 102, 157, 160, 162, 163, 164, 167, 168, Voice, 19, 66, 80, 81, 85, 102, 239 174, 175, 176, 177, 178, 182, 184, 185, Volastro, 50, 51, 264 186, 187, 188, 198, 199, 208, 209, 210, Volcker Rule, 13, 57, 64, 249 213, 234, 237, 247, 248 VY, xviii, 25, 142, 157, 158, 160, 162, Top-down, 104, 105 167, 172, 173, 174, 175, 176, 186, 187, Total value to paid-in, 149, 189, 193 190, 194, 195, 197, 198, 208, 209, 210, Towers Watson, 50, 52, 71, 261 215, 216, 217, 218, 220, 222, 223, 224, Track record, 5, 43, 65, 68, 72, 81, 102, 226, 228, 230, 233, 234, 235, 236, see 103, 134, 135 Vintage year Transaction fees, 79, 91, 93, 153 Trustee, 12 Warren Buffett, 77, 263 Turn-around, 23, 34, 91, 118 Wash out, 23 276 Index

Waters, 77, 264 Winfrey, 82, 91, 264 Waves, 4, 20, 142, 190, 240 Winton, 25, 28, 31, 51, 57, 66, Wealthy individuals, 32, 37 260 WEF, 138, 261, see World Economic Witkowsky, 82, 264 Forum World Economic Forum, 138, 260 Weidig and Mathonet, 2, 6, 96, 104, 111, 149, 235 Yale, 4, 38, 39, 100, 113 Wilshire 5000 Total Market Full Cap Index, 156, 157 Zhiming, 97, 264 Wine, 24 Zombie, 70, 81, 87, 154, 185