Inside Private Equity

“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
Inside Private Equity (Wiley, 2009)

Private equity, the business of investing in private companies, has quickly grown from a cottage industry to a mature asset class. For those that supply the money—the endowments, foundations, pension funds, family offices, and others—learning the business of private equity can be one of its principle challenges. Inside Private Equity was written for this audience to help provide a general understanding of how to invest in, monitor, and measure the performance and risk of private equity.

Divided into four comprehensive parts—Setting the Foundation, Measurements and Comparisons, Topics on Risk, and Conclusions —Inside Private Equity opens with a brief introduction to this discipline and sets the stage for more technical discussions to follow. Here, you’ll become familiar with everything from traditional industry measurements to a structured approach to portfolio management.

To discover this more structured approach, Inside Private Equity:

  • Provides an exhaustive review of internal rate of return (IRR) calculations
  • Outlines various peer universes and benchmarks
  • Presents tools that will help you uncover both how and where wealth was gained and lost
  • Examines the effect portfolio size has on performance expectations
  • Explores two different modeling techniques for cash management
  • And much more

By providing straightforward explanations and detailed examples of the concepts covered, Inside Private Equity demystifies many of the common assumptions about this asset class and puts the various pieces of the private equity puzzle in perspective.

About the Authors

JAMES M. KOCIS is the founder and President of Burgiss, one of the leading software and financial service providers to the private equity industry. He and his team designed Private i, the world’s most popular program for private equity portfolio management. Private i is used to manage in excess of $1 trillion of private equity investments.

JAMES C. BACHMAN IV, CAIA, is the Head of Research at Burgiss. In this role, he is principally responsible for research-related initiatives as well as expanding the technology platform’s portfolio management capabilities.

AUSTIN M. LONG III, JD, CPA, is the Head of Alignment Capital, a private equity consultancy. He has been active in the private markets since 1987, when he co- founded what was to become the University of Texas Investment Management Company (UTIMCO) private investment group.

CRAIG J. NICKELS, CFA, is the Director of Private Markets for Washington University in St. Louis, where his responsibilities include the oversight and management of the university’s private market investments within the multi-billion endowment.

Testimonials

“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. 

“A real practitioner-focused contribution bringing performance measurement down from the theoretical to the practical.” Jesse E. Reyes, Reyes Analytics