Private Equity Unchained: Strategy Insights for the Institutional Investor
- 6h 32m
- Thomas Meyer
- Palgrave Macmillan Ltd
- 2014
Until recently, strategy played little meaningful role in the management of illiquid investments, and what many investors call 'strategy' has been more akin to 'tactics' or 'learned reflexes'. Even large institutions still appear to manage their private equity allocations on such a case-by-case basis.
But the environment has changed and returns are no longer 'assured' as they once were. Private equity and other illiquid asset classes have matured, as more players seek to deploy ever larger amounts in a market where opportunities necessarily become difficult to identify and access. The few principles that institutional investors have relied on up to now have been anchored in a less competitive past.
Private Equity Unchained deconstructs existing practices and provides insights into how to think strategically about illiquid asset allocations. In order to thrive in markets characterised by extreme uncertainty, investors must first accept the limitations of what is knowable. This begins by leaving behind many of those financial theories that institutions normally cling to as a safe harbour for managing risk. Once divested of such false comforts, investors will be in a position to identify their real options and take an active and strategic approach to alternative investing.
About the Author
Thomas Meyer is partner and co-founder of LDS Partners, specialising in the development of private equity risk measurement models and investment strategies. He has held a distinguished career in and out of the financial services, from intelligence officer in the German Air Force to CFO of Allianz Asia Pacific. He was responsible for the creation of the European Investment Fund's risk management function with focus on the development of valuation and risk management models and investment strategies for venture capital funds-of-funds. As Director of the European Private Equity and Venture Capital Association he authored the EVCA Venture Capital White Paper 2010. Thomas co-directed the limited partner course delivered by the Private Equity Institute at the Saïd Business School, University of Oxford that led to the EVCA awarded certificate. He is member of EVCA's Private Equity Risk Measurement Group, a Shimomura Fellow of the Development Bank of Japan and was a visiting researcher at Hitotsubashi University in Tokyo.
Thomas is the co-author of Beyond the J Curve, J Curve Exposure, Mastering Illiquidity and two CAIA Level II books, which are required reading for level II of the Chartered Alternative Investment Analyst® Program.
He studied computer science at the Bundeswehr Universität in Munich and holds a Dr.rer.nat. from the University of Trier. He graduated with an MBA from the London Business School and with an MA in Japanese Language and Society from the University of Sheffield's School of East Asian Studies.
In this Book
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Introduction
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A Neo-Classical Asset Class
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The 'Repair Shop of Capitalism'
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Strategy Challenges
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Strategic Asset Allocation
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The Sky is Not the Limit
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The Limited Partnership as Part of Humanity's DNA
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Do-It-Yourself?
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Economics of Private Equity Firms
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Objectives
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Performance Persistence
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Nobody Knows Anything
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Spreading Risks–Thinly and Thickly
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Private Equity Risk
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Performance Measurement
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The Galapagos Islands of Finance
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The Locust and the Deep Blue Sea
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Don't Confuse Transparency with Intelligence
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Spreading Risks–Part II
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Open-Ended Relationships
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Hard and Soft Power
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Real Options
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No Plan Survives
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The Heavy Hand of Regulation
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Private Equity Unchained
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Notes
