Private Equity as an Asset Class

by Guy Fraser-Sampson

Book Overview

Unfairly reviled, and much misunderstood, private equity differs from all other asset classes in various important respects, not least the way in which its fund mechanisms operate, and the way in which its returns are recorded and analysed. Sadly, high level asset allocation decisions are frequently made on the basis of prejudice and misinformation, rather than a proper appreciation of the facts.

Guy Fraser-Sampson draws upon more than twenty years...

• Format: Hardcover
• Language: English
• ISBN: 0470661380
• ISBN13: 9780470661383
• Release Date: May 2010
• Publisher: Wiley
• Length: 288 Pages
• Weight: 1.45 lbs.
• Dimensions: 0.8" x 6.8" x 9.6"

Customer Reviews

Well worth the money.....

This is a very good read for students and practitioners. It is easy to read, well laid out and a very useful reference document that you will consult regularly.

the Insider's Guide to Private Equity

The author shares many lessons learnt over 20 years in the PE business. Would be very helpful to many, including PE investors looking to avoid investing in PE funds that will not make them money (most, unfortunately, after fees) and PE funds that make many of the mistakes the author so clearly explains.

A well-written, comprehensive, and practical overview of the private equity field

Guy Fraser-Sampson does an outstanding job in introducing the world of private equity in this book. He starts off defining various concepts in this field, explaining the ways to analyze private equity returns and distinguishing between buyouts and venture capital. He follows with a comprehensive discussion of buyouts (including the various types of buyouts, analysis models, and historical buyout returns) and then an equally thorough investigation of venture capital (with a similar structure to that in the buyouts section). Mr. Fraser-Sampson wraps up with a discussion on due diligence and advice on planning your own investment program in private equity. I greatly enjoyed the book. It is easy to read, and Mr. Fraser-Sampson presents the concepts in a clear and simple manner - suitable for readers completely new to private equity. I like that the author is unafraid to express his own opinions - whether on the state of transparency in the field, on future buyout returns in Europe, or on usefulness of anti-trust legislation. He furthermore makes sure to separate his thoughts from the pure factual data that he provides to support them. Interestingly, the book does not simply focus on private equity in one area of the world - the United States. It also covers Europe and sometimes ventures (no pun intended) into other parts of the globe, which I think is a breath of fresh air from the typical finance books that concentrate on US markets only. I am pleased to see this, as I strongly feel that a world-wide outlook is very important in the business world today. And, as Mr. Fraser-Sampson concludes himself, we can learn good lessons by examining the state of the private equity field in various geographic locations: "However, history is cyclical and I now see exactly the same sorts of issues which plagued continental Europe in the past rearing their heads anew in developing private equity areas such as Asia and Latin America. For those in such places who are willing to listen, the European experience has some valuable lessons" (61). I applaud the author for the amount of historical data present throughout the book - both scattered throughout the text and assembled into tables and diagrams. While most of the data comes from a single source (the VentureXpert system) and the author's own calculations based on that data, it is great to see the general trends in buyout and venture capital returns, fund sizes, etc. I also appreciate that, in a few places, Mr. Fraser-Sampson notes that some of the data may not be very reliable since it is new (which is especially important to the private equity field due to the J-curve phenomenon: fresh data often captures the state of the things on the downward portion of the curve). There is, however, one aspect of history that I would have liked to see represented more. It would have been nice to see several examples of interesting or famous buyouts and venture deals, together with their defining characteristics. While many e

Brilliantly written ! Makes very easy reading out of what are very complex issues.

I have had the advantage of reading the manuscript of this book in advance, and one of the comments on the cover is my own. Unlike other books on the subject, this one does not dive straight off into complicated areas such as return analysis, nor does it deal with such nebulous matters as the GP/LP relationship (indeed, the writer states that he considers this last topic to be something of a red herring). Instead, the book sets out to be a comprehensive account of private equity from first principles onwards, and will guide you steadily through the intricacies of the asset class until you find yourself quite happily using very complex analysis models to look at buyout and venture returns. More importantly, it focuses on explaining the principles which underlie all of this, so you will actually understand what you are doing, and why. As the writer says repeatedly "don't just look at the figures - try to think what lies behind them." Fraser-Sampson has twenty years experience of the private equity industry, and the depth and range of his knowledge shines through every page. I was a great fan (and a reviewer) of his first book "Multi Asset Class Investment Strategy", and ideally they should be read together. The first explains why you should be allocating 25% of your portfolio to private equity, and this one explains how you should actually go about it. Just as the first one came up with a whole new way of looking at investment in general, so this one makes some very innovative points, not all of which will make happy reading in some quarters. For example, he believes that private equity performance should be judged across an investor's whole allocation (what he calls Total Return investing) rather than, as presently, on just that small part of it which may be invested at any one time. Both books are brilliantly written and make very easy reading out of what are very complex issues.