Claudia Zeisberger

INSEAD business school has announced two new books on Private Equity (PE) by Claudia Zeisberger, Senior Affiliate Professor of Decision Sciences and Entrepreneurship & Family Enterprise & Academic Director at INSEAD’s Global Private Equity Initiative (GPEI) and two alumni, Michael Prahl, Distinguished Fellow at GPEI, and Bowen White, Centre Director of GPEI.

The question seems simple: How Can Family Firms Ensure Long-Term Value Creation?

But as a new report – based on interviews 123 Asia-based family firms and 14 private equity professionals – shows, the answer may be more complicated.

The report is titled “The Institutionalization of Family Firms,” and it covers a significant driver of the global economy. As the study notes: “As family firms account for 70% of GDP in the global economy and 60% of global employment, the importance of… Show more

The question seems simple: How Can Family Firms Ensure Long-Term Value Creation?

But as a new report – based on interviews 123 Asia-based family firms and 14 private equity professionals – shows, the answer may be more complicated.

The report is titled “The Institutionalization of Family Firms,” and it covers a significant driver of the global economy. As the study notes: “As family firms account for 70% of GDP in the global economy and 60% of global employment, the importance of long-term value creation extends beyond individual families – it is among the main drivers of economic growth and business innovation, as well as livelihoods.” Show less

Claudia Zeisberger, a professor at INSEAD, and two INSEAD alumni, Michael Prahl and Bowen White, joined forces to write Mastering Private Equity: Transformation via Venture Capital, Minority Investments & Buyouts and its companion case study volume Private Equity in Action-Case Studies from Developed and Emerging Markets (Wiley, 2017). Industry professionals added their thoughts to each chapter of Mastering Private Equity.

The core book, written for both graduate students and… Show more

Claudia Zeisberger, a professor at INSEAD, and two INSEAD alumni, Michael Prahl and Bowen White, joined forces to write Mastering Private Equity: Transformation via Venture Capital, Minority Investments & Buyouts and its companion case study volume Private Equity in Action-Case Studies from Developed and Emerging Markets (Wiley, 2017). Industry professionals added their thoughts to each chapter of Mastering Private Equity.

The core book, written for both graduate students and professionals, is structured like a textbook (including lots of color). It is divided into five sections: private equity overview, doing deals in PE, managing PE investments, fund management and the GP-LP relationship, and the evolution of PE.

Mastering Private Equity is a model of clarity. For instance, in a table, the authors summarize the advantages and disadvantages of various exit options. Show less

From the beginnings of the private equity industry some forty plus years ago, private equity firms have largely followed a model of raising a series of distinct, multiple investor, closed-end flagship funds (“Flagship Funds”) every three or four years. These funds were, by and large, the only vehicles offered to investors, and so investors wishing to draw on the investment resources and experience of private equity firms needed to invest in these vehicles. Over time, and increasingly in… Show more

From the beginnings of the private equity industry some forty plus years ago, private equity firms have largely followed a model of raising a series of distinct, multiple investor, closed-end flagship funds (“Flagship Funds”) every three or four years. These funds were, by and large, the only vehicles offered to investors, and so investors wishing to draw on the investment resources and experience of private equity firms needed to invest in these vehicles. Over time, and increasingly in recent years, we have seen some important changes to this model that have significant implications for private equity firms (which we will also call “sponsors”) and investors alike. While Flagship Funds are certainly still important, and are often the public faces of their sponsors, they are today far from the only investment products offered by sophisticated PE firms, particularly for institutional investors able to make large capital commitments. This article will explore the challenges presented by these new structures (which we will call “Alternative Vehicles”), and review some of their most common forms in the market. Show less

Wealth generation, internet use and returning overseas talent will determine the pace of investment.
If a California venture capitalist were to take a New Yorker’s view of Asia, it might look something like this – Japan in the foreground, China looming at the top, India rising in the far distance and then the “flyover” states of Asean dotting the middle ground.
While flows of private investment capital certainly follow this pattern, there are real differences between the buyout and… Show more

Wealth generation, internet use and returning overseas talent will determine the pace of investment.
If a California venture capitalist were to take a New Yorker’s view of Asia, it might look something like this – Japan in the foreground, China looming at the top, India rising in the far distance and then the “flyover” states of Asean dotting the middle ground.
While flows of private investment capital certainly follow this pattern, there are real differences between the buyout and venture capital approaches to Asia and between the three big economic blocks within.
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For years, Claudia Zeisberger has found herself being asked what might seem like a straightforward question: What is Private Equity.
It also might seem like a surprising question, given that global private equity assets under management run at about $2.5 trillion. It’s not like we’re talking about some hidden asset class.
But the question came frequently and in different forms – sometimes about doing PE deals, other times about managing PE investments, still others about Fund Management… Show more

For years, Claudia Zeisberger has found herself being asked what might seem like a straightforward question: What is Private Equity.
It also might seem like a surprising question, given that global private equity assets under management run at about $2.5 trillion. It’s not like we’re talking about some hidden asset class.
But the question came frequently and in different forms – sometimes about doing PE deals, other times about managing PE investments, still others about Fund Management and the GP-LP Relationship. (...) Show less

Beset by historically low interest rates, few investors can afford to ignore unlisted companies.
Private Equity is a fringe asset class no more; it has evolved, matured and refined its way into the mainstream. Yet, I foresee major changes for the industry and, fully aware that forward-looking statements have a tendency to dramatically stray from future reality, wish to dare a glimpse of what may come.

Success spawns imitators, and businesses have started to pay attention. Senior… Show more

Beset by historically low interest rates, few investors can afford to ignore unlisted companies.
Private Equity is a fringe asset class no more; it has evolved, matured and refined its way into the mainstream. Yet, I foresee major changes for the industry and, fully aware that forward-looking statements have a tendency to dramatically stray from future reality, wish to dare a glimpse of what may come.

Success spawns imitators, and businesses have started to pay attention. Senior executives are keen to learn about the secret sauce that makes private equity funds so successful to port the lessons to their own organisations. Time will reveal if companies can successfully take a leaf out of the PE playbook; if they can become as rigorous and disciplined about execution as PE investors have been. US estimates suggest that 12 to 17 per cent of all companies with valuations over $100 million are in PE hands; so many senior executives are already in ring-side seats and, presumably, learning the tools of the trade. Show less

Written with a professional audience in mind, the book provides a valuable and unique reference for investors, finance professionals, students and business owners looking to engage with private equity firms or invest in private equity funds. From deal sourcing to exit, LBOs to responsible investing, operational value creation to risk management, the book systematically distills the essence of private equity into core concepts and explains in detail the dynamics of venture capital, growth equity… Show more

Written with a professional audience in mind, the book provides a valuable and unique reference for investors, finance professionals, students and business owners looking to engage with private equity firms or invest in private equity funds. From deal sourcing to exit, LBOs to responsible investing, operational value creation to risk management, the book systematically distills the essence of private equity into core concepts and explains in detail the dynamics of venture capital, growth equity and buyout transactions.

With a foreword by Henry Kravis, Co-Chairman and Co-CEO of KKR, and special guest comments by senior PE professionals.

This book combines insights from leading academics and practitioners and was carefully structured to offer:
- A clear and concise reference for the industry expert
- A step-by-step guide for students and casual observers of the industry
- A theoretical companion to the INSEAD case book Private Equity in Action: Case Studies from Developed and Emerging Markets Show less

This book takes you on a tour of the private equity investment world through a series of case studies written by INSEAD faculty and taught at the world's leading business schools. The book is an ideal complement to Mastering Private Equity and allows readers to apply core concepts to investment targets and portfolio companies in real-life settings. The 19 cases illustrate the managerial challenges and risk-reward dynamics common to private equity investment.

The case studies in this book… Show more

This book takes you on a tour of the private equity investment world through a series of case studies written by INSEAD faculty and taught at the world's leading business schools. The book is an ideal complement to Mastering Private Equity and allows readers to apply core concepts to investment targets and portfolio companies in real-life settings. The 19 cases illustrate the managerial challenges and risk-reward dynamics common to private equity investment.

The case studies in this book cover the full spectrum of private equity strategies, including:

- Carve-outs in the US semiconductor industry (LBO)
- Venture investing in the Indian wine industry (VC)
- Investing in SMEs in the Middle East
- Turnaround situations in both emerging and developed markets
- Written with leading private equity firms and their advisors and rigorously tested in INSEAD's MBA,
EMBA and executive education programmes, each case makes for a compelling read.

As one of the world's leading graduate business schools, INSEAD offers a global educational experience. The cases in this volume leverage its international reach, network and connections, particularly in emerging markets. Show less

This report focuses on the question of value creation in private equity and presents a framework that identifies the sources of return and operational value creation in PE investment.
The framework - IVC 2.0 - deconstructs value creation across various financial and operational drivers and isolates value created through capital structure re-engineering, industry operating performance, and company-specific Alpha.

Three Steps to successful Turnarounds - interview with 2 partners from Alvarez & Marsal in India
When companies find themselves in distress, turnarounds are one way to set them back on track. But turnarounds are messy and getting them right is no easy task.

The dynamic, fast-paced operating environment of a PE-backed company can provide executives with a unique career opportunity and very attractive rewards. But it’s not for the faint hearted.

We explore the growth and institutionalization of family offices in Asia.
To understand the capabilities and characteristics of the region’s family offices in a global context, we conducted interviews with 30 family offices in locales as diverse as China and Dubai. We relate the attributes and anticipated investment performance of family offices in terms of their institutionalization in two easy to use frameworks.

As a result of our research activities and engagement with industry players and students in the classroom, we regularly encounter requests for data on activity and performance in the private equity industry. In the absence of a standard index for this asset class, we suggest various sources, each with its own pros and cons. However, different sources work with different sets of data, making it difficult to compare performance without access to the underlying fund and transaction data… Show more

As a result of our research activities and engagement with industry players and students in the classroom, we regularly encounter requests for data on activity and performance in the private equity industry. In the absence of a standard index for this asset class, we suggest various sources, each with its own pros and cons. However, different sources work with different sets of data, making it difficult to compare performance without access to the underlying fund and transaction data.

It is therefore in pursuit of the clarity that so often eludes practitioners, industry observers and academics that we are launching the quarterly INSEAD–Pevara Private Equity Navigator.

What sets this report apart is the combination of independent academic leadership and a unique dataset derived entirely from cash flows reported by limited partners (LPs). The selection and interpretation of data is carried out by the Global Private Equity Initiative (GPEI) at INSEAD, while the data is provided by Pevara, the performance monitoring module of eFront, a leading financial analysis solution for alternative investments.
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INSEAD's Global Private Equity Initiative (GPEI) set out to highlight the evolving frameworks employed by private equity GPs for managing ESG investment considerations. To gain a more granular understanding of where the industry stands on these matters, we conducted a series of interviews with 11 prominent buyout and growth equity firms. We found that while certain themes underpinned all of our conversations, no two frameworks were completely alike. As such, we saw value in sharing a detailed… Show more

INSEAD's Global Private Equity Initiative (GPEI) set out to highlight the evolving frameworks employed by private equity GPs for managing ESG investment considerations. To gain a more granular understanding of where the industry stands on these matters, we conducted a series of interviews with 11 prominent buyout and growth equity firms. We found that while certain themes underpinned all of our conversations, no two frameworks were completely alike. As such, we saw value in sharing a detailed account of each GP’s approach with a wider audience, as well as inviting reactions and feedback. Show less

This paper compares the position of strategic buyers and private equity buyers in a typical investment process, from fundraising/sourcing of equity capital, through deal sourcing, due diligence, valuation and deal financing, deal negotiation and transaction execution, to value creation post-closing and exit/long-term plans. The paper evaluates advantages and disadvantages of the two different types of buyers within each of the phases of an investment process, and suggests that the financial… Show more

This paper compares the position of strategic buyers and private equity buyers in a typical investment process, from fundraising/sourcing of equity capital, through deal sourcing, due diligence, valuation and deal financing, deal negotiation and transaction execution, to value creation post-closing and exit/long-term plans. The paper evaluates advantages and disadvantages of the two different types of buyers within each of the phases of an investment process, and suggests that the financial discipline, flexibility, focus, and incentives structure of private equity firms often provide them with an edge over strategic buyers. Rather than being a rigorous academic study, the paper is intended to help M&A practitioners, whether on the strategic buyer or private equity side, with understanding their “opponent”.

http://ssrn.com/abstract=2439589 Show less

Canadians - showing the way & going Direct
Threatened by looming shortfalls, pension funds are searching for riskier private enterprise investments to fund the gap. With its innovative approach to new markets and risk-adjusted returns, the Ontario Teachers’ Pension Plan is a model worth emulating.
Read more at http://knowledge.insead.edu/business-finance/finance-markets/going-direct-the-case-of-teachers-private-capital-2887#COwSoPvFvKoPMGQB.99

As headlines of apparent risk management failure or weak oversight inside one of Wall Street’s largest institutions abound, we argue that the story of a loss of 0.25 percent of the bank’s assets is getting too much face-time from regulators and the press.
Read more at http://knowledge.insead.edu/business-finance/banking-insurance/perspective-the-london-whale-2867#hjW6UM0hoxxYZYbl.99

Fast growing Family Businesses have many choices when considering the sources of funding to expand their business. The article discusses a systematic approach to exploring a potential partnership between Growth Equity Investors and Family Owned Businesses. It describes under which circumstances Growth Equity can significantly contribute to the development of the family firm and contemplates the main issues to consider before entering into such a long term partnership. As such it acts as a… Show more

Fast growing Family Businesses have many choices when considering the sources of funding to expand their business. The article discusses a systematic approach to exploring a potential partnership between Growth Equity Investors and Family Owned Businesses. It describes under which circumstances Growth Equity can significantly contribute to the development of the family firm and contemplates the main issues to consider before entering into such a long term partnership. As such it acts as a valuable checklist for entrepreneurs and business owners to make better informed decisions when selecting a Growth equity or Private Equity investor to facilitate future growth. Show less

Brazilian PE continues to attract the interest of LPs and currently ranks as one of the most attractive markets for future allocations globally. GPEI in cooperation with PwC continues to extend its focus to new emerging markets by supporting this project, initiated by three current MBA students with PE experience in Brazil.
The report includes answers from a survey of leading LPs and GPs and provides a broad overview of the state of PE in Brazil analyzing opportunities and risks for… Show more

Brazilian PE continues to attract the interest of LPs and currently ranks as one of the most attractive markets for future allocations globally. GPEI in cooperation with PwC continues to extend its focus to new emerging markets by supporting this project, initiated by three current MBA students with PE experience in Brazil.
The report includes answers from a survey of leading LPs and GPs and provides a broad overview of the state of PE in Brazil analyzing opportunities and risks for investors interested in Private Equity in Brazil. Show less

For PE firms exiting from their investment in a manner that crystallizes the value created over the period of their ownership is one of the most crucial aspects.
This report by INSEAD and LGT Capital Partners looks closely into the exit situation for PE investments in Asia’s largest emerging markets of China and India.
Data from the Asian Venture Capital Journal (AVCJ) as well as INSEADs inaugural LP panel provide the basis for a comprehensive overview of the exit environment… Show more

For PE firms exiting from their investment in a manner that crystallizes the value created over the period of their ownership is one of the most crucial aspects.
This report by INSEAD and LGT Capital Partners looks closely into the exit situation for PE investments in Asia’s largest emerging markets of China and India.
Data from the Asian Venture Capital Journal (AVCJ) as well as INSEADs inaugural LP panel provide the basis for a comprehensive overview of the exit environment, highlighting the main differences between the two markets particularly with respect to the relative importance of exit channels and their impact on realized and unrealized returns.

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The paper provides a detailed introduction to the topic of valuation and measurement of return across the life cycle of private equity investing. It addresses the whole range of valuation approaches from the individual company up to the aggregated fund level as applied by the PE practitioner. Questions of performance measurement and reporting are explained and illustrated with numerical examples. The paper does not attempt to systematically explore all the variations that exist in the market… Show more

The paper provides a detailed introduction to the topic of valuation and measurement of return across the life cycle of private equity investing. It addresses the whole range of valuation approaches from the individual company up to the aggregated fund level as applied by the PE practitioner. Questions of performance measurement and reporting are explained and illustrated with numerical examples. The paper does not attempt to systematically explore all the variations that exist in the market but rather to give an overview of the most common approaches, highlighting their strengths and weaknesses and pointing to major alternative methods. Show less

The demographic metrics and inflationary circumstances that framed the January 2011 revolution in Egypt’s Tahrir Square were almost identical to those prevailing in Japan during their violent 1968 student-led revolts, in the United States when millions demonstrated against the Vietnam War in the late 1960s to early 1970s and in China when hundreds of thousands converged on Tiananmen Square in 1989. Disenchantment by growing numbers of unemployed youth develops into anti-government revolutionary… Show more

The demographic metrics and inflationary circumstances that framed the January 2011 revolution in Egypt’s Tahrir Square were almost identical to those prevailing in Japan during their violent 1968 student-led revolts, in the United States when millions demonstrated against the Vietnam War in the late 1960s to early 1970s and in China when hundreds of thousands converged on Tiananmen Square in 1989. Disenchantment by growing numbers of unemployed youth develops into anti-government revolutionary potential when rapidly rising inflation enters the picture. This paper identifies time periods when two demographic metrics suggest a nation is ripe for revolution. Show less

This report discusses Asian private equity as an asset class from an institutional investor perspective. It is based on surveys with leading limited partners (LPs) and general partners (GPs) in Asian private equity. The two INSEAD- AXA Private Equity Surveys were conducted from April to June 2010. The surveys explore the question: Has Asian private equity grown into a viable investment category for “sophisticated” institutional investors?

Our ability to forecast degrades rapidly the further out we predict. Even if we do manage to accurately forecast an event, the magnitude and consequences of that event usually astonish us. On the rare occasion where we manage to accurately forecast the event, its magnitude and consequences, our timing is invariably off - sometimes by many years. Yet we still seek the advice of economists, technicians and academics, knowing full well their documented inability to forecast with greater accuracy… Show more

Our ability to forecast degrades rapidly the further out we predict. Even if we do manage to accurately forecast an event, the magnitude and consequences of that event usually astonish us. On the rare occasion where we manage to accurately forecast the event, its magnitude and consequences, our timing is invariably off - sometimes by many years. Yet we still seek the advice of economists, technicians and academics, knowing full well their documented inability to forecast with greater accuracy than chance would allow. There must be a better way to invest for the future. Forecasts usually fail because we try to guess the future path of prices and the economy by building fundamental and technical models whose inputs are historic prices, correlations, covariances, causations and a steady stream of the latest economic numbers. Those are all symptoms of the past, not predictors of the future. Show less

Most of what we call black swans, unpredictable events with massive consequences, are in reality just dirty white swans; entirely plausible and hedgeable events if you study history, perform basic due diligence, employ value-based hedging and listen to those highlighting dangers.