presentation on private equity - mrs rupa vora, idfc
TRANSCRIPT
![Page 1: Presentation on Private Equity - Mrs Rupa Vora, IDFC](https://reader034.vdocuments.site/reader034/viewer/2022051323/547e295bb4af9f2d168b4596/html5/thumbnails/1.jpg)
November 04, 2011
Creating and Deriving Value
in Private Equity
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1. What is Private Equity?
2. Fund Structure
3. Stakeholders
4. Fund Life Cycle
5. The Value Drivers
6. The Value Proposition
Outline
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What is Private Equity?
It’s Different!
Private
Equity
Patient Capital
Exists for Investors
Driven by Self Regulation
Partnering with Portfolio Companies
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Fund Structure - Unified
International InvestorsRest of World
Mauritius
India
Indian Investors
Mauritius Fund
India Fund
Sponsor
Trustee
Investment Manager
Portfolio Company 1 Portfolio Company 2 Portfolio Company 3
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Stakeholders
Identifying the Stakeholders
Investors
Sponsor
Trustee
Investment Manager
Others – Regulators, Advisors, Society
etc.
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Fund Raising Stage
Investment Stage
Divestment Stage
Fund Life Cycle
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Limited Life Vehicles – Strategy and Timing matters
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The Value Drivers – 1
Value Drivers – Fund Raising Stage
People & Track Record
Fund Terms and Strategy
Fund Documentation
Investor Profile
Regulations
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The Value Drivers – 2
Value Drivers – Investment Stage
Four Factor Analysis – Promoter - Business -
Terms - Exit
Investment Process
Entry Valuation
Portfolio Monitoring
Portfolio Valuation
Reporting
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The Value Drivers – 3
Value Drivers – Divestment Stage
Liquidity and Exit Opportunities
Timing
Divestment Process
Relationships
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The Value Drivers - 4
The Value Drivers – The Core
People
Passion
Processes
Relationships
Trust
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The Value Proposition -1
The Value Proposition – Investors
Risk and Reward
Risk Mitigation
Responsible Investing
Good Corporate Governance
Co-invest opportunities
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The Value Proposition -2
The Value Proposition – Investment
Manager
High ROE Business
Steady Income
Share in Profits
Building a Partnership
Brand and Track Record
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The Value Proposition - 3
The 2-20 Game Decoded INRCapital Contribution received from Investors on Day 1 100
Of which: Management Fees paid for one year @ 2% pa 2Expenses of the Fund paid 8Invested in Equity Shares of a Portfolio Company 90
Sale Proceeds on divestment of the equity investment on Day 366 200DISTRIBUTION WATERFALL
Capital Contribution redeemed to Investors 100Hurdle paid to Investors @ 8% p.a. 8Catch up paid to the Investment Manager (IM) @25% of Hurdle 2Total Distributions made before Carry Payouts 110Balance Available for distribution 90Shared 80:20 - 80% to Investors 72Shared 80:20 - 20% to the IM as Carry 18Total Income Distribution to Investors (8+72) 80Total Income Distribution to the IM (2+18) 20
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The Value Proposition - 4
The Value Proposition – Portfolio
Companies
Risk Capital
Focus on Value Accretion
Strategy & Business Development
Best Practices & Improved Governance
HR Matters
Finance & Leveraging Relationships
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The Value Proposition - 5
The Value Proposition – Society
Encouraging Entrepreneurship
Support to Sunrise Sectors
Growth Capital & PPP
Economic Growth & Job Creation
Better Governance
Responsible Investing
Mitigating Systemic Risks
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Private Equity – A MAD World
It is all about Making A Difference!
AND
To make a difference, you need to walk that extra mile and on that extra mile, you seldom have company!
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THANK YOU
For more information, contact
Rupa VoraInfrastructure Development Finance Co. Ltd. Naman Chambers, C-32, G-BlockBandra Kurla Complex, Bandra (East),Mumbai 400 051Email: [email protected]