Private Equity Laid Bare

by Ludovic Phalippou

Designed for an MBA course on private equity, this textbook aims to familiarize any reader with the jargon and mechanics of private equity using simplified examples, real-life situations and results from thorough academic studies. The book starts with the basics, but it is probably difficult to follow for someone with no knowledge of financial markets. Nonetheless, the intention is to have a book that can be read more like a novel than like a regular textbook. Private equity and finance textbooks are often made up of dry and technical material. In order to have long-lasting impact on readers, I believe in making things as simple as possible, boiling everything down to the essence, going straight to the point, and, most importantly, writing in an informal and hopefully entertaining way. The objective is for the reader to open this book with anticipation of having a good educational time.

Genres: Finance, Business, Economics

203 pages, Kindle Edition

Published September 17, 2017

Reviews

[Colton Davie]

Very smart book. Enjoyed the accessible storybook structure. I suggest everyone reads an LPA once in their life though audiobook

"NPV uses 5 because 5 is half of 10 and 10 is a round number, making 5... kind of round" hahahaa

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Debt gets a tax break compared to equities because equity holders invest money and get divined payments, debt holders get interest payments

companies are made from capital claims not just debt and equity

when levered returns are higher than borrowing costs = arbitrage the spread = free lunch
but debt only increases returns if you buy when npv>0
NPV=0 is fmv
Npv=0 key component of GP's job. determines maximum expected value
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chapter 7 good for distressed

ch 8 some value bridge things (multiple arbitrage vs operation arbitrage) & leverage's role in acquisitions

Late lbos underperform
txu energy future holdings - largest bankruptcy 2007
safeway 50x kkr
stock exchange arbitrage through multiple discrepancies

Gp's gold losers and exit winners quickly
ch 11 purchasing
LPA clauses and their effects on fee's ch12

American (not so simple as GP friendly) waterfalls vs Uk (no so simple as LP friendly) waterfalls

Ch 13 terminology

management service agreements *** - the importance of trust in LP and GPs
Really important dialogue ch 14
CH 15 is wonderful - metric, benchmarking and irr demystification .

[Mark J. · Rating 5 out of 5]

Humorous Understandable Call-outs for Important Concepts

This is a good primer for anyone interested in Private Equity or Equity Markets in General - There are humorous Anecdotes and visuals throughout the book. — there are current articles from sources to compliment the academic analysis

[Shawn · Rating 4 out of 5]

Lots of insight into the world of PE and strategies PE companies use to maximise earnings. Listened to the Audible version but I think I'll probably buy the paper copy and read it again to get the most from it.

[Stephen Teasdale · Rating 5 out of 5]

Highly recommended for a comprehensive introduction to the Private Equity industry

Brilliant intro into the growth in the world of private funds, cash studies of strategies and the dynamics between the private equity managers and those that invest in them. Well explained and easy

[Angelica · Rating 4 out of 5]

A reasonable useful introduction to private equity.

[Miao · Rating 5 out of 5]

Well structured, very appropriate for MBA students

[Davis Parker · Rating 4 out of 5]

The writing style is a bit gimmicky, but I learned a great deal. The chapters on fee structure and lawyers are especially insightful.

[Ahmad · Rating 5 out of 5]

I read this book as part of my MBA. The book is concise, introduces the PE industry to a broad audience and is well researched and documented. The author does a great job transforming a dry subject into a fun one. I highly recommend reading the book to interested people.

[Seiji Fujimoto · Rating 5 out of 5]

This is the best book about PE industry I have ever read.

- This book makes a fantastic argument about why IRR is a bad metric, although it is extensively used as a performance indicator in promotional materials.

- While the author is critical of many aspects of PE, he doesn't fall into a common baloney (a.k.a. "Private Equity is pure evil"). The arguments this book makes are interesting, exactly because PE firms do add a lot of values to our society.

- I read this book along with "Mastering Private Equity" by Claudia Zeisberger. I think Zeisberger is more pro-industry (and arguably more orthodox) than Phalippou. I can recommend both books.

[Niels Smoor · Rating 5 out of 5]

Marvellous! Lewis Carroll's Alice loves free lunches!