General PE Knowledge
They participate as passive investors, with individual liability limited to the capital committed to the fund
Limited Partner
IRR
Internal Rate of Return
These questionnaires are sent to funds by LPs as part of the investment process
Due Diligence Questionnaires
Tate's Bake Shop
RMCF
These funds aim to take a controlling stake in mature businesses with the intention to improve the business and exit at a higher multiple
Buyout Fund
A fund’s un-invested committed capital is referred to as its
Dry Powder
EBITDA
Earnings before Interest, Taxes, Depreciation and Amortization
LPs such as pension funds and endowments are called what kind of investors?
Institutional Investors
Avance Clinical
RAF
This type of fund pools money from investors to buy stakes in other private equity funds, rather than directly investing in private companies
Fund of Funds
New vehicles created by a GP to extend the ownership of select assets beyond a fund's typical lifespan
Continuation Funds
FRE
Fee Related Earnings
When a fund secures enough capital commitments from initial investors to officially launch, allowing the GP to start investing
First Close
A.forall
REF
These investments differ from conventional PE funds as their mandate adds a social return component to their financial return target
Impact Investing (or ESG)
In a typical distribution waterfall, PE funds will return all invested capital and provide a minimum return to investors – a fund’s "blank" – before any carried interest is paid out to the GP.
Hurdle rate or preferred return
DPI
Distributed to Paid-In Capital
This type of LP is a state-owned investment fund that manages a country's surplus reserves to generate economic benefits for its citizens
Sovereign Wealth Fund
Lakeview Health
RCAF
This investment strategy focuses on purchasing minority stakes in fast-growing businesses that have surpassed the startup stage.
Growth Equity
In an LBO model, cash inflows such as new debt, sponsor equity, rollover equity, etc. are called
Sources
MOIC
Multiple on Invested Capital
Funds set up these investment opportunities to raise additional capital to make a larger investment than would otherwise be possible
Co-Investments
Ziflow
ROF
This investment strategy invests in troubled companies’ Debt or Equity to take control of the companies during bankruptcy or restructuring processes, turn the companies around, and eventually sell them or take them public.
Destressed Debt