Wharton Private Equity Review N avigatiNg the
C halleNges a head knowledge.wharton.upenn.edu
Connecting Alumni in Private Equity
WPEP is the community connecting the 2,500+ Wharton and UPENN alumni who are leaders in private equity around the globe.
An exclusive and growing network, WPEP is limited to alumni who are GPs and/or LPs investing in leveraged buyouts, growth capital, mezzanine, venture capital and condaries. Members access resources that:
•Offer unique opportunities for our members to network with their peers.
•Deliver the latest in market trends and industry knowledge.
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•Enhance Wharton’s standing in the private investor community.
•Support the engagement of the alumnae members with the school.项目化教学
Formed in 1998, WPEP has grown to nearly 500 members with chapters in cities around the world.
Atlanta Boston Chicago Los Angeles
Miami
New York
Philadelphia个别化教学
Silicon Valley
T exas
Washington, D.C.
United States International
London
Paris
The Middle East Hong Kong India
Editorial Team Karina Danilyuk (WG’09) Executive Editor
Thomas Cuvelier (WG’10) Editor
Julian Rampelmann (WG’10) Editor Advisory Board Manning Doherty (WG’02) Senior Vice President Oaktree Capital Management Michael Kopelman (WG’05) Principal, Edison Venture Dean Miller (WG’99) Managing Director, Novitas Capital
Vinay B. Nair Co-founder, Ada Investment Management Senior Fellow, Wharton Financial Institutions Center
Stephen Sammut (WG’84) Venture Partner, Burrill & Company Senior Fellow, Wharton Health Care Management Lecturer, Wharton Entrepreneurial Programs
Rick Slocum (WG’85) Director of Private Investments The Robert Wood Johnson Foundation
Jason Wright (WG’00) Partner, Apax Partners Summer 2009Wharton Private Equity Review
哭字开头的成语Private equity (PE) firms will e unprecedented challenges over the next few years, given the depth and duration of the current financial crisis. In this special report, produced in cooperation with the Wharton Private Equity Club, Knowledge@Wharton looks at how markets are shifting and what participants can expect in the coming months. One example: Deals that ttled for just 15% in equity a couple of years ago now require 35% to 40%, and up to 75% for some smaller buyouts. Going forward, a “wall” of refinancing due in 2012 will challenge the survival of many portfolio companies — and PE firms as well. Also included in this report are a roundtable discussion on the condaries industry (the buying and lling of pre-existing PE commitments) and an interview with Dalip Pathak of Warburg Pincus and Bridgepoint Capital’s Alastair Gibbons on the prospects for PE in India and China.C oNteNts
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梅雨期Private equity faces a difficult environment as credit markets try to absorb maturing debt from large leveraged buyouts. Panelists at the 2009 Wharton Private Equity & Venture Capital Conference said financial sponsors are scrambling to prepare for the refinancings that will start coming onto markets i
n 2012. They also noted that firms are focusing on portfolio company operations, exploring new positions in the capital structure and considering strategic, synergistic transactions. Page 7At the peak of the private equity boom, the largest leveraged buyouts ballooned in value and captured headlines. Traditional middle-market deals also grew at a robust pace, but with less fanfare. Now that the market has turned, both ctors are challenged. Panelists at the 2009 Wharton Private Equity & Venture Capital Conference said opportunities, or “gems,” are nonetheless still available for investors in midsize deals if they approach transactions creatively and consider taking new and innovative positions in companies’ capital structures. Page 10As the economic downturn continues and bankruptcies ri, private equity is turning away from traditional leveraged deals and toward investment in distresd companies, according to speakers at
the 2009 Wharton Private Equity & Venture Capital Conference, “Multiplicity Without Rhythm: Investing in Chaotic Markets.” Specialists in distresd business expect a tidal wave of private equity deals made in 2006 and 2007 to go bad in the next few years. Given the number of opportunities and the lack of bankruptcy credit, many restructurings will occur outside of bankruptcy court and could result in swift liquidation.
Investment managers involved in the private equity (PE) condaries industry — the buying and lli
ng
烧鸭子of existing PE commitments — e distresd llers continuing to act as a source of growth through
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2009 and 2010. In an interview with members of the Wharton Private Equity Club, three nior members
of firms that focus on the transactions predicted the role of condaries will grow over the medium
and long term as they provide a solid source of short-term liquidity, allow larger PE positions to change六个月宝宝辅食
hands and make it easier for investors to adjust their PE portfolios.
Strong fundamentals in China and India continue to offer some highly attractive opportunities for
prudent private equity investors. But successful PE investments require careful planning and a regional prence in order to identify lucrative opportunities and better understand potential competitive
threats to Western companies. To learn more about private equity investment in the countries, members of Wharton’s Private Equity Club recently interviewed Dalip Pathak of Warburg Pincus and
Alastair Gibbons of Bridgepoint Capital about their views on the best investing practices in today’s transformed environment.
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