Discover published sets by community

General Partners manage the private equity fund, make investment decisions, and are responsible for the operation of the fund. They invest their own capital into the fund and earn carried interest, playing a crucial role in shaping the fund's success.

A Bridge Loan is a short-term loan used until a person or company secures permanent financing or removes an existing obligation. It provides immediate cash flow when funding is needed but not yet available. In corporate finance, it facilitates transactions like acquisitions or real estate purchases.

Private Equity refers to investment funds that acquire equity ownership in companies, typically taking a hands-on approach to management and strategy to drive value before selling the companies at a profit. In corporate finance, it provides an alternative to public markets for raising capital.

Divestiture is the partial or full disposal of a business unit through sale, exchange, closure, or bankruptcy. Companies may divest non-core businesses to focus on their core activities. In corporate finance, it's one way to optimize a company's portfolio.

A Term Sheet is a non-binding agreement setting forth the basic terms and conditions under which an investment will be made. It's a precursor to a definitive agreement. In corporate finance, it lays the groundwork for financing and outlines the transaction's details.

A Pledge Fund is a type of investment vehicle where investors pledge a certain amount of capital to a fund but only contribute capital when investments are identified. It offers flexibility to investors and reduces upfront capital requirement in private equity.

Due Diligence in corporate financing refers to the comprehensive appraisal of a business undertaken by a prospective buyer, especially to establish its assets and liabilities and evaluate its commercial potential. It's essential for assessing risks and determining valuation.

An Exit Strategy is a private equity firm's plan for selling its investment in a company to reap the benefits of the investment. Common strategies include IPO, sale to another company, or recapitalization. It's crucial for realizing the return on investment.

Growth Capital, also known as growth equity, is a type of private equity investment, often a minority investment, in relatively mature companies that are looking for capital to expand or restructure operations or enter new markets. Its significance lies in fueling company growth without changing the control structure.

Carried Interest is a share of profits that the general partners of private equity and hedge funds receive as compensation, irrespective of whether they contributed any initial funds. This aligns the general partner's interest with fund performance and is a significant incentive structure in private equity.

Mezzanine Financing is a hybrid of debt and equity financing that gives the lender the rights to convert to an equity interest in the company in case of default, generally, after other senior lenders are paid. It is used in corporate finance to bridge the gap between debt and equity financing.

A Capital Call is a legal right of an investment firm to demand a portion of the money promised to it by an investor. Capital calls are significant in corporate finance as they ensure that private equity funds have access to the necessary capital when investment opportunities arise.

SPACs are companies with no commercial operations formed strictly to raise capital through an initial public offering (IPO) for the purpose of acquiring an existing company. In corporate finance, SPACs present an alternative route for companies to go public.

A Clawback Provision is a contractual clause typically found in private equity agreements that allows an investment firm to reclaim money or stock options already disbursed in case of fraud, loss, or other specific conditions. It ensures the firm's profits are distributed fairly and protects investors.

An Evergreen Fund is a private equity fund that has an indefinite fund life. Instead of liquidating after a set period, it reinvests returns into new opportunities. It allows for a perpetual investment structure which is significant for ongoing growth opportunities.

Limited Partners are investors in a private equity fund that contribute capital but are not involved in the daily management. They receive income, capital gains, and tax benefits. Their significance lies in providing the capital necessary for private equity funds to operate.

A Buyout Fund is a private equity fund that is focused primarily on acquiring controlling equity interests in companies through buyout transactions. They are significant in corporate finance for restructuring industries and driving operational improvements.

Venture Capital is a form of private equity financing that is provided by venture capital firms to startups and early-stage companies with strong growth potential. It's significant because it helps companies grow without the need to go public or take on debt.

A Leveraged Buyout involves acquiring a company using a significant amount of borrowed money (leverage) to meet the cost of acquisition. It's significant in corporate finance because it allows investors to make large acquisitions without committing a lot of capital.

A Fund of Funds is an investment strategy of holding a portfolio of other investment funds rather than investing directly in stocks, bonds, or other securities. This approach can provide broad diversification and a reduced risk profile. In corporate finance, it is an investment option for diversifying holdings.

The Secondary Market is where investors buy and sell securities they already own, such as stocks, bonds, options, and futures. It provides liquidity and the opportunity for price discovery for private equity investors looking to exit investments.

Angel Investors are affluent individuals who provide capital for a business start-up, usually in exchange for convertible debt or ownership equity. They're significant for providing early-stage financing and often contribute experience or managerial skills.

Distressed Securities are financial instruments issued by a company that is near to or is currently going through bankruptcy. Investors in distressed securities can potentially achieve high returns if the company recovers. In corporate finance, it's a high-risk, high-reward strategy.

Convertible Debt is a type of bond that the holder can convert into a specified number of shares of common stock. It's a flexible financing tool, offering lower interest rates than standard debt and benefiting investors if the company grows significantly.