Private Equity Essay Example | Topics and Well Written Essays - 3500 words

Private Equity - Essay Example On average, private equity has produced very high returns with low correlations to public stocks and bonds and real estate. In other words, private equity offers the prospect of both high returns and increased portfolio diversification. In some cases, private equity may also provide collateral benefits, e.g., a vehicle to make economically targeted investments or to create or preserve union jobs. Finally, there is also the undeniable appeal of seeking innovative investments (Gompers, 2003). 1. Until the investments go public or are liquidated, investments are carried either at cost or at prices set by later rounds of financing. Except in this latter case, private equity is even harder to accurately value than real estate (Bray,1997). 2. Ultimate returns have varied (and are likely to continue to vary) widely by "vintage year," i.e., the year of initial investment, because of wide fluctuations in the business cycle. For example, the median 1986 private equity fund returned only 8.4% per year through 1997, whereas the median 1990 private equity fund returned more than 17% per year through 1997. 3. ... (In statistical terms, the mean return is much higher than the median.) For example, for venture funds formed in 1988, an upper quartile manager returned almost 18% more per year than a lower quartile one from 1988 through 1997 (21.6% vs. 3.9%). 4. Reputation is very important: The best deals and the largest investment flows tend to go to firms with the best track records. Consequently (and quite unlike public equity markets), success tends to persist. The result, however, is that it is often difficult, if not impossible, for new investors to get into the best partnerships or deals. Here, the services of an established fund-of-funds manager can be of real value (Gompers, 2003). AIM OF THE PAPER Private equity (PE) buy-out deals have profound influence on domestic economies. Since the beginning of this year, they have accounted for more than one third of all deals that have been done on the New York stock Exchange1, and have raised $240 billion of cash for their acquisition plans2. The purpose of this report is to discuss the consequences of this type of buy-out on public markets, jobs, and tax revenues. Nevertheless, The effects of high leverage, which is used by PE firms to finance this class of acquisition, are beyond the scope of this report. DISCUSSION Private Equity investment used to be defined as "an equity investment in a company which is not quoted on a stock exchange". However, currently this definition has many limitations because it does not include investments that are structured as convertible debt and investments in public companies that are taken private3. For the purposes of this paper, Private Equity Buy-Out deal is a subset of

Statement of Purpose Essay Example | Topics and Well Written Essays - 250 words - 3

Statement of Purpose - Essay Example This dream has therefore fostered me to apply for the graduate school (school of engineering) engineering management, project and system engineering management. Engineering Management is a specialized form of management and engineering. It is mostly concerned with the application of engineering principles to business practice. Engineering managers ensure that engineers use their engineering skills to design and provide high quality products and services. My obsession with management started just after I had cleared high school. In the summer of 2008, I had a chance of working as a marketing strategist at Gardeniya Ladies Center in Alkhobar Saudi Arabia. Specifically, I dealt with customer relations and I was a receptionist. While working here, I managed social media presence, developed promotions and packages for customers and handled customers complaints and disputes. In the year 2009, I partially worked as a market strategist at Cupcake Girls in Alkhobar Saudi Arabia. I was the marketing assistant and assisted in preparations of orders and clientele, handled financial and advertising organizations and prepared for upcoming events and festivities. I have been active in many other activities such as Student volunteer- Children with Down Syndrome Center (Alkhobar Saudia Arabia, 2009) and Managed social media presence for campaigns and managed gathering donations. This has made me feel that my passion lies in the leadership and management and I believe that if one does what they love, chances are that they will become very successful. In the selecting of the Catholic University at Washington DC, I have been influenced by the way your engineering management program addresses issues such as planning, organizing, motivating, and controlling resources, procedures and protocols. I am fluent in Arabic and English and I have been talking to a friend who has studied in this University and it has come to my understanding that the