Introduction to Private Equity

Glossary

A

Accredited investor An investor declared as sufficiently informed and sophisticated, who benefits from a satisfactory knowledge on investments and is thus able to handle private equity investments, which do not bear the protection offered by the stock exchange regulations.

Acquisition The take over of a portfolio company by another industrial or financial company.

Amount under management The sum of all the assets managed (that is to say the ones available for investment and the ones already invested) by an investment team in private equity deals.

Angel investor A high net worth individual who invests in private equity to help companies and let them benefit from his experience, his network and his know-how. Also called business angel.

B

Balance sheet The picture of the financial situation of a company at a given time. The balance sheet is the synthesis of the value of assets, debts and capital of the company.

Balanced fund An investment strategy in private equity designed to build a portfolio of companies at different stages of development (venture capital, growth capital, leveraged buy-out).

Book value See Historical cost.

Bridge finance Short-term financing generally provided to a company expecting a financing event (IPO or further round of financing) in the coming six to 12 months following bridge financing. The bridge round usually combines debt and equity features. The shares or debt instruments are then generally converted at the time of the liquidity event. ...