An International Stage
With the globalisation of private equity funds, most buyout processes have an international element, with a mix of US, European and UK investors vying for assets.
Private Equity has evolved into Private Capital, with an influx of investors from adjacent asset classes to traditional private equity. At the same time management teams actively court the international stage as part of their expansion ambitions.
With this added diversity of investors along with the growth in Private Capital availability, management going through change of ownership processes are faced with a bewildering range of options. It can be difficult knowing which way to turn to achieve the right outcome.
- How do global funds differ from one another?
- How do capital structures vary across different geographies?
- How do equity packages differ between US funds and European funds?
- What are the cultural differences and house styles in respect to board structure and governance?
Cross-Border Challenges
An understanding of different investor perspectives, their house style, and approach to structuring deals, will help us plan and shape the approach that we take to optimise your management terms in a transaction.
We appreciate and pre-empt potential cross-border cultural and technical challenges, and use our market know-how to negotiate and structure bespoke terms to appeal to all stakeholders. Combining the best of local market intelligence with the best of international market practice. Key considerations include:
Capital structure – the composition of equity funding varies across different geographies and funds types. In the US, equity funding tends to be structured entirely as ordinary shares with incentive arrangements comprising options and / or profits interests which are linked to time and performance vesting criteria. In Continental Europe, equity funding tends to be split between ordinary shares and fixed return preference shares, with a pool of the ordinary shares carved out as the incentive equity for management.
The decision on the mix of these equity instruments is as much a commercial preference as it is local tax driven determination and this decision can have a significant impact on the risk/reward profile for management.
House style – different approaches by geography and individual investor directors make it imperative to get to grips with house style ahead of equity terms discussions.
Fund type – whether long-term infrastructure, sovereign wealth or evergreen funds, these fund types add complexity to the structuring of management terms. Understanding investor time horizons ensures the focus is on the best approach to optimise future liquidity; for example, securing synthetic liquidity arrangements is key with long-term investors.
Governance – understanding your investor’s approach to board composition, governance, Chairman and NEDs will help to inform decisions on choosing the right investor.
Our scale and depth of global experience, combined with local knowledge, safely guides management teams through the deal process. While our deal flow and track record means we offer management teams an insight into fund investment styles and strategies, resulting in a true understanding of what can be negotiated.
An International Stage
With the globalisation of private equity funds, most buyout processes have an international element, with a mix of US, European and UK investors vying for assets.
Private Equity has evolved into Private Capital, with an influx of investors from adjacent asset classes to traditional private equity. At the same time management teams actively court the international stage as part of their expansion ambitions.
With this added diversity of investors along with the growth in Private Capital availability, management going through change of ownership processes are faced with a bewildering range of options. It can be difficult knowing which way to turn to achieve the right outcome.
- How do global funds differ from one another?
- How do capital structures vary across different geographies?
- How do equity packages differ between US funds and European funds?
- What are the cultural differences and house styles in respect to board structure and governance?
Cross-Border Challenges
An understanding of different investor perspectives, their house style, and approach to structuring deals, will help us plan and shape the approach that we take to optimise your management terms in a transaction.
We appreciate and pre-empt potential cross-border cultural and technical challenges, and use our market know-how to negotiate and structure bespoke terms to appeal to all stakeholders. Combining the best of local market intelligence with the best of international market practice. Key considerations include:
Capital structure – the composition of equity funding varies across different geographies and funds types. In the US, equity funding tends to be structured entirely as ordinary shares with incentive arrangements comprising options and / or profits interests which are linked to time and performance vesting criteria. In Continental Europe, equity funding tends to be split between ordinary shares and fixed return preference shares, with a pool of the ordinary shares carved out as the incentive equity for management.
The decision on the mix of these equity instruments is as much a commercial preference as it is local tax driven determination and this decision can have a significant impact on the risk/reward profile for management.
House style – different approaches by geography and individual investor directors make it imperative to get to grips with house style ahead of equity terms discussions.
Fund type – whether long-term infrastructure, sovereign wealth or evergreen funds, these fund types add complexity to the structuring of management terms. Understanding investor time horizons ensures the focus is on the best approach to optimise future liquidity; for example, securing synthetic liquidity arrangements is key with long-term investors.
Governance – understanding your investor’s approach to board composition, governance, Chairman and NEDs will help to inform decisions on choosing the right investor.
Our scale and depth of global experience, combined with local knowledge, safely guides management teams through the deal process. While our deal flow and track record means we offer management teams an insight into fund investment styles and strategies, resulting in a true understanding of what can be negotiated.
