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"Until recently, strategy played little meaningful role in the management of illiquid investments, and what many investors call 'strategy' has been more akin to 'tactics' or 'learned reflexes'. Even large institutions still appear to manage their privateequity allocations on such a case-by-case basis. But the environment has changed and returns are no longer 'assured' as they once were. Private equity and other illiquid asset classes have matured, as more players seek to deploy ever larger amounts in amarket where opportunities necessarily become difficult to identify and access. The few principles that institutional investors have relied on up to now have been anchored in a less competitive past. Private Equity Unchained deconstructs existing practices and provides insights into how to think strategically about illiquid asset allocations. In order to thrive in markets characterised by extreme uncertainty, investors must first accept the limitations of what is knowable. This begins by leaving behind many of those financial theories that institutions normally cling to as a safe harbour for managing risk. Once divested of such false comforts, investors will be in a position to identify their real options and take an active and strategic approach to alternative investing"--
List of contents
1. Introduction 2. A Neo-Classical Asset Class 3. The 'Repair-Shop of Capitalism' 4. Strategy Challenges 5. Strategic Asset Allocation 6. The Sky is Not the Limit 7. The Limited Partnership as Part of Humanity's DNA 8. Intermediation 9. Economics of Private Equity Firms 10. Objectives 11. Performance Persistence 12. Nobody knows Anything 13. Spreading Risks - Thickly and Thinly 14. Private Equity Risk 15. Performance Measurement 16. The Galapagos Islands of Finance 17. The Locust and the Deep Blue Sea 18. Intelligence 19. Spreading Risks - Part II 20. Open-Ended Relationships 21. Hard and Soft Power 22. Real Options 23. No Plan Survives... 24. The Heavy Hand of Regulation 25. Private Equity Unchained
About the author
Thomas Meyer is partner and co-founder of LDS Partners, specialising in the development of private equity risk measurement models and investment strategies. He has held a distinguished career in and out of the financial services, from intelligence officer in the German Air Force to CFO of Allianz Asia Pacific. He was responsible for the creation of the European Investment Fund's risk management function with focus on the development of valuation and risk management models and investment strategies for venture capital funds-of-funds. As Director of the European Private Equity and Venture Capital Association he authored the EVCA Venture Capital White Paper 2010. Thomas co-directed the limited partner course delivered by the Private Equity Institute at the Saïd Business School, University of Oxford that led to the EVCA awarded certificate. He is member of EVCA's Private Equity Risk Measurement Group, a Shimomura Fellow of the Development Bank of Japan and was a visiting researcher at Hitotsubashi University in Tokyo.
Thomas is the co-author of Beyond the J Curve, J Curve Exposure, Mastering Illiquidity and two CAIA Level II books, which are required reading for level II of the Chartered Alternative Investment Analyst® Program.
He studied computer science at the Bundeswehr Universität in Munich and holds a Dr.rer.nat. from the University of Trier. He graduated with an MBA from the London Business School and with an MA in JapaneseLanguage and Society from the University of Sheffield's School of East Asian Studies.
Report
'Based on his wealth of knowledge and experience, Thomas Meyer provides important insights into the private equity business and valuable advice to anyone involved in it. He describes how private equity is an engine of innovation and how the partnership model evolved as a central component of it. He cautions against some of the regulatory and valuation practices that are currently employed in the sector.'
Colin Mayer, Peter Moores Professor of Management Studies, Said Business School, University of Oxford, author of "Firm Commitment: Why the Corporation is Failing Us and How to Restore Trust in It"
'There is not much work on a subject as arcane as private equity asset management that can be read by both specialists and amateurs with the same pleasure of discovery or re-discovery. Private Equity Unchained succeeds in this feat by dissecting the subject in depth, but in my view, also by re-introducing the 'human factor' in its perspective of the Private Equity investment landscape. This fresh approach illustrates the dimensions of perpetual change, the biological foundations of human behavior and the uncertainty that goes with them.'
Georges Sudarskis, Founder and Chairman, Sudarskis & Partners (UAE) and former Chief Investment Officer, Private Equities, Abu Dhabi Investment Authority
