Private Equity as a career

[Apurv]

Hello folks!

Beginning today, we bring you the lowdown on management careers straight from the horses' mouths! Interviews with industry experts, HR Managers, B-school alumni to get you the dope on what companies look for and how you can shape your MBA dream accordingly.

Private Equity as a career

What exactly is private equity and why should you be interested in it? IIM Ahmedabad alumnus Abhijit Nath gives you the lowdown and hopes that at the end of it, some of you will be interested enough to want to get into the field as well.

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[kzx8a]

Originally Posted by Apurv

Hello folks!

Beginning today, we bring you the lowdown on management careers straight from the horses' mouths! Interviews with industry experts, HR Managers, B-school alumni to get you the dope on what companies look for and how you can shape your MBA dream accordingly.

Private Equity as a career

What exactly is private equity and why should you be interested in it? IIM Ahmedabad alumnus Abhijit Nath gives you the lowdown and hopes that at the end of it, some of you will be interested enough to want to get into the field as well.

Read More

Excellent thread Apurv

we all bschool wannabes wud get a sneak peek into what exactly the life after mba is....
not just money...

may be some ppl get scared out...


kudos to u , Allwin & all PG team
You ROCK!

[ahmadazeem777]

Lot of Fundoo Initiatives from PG off late........ Hats off to all you guys.....

Btw good post by Abhijit, really intresting....

Thankx
Azeem

[mukulc]

Originally Posted by Apurv

Hello folks!

Beginning today, we bring you the lowdown on management careers straight from the horses' mouths! Interviews with industry experts, HR Managers, B-school alumni to get you the dope on what companies look for and how you can shape your MBA dream accordingly.

Private Equity as a career

What exactly is private equity and why should you be interested in it? IIM Ahmedabad alumnus Abhijit Nath gives you the lowdown and hopes that at the end of it, some of you will be interested enough to want to get into the field as well.

Read More

Great Initiative ..Please keep it up ...

Incidentally last week, Mr. Pulak Prasad , MD, Warburg Pincus visited IIMA as part of the Industry Interface program (Avenues) run by PGPX class -07. It was a great session. He went beyond giving a bird's eye view of the industry and talked about the finer aspects of the business. Good learning for many of us.

On my part, I can keep the forum updated about forth coming sessions at IIMA and anyone from PG who is in ahd. is welcome to join the session. Just one rider, we do it in our classroom (to make the session informal and interactive) so the number of guests will be limited. . Need to inform me in advance.

Cheers
Mukul

[ajay_citm]

thanks abhijit nice post
i did nt unerstand some things:-----as what is buy back of shares,y it is req if the company is taken by PE firm and from where PE firm will get fund to manage a
sick firm and it is always true tat PE will make that firm healthy again and if not
who will incur the losses and then ......plzzzzzzzz explain

[chanakya_raj]

Guys, I am working for a reputed PE/M&A firm. I am now thinking of going solo with another partner and setting up a specialist firm that focuses on PE funds/fund placement for SME's and mid market investors. I am sure this thread will be useful to me.

Maybe apurv r any one in this forum can answer some of my questions here

1. What is the procedure for setting up a PE Fund?

2. What is the client fee structure model for a PE firm when this fee is charged to a prospective client? Especially, for a startup how is the fee structure modelled?

3. Besides PE investors, does sourcing of funds from VC's and angel investors work in the same way? Are there any procedural difference?

If anyone from IIM-A is interested in knowing more about my initiative and the prospective firm I am setting up, kindly do get in touch with me rajatbijur@gmail.com

[Apurv]

Originally Posted by chanakya_raj

Guys, I am working for a reputed PE/M&A firm. I am now thinking of going solo with another partner and setting up a specialist firm that focuses on PE funds/fund placement for SME's and mid market investors. I am sure this thread will be useful to me.

Maybe apurv r any one in this forum can answer some of my questions here

1. What is the procedure for setting up a PE Fund?

2. What is the client fee structure model for a PE firm when this fee is charged to a prospective client? Especially, for a startup how is the fee structure modelled?

3. Besides PE investors, does sourcing of funds from VC's and angel investors work in the same way? Are there any procedural difference?

If anyone from IIM-A is interested in knowing more about my initiative and the prospective firm I am setting up, kindly do get in touch with me rajatbijur@gmail.com

1. The procedure is that you have to register with SEBI as a VCF. Then go on roadshows to convince people to invest in you: typically HNIs and institutions.
2. Say you have set up a $ 100 mn fund with $ 1 mn from 100 investors. Each year, they will pay you 2% of this as a management fee. You, in turn, have to return their money after a period of X years (it would be a closed-ended fund). At this point, you would have a hurdle rate defined at say 8%. If your fund performance has beenworse than this, ie you have retruned less than 8% p.a. over the period of the fund, you will get paid nothing over and above the 2% management fee you have earned annually. Above this, you would get a percentage, called carried interest (industry standard is 20%) of the returns you garner for your clients.
3. AFAIK it works the same way. You just go out and hunt for people willing to invest. However, the risk/return expectations of VC and PE investors is different

[uRmad]

Hehe....About time the thread got bumped I guess. After Avago and Philips Semi, looks like Freescale too is now on the radar screens of the barbarians

Cheers

[MartianOnEarth]

Rajat (Chanakya_Raj),
A few things to be cautious about if you are planning to venture out on your own in the PE space.

In the current upswing phase, raising funds to launch your new fund would be the easy part (am assuming you've already looked at the hygiene issues). You'll have competition from a lot of experienced well-connected professionals from the PE industry with ambitions similar to yours.

The PE industry in India in comparison to the US and European scene, is still fledgling. There have been a few fantastic exits (read up the Warburg Pincus/Pulak Prasad/Bharti story), but these are still exceptions. The carried interest which will be your primary motivation, will take years to materialise (No exits, no carry). Watch out for 'clawback' scenarios as well.
A lot of investments are happening in specific areas (mainly 'PIPE' deals and late stage). The concept of early stage investing has yet to really take off.

So define your investment strategy really well before you hit the road trying to raise funds and identify supporters who buy into your vision.

Good luck with your efforts.