PRIVATE EQUITY | DEMYSTIFY 13
Limited Partner (LP)
An entity that commits capital to a general partner’s fund.
Management buy-in (MBI)
A buy-out in which external managers take over the company. Financing is provided to enable a manager or group of managers from outside the target company to buy into the company with the support of Private Equity investors. A buy-out in which the target’s management team acquires an existing product line or business from the vendor with the support of Private Equity investors. An instrument that pays interest or dividends to investors of bonds, notes, or preferred stock with additional securities or equity instead of cash. An instrument in the form of options, performance rights, or rights to further shares that increase the value of management equity relative to other shareholders. Often issued at a lower price to motivate management with the incentive of a higher upside when objectives are achieved. A buy-out in which a Private Equity house sells control of a portfolio company to another Private Equity house. A type of Private Equity investing that focuses on startups and early-stage companies with long-term, high-growth potential.
Management buy-out
Payment in Kind (PIK)
Sweet Equity
Secondary Buy-out
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Venture Capital
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