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Global Advisors | Quantified Strategy Consulting

Private Equity

“This is an AI that has been trained on all of our investment committee papers over the last 13 years. So, it’s ingested everything - all the deals that we’ve shown the committee. And interestingly, it has the perspective on what happened to the deals that we did, but also the deals that we didn’t do.” - James Brocklebank - Co-chair of Advent International

Quote: James Brocklebank – Co-chair of Advent International

"A general partner (GP) is the entity responsible for managing a private equity fund, making investment decisions, overseeing portfolio companies, and executing the fund’s value-creation strategy." - General partner (GP) -

Term: General partner (GP)

"A limited partner (LP) is an investor in a private equity fund who provides capital but does not participate in the day-to-day management of the fund." - Limited partner (LP) -

Term: Limited partner (LP)

"Carry, short for carried interest, is the share of a fund’s investment profits allocated to the general partner (GP) as performance compensation." - Carried interest (carry) -

Term: Carried interest (carry)

"Dry powder refers to committed but uninvested capital that a private equity fund has available to deploy into new investments or follow-on capital." - Dry powder -

Term: Dry powder

"Platform strategy refers to the acquisition of a core (“platform”) company that serves as the foundation for subsequent bolt-on acquisitions, with the objective of creating value through scale, scope, and capability enhancement." - Platform strategy -

Term: Platform strategy

"Multiple on Invested Capital (MOIC) measures the total value returned from an investment relative to the total equity capital invested, expressed as a simple multiple (e.g., 2.5×). In private equity, MOIC captures the absolute value creation of an investment without regard to the time taken to achieve it." - Multiple on Invested Capital (MOIC) -

Term: Multiple on Invested Capital (MOIC)

"Multiple expansion refers to the increase in a company’s valuation multiple at exit relative to the multiple paid at entry, holding operating performance constant." - Multiple Expansion -

Term: Multiple Expansion

"Operational alpha refers to the incremental value created through improvements in a portfolio company’s operating performance, independent of financial leverage or changes in valuation multiples." - Operational alpha -

Term: Operational alpha

"An investment thesis is a clear, testable statement of why an investment should generate attractive returns, specifying the mechanisms through which value will be created and the key risks that could prevent that outcome." - Investment thesis -

Term: Investment thesis

"Private equity (PE) is capital invested in companies not listed on a public stock exchange, where firms raise funds from investors (like pensions, endowments) to buy, improve, and then sell these businesses for profit, often taking an active management role to boost performance." - Private Equity -

Term: Private Equity

"In an effort to satisfy their investors’ thirst for distributions, some [PE] fund managers are selling their crown jewels now, even if it means giving up potential returns." - Pitchbook -

Quote: Pitchbook

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