Value adding investors

7 important questions on Value adding investors

Why PE returns more different among each other than Public Equity?

More skill needed in less liquid & less efficient mkts
Variation this skillset among PE's is big

How do PE investors believe they add value?

1. Liquidity /availability
2. Information
3. Incentives mgmt
4. Governance
5. Business skills



1. Liquidity / availability regardless of market
2. Information based investment model
3. Greater incentives for management
4. Superior governance structure
5. Complementary business skills

Explain liquidity / availability regardless of MKT conditions?

PE often countercyclical
In illiquid markets
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Explain difference in governance PE vs Public Equity

PE seeks to be on the board

Difference small and big boards

Small board = more efficient
Big board = more politics

Explain business skills PE

PE can bring
extra suppliers, customers, management
relevant info, experience

What can VC / PE investment investments have done to company at an exit?

Lower costs public equity as mkt sees added benefit

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