Table Of Content(cid:2)
TrimSize:170mmx244mm Demaria537380 ffirs01.tex V1-03/21/2020 2:20pm Pagei
Introduction to
Private Equity, Debt
and Real Assets
(cid:2) (cid:2)
(cid:2)
(cid:2)
TrimSize:170mmx244mm Demaria537380 ffirs01.tex V1-03/21/2020 2:20pm Pageii
Founded in 1807, John Wiley & Sons is the oldest independent publishing company
intheUnitedStates.WithofficesinNorthAmerica,Europe,AustraliaandAsia,Wiley
is globally committed to developing and marketing print and electronic products and
servicesforourcustomers’professionalandpersonalknowledgeandunderstanding.
The Wiley Finance series contains books written specifically for finance and
investment professionals as well as sophisticated individual investors and their finan-
cial advisors. Book topics range from portfolio management to e-commerce, risk
management,financialengineering,valuationandfinancialinstrumentanalysis,aswell
asmuchmore.
Foralistofavailabletitles,visitourwebsiteatwww.WileyFinance.com.
(cid:2) (cid:2)
(cid:2)
(cid:2)
TrimSize:170mmx244mm Demaria537380 ffirs01.tex V1-03/21/2020 2:20pm Pageiii
Introduction to
Private Equity, Debt
and Real Assets
From Venture Capital to LBO,
Senior to Distressed Debt,
Immaterial to Fixed Assets
(cid:2) (cid:2)
Third Edition
CYRIL DEMARIA
(cid:2)
(cid:2)
TrimSize:170mmx244mm Demaria537380 ffirs01.tex V1-03/21/2020 2:20pm Pageiv
Thiseditionfirstpublished2020
©2020JohnWiley&SonsLtd.
Registeredoffice
JohnWiley&SonsLtd,TheAtrium,SouthernGate,Chichester,WestSussex,PO198SQ,UnitedKingdom
Fordetailsofourglobaleditorialoffices,forcustomerservicesandforinformationabouthowtoapply
forpermissiontoreusethecopyrightmaterialinthisbookpleaseseeourwebsiteatwww.wiley.com.
Allrightsreserved.Nopartofthispublicationmaybereproduced,storedinaretrievalsystem,or
transmitted,inanyformorbyanymeans,electronic,mechanical,photocopying,recordingorotherwise,
exceptaspermittedbytheUKCopyright,DesignsandPatentsAct1988,withoutthepriorpermissionof
thepublisher.
Wileypublishesinavarietyofprintandelectronicformatsandbyprint-on-demand.Somematerial
includedwithstandardprintversionsofthisbookmaynotbeincludedine-booksorinprint-on-demand.
IfthisbookreferstomediasuchasaCDorDVDthatisnotincludedintheversionyoupurchased,you
maydownloadthismaterialathttp://booksupport.wiley.com.FormoreinformationaboutWileyproducts,
visitwww.wiley.com.
Designationsusedbycompaniestodistinguishtheirproductsareoftenclaimedastrademarks.Allbrand
namesandproductnamesusedinthisbookaretradenames,servicemarks,trademarksorregistered
trademarksoftheirrespectiveowners.Thepublisherisnotassociatedwithanyproductorvendor
mentionedinthisbook.
LimitofLiability/DisclaimerofWarranty:Whilethepublisherandauthorhaveusedtheirbestefforts
(cid:2) inpreparingthisbook,theymakenorepresentationsorwarrantieswithrespecttotheaccuracyor (cid:2)
completenessofthecontentsofthisbookandspecificallydisclaimanyimpliedwarrantiesof
merchantabilityorfitnessforaparticularpurpose.Itissoldontheunderstandingthatthepublisheris
notengagedinrenderingprofessionalservicesandneitherthepublishernortheauthorshallbeliablefor
damagesarisingherefrom.Ifprofessionaladviceorotherexpertassistanceisrequired,theservicesofa
competentprofessionalshouldbesought.
LibraryofCongressCataloging-in-PublicationData
Names:Demaria,Cyril,author.
Title:Introductiontoprivateequity,debtandrealassets:fromventure
capitaltoLBO,seniortodistresseddebt,immaterialtofixedassets/
CyrilDemaria.
Othertitles:Introductiontoprivateequity
Description:Thirdedition.|Hoboken:JohnWiley&Sons,2020.|Includes
bibliographicalreferencesandindex.
Identifiers:LCCN2020004378(print)|LCCN2020004379(ebook)|ISBN
9781119537380(hardback)|ISBN9781119537410(adobepdf)|ISBN
9781119537373(epub)
Subjects:LCSH:Privateequity.
Classification:LCCHG4751.D462020(print)|LCCHG4751(ebook)|DDC
332.6—dc23
LCrecordavailableathttps://lccn.loc.gov/2020004378
LCebookrecordavailableathttps://lccn.loc.gov/2020004379
CoverDesign:Wiley
CoverImage:©oxygen/GettyImages
Setin10/12ptSabonLTStdbySPiGlobal,Chennai,India
PrintedinGreatBritainbyCPIAntonyRowe,UK
10987654321
(cid:2)
(cid:2)
TrimSize:170mmx244mm Demaria537380 ffirs01.tex V1-03/21/2020 2:20pm Pagev
John Donne wrote that ‘No man is an island entire of itself’. I am
indebted to my family and my friends for their constant support, their
kindness and their gentle nudges. This book is dedicated to them.
(cid:2) (cid:2)
(cid:2)
(cid:2)
TrimSize:170mmx244mm Demaria537380 ftoc.tex V1-03/20/2020 8:05am Pagevii
Contents
Acknowledgements ix
AbouttheAuthor xi
Introduction 1
PART I
WhatarePrivateEquity,PrivateDebtandPrivateRealAssets?
CHAPTER1
PrivateEquityasanEconomicDriver:AnHistoricalPerspective 15
(cid:2) CHAPTER2 (cid:2)
ModernPrivateEquity–AFrenchInvention? 39
PART II
ThePrivateMarketsEcosystem
CHAPTER3
PrivateMarkets:ABusinessSystemPerspective 85
CHAPTER4
TheUniverseofInvestment 145
CHAPTER5
TheProcessofInvestment:AMatterofTrustandMutualInterest 245
PART III
PrivateMarketsinTeenageTime:TrendSetting,FadsandResponsibilities
CHAPTER6
PrivateMarketsEvolution:TrendsorBuzzes? 267
vii
(cid:2)
(cid:2)
TrimSize:170mmx244mm Demaria537380 ftoc.tex V1-03/20/2020 8:05am Pageviii
viii CONTENTS
CHAPTER7
PrivateEquityandEthics:ACultureClash 287
CHAPTER8
GeneralConclusion:PrivateMarketsTodayandTomorrow 309
Template1(Fund):ArchitectureofthePrivatePlacement
MemorandumofaPrivateEquityFund 329
Template2(Fund):StructureofaLimitedPartnershipAgreement 331
Template3(Fund):DueDiligenceChecklist 335
Template4(Fund):QuarterlyReportTemplate 339
Template5(Company):Non-DisclosureAgreement 343
Template6(Company):BusinessPlan 347
Template7(Company):TermSheet 353
(cid:2) BusinessCase:KrotonEducacionalSA–APrivateEquity (cid:2)
OperationCanHideAnotherOne 363
Exhibits 379
Glossary 389
Bibliography 425
Index 439
(cid:2)
(cid:2)
TrimSize:170mmx244mm Demaria537380 flast01.tex V1-03/20/2020 8:05am Pageix
Acknowledgements
I
thank Sarah Debrand for her kind assistance in helping me put this new edition
together. Her inputs, patience, kindness and reactivity were very much of help.
Thankyou.
IalsothanktheEmergingMarketsPrivateEquityAssociation,andspecificallyJeff
SchlapinskiandSabrinaKatz,forkindlyprovidingmewithcrucialdata.
(cid:2) (cid:2)
ix
(cid:2)
(cid:2)
TrimSize:170mmx244mm Demaria537380 flast01.tex V1-03/20/2020 8:05am Pagexi
About the Author
S
ince2017,CyrilDemariahasbeenaPartnerandHeadofPrivateMarketsatWeller-
shoff & Partners, in Zurich. The company is an independent research and advice
company to institutional investors and family offices. He is also the General Partner
and President of Pilot Fish, created in 2009, which manages a series of venture cap-
ital funds for family offices and high net worth individuals. Prior to his current role,
CyrilDemariawasinchargeofprivatemarketsresearchattheChiefInvestmentOffice
of UBS Wealth Management from 2014 to 2016. From 2009 to 2012, he co-founded
and was Partner and Chief Investment Officer at Tiaré Investment Management AG,
a Zürich-based wealth and investment management company. Prior to that, he cre-
atedamulti-strategyfundoffundsfocusedonenvironmentalmatters.Hewasalsoan
Associateinprivateequityfundsoffunds,aPortfolioManagerresponsibleforprivate
equityfundinvestmentsataFrenchinsurancegroupwherehemanaged27investments
totalling EUR 60 million in private equity funds and funds of funds. As Head of Cor-
porateDevelopmentatExternall(Paris),hemanagedfourassetacquisitionsandraised
(cid:2) (cid:2)
debtfinancing.Hestartedhiscareerinahybridventurecapitalandfundoffundsfirm
(SanFrancisco,Paris).
A French and Swiss citizen, Cyril Demaria holds a BA in Political Sciences from
theInstitutd’EtudesPolitiques(Lyon),aMaster’sinGeopoliticsappliedtoMoneyand
Finance(Paris),aMaster’sinEuropeanBusinessLaw(Paris),isagraduatefromHEC
(Paris)andholdsaPhDfromtheUniversityofStGallen.
An Affiliate Professor at EDHEC, he also lectures at EADA (Barcelona), as well
asuniversitiesandbusinessschools.HecollaboratesregularlyasanexpertwithInvest
Europe,FranceInvestandtheSwissPrivateEquityandCorporateFinanceAssociation.
Heistheauthorof:
■ Développementdurableetfinance(Maxima,2003).
■ Introductionauprivateequity(RevueBanqueEditeur,2006,2ndedn2008,3rdedn
2009, 4th edn 2012, 5th edn 2015, 6th edn 2018) – foreword by Xavier Moreno
(formerPresidentoftheAFIC,ManagingPartnerofAstorgPartners).
■ Profession: business angel – Devenir un investisseur providentiel averti, with M.
Fournier (Revue Banque Editeur, 2008) – foreword by Claude Bébéar (Chairman
oftheBoardofAxa,ChairmanofthethinktankInstitut-Montaigne).
■ Le marché, les acteurs et la performance du private equity suisse, with M. Ped-
ergnana (SECA, 2009, 2nd edn 2012) – foreword by Patrick Aebischer (President
oftheEcolePolytechniqueFédéraledeLausanne).
Hecanbereachedat:[email protected],+41798138649.
xi
(cid:2)
