Asset classes vary when it comes to setting and calculating hurdle rates, determining catch-up provisions, and starting successor funds. In Goodwin’s Fund Terms Intelligence series, we highlight those differences by...more
This amendment builds on FINRA’s recent willingness to relax the prohibition on the use of projections and targeted returns in the marketing materials broker-dealers deliver to institutional investors and qualified...more
The staff (“Staff”) of the SEC’s Division of Investment Management recently issued a new FAQ (the “FAQ”) on Rule 206(4)-1 (the “Marketing Rule”) under the Investment Advisers Act of 1940 in which the Staff confirmed that the...more
On February 6, 2024, the SEC’s Division of Investment Management (SEC Staff) released an update to frequently asked questions document (FAQ) regarding amendments to rule 206(4)-1. The SEC Staff responses to the FAQ’s...more
On February 6, 2024, the staff of the Securities and Exchange Commission (SEC) issued an updated FAQ with respect to the Marketing Rule (Rule 206(4)-1) under the Investment Advisers Act of 1940 (the Advisers Act). This FAQ...more
A look at how funds across asset classes – including private equity, real estate, infrastructure, venture capital, and debt – calculate hurdle rates. In a recent piece in this series, our colleagues showed that funds set...more
This article is part of a series about evaluating real estate investments and discusses using equity multiple and annualized rate of return (annualized ROR) to evaluate investments....more
Today, maximizing the use of your limited capital is especially important because: margins continue to be squeezed, access to capital has become more difficult, the cost of capital continues to rise, the cost of...more
Methodology - At the beginning of the third quarter of 2022, Mergermarket, on behalf of Dechert LLP, surveyed 100 senior-level executives at private equity (PE) firms based in North America (45%), Europe, the Middle East...more
In the years since FAS 141 (now codified as ASC 805, Business Combinations) was implemented in 2001, the vast majority of business combinations have resulted in the recognition of goodwill or have been goodwill/bargain...more
What is the Equity Multiple? - The equity multiple for an investment is the sum of all cash flow to the investor from the investment divided by the investor’s investment amount. The equity multiple is usually reported as...more
The Department of Finance (Canada) (Finance) released draft legislation on February 4, 2022 that would limit the deduction of “interest and financing expenses” to a fixed percentage of earnings before interest, taxes,...more
On February 9, 2022, the US Securities and Exchange Commission (the “SEC”) proposed changes to the rules governing advisers to private funds. If adopted, the rules would constitute a sweeping change to the regulatory...more
This article is part of a series about methods investors use to evaluate investment profitability. A previous article discussed cash on cash return. This article focuses on IRR....more
Find out why traditional valuation methodologies may not be appropriate for new technologies and/or early-stage private equity energy investments....more
There is often a blurring of the lines between independent sponsors and searchers engaged in a traditional search as participants in lower-middle market mergers and acquisitions transactions. The table below presents a...more
In July 2020, FINRA issued Regulatory Notice 20-21, which is designed to provide guidance to broker-dealers in connection with their creation and use of retail communications relating to private placements. The notice...more
The asset manager's expertise, coupled with the investor's capital, allows both parties to maximise their respective returns. Real estate has always had a strong appeal to investors. Property yields have been outperforming...more
In the years since Financial Accounting Standard (FAS) 141 (now codified as ASC 805, Business Combinations) was implemented in 2001, most business combinations have resulted in the recognition of goodwill or have been...more
Private equity (PE) fundraising in Europe hit €91.9 billion in 2017, the highest it has been since 2006.1 Of that amount, €71.7 billion was invested in European companies, an increase of 29 percent year over year. This record...more
Despite numerous economic, political and regulatory challenges faced by investors, private equity in South Africa appears to continue to deliver long-term sustainable returns for its stakeholders as it outperformed ALSI TRI,...more
The Institutional Limited Partners Association (ILPA) recently released “Subscription Lines of Credit and Alignment of Interests,” a report designed to provide private equity fund limited partners (LPs) guidance regarding...more
The recent SEC subpoena of a fund sponsor for additional information concerning how it calculates internal rates of return ("IRRs") indicates that investment performance disclosure, and specifically the calculation of IRRs,...more