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Assume you are a financial analyst in an investment bank. You are currently reviewing the performance of some private equity funds so that you can provide advice to your clients. Below is

Assume you are a financial analyst in an investment bank. You are currently reviewing the performance of some private equity funds so that you can provide advice to your clients. Below is the information of the private equity funds ACE I and KGC I. Produce a short report. In the report, you need to:

Compare performance of two funds on the report date. The discussion should be supported by performance evaluation calculations. You can select any performance evaluation calculations that you deem suitable. You can also make assumptions when calculating. For example, you can assume the management fees are paid based on paid-in capital and the total return method following first alternative is used for distribution waterfall.

 

ACE I

Established in 2010

 

Type: Development Capital

   

Fund

Vintage

Actual Fund size (£Millions)

 

Capital Called%

Management %

Carried Interest%

Hurdle Rate

Term

Report Date

ACE I

2013

300.0

 

90.0

1.0

20.0

10.0

2023

31/12/2018

Note: Clawback provision is included: Distribution water fall: Total return

ACE I

2013

2014

2015

2016

2017

2018

Called-down

120

40

40

20

10

40

Realised value

0

0

100

80

40

80

Unrealized value

-15

0

20

60

70

20

Distribution

0

0

60

65

60

60

KGC I

Established in 2011

 

Type: Development Capital

   

Fund

Vintage

Actual Fund size (£Millions)

 

Capital Called%

Management %

Carried Interest%

Hurdle Rate

Term

Report Date

KGC I

2012

350.0

 

95.0

2.0

15.0

8.0

2024

31/12/2018

Note: Clawback provision is not included; Distribution water fall: Total return

KGC I

2013

2014

2015

2016

2017

2018

Called-down

130

50

50

40

20

30

Realised value

0

0

0

100

90

90

Unrealized value

0

-18

-5

80

40

30

Distribution

0

0

0

90

80

70

Apr 05 2021 View more View Less

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