Glossary of Alternative Investment Terms

The moment when the cash is delivered to the seller and the stock is delivered to the buyer. The possibility of reinvesting the distribution in the same fund. Certain funds offer investors a special reinvestment discount on the issuing price if the annual distribution is reinvested. The market value of the securities and assets held by the fund, less its current liabilities divided by the number of total shares. Fixed-income investment instruments issued by banks, with maturities between two and eight years. Bond funds cannot invest in medium-term notes as they are not permitted for official stock exchange trading. The market value of a listed company, corresponding to the current market price of its shares multiplied by the number of all the equity securities in circulation. The admission of a security to official trading on a stock exchange, which is usually subject to the fulfilment of certain criteria. In Luxembourg and in Germany, investors are protected by the law regarding undertakings for collective investments.

However, more practically, the term ‘private equity’ is has a distinct meaning in the private markets, apart from angel investing or venture capital, which are also forms of private investing. From angels to zombie funds—we explained some of the most common terms used in the private markets to help you learn more about the industry. Take a look at the definitions—then see what you can do with data on the entire venture capital, private equity and M&A landscape. State-owned investment funds investing in foreign direct private equity funds to diversify their portfolio. The IRR is the interim net return earned by investors , from the fund from inception to a stated date.

Active management

Under this provision, issuers cannot engage in “general solicitation”, such as advertising. The term preemptive rights refers to the right to purchase a company’s new shares before they are offered to anyone else. In term sheets the preemptive rights provision may be titled “Right to Participate Pro Rata in Future Rounds”. The investor who takes on most of the work in negotiating the investment terms, doing due diligence and monitoring the company after the closing. The lead investor usually invests more than other investors who participate in the round. The lead investor is often located near the company or specializes in the company’s industry. A possible valuation methodology is based on a comparison of private and public companies’ value as a multiple of EBIT.
This includes a description of the types, locations and sizes of properties to be considered, the ownership positions that will be used, and the stages of the investment lifecycle. Flat feeA fee paid to an adviser or manager for managing a portfolio of real estate assets, typically stated as a flat percentage of gross asset value, net asset value or invested capital. FFO A ratio intended to highlight the amount of cash generated by a company’s real estate portfolio relative to its total operating cash flow. FFO is equal to net income, excluding gains from debt restructuring and sales of property, plus depreciation and amortization. Co-investmentCo-investment occurs when two or more pension funds or groups of funds share ownership of a real estate investment. In co-investment vehicles, relative ownership is always based on the amount of capital contributed. It also refers to an arrangement in which an investment manager or adviser co-invests its own capital alongside the investor.

Direct Investment Plans: Buying Stock Directly from the Company

Market rental ratesThe rental income that a property most likely would command in the open market, indicated by the current rents asked and paid for comparable space. Exit strategyStrategy available to investors when they desire to liquidate all or part of their investment. ERISA Legislation passed in 1974 and administered by the Department of Labor that controls the investment activities primarily of corporate and union pension plans. Credit enhancementThe credit support needed in addition to the mortgage collateral to achieve a desired credit rating on mortgage-backed securities. Read more about eth to usd converter google here. The forms of credit enhancement most often employed are subordination, over-collateralization, reserve funds, corporate guarantees and letters of credit.

Increase in the level of investment by a fund through financial means, such as borrowing and derivatives. Payment to the partners of profits and other amounts returned from investments made by the fund. The amount an investor obligates itself to pay to the fund in its subscription agreement. The aggregate amount of the commitments of all investors is equal to the total fund volume. Organizational expenses are the expenses incurred by the fund in forming the fund and the GP and marketing the fund. These expenses include legal, accounting, printing, travel and other fees and expenses, and can exceed $1 million for large funds. Also known as “NAV,” this is calculated as the sum of all of the fund’s assets less all liabilities. If the fund is publicly-traded, this amount is divided by the fund’s outstanding shares to obtain a NAV per share. “Market Capitalization” or “Market Cap” is the market value of a publicly-traded company obtained by multiplying the company’s earnings per share by the number of outstanding shares.

As a rule, UBS bond funds principally invest in bonds issued by prime borrowers. A figure, usually expressed as a percentage, to indicate, for example, how high the issue price of a security lies over a specific reference price, usually the nominal value. A premium can also mean the amount a buyer is willing to pay for a right above the book value. For derivative instruments used for hedging purposes , it is the price that the option buyer pays for the right to sell the underlying security. In the case of the put options used for the Limited Risk Funds, the premium rises as market volatility increases. Measure of the price sensitivity of a fixed-income security with an embedded call or put option. The embedded option changes the pay-out profile of the security and usually shortens the duration compared to a fixed-income security without option.

  • The document provides the details about an investment offering for sale.
  • A class action arises when a group of investors initiates a legal action against a company or ist directors in respect of alleged negligence or illegal behaviour.
  • On the XD date, the stock’s price usually falls by the amount of the dividend, reflecting the payout.

Income statements show how much money a company made and spent over a specific period of time (such as over the company’s fiscal year). State securities laws are often referred to as “Blue Sky” laws and govern the offer and sale of securities within a state. In some instances, federal securities laws preempt the ability of the states to regulate the offer and sale of securities; however, some state laws—including antifraud laws—still apply. Registered investment advisers should reference Section 205 of the Investment Advisers Act and the rules thereunder for additional information on performance fee arrangements. Performance fees are compensation provided to an adviser based on the performance of a client’s portfolio.

Monetary stimulus refers to a central bank increasing the supply of money and lowering borrowing costs. Monetary tightening refers to central bank activity aimed at curbing inflation and slowing down growth in the economy by raising interest rates and reducing the supply of money. Typically high-value, high-profitability, low-investment and low-risk stocks. The ability to buy or sell a particular security or asset in the market.

The SEC requires the RIA to provide a policies and procedures manual outlining the advisor’s policies to protect investor interests and comply with advisor regulations. Investment advisors to separately managed accounts that make commodities futures recommendations must register with the CFTC as a commodity trading advisor . OverweightIf a fund is ‘overweight’ a stock, it holds a larger proportion of that stock than the benchmark index or sector. Monetary policyA central bank’s regulation of money in circulation and interest rates. Local currency bondsBonds denominated in the currency of the issuer’s country, rather than in a highly traded international ‘hard’ currency, such as the US dollar. The value of local currency bonds tends to fluctuate more than that of bonds issued in a hard currency, as these currencies tend to be less stable. Economic fundamentals are factors such as inflation, employment, economic growth. Developed economy/marketWell-established economy with a high degree of industrialisation, standard of living and security. Accumulation unitsA type of unit where distributions are automatically reinvested and reflected in the value of the units. The GARS is a single-employer defined benefit retirement plan that provides retirement and other benefits to members of the General Assembly.

For example, if an individual invests $3 million in a company with a $10 million pre-money valuation, the post-money valuation is $13 million. Ratio of (price/earnings to growth ratio) is a valuation metric for determining the relative trade-off between the price of a stock, the earnings generated per share , and the company’s expected growth. The right of the investor to convert shares of Preferred Stock into shares of Common Stock at the Conversion Rate stated in the corporate charter. Rights of an investor or shareholder relating to control over the company’s affairs. The right of an investor to sell shares, if a founder or other key employee sells shares. This right is designed to protect the investors against being trapped in an investment after the founders have cashed out. Contractual clause that protects an investor from having their investment as a percentage of ownership significantly reduced in subsequent rounds of fundraising. The valuation that a company raises funds at, excluding the value of the funds they are seeking in their current round.
private equity glossary
Forward contracts are customised and do not trade on public exchanges, but directly between interested parties . Exchange-traded fund A type of fund that is traded on the stockmarket like ordinary shares. ETFs can be bought and sold throughout the day, like ordinary shares, whereas other types of funds are priced once a day only. Exchange tradedUsually refers to securities traded on an exchange, such as company shares on a stock exchange.

Q4 M&A League Tables: A Bumper Year for Dealmaking – The Deal Pipeline

Q4 M&A League Tables: A Bumper Year for Dealmaking.

Posted: Thu, 20 Jan 2022 08:00:00 GMT [source]

Closed-end fundA commingled fund that has a targeted range of investor capital and a finite life. Class “A”A real estate rating generally assigned to properties that will generate the highest rents per square foot due to their high quality and/or superior location. Base principal balanceThe original mortgage amount adjusted for subsequent fundings and principal payments without regard to accrued interest or other unpaid debt. Average total assetsCalculated by adding the total assets of a company for the five most recent quarters and dividing by five. Average downtimeExpressed in months, the amount of time expected between the expiration of a lease and the commencement of a replacement lease under current market conditions.

An investment strategy that involves restructuring a company’s debt and equity mixture. There is no universal definition of net debt, which makes its definition in a LOI and SPA paramount. A secure, digital location where potential investors can review confidential information on a target company, including financial statements, compensation agreements, intellectual property and client contracts. A fund that is finished taking commitments from limited partners and is ready to make investments. A private equity transaction in which a firm acquires all—or a significant amount of—equity in a company. A leveraged buyout is when firms use a mix of cash and debt to acquire equity, which is very common.

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