{"product_id":"private-equity-operational-due-diligence-tools-to-evaluate-liquidity-valuation-and-documentation-website-731-wiley-finance-9781118113905","title":"Private Equity Operational Due Diligence Tools to","description":"\u003cb\u003eBook Synopsis\u003c\/b\u003e\u003cbr\u003eAddressing the aspects and challenges associated with performing operational due diligence review of both private equity and real estate asset classes, this book provides you with the tools to develop a flexible comprehensive operational due diligence program for private equity and real estate.\u003cbr\u003e\u003cbr\u003e\u003cb\u003eTable of Contents\u003c\/b\u003e\u003cbr\u003e\u003cp\u003ePreface xiii\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 1 Introduction to Private Equity Operational Risk 1\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eIntroduction to Operational Risk 1\u003c\/p\u003e \u003cp\u003eOperational Risk Compared to Operational Due Diligence 3\u003c\/p\u003e \u003cp\u003eWhat Is Operational Due Diligence? 4\u003c\/p\u003e \u003cp\u003eOperational Due Diligence in the Field of Private Equity 8\u003c\/p\u003e \u003cp\u003eOperational Due Diligence as Distinguished from Operational Management of Portfolio Companies 9\u003c\/p\u003e \u003cp\u003eTiming of Operational Due Diligence in the Investing Process 10\u003c\/p\u003e \u003cp\u003eOperational Due Diligence Process 13\u003c\/p\u003e \u003cp\u003eHistorical Perspectives of Private Equity Operational Risk 16\u003c\/p\u003e \u003cp\u003eItems Typically Covered during the Operational Due Diligence Process 23\u003c\/p\u003e \u003cp\u003eCore versus Expanded Operational Due Diligence Reviews 25\u003c\/p\u003e \u003cp\u003eShared Commonalities between Private Equity and Real Estate Operations Risk 30\u003c\/p\u003e \u003cp\u003eDifferences in Operational Risk Factors between Private Equity and Real Estate 32\u003c\/p\u003e \u003cp\u003eCountry- and Industry-Specific Risk Considerations 33\u003c\/p\u003e \u003cp\u003eInvestment and Operational Due Diligence: Nexus or Blurred Lines? 39\u003c\/p\u003e \u003cp\u003eDifferences and Similarities with Hedge Fund Operational Due Diligence 40\u003c\/p\u003e \u003cp\u003eNotes 49\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 2 Importance of Operational Due Diligence for Private Equity Funds 51\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eUnderstanding the Goals of the Operational Due Diligence Process 52\u003c\/p\u003e \u003cp\u003eCommon Arguments against Operational Reviews of Private Equity Funds 55\u003c\/p\u003e \u003cp\u003eCommon Arguments in Favor of Performing Operational Reviews of Private Equity Funds 75\u003c\/p\u003e \u003cp\u003eConclusion 82\u003c\/p\u003e \u003cp\u003eNotes 82\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 3 Beginning the Operational Due Diligence Review: Core Issues 85\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eGoal Self-Assessment 85\u003c\/p\u003e \u003cp\u003eDesigning an Operational Due Diligence Program for Private Equity 87\u003c\/p\u003e \u003cp\u003eWhen Does the Operational Due Diligence Process Begin? 101\u003c\/p\u003e \u003cp\u003eSignaling Effects of Operational Flags 104\u003c\/p\u003e \u003cp\u003eRequesting and Collecting Documentation 104\u003c\/p\u003e \u003cp\u003eNondisclosure and Confidentiality Agreements 106\u003c\/p\u003e \u003cp\u003eDocument Collection: What Documents Should Investors Request? 113\u003c\/p\u003e \u003cp\u003eDocument Collection Negotiation Techniques: Avoiding a Pass-the-Buck Environment 117\u003c\/p\u003e \u003cp\u003eDocument Collection: Hard Copy or Electronic? 119\u003c\/p\u003e \u003cp\u003eFund Manager On-Site Due Diligence Considerations 125\u003c\/p\u003e \u003cp\u003eKey Risk Consideration Areas to Cover 128\u003c\/p\u003e \u003cp\u003eConclusion 133\u003c\/p\u003e \u003cp\u003eNotes 133\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 4 Additional Operational Due Diligence Considerations: An Expanded Analysis 135\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eCore Issues versus Expanded Analysis 135\u003c\/p\u003e \u003cp\u003eCompensation Structures 138\u003c\/p\u003e \u003cp\u003eIntroduction to Private Equity Fund Fees 139\u003c\/p\u003e \u003cp\u003eManager Investment in Funds 140\u003c\/p\u003e \u003cp\u003eEvaluating Service Providers 141\u003c\/p\u003e \u003cp\u003eAdditional On-Site Visit Considerations: Negative Operational Due Diligence 148\u003c\/p\u003e \u003cp\u003eAdditional On-Site Visit Considerations: Interview Techniques and Question Design 150\u003c\/p\u003e \u003cp\u003eAsset Raising and the Use of Placement Agents and Third-Party Marketers 159\u003c\/p\u003e \u003cp\u003eCash Management and Controls 162\u003c\/p\u003e \u003cp\u003eBusiness Continuity and Disaster Recovery 165\u003c\/p\u003e \u003cp\u003eUnderstanding the Trade Life Cycle Process 168\u003c\/p\u003e \u003cp\u003eLegal, Compliance, and Regulatory Risks 171\u003c\/p\u003e \u003cp\u003eInsurance 173\u003c\/p\u003e \u003cp\u003eTechnology and Systems 174\u003c\/p\u003e \u003cp\u003eTax Practices 175\u003c\/p\u003e \u003cp\u003eDiagnosing and Mitigating Reputational Risk 177\u003c\/p\u003e \u003cp\u003eConclusion 179\u003c\/p\u003e \u003cp\u003eNotes 179\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 5 Valuation Techniques, Methodologies, and Standards 181\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eLimited Partner Distinction between Fund Level and Portfolio Company Valuation Approaches 181\u003c\/p\u003e \u003cp\u003eValuation Considerations for Newly Formed Funds 182\u003c\/p\u003e \u003cp\u003eIntroduction to Valuation 182\u003c\/p\u003e \u003cp\u003eGIPS Statement on Private Equity 183\u003c\/p\u003e \u003cp\u003eIPEV Guidelines 185\u003c\/p\u003e \u003cp\u003eFas 157 189\u003c\/p\u003e \u003cp\u003eUse of Third-Party Valuation Consultants 191\u003c\/p\u003e \u003cp\u003eValuation Output Process Documentation 194\u003c\/p\u003e \u003cp\u003eValuation Committee Review Scope 196\u003c\/p\u003e \u003cp\u003eAdditional Limited Partner Valuation Considerations 197\u003c\/p\u003e \u003cp\u003eConclusion 197\u003c\/p\u003e \u003cp\u003eNotes 198\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 6 Legal Due Diligence 199\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eOperational Due Diligence Specialists versus Generalists 199\u003c\/p\u003e \u003cp\u003eCommon Private Equity Fund Structures 201\u003c\/p\u003e \u003cp\u003eUnderstanding the Private Placement Memorandum 201\u003c\/p\u003e \u003cp\u003eCommon Document Risk Assignment Terms 206\u003c\/p\u003e \u003cp\u003eExculpation and Indemnity 206\u003c\/p\u003e \u003cp\u003eTrends in Indemnification and Exculpation Clauses 217\u003c\/p\u003e \u003cp\u003eOther Legal Documents Considerations 227\u003c\/p\u003e \u003cp\u003eConclusion 228\u003c\/p\u003e \u003cp\u003eNotes 228\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 7 Financial Statement Due Diligence 233\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eAudit Standards 233\u003c\/p\u003e \u003cp\u003eAccounting Standards 235\u003c\/p\u003e \u003cp\u003eOther Financial Statement Formats 237\u003c\/p\u003e \u003cp\u003eConsiderations That Are Unique to Private Equity and Real Estate Financial Statements 241\u003c\/p\u003e \u003cp\u003eUnderstanding Financial Statement Sections 244\u003c\/p\u003e \u003cp\u003eOther Financial Statement Sections 245\u003c\/p\u003e \u003cp\u003eUnderstanding FAS 157 251\u003c\/p\u003e \u003cp\u003eConclusion 254\u003c\/p\u003e \u003cp\u003eNotes 254\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 8 Distinguishing the Assets Class: Real Estate–Specific Concerns 257\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eReal Estate Trade Flow Process 257\u003c\/p\u003e \u003cp\u003eSample Real Estate Process 258\u003c\/p\u003e \u003cp\u003eReal Estate Valuation 262\u003c\/p\u003e \u003cp\u003eMonitoring Conflicts of Interest 266\u003c\/p\u003e \u003cp\u003eFraud Considerations: Mortgage Fraud and Straw-Man Borrowers 269\u003c\/p\u003e \u003cp\u003eUnderstanding Real Estate Fund Fees 270\u003c\/p\u003e \u003cp\u003eProperty Holdings Legal Considerations 271\u003c\/p\u003e \u003cp\u003eConclusion 272\u003c\/p\u003e \u003cp\u003eNote 273\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 9 Putting It All Together: Asset Allocation and Ongoing Monitoring 275\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eIncorporating the Results of Operational Due Diligence into Asset Allocation 276\u003c\/p\u003e \u003cp\u003eEvolution of Minimum Operational Risk Regime (MORR) 283\u003c\/p\u003e \u003cp\u003eOperational Risk Correlations to Portfolio Transaction Frequency 285\u003c\/p\u003e \u003cp\u003eOperational Lift-to-Drag Ratio 286\u003c\/p\u003e \u003cp\u003eNegotiating Private Equity Side Letters 290\u003c\/p\u003e \u003cp\u003eOngoing Monitoring: Operational Due Diligence Monitoring for Private Equity Funds 292\u003c\/p\u003e \u003cp\u003eConclusion 296\u003c\/p\u003e \u003cp\u003eAppendix: Mathematical Conepts 297\u003c\/p\u003e \u003cp\u003eThe Derivative 297\u003c\/p\u003e \u003cp\u003eThe Chain Rule 298\u003c\/p\u003e \u003cp\u003eThe Second Partial Derivative Test 299\u003c\/p\u003e \u003cp\u003eNotes 300\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 10 Boards, Committees, and Activism 301\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003ePrivate Equity Fund Advisory Boards 301\u003c\/p\u003e \u003cp\u003eDifferent Types of Advisory Boards: Limited Partners versus Pure Advisors 302\u003c\/p\u003e \u003cp\u003eOngoing Operational Due Diligence Monitoring Advisory Benefits 303\u003c\/p\u003e \u003cp\u003eBalancing the Role of Inner Circle versus Broadly Representative Advisory Boards 305\u003c\/p\u003e \u003cp\u003eAdvisory Board Criticisms: Crowding Out, Power Aggregation, and Redundant Board Layers 306\u003c\/p\u003e \u003cp\u003eInformation Flow Considerations from Underlying Portfolio General Partner to Limited Partners 307\u003c\/p\u003e \u003cp\u003eLimited Partner Due Diligence Considerations for a Private Equity Fund of Funds 308\u003c\/p\u003e \u003cp\u003eAdditional Private Equity Advisory Board Considerations 311\u003c\/p\u003e \u003cp\u003eConclusion 313\u003c\/p\u003e \u003cp\u003eNotes 313\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 11 Case Studies and Scenarios 315\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eCase Studies 315\u003c\/p\u003e \u003cp\u003eHypothetical Scenarios 326\u003c\/p\u003e \u003cp\u003eNotes 335\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 12 Trends and Future Developments 341\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eUse of Third-Party Administrators 341\u003c\/p\u003e \u003cp\u003eIncreased Focus on Material Nonpublic Information in the United States 345\u003c\/p\u003e \u003cp\u003eIncreased Reliance on Audit-Type Certifications 348\u003c\/p\u003e \u003cp\u003eIncreased Use of Operational Due Diligence Consultants 350\u003c\/p\u003e \u003cp\u003ePooling Operational Due Diligence Resources among Multiple LPs 352\u003c\/p\u003e \u003cp\u003eOperational Benchmarking 353\u003c\/p\u003e \u003cp\u003eILPA Guidelines 354\u003c\/p\u003e \u003cp\u003eFrom Self-Regulation to Mandatory Registration 355\u003c\/p\u003e \u003cp\u003eImpact of Dodd-Frank on Operational Due Diligence 356\u003c\/p\u003e \u003cp\u003eConclusion 357\u003c\/p\u003e \u003cp\u003eNotes 358\u003c\/p\u003e \u003cp\u003eAbout the Author 359\u003c\/p\u003e \u003cp\u003eAbout the Website 361\u003c\/p\u003e \u003cp\u003eIndex 363\u003c\/p\u003e","brand":"John Wiley \u0026 Sons Inc","offers":[{"title":"Default Title","offer_id":48866365473111,"sku":"9781118113905","price":59.25,"currency_code":"GBP","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0817\/1739\/5799\/files\/9781118113905.jpg?v=1722278302","url":"https:\/\/bookcurl.com\/products\/private-equity-operational-due-diligence-tools-to-evaluate-liquidity-valuation-and-documentation-website-731-wiley-finance-9781118113905","provider":"Book Curl","version":"1.0","type":"link"}