Monthly Archives November 2012

Private Equity Investing

Private equity is money that is invested by individuals and funds that are used to make an investment in a private company or to take a publicly traded company private. The funds in use by private equity may be raised by using institutional and retail investors. Capital from private equity is used to make an acquisition or to provide funding for new technologies. A private equity firm will try to improve financial results of an acquisition to sell at a later time or take it public. Familiarity with terms used with private equity is a benefit when discussing investments.

Limited Partners
These are institutional investors or investors with high net worth that will receive capital gains and any income when making an investment in a private equity fund. A limited partner is not involved with any aspect of the management of a fund. Investors are protected from litigation taken against the fund or from losses that exceed their original investment.

General Partners
These are people that are actively managing capital that has been invested in a private equity fund. The general partners receive a percentage of the profits made by the fund known as carried interest and will earn management fees. A general partner is also legally liable for any actions taken by the fund.

Compensation Structure
Compensation for general partners will come from any management fees or carried interest. The share of profits of an investment in a private equity fund is carried interest. The amount of carried interest on a fund is often between 5 and 30 percent of the total profit. Management fees are about 2 percent on all investments made each year.

Included Clauses
Two clauses are typically found in the compensation agreements for private equity funds. There will be a return provision and a clawback provision. The return provision is a minimum annual return a limited partner is entitled before any general partners receive any carried interest. The preferred return is called the hurdle rate and is typically about 8 percent. The clawback provision for a private equity fund allows a limited partner to get back some of the carried interest from a general partner. This occurs when a general partner has withheld a higher percentage of carried interest from future investments.

Residual Value and Cumulative Distribution
The residual value for a private equity fund is defined as the market value of the equity that remains for all limited partners in a fund. The cumulative distribution is the amount of stock or cash that is paid out to a limited partner. There are important factors for the track record of a fund.

Additional Information
Investors that are interested in private equity need to have an understanding of basic terms that are used to make smart investment decisions.

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Hedge Funds, Venture Capital, and Private Equity

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Courses in Hospitality Management

Hospitality management is an area of academic study designed to prepare students for a career in the hospitality industry, in areas including hotel management, gaming, tourism and event management. Students enrolling in a hotel management course can expect a business focused course in a higher education environment that will result in a BA, BA or advanced qualification.

The job of a hotel management course graduate is to create a positive experience for guests in the hotel and tourism industry; in most cases a hospitality manager is responsible for making sure their department of responsibility is fully equipped and coordinated correctly. As an example the graduate managing a restaurant or food and beverage department ensures all the staff in their department are coordinated correctly and have the correct equipment to provide the guest with a quality experience.

Hospitality – How to Deal with Rude Customers

In U.S. states like California, where the economy relies heavily on tourism for survival the number of qualified applicants for positions within the hotel and tourism industry does not reach demand for the available positions. Tourism and hospitality management is the world’s largest industry and the available courses of study have developed in recent years to bring more highly qualified applicants to available positions. Most colleges and universities providing four-year courses attempt to assist their students and graduates in finding internships through links with hotel and tourism chains of large and small sizes.

A hospitality management course follows closely the core curriculum of a business degree with the focus shifting slightly towards a focus in the hospitality industry. Areas of study include accounting, finance, human resources, information systems and public relations. Once completed, a student entering the job market in the hotel and tourism industry with a four year degree, whether taken online or at a college campus is better prepared for their career than unqualified job applicants. As the tourism industry continues to grow the academic courses available will also continue to develop and become more focused on specific areas of the industry.

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