Get instant access to this case solution for only $15

Pro invest How To Launch A Private Equity Real Estate Fund Case Solution

Solution Id Length Case Author Case Publisher
2281 1031 Words (6 Pages) Anne-Marie Carrick, Bowen White, Claudia Zeisberger INSEAD : IN1244
This solution includes: A Word File A Word File

There are many keys to take away with regards to fund raising in the private equity. Although, private equity firms look for the opportunity to create value in the companies or function which they seem can be turnaround through some structural changes. To make institutional policy changes in the firms to achieve potential gain from the upside of the firm restructuring the PE firms often look for control to ensure that their guidelines are being followed in the company without any interruption (McGuire, 2020). In this regard, the controlling interest in for of maximum seats in the board is desired by the PE firms to lead the decision made by the board of directors of the firms. In this regard, the fundraising from a suitable option that does not substantially interfere with the day-to-day decision-making is critical. 

Case Analysis for Pro invest How To Launch A Private Equity Real Estate Fund Case Solution

1. 

Options Criteria

The UHNWI

The IPO

The Mezzanine

Project Pony

The Managed Account

The private bank

Reverse IPO

Pro-invest keeps control

4

2

3

3

4

2

2

Pro-invest team keeps upside

2

1

4

4

4

2

2

Certainty of funding

2

5

3

2

3

3

4

Investor fit

4

2

4

3

3

3

3

Additional costs

2

4

3

3

4

5

4

Investor value-add

5

5

4

4

4

4

4

Future fundraising

4

1

3

3

2

2

3

Total

23

20

24

22

24

21

22

*1 being the highest and 5 being the lowest. 

2. The option of the Initial public offerings seems to be a reasonable choice among the given funding choices available to Pro – Invest. The IPO has scored the least score in the above table meaning that it has the highest ranking in most of the criteria’s established by Sabina. The UHNWI is ensuring the availability of funds but demands substantial control but the investment will be as per his terms. This does not go along with investor fit for Pro – invest moreover since the UHNWI would not be able to add any value in the investment on account of his limited knowledge (Worth, 2020). In this regard, it would not be a suitable funding option for pro – invest. The mezzanine investment from an international investment firm requires a seat in the investment committee team which would dilute the control of or – invest in decision making. Also, the principal of the firm in Australia had little knowledge of the hotel industry thereby adding very little value. Moreover, mezzanine financing is more expensive than the tradition debt financing (Chris, 2019).

The Australian investment house providing investment through project pony demanded an equity stake in the company. Their ability to raise funds through private placement was also questionable. Moreover, the placement agent does hold the ability to add any value in the day-to-day business of the firm. The managed account through a pension fund is willing to provide investment in the range of AUS$300 – AUS$500 Million but required the approving power to veto each opportunity for investment. The approving power for investment dilutes the control of the private equity firm thereby generally not desired by the PE firms (Cleartax, 2020). 

Get instant access to this case solution for only $15

Get Instant Access to This Case Solution for Only $15

Standard Price

$25

Save $10 on your purchase

-$10

Amount to Pay

$15

Different Requirements? Order a Custom Solution

Calculate the Price

Approximately ~ 1 page(s)

Total Price

$0

Get More Out of This

Our essay writing services are the best in the world. If you are in search of a professional essay writer, place your order on our website.

Essay Writing Service
whatsapp chat icon

Hi there !

We are here to help. Chat with us on WhatsApp for any queries.

close icon