Class 4 Asian Capital Markets (FIN579) Stephan

Transcript:Class 4 Asian Capital Markets (FIN579) Stephan:
Class 4 Asian Capital Markets (FIN579) Stephan Siegel 2 Admin Topic Write-up: Update Name Tents Panel Discussion: February 10 Keith Ferguson, CIO, University of Washington Mark Whitmore, CEO, Whitmore Capital Management Gerard Fitzpatrick, CIO, Fixed-income Portfolios, Russell  Prepare questions for panelists. Email me your “best” question by Sunday (for participation credit). 3 Class 4 Guest Speaker: Brian Ingram, Head of Investments, PingAn Russell, Shanghai Lecture in preparation of Classes 6, 7, and 8 Class 6: Private Equity and Frontier Markets Class 7: Credit Markets and Regulation Risk Class 8: Real Estate Next Class 4 Today’s guest speaker Guest Speaker: Brian Ingram, Head of Investments, PingAn Russell, Shanghai PAR is a joint venture between Russell Investments and the Chinese financial services conglomerate Ping An Group. PAR focuses exclusively on mainland Chinese public capital markets, including A-share equity and inter-bank fixed income. PAR’s primary international clients are QFII and RQFII institutional investors. As of November 2013, the firm manages about USD $480 million on behalf of domestic and international institutional clients. Until 2010 Brian was a Senior Research Analyst with Russell in London Brian is a graduate of Yale University. Class 6: Private Equity and Frontier Markets Private equity (PE) investments are equity (or equity-like) investments that are not traded on public exchanges. Forms of PE: Venture capital LBO Special situations (distressed investing) Shared characteristics: great uncertainty difficult to value asymmetric information illiquid PE Structures and Process In the U.S., PE funds are typically organized as limited partnerships: General Partners: PE firm or managers: screen, value, select, monitor, manage portfolio firms receive management fee of about 2% of capital committed by limited partners receive an incentive fee of 20% of profits (carried interest) Limited Partners: Institutional investors, high net-worth individuals commit to provide certain amount of capital over certain period (5 years) have only cash flow rights, no control rights get paid as investments are exited Closed end fund with finite life (10 years) that avoids taxation at fund level Growth of PE in the U.S. 7 Growth of PE in the U.S. 8 Source: Lerner, Stromberg, and Sorensen (2009) Performance (after fees) of PE in U.S. Median Average Standard Deviation 25th and 75th %-ile PME denotes Public Market Equivalent, calculated as the difference between an investment in a PE fund to an investment in the S&P 500. But, no adjustment for risk and illiquidity Source: Kaplan and Schoar (2005) Performance