Taking a long-term approach

Article Abstract:

Some venture capital firms tend to take a short-term view which may not be compatible with the aims of the management buyout team. For example, funds which depend on raising external sources of capital regularly may put pressure on for an early exit, whereas funds which seek to match long-term liabilities may take a longer-term view. For management teams, the most important factor in choosing a financial backer is to make sure the venture capitalist is willing and able to help the team implement its business plan.

Management

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Investment trust or limited partnership?

Article Abstract:

The UK venture capital industry took off in the early 1980s and the British Venture Capital Association was set up in 1983. Investment trusts had previously provided risk capital, and these have been operating for over 100 years. Investments trusts can provide a long term relationship. They can also retain a cash surplus when the business cycle is at its peak, and gear up when the cycle is at its lowest. Institutions tend to commit only some 3% of their assets to equity that is unquoted.

Investment Companies, Open-End Investment Funds, Mutual funds

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Does management still have a place in the MBO?

Article Abstract:

There have been more than 3,800 management buyouts (MBOs) involving a commitment of over 25 billion pounds sterling in the UK in the ten years to 1995. Venture capital funds are increasingly seeking to buy businesses themselves rather than simply backing management with funds. There are more funds than deals, and new funds reached at record of 3 billion pounds sterling in 1994. Both management and venture capitalists should recognise what each can contribute to MBOs.

Analysis

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