The Secrets of Private Equity Investment and Management
 |
Description
Book Introduction
In an age of chaos and recession, how should we invest and manage?
If you know how private equity makes money, the way is clear!
Investing 6 trillion won over 20 years, achieving an annual return of 27%!
Kim Tae-yeop, CEO of Aperma Capital Korea, tells us
Everything about investing and managing private equity funds.
Former Samsung Electronics President Lee Don-joo, MBK Partners Vice Chairman Yoon Jong-ha,
Strongly recommended by APR CEO Kim Byeong-hun and Understanding CEO Ahn Seung-chan!
It has been 20 years since the first private equity fund was launched in Korea.
In 2023, the private equity industry swept 37% of domestic M&A deals, with a capital of 136 trillion won.
It's no longer uncommon to hear the names of large private equity funds in the news or articles, or to hear about the "big deals" they're making.
Yet, there's still a lot we don't know about private equity.
What exactly is a private equity fund? Who participates and how? Who raises investors and manages the capital? What are their goals? In what sectors do they operate, how do they operate, and how much profit do they generate? How do you work with or within a private equity fund? A book has been published that answers all these questions.
"The Secret of Private Equity Investment and Management" is a book about the private equity industry written by Tae-Yeop Kim, the Korean representative of the private equity fund management company 'Aperma Capital'.
Affirma Capital is a global private equity fund management company established in 2019 as an independent PE investment division of Standard Chartered (SC) Group.
Aperma Capital's cumulative assets under management amount to approximately 6 trillion won, and it has achieved an annual return of a whopping 27%.
Apalma Capital has invested in several companies, including Gwangjin Chemical, Sae-A FS, Hanmaeum Energy, Samyang Packaging, Seonggyeong Food, and T Map Mobility. In particular, it surprised the industry by selling EMC Holdings, a waste disposal company in which it had invested 45 billion won, to SK Ecoplant for 1.05 trillion won in 2020.
This book, written by Tae-Yeop Kim, the Korean representative of Aperma Capital, a company that has achieved remarkable results, contains various management strategies and investment insights used by private equity funds to ensure investment success.
The rapidly changing business environment, the ever-present challenges, the behind-the-scenes work of corporate sales and acquisitions, the secretive pursuit of new ventures and the restructuring of existing ones, the fierce competition to recruit key talent, and even the severing of incompetent and corrupt personnel.
The author's real-life experience introduces the story behind the buildings and ledgers, which is invisible to the average investor.
The book is written in an easy-to-read format that even those unfamiliar with management and M&A can easily understand, and is filled with the author's characteristic wit and wittiness, known within the industry for his guts and wit, making it accessible to anyone.
This book will serve as a guide to survival for both businesspeople and employees who are fighting a daily battle in this recessionary era and worrying about their future survival.
It will also provide a satisfying explanation to those who are curious about what private equity funds are and what they do.
If you know how private equity makes money, the way is clear!
Investing 6 trillion won over 20 years, achieving an annual return of 27%!
Kim Tae-yeop, CEO of Aperma Capital Korea, tells us
Everything about investing and managing private equity funds.
Former Samsung Electronics President Lee Don-joo, MBK Partners Vice Chairman Yoon Jong-ha,
Strongly recommended by APR CEO Kim Byeong-hun and Understanding CEO Ahn Seung-chan!
It has been 20 years since the first private equity fund was launched in Korea.
In 2023, the private equity industry swept 37% of domestic M&A deals, with a capital of 136 trillion won.
It's no longer uncommon to hear the names of large private equity funds in the news or articles, or to hear about the "big deals" they're making.
Yet, there's still a lot we don't know about private equity.
What exactly is a private equity fund? Who participates and how? Who raises investors and manages the capital? What are their goals? In what sectors do they operate, how do they operate, and how much profit do they generate? How do you work with or within a private equity fund? A book has been published that answers all these questions.
"The Secret of Private Equity Investment and Management" is a book about the private equity industry written by Tae-Yeop Kim, the Korean representative of the private equity fund management company 'Aperma Capital'.
Affirma Capital is a global private equity fund management company established in 2019 as an independent PE investment division of Standard Chartered (SC) Group.
Aperma Capital's cumulative assets under management amount to approximately 6 trillion won, and it has achieved an annual return of a whopping 27%.
Apalma Capital has invested in several companies, including Gwangjin Chemical, Sae-A FS, Hanmaeum Energy, Samyang Packaging, Seonggyeong Food, and T Map Mobility. In particular, it surprised the industry by selling EMC Holdings, a waste disposal company in which it had invested 45 billion won, to SK Ecoplant for 1.05 trillion won in 2020.
This book, written by Tae-Yeop Kim, the Korean representative of Aperma Capital, a company that has achieved remarkable results, contains various management strategies and investment insights used by private equity funds to ensure investment success.
The rapidly changing business environment, the ever-present challenges, the behind-the-scenes work of corporate sales and acquisitions, the secretive pursuit of new ventures and the restructuring of existing ones, the fierce competition to recruit key talent, and even the severing of incompetent and corrupt personnel.
The author's real-life experience introduces the story behind the buildings and ledgers, which is invisible to the average investor.
The book is written in an easy-to-read format that even those unfamiliar with management and M&A can easily understand, and is filled with the author's characteristic wit and wittiness, known within the industry for his guts and wit, making it accessible to anyone.
This book will serve as a guide to survival for both businesspeople and employees who are fighting a daily battle in this recessionary era and worrying about their future survival.
It will also provide a satisfying explanation to those who are curious about what private equity funds are and what they do.
- You can preview some of the book's contents.
Preview
index
Recommendation
Entering
For aspiring entrepreneurs who want to enter the private equity industry
Part 1.
Private Equity Funds: The Alchemists of the 21st Century Capital Market
Chapter 1.
Where to invest
Choosing a company smarter than Gangnam Building
How Private Equity Funds Find Pearls in the Dirt
We sell your company
Chapter 2.
How to make it expensive
How Private Equity Funds Make Money in Marginal Industries
The Art of Cutting Losses: The Hardest and Simplest Strategy for Success
A Successful Bolt-On Strategy for Emrin
How to Make the Most of Your Friend, a Good Advisor
Rescue a company in a slump
Chapter 3.
The company changes only when the organization changes.
Corporate Singles: When Two Organizations Merged
The importance of water change and fishery management
Listen to the siren sound within the organization.
The PMI Magic Formula for Achieving Results in 3 Months (1): Setting a Vision and Mission
The PMI Magic Formula for 3-Month Results (2): KPI Thinning
The PMI Magic Formula for 3-Month Results (3): Reimagining Leadership
Part 2.
Private Equity Advice for Competitive Talent and Organizations
Chapter 4.
Private equity fund-style, no-frills mentality in investing and managing
Three Ways to Gain Investment Insights
Real opportunities arise when markets are unstable.
Our attitude towards Italian people
Don't be scared by the 'R' of the recession
The Strategic Implications of a Leader's Vacation
A Guide for Chairman Dreaming of Succession
Chapter 5.
The Secret to Private Equity-Style Player Selection
How to Find and Hire a Golden Egg-Laying CEO
The Track to Becoming the CEO Selected by Private Equity Funds
C-level executives, let's be human first.
The competitiveness of C-level employees with 'secondary roles'
How to Negotiate a Price with a Private Equity Fund
In conclusion
Entering
For aspiring entrepreneurs who want to enter the private equity industry
Part 1.
Private Equity Funds: The Alchemists of the 21st Century Capital Market
Chapter 1.
Where to invest
Choosing a company smarter than Gangnam Building
How Private Equity Funds Find Pearls in the Dirt
We sell your company
Chapter 2.
How to make it expensive
How Private Equity Funds Make Money in Marginal Industries
The Art of Cutting Losses: The Hardest and Simplest Strategy for Success
A Successful Bolt-On Strategy for Emrin
How to Make the Most of Your Friend, a Good Advisor
Rescue a company in a slump
Chapter 3.
The company changes only when the organization changes.
Corporate Singles: When Two Organizations Merged
The importance of water change and fishery management
Listen to the siren sound within the organization.
The PMI Magic Formula for Achieving Results in 3 Months (1): Setting a Vision and Mission
The PMI Magic Formula for 3-Month Results (2): KPI Thinning
The PMI Magic Formula for 3-Month Results (3): Reimagining Leadership
Part 2.
Private Equity Advice for Competitive Talent and Organizations
Chapter 4.
Private equity fund-style, no-frills mentality in investing and managing
Three Ways to Gain Investment Insights
Real opportunities arise when markets are unstable.
Our attitude towards Italian people
Don't be scared by the 'R' of the recession
The Strategic Implications of a Leader's Vacation
A Guide for Chairman Dreaming of Succession
Chapter 5.
The Secret to Private Equity-Style Player Selection
How to Find and Hire a Golden Egg-Laying CEO
The Track to Becoming the CEO Selected by Private Equity Funds
C-level executives, let's be human first.
The competitiveness of C-level employees with 'secondary roles'
How to Negotiate a Price with a Private Equity Fund
In conclusion
Detailed image
Into the book
Only those who have invested their own money and experienced the bitter and sweet aspects of investing are likely to adapt well to investing in private equity funds.
I know a lot about technology, but I really avoid chatterboxes who have no practical experience.
… It is nothing but nonsense to say that a novice who has never invested even 100 million won of his own money is managing hundreds of billions of won of his precious customers’ money.
I would never vote for a candidate like this.
--- pp.25-26
A business that grows at a rate lower than the 5-7% interest rate on a negative account feels quite sluggish.
However, there is a way to increase the value of a business with a growth rate of less than 7%: monopoly.
Even if it belongs to a marginal industry, if it establishes a complete monopoly, it will transform into an iron rice bowl business that not just anyone can enter!
--- p.87
Cutting one's losses is the most difficult yet simplest strategy a human can employ.
The reason why humans find this strategy difficult to use is because they have a mindset called 'loss aversion bias', which makes them more afraid of losing than gaining.
…there are places in the business where a loss-cutting strategy must be used.
The first is the business, and the second is the core organization (executives).
--- pp.95-96
The money recovered is spent according to a precise plan.
The money recovered through business closure is money stained with blood and tears, so it must be used wisely.
It is about making a specific plan for when, where, how much to spend the money on, and how much to earn as a result.
…It is important to remember that even when re-entering a new business, you must be mindful of failure and define clear criteria and timeframes for cutting losses.
--- p.102
Regular audits and organizational consulting should be conducted to identify and correct any problems within the organization.
Performance without reward leads to a secure job, but incompetence without punishment leads to corruption.
--- p.104
What should we do to get 120%, or even 200%, of the benefit from the consulting firms we pay so much for? It's about clearly defining what we want, what challenges our company faces, and what hypotheses we need to develop to address them.
In other words, you have to choose your questions well.
…in order to choose good questions, you must have at least a minimum of experience.
There must be a standard by which the company can identify the root of its current problems and assess the strengths and weaknesses of its desired future.
--- p.129
I believe that the basis of cool-headed judgment lies in establishing an accurate business plan.
Only someone who knows the inside and outside of the company can accurately draw up a business plan.
And if you watch how well the budget is achieved for about a year, you can see how good the management is.
…If you raise the budget by saying something like ‘10% growth compared to the previous year,’ I immediately prepare for a change.
--- p.174
Asking someone who has worked with me to leave the company is truly painful, like cutting into my bones and flesh.
Still, it must be done.
I decided that if I had to do it, I would do it well and do it in advance.
Then, the hundred or thousand employees and their families working at that company will survive.
As a private equity fund manager, it is my duty to be cool-headed, appropriate, and constantly manage the fishery.
--- p.176
You discover a leader who is very good at his job, but has a very political disposition.
…I don't mistake these executives or managers for 'wise but cruel monarchs.'
…the reason political figures end up being poison to the company is because when their luck runs out, if a superstar who threatens their position sprouts up underneath, they mercilessly nip that bud in the bud.
So I make sure to kill these 'snakes' with a leeway of about a year to a year and a half.
--- p.231
In my case, I always make sure that at least one of the COO, CSO, and CFO positions in the portfolio is someone who can be immediately promoted to CEO in an emergency.
If a successor prepared in this way graduates from the portfolio without any experience as a CEO, the successor will be used as a vice president or CEO in the next investment.
This successor strategy has worked 100% for the past 19 years.
--- p.232
Having been in the investment business for over 20 years, I have met countless successful entrepreneurs and investors.
They have exactly two things in common.
It is ‘curiosity’ and ‘persistence’.
There is no such thing as intelligence, honesty, or having a silver spoon in your mouth that many people expect.
--- p.245
There are two things to note.
One is that you have to meet someone who is different from you.
…the people you meet to invest in your network should be different from you.
…when different perspectives and inclinations meet, sparks fly, change and development occur.
Encouragement without criticism breeds laziness, and only relative deprivation awaits the lazy genius.
…the other one is that you have to meet a ‘successful person’.
…To be precise, it means ‘a person who has achieved success in his/her field’, and is a person with a high energy level.
--- pp.253-254
I often say, 'There is no captain who can beat the waves, and there is no business who can beat the macro.'
If you can read the big flow and get into the top 3, you can hit the jackpot.
…The major trends that Korea is facing, and that everyone can agree on, are gradual income growth (middle class expansion), population decline, aging, and eco-friendliness/low-carbon.
--- pp.270-271
If you look closely at the industry you're in and the industry you're working in, you'll find megatrends that never change, no matter what happens: recession, inflation, war.
By assessing whether the business or investment you're currently pouring your energy into is aligned with a megatrend and considering how to capitalize on it, you'll be able to more clearly determine the direction of your investments.
There's no need to be afraid.
Investing is within the realm of 'common sense'.
--- p.303
The biggest problem with the sign is that it looks really flashy.
The type of person I dislike the most is someone who moves to a foreign company or subsidiary of a large corporation every three years.
If you only look at their careers, they may seem very impressive, but if you look closely at their background, you will see that most of them have lost their talents after just three years and are quickly moving on to find the next job.
--- p.347
If you insist on entering this private equity jungle, I tell you that the key negotiations aren't about salary, but about exit bonuses and your position in the next deal.
Instead of negotiating your base salary, it's better to say that you'll work hard to achieve results and ask for a generous share of the money you earn.
Set performance goals, determine your contribution to them, and negotiate how much you will be paid for the excess.
I know a lot about technology, but I really avoid chatterboxes who have no practical experience.
… It is nothing but nonsense to say that a novice who has never invested even 100 million won of his own money is managing hundreds of billions of won of his precious customers’ money.
I would never vote for a candidate like this.
--- pp.25-26
A business that grows at a rate lower than the 5-7% interest rate on a negative account feels quite sluggish.
However, there is a way to increase the value of a business with a growth rate of less than 7%: monopoly.
Even if it belongs to a marginal industry, if it establishes a complete monopoly, it will transform into an iron rice bowl business that not just anyone can enter!
--- p.87
Cutting one's losses is the most difficult yet simplest strategy a human can employ.
The reason why humans find this strategy difficult to use is because they have a mindset called 'loss aversion bias', which makes them more afraid of losing than gaining.
…there are places in the business where a loss-cutting strategy must be used.
The first is the business, and the second is the core organization (executives).
--- pp.95-96
The money recovered is spent according to a precise plan.
The money recovered through business closure is money stained with blood and tears, so it must be used wisely.
It is about making a specific plan for when, where, how much to spend the money on, and how much to earn as a result.
…It is important to remember that even when re-entering a new business, you must be mindful of failure and define clear criteria and timeframes for cutting losses.
--- p.102
Regular audits and organizational consulting should be conducted to identify and correct any problems within the organization.
Performance without reward leads to a secure job, but incompetence without punishment leads to corruption.
--- p.104
What should we do to get 120%, or even 200%, of the benefit from the consulting firms we pay so much for? It's about clearly defining what we want, what challenges our company faces, and what hypotheses we need to develop to address them.
In other words, you have to choose your questions well.
…in order to choose good questions, you must have at least a minimum of experience.
There must be a standard by which the company can identify the root of its current problems and assess the strengths and weaknesses of its desired future.
--- p.129
I believe that the basis of cool-headed judgment lies in establishing an accurate business plan.
Only someone who knows the inside and outside of the company can accurately draw up a business plan.
And if you watch how well the budget is achieved for about a year, you can see how good the management is.
…If you raise the budget by saying something like ‘10% growth compared to the previous year,’ I immediately prepare for a change.
--- p.174
Asking someone who has worked with me to leave the company is truly painful, like cutting into my bones and flesh.
Still, it must be done.
I decided that if I had to do it, I would do it well and do it in advance.
Then, the hundred or thousand employees and their families working at that company will survive.
As a private equity fund manager, it is my duty to be cool-headed, appropriate, and constantly manage the fishery.
--- p.176
You discover a leader who is very good at his job, but has a very political disposition.
…I don't mistake these executives or managers for 'wise but cruel monarchs.'
…the reason political figures end up being poison to the company is because when their luck runs out, if a superstar who threatens their position sprouts up underneath, they mercilessly nip that bud in the bud.
So I make sure to kill these 'snakes' with a leeway of about a year to a year and a half.
--- p.231
In my case, I always make sure that at least one of the COO, CSO, and CFO positions in the portfolio is someone who can be immediately promoted to CEO in an emergency.
If a successor prepared in this way graduates from the portfolio without any experience as a CEO, the successor will be used as a vice president or CEO in the next investment.
This successor strategy has worked 100% for the past 19 years.
--- p.232
Having been in the investment business for over 20 years, I have met countless successful entrepreneurs and investors.
They have exactly two things in common.
It is ‘curiosity’ and ‘persistence’.
There is no such thing as intelligence, honesty, or having a silver spoon in your mouth that many people expect.
--- p.245
There are two things to note.
One is that you have to meet someone who is different from you.
…the people you meet to invest in your network should be different from you.
…when different perspectives and inclinations meet, sparks fly, change and development occur.
Encouragement without criticism breeds laziness, and only relative deprivation awaits the lazy genius.
…the other one is that you have to meet a ‘successful person’.
…To be precise, it means ‘a person who has achieved success in his/her field’, and is a person with a high energy level.
--- pp.253-254
I often say, 'There is no captain who can beat the waves, and there is no business who can beat the macro.'
If you can read the big flow and get into the top 3, you can hit the jackpot.
…The major trends that Korea is facing, and that everyone can agree on, are gradual income growth (middle class expansion), population decline, aging, and eco-friendliness/low-carbon.
--- pp.270-271
If you look closely at the industry you're in and the industry you're working in, you'll find megatrends that never change, no matter what happens: recession, inflation, war.
By assessing whether the business or investment you're currently pouring your energy into is aligned with a megatrend and considering how to capitalize on it, you'll be able to more clearly determine the direction of your investments.
There's no need to be afraid.
Investing is within the realm of 'common sense'.
--- p.303
The biggest problem with the sign is that it looks really flashy.
The type of person I dislike the most is someone who moves to a foreign company or subsidiary of a large corporation every three years.
If you only look at their careers, they may seem very impressive, but if you look closely at their background, you will see that most of them have lost their talents after just three years and are quickly moving on to find the next job.
--- p.347
If you insist on entering this private equity jungle, I tell you that the key negotiations aren't about salary, but about exit bonuses and your position in the next deal.
Instead of negotiating your base salary, it's better to say that you'll work hard to achieve results and ask for a generous share of the money you earn.
Set performance goals, determine your contribution to them, and negotiate how much you will be paid for the excess.
--- p.381
Publisher's Review
Specialist in management and negotiation,
Secrets of Investment and Management Learned from Private Equity Funds
What image comes to mind when you think of "private equity"? Most people picture corporate raiders who acquire struggling companies at a low price, lay off large numbers of employees, and then tear the entire business apart and sell it off.
In fact, among private equity funds, 'Vulture Capital' makes money in that way.
However, these are only a few of the many forms and methods of private equity.
A typical private equity fund (PE) increases the value of a company by acquiring its management rights or investing in new businesses, and then sells shares or the entire company to generate profits.
The business of private equity funds is to normalize management by strengthening the fundamentals of ailing companies and increasing the efficiency of their extravagant operations, and then to sell these companies or business units to larger institutions or companies to generate large profits.
Naturally, private equity managers need the insight to discern the intrinsic value of a company to be acquired, the management skills to realize that value, the tolerance to select and employ individuals with such skills, and the talent to persuade counterparties and lead negotiations during acquisitions and sales.
A specialist in management and negotiation.
That is what private equity is and what private equity does.
Tae-Yeop Kim has been involved in the private equity industry for nearly 20 years, acquiring, merging, and selling companies of various sectors and sizes.
He has fully disclosed all of the investment and management knowledge he has acquired, as well as his know-how in forming management teams and recruiting talent, in this book, "Secrets of Private Equity Investment and Management."
The book covers a wide range of topics, including how to identify and grow suitable companies for investment, how to remove the bubble and realistically evaluate the value of a company, bolt-on M&A strategies to increase corporate value, how to effectively utilize advisors, how private equity firms can make profits in marginal industries, how to discover investment insights, criteria and evaluation methods for talent classification in private equity firms, how to select, utilize, and replace appropriate management teams, the qualifications and qualities needed for someone who wants to work in private equity, and how to join a C-level position in a company that private equity funds invest in.
This valuable insight will be useful not only to those seeking to enter the private equity industry, but also to entrepreneurs and financial managers seeking to grow their corporate value, and to employees seeking to increase their value at work.
“For private equity funds, numbers are everything.”
The ruthless yet thrilling world of private equity
Private equity funds are more deeply entrenched in our lives than we think.
It encompasses every aspect of our daily lives, from the food we eat, the cars we drive, the clothes we wear, the cosmetics we apply, the music we listen to, the cell phones we look at, the computers we use, the semiconductors inside them, and even the trash and waste we throw away every day.
Corporations create and sell all the products and services we consume, and private equity funds buy and sell those companies.
No company, no matter the country or size, is immune to the gaze of private equity funds.
The same goes for people.
Private equity funds can restructure management teams at any time, both when acquiring a company and afterwards, depending on their objectives and needs.
Anyone can be promoted to management and fired at any time as long as they can generate the targeted profits.
You cannot remain a player in the capitalist arena without understanding the investment and management principles of private equity funds, which are all about numbers.
· Of course, there are people who ask this question.
“Private equity funds are so ruthless that if they don’t perform well, they get shut down right away, right?” My answer is “yes.”
But isn't the situation similar for executives of most domestic companies these days?
Conversely, this means that the more valuable a company or employee is to a private equity fund, the more love calls it will receive from the private equity fund.
Private equity funds offer those who can prove their worth the opportunity to amass enormous wealth and fame.
· Private equity fund corporate investment is a game that can take anywhere from six years at the longest to three years at the shortest.
Even if a former executive at a large corporation with an annual salary of 200 million won earns 10% more, he or she will only earn 120 million won after 6 years.
After taxes, it's much less.
In comparison, the performance bonuses received by key personnel of companies invested in by private equity funds are around 4-10% of stock options.
For example, let's say a company worth 100 billion won becomes worth 200 billion won.
4% of the increase in value of 100 billion won is 4 billion won.
Again, this is a performance-based pay.
It is money received separately from salary and bonus.
What is more profitable is not a question of mathematics, but of arithmetic.
“The core of private equity fund management strategy is talent.”
What are the talent strategies used by private equity funds and what are the criteria for top-tier talent?
“Find and pair good management with companies that can dominate good industries.” This is the author’s secret to success in private equity acquisitions and investments.
Among the ways in which private equity funds increase corporate value, the author cited the selection and employment of capable executives, or "talent strategy," as the top priority.
· If you're building a business that's above a certain level, I definitely consider 'management competitiveness' as the first criterion.
Business models are bound to change and evolve with the times, trends, and technological advancements.
Companies desperately need management who can read these changing trends and lead their businesses with a long-term perspective.
The talent strategy employed by private equity funds is 'appropriate water turnover and fishing ground management.'
Private equity firms don't hesitate to replace management when a company grows, its business objectives change, the system needs to be reorganized, or when the performance and role of management falls short of expectations.
The author describes this as 'wise cruelty'.
Only by not becoming complacent and being swayed by recognition can the thousands of employees and their families who work for that company survive.
To ensure rapid management turnover, private equity managers daily check in with and network with prominent CEOs, founders, executives, and team leaders in their respective industries.
So, what kind of people are classified as S-class by private equity funds?
· Business, like life, can go wrong depending on external variables.
The easiest criteria for distinguishing between S-level and B-level talent are how quickly they can organize and overcome a crisis, and how well they have prepared and meticulously planned a Plan B in advance.
Understanding the nature of business and its operations, identifying industry trends, and establishing accurate business plans are the foundations of good management.
The problem is that the private equity battlefield is like a jungle battle, with no way to predict what's ahead.
Therefore, private equity funds treat individuals who can flexibly respond to rapid changes in the business environment and unexpected problems, while always presenting new alternatives, as top-tier talent.
If you want to survive, understand private equity!
Everything You Need to Know About Private Equity Funds in One Volume
According to domestic laws, the number of investors in a private equity fund is limited to 100 or fewer, and the minimum investment amount is 300 million won.
It is not easy for ordinary people without sufficient assets to participate as investors in private equity funds.
That doesn't mean we have nothing to gain from private equity funds.
First, you can learn how to read trends and get new business ideas from private equity fund investment insights.
Second, you can learn how to restructure your organization and appropriately utilize resources and talent to adapt to the ever-changing business environment.
Of course, you can also have the opportunity to earn a lot of money that would be difficult to imagine for an average salaried worker by joining a private equity firm and working as an investment manager or participating in the management of a company in which the private equity fund invests.
However, one thing we must keep in mind is that the workplace we work at could one day be owned by a private equity fund.
Private equity funds do not discriminate between listed and unlisted companies as acquisition targets.
If you don't have a good understanding of how private equity firms work and their values, you could be the first to signal your downfall when they actually take over your company.
"Secrets of Private Equity Investment and Management" details the investment and management strategies of private equity funds that "make money even in a recession," along with their values and principles of action, where "numbers are everything."
Any businessperson or employee who wants to survive must read this book.
Secrets of Investment and Management Learned from Private Equity Funds
What image comes to mind when you think of "private equity"? Most people picture corporate raiders who acquire struggling companies at a low price, lay off large numbers of employees, and then tear the entire business apart and sell it off.
In fact, among private equity funds, 'Vulture Capital' makes money in that way.
However, these are only a few of the many forms and methods of private equity.
A typical private equity fund (PE) increases the value of a company by acquiring its management rights or investing in new businesses, and then sells shares or the entire company to generate profits.
The business of private equity funds is to normalize management by strengthening the fundamentals of ailing companies and increasing the efficiency of their extravagant operations, and then to sell these companies or business units to larger institutions or companies to generate large profits.
Naturally, private equity managers need the insight to discern the intrinsic value of a company to be acquired, the management skills to realize that value, the tolerance to select and employ individuals with such skills, and the talent to persuade counterparties and lead negotiations during acquisitions and sales.
A specialist in management and negotiation.
That is what private equity is and what private equity does.
Tae-Yeop Kim has been involved in the private equity industry for nearly 20 years, acquiring, merging, and selling companies of various sectors and sizes.
He has fully disclosed all of the investment and management knowledge he has acquired, as well as his know-how in forming management teams and recruiting talent, in this book, "Secrets of Private Equity Investment and Management."
The book covers a wide range of topics, including how to identify and grow suitable companies for investment, how to remove the bubble and realistically evaluate the value of a company, bolt-on M&A strategies to increase corporate value, how to effectively utilize advisors, how private equity firms can make profits in marginal industries, how to discover investment insights, criteria and evaluation methods for talent classification in private equity firms, how to select, utilize, and replace appropriate management teams, the qualifications and qualities needed for someone who wants to work in private equity, and how to join a C-level position in a company that private equity funds invest in.
This valuable insight will be useful not only to those seeking to enter the private equity industry, but also to entrepreneurs and financial managers seeking to grow their corporate value, and to employees seeking to increase their value at work.
“For private equity funds, numbers are everything.”
The ruthless yet thrilling world of private equity
Private equity funds are more deeply entrenched in our lives than we think.
It encompasses every aspect of our daily lives, from the food we eat, the cars we drive, the clothes we wear, the cosmetics we apply, the music we listen to, the cell phones we look at, the computers we use, the semiconductors inside them, and even the trash and waste we throw away every day.
Corporations create and sell all the products and services we consume, and private equity funds buy and sell those companies.
No company, no matter the country or size, is immune to the gaze of private equity funds.
The same goes for people.
Private equity funds can restructure management teams at any time, both when acquiring a company and afterwards, depending on their objectives and needs.
Anyone can be promoted to management and fired at any time as long as they can generate the targeted profits.
You cannot remain a player in the capitalist arena without understanding the investment and management principles of private equity funds, which are all about numbers.
· Of course, there are people who ask this question.
“Private equity funds are so ruthless that if they don’t perform well, they get shut down right away, right?” My answer is “yes.”
But isn't the situation similar for executives of most domestic companies these days?
Conversely, this means that the more valuable a company or employee is to a private equity fund, the more love calls it will receive from the private equity fund.
Private equity funds offer those who can prove their worth the opportunity to amass enormous wealth and fame.
· Private equity fund corporate investment is a game that can take anywhere from six years at the longest to three years at the shortest.
Even if a former executive at a large corporation with an annual salary of 200 million won earns 10% more, he or she will only earn 120 million won after 6 years.
After taxes, it's much less.
In comparison, the performance bonuses received by key personnel of companies invested in by private equity funds are around 4-10% of stock options.
For example, let's say a company worth 100 billion won becomes worth 200 billion won.
4% of the increase in value of 100 billion won is 4 billion won.
Again, this is a performance-based pay.
It is money received separately from salary and bonus.
What is more profitable is not a question of mathematics, but of arithmetic.
“The core of private equity fund management strategy is talent.”
What are the talent strategies used by private equity funds and what are the criteria for top-tier talent?
“Find and pair good management with companies that can dominate good industries.” This is the author’s secret to success in private equity acquisitions and investments.
Among the ways in which private equity funds increase corporate value, the author cited the selection and employment of capable executives, or "talent strategy," as the top priority.
· If you're building a business that's above a certain level, I definitely consider 'management competitiveness' as the first criterion.
Business models are bound to change and evolve with the times, trends, and technological advancements.
Companies desperately need management who can read these changing trends and lead their businesses with a long-term perspective.
The talent strategy employed by private equity funds is 'appropriate water turnover and fishing ground management.'
Private equity firms don't hesitate to replace management when a company grows, its business objectives change, the system needs to be reorganized, or when the performance and role of management falls short of expectations.
The author describes this as 'wise cruelty'.
Only by not becoming complacent and being swayed by recognition can the thousands of employees and their families who work for that company survive.
To ensure rapid management turnover, private equity managers daily check in with and network with prominent CEOs, founders, executives, and team leaders in their respective industries.
So, what kind of people are classified as S-class by private equity funds?
· Business, like life, can go wrong depending on external variables.
The easiest criteria for distinguishing between S-level and B-level talent are how quickly they can organize and overcome a crisis, and how well they have prepared and meticulously planned a Plan B in advance.
Understanding the nature of business and its operations, identifying industry trends, and establishing accurate business plans are the foundations of good management.
The problem is that the private equity battlefield is like a jungle battle, with no way to predict what's ahead.
Therefore, private equity funds treat individuals who can flexibly respond to rapid changes in the business environment and unexpected problems, while always presenting new alternatives, as top-tier talent.
If you want to survive, understand private equity!
Everything You Need to Know About Private Equity Funds in One Volume
According to domestic laws, the number of investors in a private equity fund is limited to 100 or fewer, and the minimum investment amount is 300 million won.
It is not easy for ordinary people without sufficient assets to participate as investors in private equity funds.
That doesn't mean we have nothing to gain from private equity funds.
First, you can learn how to read trends and get new business ideas from private equity fund investment insights.
Second, you can learn how to restructure your organization and appropriately utilize resources and talent to adapt to the ever-changing business environment.
Of course, you can also have the opportunity to earn a lot of money that would be difficult to imagine for an average salaried worker by joining a private equity firm and working as an investment manager or participating in the management of a company in which the private equity fund invests.
However, one thing we must keep in mind is that the workplace we work at could one day be owned by a private equity fund.
Private equity funds do not discriminate between listed and unlisted companies as acquisition targets.
If you don't have a good understanding of how private equity firms work and their values, you could be the first to signal your downfall when they actually take over your company.
"Secrets of Private Equity Investment and Management" details the investment and management strategies of private equity funds that "make money even in a recession," along with their values and principles of action, where "numbers are everything."
Any businessperson or employee who wants to survive must read this book.
GOODS SPECIFICS
- Date of issue: October 25, 2024
- Page count, weight, size: 384 pages | 672g | 152*225*24mm
- ISBN13: 9791193239162
- ISBN10: 1193239168
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