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A Guide to Private Equity for SMEs

Small and medium-sized enterprises (SMEs) are increasingly seeking investors who not only provide medium- to long-term capital but also support entrepreneurs in their strategic and financial decisions. Private equity and private debt funds can play precisely this role, but SMEs need to learn about them and fully understand their modes of action.

 

In their book Private Capital. Principi e pratiche di private equity e private debt (in Italian), Roberto Ippolito (Managing Director and Head of the investment team at Clessidra Private Debt Fund) and Leonardo Etro (Associate Professor of Practice of Corporate Finance and M&A at SDA Bocconi School of Management) explain that “by providing medium- to long-term financing against the expected cash flow of the target company, “the two types of funds” use a similar methodology and approach.”

 

In particular, the book delves into key areas such as due diligence (accounting, financial, and business), company valuation, structuring the agreement, and preparing the legal documentation for closing.

 

Ippolito and Etro classify private debt and private equity funds as part of the alternative investments sector, which has grown from one trillion dollars in 1999 to over 18 trillion dollars in 2022, and is expected to double to 25 trillion dollars by 2027. Within alternative asset classes, private debt and private equity represent a significant and rapidly growing share.

 

  • Publisher: EGEA. 
  • Date of Publication: June 2024.
  • ISBN: 978-88-238-3980-9.
  • Pages: 210.
  • Format: paper, digital.

 

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