Apex Investment Partners

We also know that Louis was contemplating a possible IPO exit strategy before the end of the holding period term. To estimate a multiple for this IPO exit, we need to look at the Price/Earnings ratio for Dollarama. Using the same methodology as above, we compared Dollarama to the same group of companies and computed the average P/E ratio for the set, see Exhibit 6a. We will consider the values for the year 2005 and will take a multiple of 24.6 for an eventual IPO exit.

For the purpose of calculating the net present value of the project, an appropriate cost of capital has to be calculated at which free cash flows of the project should be discounted. Since the project will be solely financed by selling new shares, cost of equity will be used as the discount rate. Beta for the company can be assumed to be equal to average of the betas of the competitors of the company. This average beta value comes out to be 1.2. Risk free rate is 0.17% while risk premium has been estimated to be 6%. Thus by putting these values in CAPM formula, we can find the cost of equity for the company which is 7.39%.

Walnut Venture Associates are a group of angel investors. In 1997 the club had around a dozen individual investors, forming an “angel group”. Their primary targets are investments ranging from $250,000 to $1,000,000. This is due to the gap of capital funds initiated by the VC’s from not considering investments bellow $1 million. Also, angel investors can acquire significant equity at low cost, and help the growth of the company with their knowledge and expertise. By selecting only the most exceptional people and ideas, investments in startups can lead to massive returns on relatively small investments. As unexperienced entrepreneurs, they are a key resource to have in order to achieve quick growth, and secure the company’s early stages.

1. What is private-equity investing? Who participates in it and why? How is Palamon positioned in the industry?

La Jolla Cove Investors Management, Inc., a California corporation (the "General Partner") will be the sole general partner of the Fund. The Managers of the General Partner are Travis W. Huff, Brad Barnard, and Steven Romanoff.

4) Do you think the total market value of Redhook, Pete’s and Boston Beer (at your proposed IPO price) makes sense, given the total size and profitability of the beer industry, and the craft-brewing segment? What profitability and growth assumptions are necessary to justify the total market value of these three craft brewers? (Hint: First determine the total market value of these three companies. Then figure out what the average after tax operating profit margin is for these three companies. Figure out what the value of these three companies would be if their after tax earnings continued forever, but did not grow at all. Then take the difference between their total Market Value and this (no growth) perpetuity value. This difference reflects the market value due to GROWTH. Try to figure out what growth rate in revenues is implied here by projecting total revenues for 10 years, and finding the after tax earnings for 10 years, and then discounting the after tax earnings at the cost of equity. Don't forget to calculate the terminal value (grow earnings at 4% after year 10.)

According to my analysis of the Accessline’s proposed term sheet, I do not believe that Apex would serve its own interests, or those of its investing partners, by investing in Accessline according to the terms proposed. By investing at the proposed valuation, according to the proposed control and incentive structure, Apex would be shouldering a disproportionate share of the risk should Accessline fail to meet its performance targets, or require fresh inflows of capital from future investment rounds. Nor can Accessline take the sort of steps necessary to protect its investment in the case of management failure.

4) Do you think the total market value of Redhook, Pete’s and Boston Beer (at your proposed IPO price) makes sense, given the total size and profitability of the beer industry, and the craft-brewing segment? What profitability and growth assumptions are necessary to justify the total market value of these three craft brewers? (Hint: First determine the total market value of these three companies. Then figure out what the average after tax operating profit margin is for these three companies. Figure out what the value of these three companies would be if their after tax earnings continued forever, but did not grow at all. Then take the difference between their total Market Value and this (no growth) perpetuity value. This difference reflects the market value due to GROWTH. Try to figure out what growth rate in revenues is implied here by projecting total revenues for 10 years, and finding the after tax earnings for 10 years, and then discounting the after tax earnings at the cost of equity. Don't forget to calculate the terminal value (grow earnings at 4% after year 10.)

The first proposal was from Electra Networks. They aim to deliver phone services through the internet or VOIP. The company has projected a large market segment but the market is now saturated. They were able to raise capital through three rounds of financial funding. The company’s previous valuation was $125 Million but the current valuation was not presented. Also they have power house management team which has strategic alliances with other companies on the industry. Currently, they are anticipating for IPO.

The total amount of the investment is worth $7 million and is invested by the below parties:

An investment firm with the name of J.D.Williams, Inc. helps many of its clients invest over $120 million for the last 40 years. We have many personal investors helping many individuals with their investments. We create personalized plans for our clients depending on their needs. Our company has multiple methods to help its clients with investments. We use many different approaches when it comes to assessing and making an appropriate plan for the investment.

Philips Edison is a unique company that truly master the concept of investing for the future. With doing that, they built their company to have a high net worth and successful platform. But in order to grow even bigger and more dominant, Phillips and Edison need money. In order to obtain that, Philips Edison needs investors to help them fuel their business. They established themselves in the retail channel, therefore, they rely on retail investors. They also have institutional investors such as TPG, Zurich, GIC and Northwestern mutual. The company knows how to attract investors with their numbers, high net-worth, and their assets under management worth around $6 billion, but that is only half the work. In order to continue getting investors,

As you can see in the graph below, the terminal value for the company if it takes the equity route is about $106M, where if it takes the debt route its terminal value will be about $45M.

CornerStone, as an investment advisory firm, has all the necessary expertise and ability to dedicate all of its resources for the sole goal of maximizing Lumina’s endowment fund returns at the desired level of risk. Lumina has limited staff, so outsourcing investment responsibility allows them to focus on their core business. CornerStone specializes in managing portfolios, so they have more knowledge and access to sophisticated investment techniques and asset classes, which small funds are deprived of. All of these factors, coupled with CornerStone’s ability to act on investment decisions quickly, allow Lumina to benefit from reduced opportunity costs.

In regards, to the size of the investment we would estimate that they should spend anywhere from $550 million to $1 billion to startup their business in Switzerland. This is based off the fact that in 2007 they raised $750 million to invest in new middle markets in North America and Europe, and they also raised $1 billion in a Gulf Opportunity Fund in 2013. These findings demonstrate how the company was willing to raise and invest money because they see the significant return on investment for their company. Additionally, in 2008 their tech fund actually put $500 million into other tech firms to help them globalize. The fact that Investcorp currently manages approximately $21.4 billion in assets, their tech has been able to gain twice (return of investment) of what the company originally invested. Based on this information we can estimate the company can see a return investment of $2 billion to $3 billion entering the Swiss market.