MARC KITTEN is a visiting Professor of Finance at Imperial Business School in London and a founding partner at Candesic, a leading strategy consultancy focused on healthcare and life sciences. He has advised on several hundred transactions and holds an MBA from Chicago Booth.

GILLES CHEMLA, PHD, is a Professor of Finance at Imperial Business School and Co-director of Imperial's Centre for Financial Technology. He holds a PhD in economics from the London School of Economics.

Foreword xxi
Acknowledgments xxv
About the Authors xxvii
Infographics xxix

Introduction 1

CHAPTER 1 Introduction and History 5
1.1 An Initial Definition 5
1.2 Origins and History of Private Equity 7
1.3 Definitions and Segmentations 14
1.4 GP and LP 26
1.5 The PE Cycle 29
[...]ope and the Globalization of PE 30
1.7 The Investment Case for Healthcare and Life Sciences 35
1.8 Lessons From the Crises and Health Sector Resilience 47
1.9 Case Study: STADA Arzneimittel Take-private LBO 59
1.10 Chapter Summary 61

CHAPTER 2 Types and Economics of Private Equity 63
2.1 Venture Capital 64
2.2 Growth Capital and Development Capital 71
2.3 Buyouts and the Value Creation Framework 74
2.4 Infrastructure Equity Funds 86
2.5 Funds of Funds and Secondaries 90
2.6 Closer to Debt: Mezzanine, Distressed Debt and Turnaround 98
2.7 Private Credit 102
2.8 Private and Public Equity 104
2.9 Intermittent Trading of Shares in Private Companies 109
2.10 Special Purchase Acquisition Company 111
2.11 Take-Private 113
2.12 Case Study: The Rise and Fall of Babylon 114
2.13 Chapter Summary 120

CHAPTER 3 Opportunities and Risks for Investors 121
3.1 The Liquidity Factor 121
3.2 J-curve and IRR 123
3.3 Empirical Performance 127
3.4 Persistence of Performance 142
3.5 Asset Allocation and Diversification 143
3.6 Data and AI Adoption 147
3.7 Digital Platforms, Crowdfunding, and Tokenization 149
3.8 Three Episodes of Liquidity Constraints 151
3.9 Chapter Summary 152

CHAPTER 4 Investment Process 153
4.1 Investment Strategy 153
4.2 Fundraising and Fund Setup 155
4.3 Sourcing Deals 184
4.4 Structuring the Investment 190
4.5 Intelligence and Due Diligence 195
4.6 Introduction to Valuation 209
4.7 Negotiation 211
4.8 Closing 215
4.9 Chapter Summary 216

CHAPTER 5 Leveraged Buyout Analysis and Valuation 217
5.1 Valuation 101 217
5.2 Valuation of Startups 221
5.3 The Beta in Private Equity 222
5.4 Target IRR and Cash Sweep 222
5.5 APV and Relative Valuations 226
5.6 LBO Analysis 230
5.7 Equity Story and Investment Case 255
5.8 Chapter Summary 258

CHAPTER 6 Value Creation and Exit 259
6.1 Steps in Value Creation 259
6.2 100-Day Plan 259
6.3 Drivers of Value Creation in Portfolio 261
6.4 Managing the Management and the Growing Role of the Operating Partner 263
6.5 Performance Monitoring and Metrics 268
6.6 Value Creation with Data and AI 274
6.7 Investor Relations 275
6.8 Managing the Lenders 277
6.9 Managing Other Stakeholders 278
6.10 Managing the Exit 279
6.11 Case Study: Genesiscare-A Global Oncology Vision that Faltered 287
6.12 Tying It All Together 289
6.13 The Unite Playbook 293
6.14 Chapter Summary 294

CHAPTER 7 Investing in Health-Investment Strategies and a Dedicated Playbook 297
7.1 Investor Playbook 298
7.2 CEO Playbook 320
7.3 CFO Playbook 341
7.4 COO Playbook 358
7.5 Chief Technology Officer Playbook 376
7.6 A Framework for Value Creation in Healthcare 400

CHAPTER 8 Owners, Other Stakeholders, and Society 411
8.1 Perspectives of Corporate Owners 414
8.2 Tensions Between Investors 420
8.3 Tensions with Other Stakeholders 425
8.4 Impact of Innovation on the Relationships Between Stakeholders 444
8.5 Case Study: KKR and Envision Healthcare 446
8.6 Chapter Summary 447

CHAPTER 9 Private Equity in Emerging and Developing Markets 449
9.1 Fundraising 449
9.2 Investment 450
9.3 Exit 454
9.4 Health Specificities 455
9.5 Reverse or Frugal Innovation-Low-tech Solutions from Emerging Markets to Developed Healthcare Systems 456
9.6 Regional Outlooks 458
9.7 PE in Autocracies 498
9.8 Case Study: CVC and the Greek Hospitals 499
9.9 Chapter Summary 501

CHAPTER 10 Industry Outlook and Career Opportunities 503
10.1 Developments to Watch 503
10.2 Healthcare Specialist Investors 534
10.3 Roles and Careers 541
10.4 Chapter Summary 550
10.5 Conclusions 550

Glossary of Private Equity and Healthcare 553
Main Resources 567
List of Companies Mentioned 569
About the Website 571
Bibliography 573