156
| Strategic Investment Funds
2. In a survey of 79 private equity funds with combined assets under management of more than US$750 billion, Gompers, Kaplan, and Mukharlyamov (2015) find that 46 percent of the closed deals were presented by investment banks, deal brokers, or other private equity funds. They note that large investments are more likely to go through an auction process. 3. Gompers, Kaplan, and Mukharlyamov (2015) find that 36 percent of deals closed by the private equity funds surveyed were “proactively self-generated.” In their sample, smaller private equity firms were more likely to source proprietary deals, probably reflecting smaller deal sizes. In general, however, the generation of a proprietary deal flow remains a core priority for large and small private equity firms. 4. Including chief executive officers of major corporations such as Honeywell and PepsiCo. 5. See Bain & Company (2017) for an elaboration on useful networks for proactive investment origination. 6. See EY Global (2019) for discussion on partnerships between corporate acquirers and funds. 7. For instance, PCFs and SIFs that receive capital from development finance institutions are generally required to comply with those institutions’ ESG criteria. 8. Projects that promote economic development in underserved sectors or regions of Nigeria. 9. All NIF’s investments, including Development Projects, are ultimately evaluated by the same Direct Investment Committee and subject to final approval by the NSIA board. 10. See the DLA Piper web page “Mergers and Acquisitions: Overview of a Transaction” (https://www.dlapiperaccelerate.com/knowledge/2017/mergers-and-acquisitions -overview-of-a-transaction.html). 11. Of the private equity funds surveyed by Gompers, Kaplan, and Mukharlyamov (2015), 90 percent based their exit decisions on the portfolio company’s achievement of the expected operational plan as well as on conditions in the exit markets (initial public offering and mergers and acquisitions). 12. More than 75 percent of the private equity funds surveyed by Gompers, Kaplan, and Mukharlyamov (2015) took into account hitting an internal rate of return or return on investment target, the opinion of the portfolio company’s management, and competitive considerations. Over half of the funds surveyed considered in their exit decisions their investors’ pressure to return capital. The pressure to exit investments is greater when the fundraising environment is robust and a proven return track record can facilitate raising a new and possibly bigger fund (Bain & Company 2019). 13. This consideration is in line with the government’s primary objective in infrastructure projects to provide affordable and best value-for-money services to the end user (see PPIAF 2001).
REFERENCES Aiyar, S. A. 2012. “Infrastructure Crisis Endangers Future Growth.” Times of India, September 30, 2012. https://timesofindia.indiatimes.com/blogs/Swaminomics/infrastructure -crisis-endangers-future-growth/. Bain & Company. 2017. “Global Private Equity Report 2017.” Bain & Company, Inc., Boston. http://go.bain.com/rs/545-OFW-044/images/BAIN_REPORT_Global_Private_Equity _Report_2017.pdf. Bain & Company. 2019. “Global Private Equity Report 2019.” Bain & Company, Inc., Boston. https://www.bain.com/contentassets/875a49e26e9c4775942ec5b86084df0a/bain_report _private_equity_report_2019.pdf. EY Global. 2019. “The New Imperatives for Deal Origination.” Ernst & Young Global Ltd., April 10, 2019. https://www.ey.com/en_gl/private-equity/the-new-imperatives-for - deal -origination. Gompers, Paul, Steven N. Kaplan, and Vladimir Mukharlyamov. 2015. “What Do Private Equity Firms Say They Do?” Working Paper 15-081, Harvard Business School, Boston. https:// www.hbs.edu/faculty/Publication%20Files/15-081_9baffe73-8ec2-404f-9d62-ee0d 825ca5b5.pdf.
