Building on the success of the author's previous book
Beyond the J Curve:Managing a Portfolio of Venture
Capital and Private Equity Funds, this work covers new and
additional material and offers advanced guidance on the practical
questions faced by institutions when setting up and managing a
successful private equity investment programme. Written from the
practitioner's viewpoint, the book offers private equity and
venture capital professionals an advanced guide that will make high
return targets more realistic and sustainable.

Factors that can sometimes cause institutions to shy away from
venture capital are the industry's opaque track record,
unclear valuations and risks, perceived lack of transparency as
well as the significant entry barriers to overcome before tangible
results show. These issues are all addressed in details with
practical solutions to the problems. Among other topics J-Curve
Exposure includes discussions of:

* Experiences with the adoption of the International Private
Equity and Venture Capital Valuation Guidelines to address fair
value under IFRS.

* Approaches for splitting and prioritizing distributions from
private equity funds.

* Techniques for track record analysis and other tools to help
limited partners in their due diligence.

* Approaches to dealing with uncertainty, the relevance of real
options, and co-investments and side funds as advanced portfolio
management techniques.

* Questions related to limited partner decision making fallacies
and how to manage portfolios of VC funds.

* Securitization backed by portfolios of investments in private
equity funds.

Real life case studies illustrate the issues relevant for the
practitioner.

PIERRE-YVES MATHONET MSc Fin MSc Mngt, is heading the venture capital unit within the risk management division of the European Investment Fund. He is also a member of the private equity subcommittee of the Chartered Alternative Investment Analyst® Program. as an investment banker in the technology groups of Donaldson, Lufkin & Jenrette, and Credit Suisse First Boston, and previously for the audit and consulting departments of PricewaterhouseCoopers. He is a regular speaker at major conferences, and initiated and chaired the EVCA's Private Equity Foundation Course for Limited Partners. He has contributed articles to some leading alternative investments and financial publications. Pierre-Yves holds a Master of Science cum laude in Finance from London Business School and a Master of Science magna cum laude in Management from Solvay Business School in Brussels. He is also a Certified European Financial Analyst cum laude.

Dr THOMAS MEYER heads up the risk management division of the European Investment Fund. Over the last few years he has been responsible for the creation of the European Investment Fund's risk management function. The focus of his work is the development of valuation and risk management models and investment strategies for venture capital fund-of-funds. Thomas studied computer science at the Bundeswehr Universität in Munich followed by doctoral studies at the University of Trier. He holds an MBA from the London Business School and an MA in Japanese Language and Society from the University of Sheffield. After 12 years in the German Air Force he worked for the German insurance group Allianz AG in corporate finance and as the regional Chief Financial Officer of Allianz Asia Pacific in Singapore. He was a Visiting Research Fellow at Hitotsubashi University in Tokyo and is a member of the private equity subcommittee of the Chartered Alternative Investment Analyst® (CAIA) Program.

Together, as risk managers, the authors are responsible for one of the largest European private equity portfolio's with of more than 250 funds and over EUR6 billion under management.

Factors that can sometimes cause institutions to shy away from venture capital are the industry's opaque track record, unclear valuations and risks, perceived lack of transparency as well as the significant entry barriers to overcome before tangible results show. These issues are all addressed in details with practical solutions to the problems. J-Curve Exposure includes discussions of:

• Experiences with the adoption of the International Private Equity and Venture Capital Valuation Guidelines to address fair value under IFRS.
• Approaches for splitting and prioritizing distributions from private equity funds.
• Techniques for track record analysis and other tools to help limited partners in their due diligence.
• Approaches to dealing with uncertainty, the relevance of real options, and co-investments and side funds as advanced portfolio management techniques.
• Questions related to limited partner decision making fallacies and how to manage portfolios of VC funds.
• Securitization backed by portfolios of investments in private equity funds.

Real life case studies illustrate the issues relevant for the practitioner.

Factors that can sometimes cause institutions to shy away from venture capital are the industry's opaque track record, unclear valuations and risks, perceived lack of transparency as well as the significant entry barriers to overcome before tangible results show. These issues are all addressed in details with practical solutions to the problems. Among other topics J-Curve Exposure includes discussions of:

• Experiences with the adoption of the International Private Equity and Venture Capital Valuation Guidelines to address fair value under IFRS.
• Approaches for splitting and prioritizing distributions from private equity funds.
• Techniques for track record analysis and other tools to help limited partners in their due diligence.
• Approaches to dealing with uncertainty, the relevance of real options, and co-investments and side funds as advanced portfolio management techniques.
• Questions related to limited partner decision making fallacies and how to manage portfolios of VC funds.
• Securitization backed by portfolios of investments in private equity funds.

Real life case studies illustrate the issues relevant for the practitioner.

List of Boxes.

Foreword.

Acknowledgments.

Abbreviations.

Disclaimer.

PART I. PRIVATE EQUITY LANDSCAPE.

1. Introduction.

1.1 Barbarians, pirates and privateers.

1.2 A difficult world to conquer.

2. Institutional Investing in Private Equity.