Vintage Year Research Articles

What Drives PE? Analyses of Success Factors for Private Equity Funds

This article identifies key performance indicators for private equity funds by scrutinizing a dataset of 358 funds holding an aggregate number of 7,511 portfolio companies. First, we show a high persistence of the top-performing private equity fund managers. Then, we explore the influence on fund performance, measured by the internal rate of return and the public market equivalent of the following variables: the stock market return, the GDP growth, and the average interest rate all during a fund9s lifetime and in its vintage year, the experience of the fund manager, the percentage of buyout deals, and the diversification across portfolio companies, industry sectors, regions, and financing stages. Furthermore, we demonstrate that successful general partners venture riskier investments than their less fortunate colleagues. <b>TOPICS:</b>Private equity, manager selection, statistical methods, performance measurement

The Method of Prime Costs Determination of the Model Row Goods

The concept of the model row goods is introduced. These are the interchangeable goods differing by quality and price. Cognacs of various vintage years produced on one cognac factory are a typical example of such goods. For the indicated kind of the goods the method of the cost price determination of the goods of competitors is worked out and realized. The initial information for determination is the data on the prices of the goods and sales volumes.

Recent Developments in the European Private Equity Markets

This paper examines market developments in venture capital and buyout investment in Europe and the United States through the analysis of funds raised, investments and exits. It discusses the profitability differential of European venture capital investment in comparison with the United States and suggests that it could originate in the different ways in which research is financed and the unequal supply of financing, notably from business angels, for young companies that are not sufficiently mature for venture capital financing. Investment performance measures used are the internal rate of return (IRR) and investment multiples. The analysis covers aggregated industry returns and venture capital funds' returns aggregated by vintage year. It relies on the VentureXpert private equity and venture capital performance database, maintained by Thomson Financial.

Two Jewish Lawyers Named Louis

The year 1856 was a vintage year for brilliant Jewish lawyers named Louis. On November 13, 1856, Louis Brandeis was born in Louisville, Kentucky. One month later, on December 14, 1856, Louis Marshall was born in Syracuse, New York. Louis and Louis were both first-generation Americans, born of central European Jewish parents. They both compiled stellar academic records. They both went on to have a profound affect on American law. Both were considered for seats on the U.S. Supreme Court, although only one of them made it.1 And both became eminent leaders in American Jewish life. Yet while both men earned enormous respect within the Jewish and general communities, they never became friends and rarely worked to gether. They differed religiously, philosophically, and politically. They approached Judaism, America, and even the law itself from sharply different perspectives. The parents of Louis Brandeis and Louis Marshall arrived in America at approximately the same time in the middle of the nineteenth century.1 Brandeis' parents hailed from Prague, Marshall's father from Baden and his mother from Wiirttemberg. The two fathers had experienced prejudice and privation in central Europe that precipitated their emigration. Adolph Brandeis, who grew up in an urban area and studied at the Technical

Electronic integrated multisensor tongue applied to grape juice and wine analysis

An integrated multisensor composed by six ISFET devices selective to common ions and heavy metals combined with a flow injection analysis (FIA) system has been applied as an electronic tongue to grape juice and wine sample analysis. The data obtained for several grape and wine variety samples analysis have been treated using multiparametric tools like principal component analysis (PCA) and soft independent modelling class analogy technique (SIMCA) for the patterning recognition and classification of samples and partial least squares (PLS) regression for quantification of several parameters of interest in wine production. The results obtained have demonstrated the potential of using those multisensors as electronic tongues not only for distinguishing the samples according to the grape variety and the vintage year but also for quantitative prediction of several sample parameters.

21st Santa Fe Symposium on jewelry manufacturing technology, Albuquerque, New Mexico, USA

This was yet another excellent vintage year for the Santa Fe Symposium in which gold featured strongly. The quality of presentations and range of topics were noteworthy within the context of practical use by — and relevance to — the jewellery industry. It is an unmissable event for all serious jewellery manufacturers. The Santa Fe Symposium proceedings are published as a book and the Powerpoint presentations are available on CD. They can be obtained from the organisers at www.santafesymposium.org . The 22nd Symposium will be held once again in Albuquerque, New Mexico on 18th — 21st May 2008 (see Calendar in this issue).

Investigation of Phenolic Components of Hungarian Wines

Ninety-two wines from the southernmost wine-producing region in Hungary(Villány) were analyzed for their polyphenolic content by high performance liquidchromatography (HPLC). Our results show that wine variety or vintage year could not bedistinguished based on polyphenol content, but winery origin could be. Resveratrolconcentration is mainly dependent on variety and vintage year. The “human factor” (i.e.,winemaking style and technology) seems to be more decisive for the polyphenoliccomposition of red wines than other factors, such as variety and vintage year.

Vintage Year Determination of Bottled Chinese Rice Wine by VIS‐NIR Spectroscopy

The feasibility of noninvasive visible and near infrared (VIS-NIR) spectroscopy for determining vintage year of Chinese rice wine was investigated. VIS-NIR spectra of 100 samples were collected in transmission mode in 600-mL square brown glass bottles by a fiber spectrometer system. Discriminant models were developed based on discriminant analysis (DA) together with raw, 1st, and 2nd derivative spectra. The concentration of alcohol content, total acid, and degrees Brix was determined to validate the VIS-NIR results. The calibration result for raw spectra was better than that for 1st and 2nd derivative spectra. The percentage of samples correctly classified for raw spectra was 97.1%. For the sample groups in the vintage years of 2002, 2003, and 2004, the samples were all correctly classified. And for the 2000 and 2001 sample groups, the percentage of samples correctly classified was 92.9%. In validation analysis, the samples were all correctly classified. The results demonstrated that the VIS-NIR spectroscopic technique could be used as a noninvasive and rapid method for predicting vintage year of bottled Chinese rice wine.

Rapid headspace solid-phase microextraction–gas chromatographic–time-of-flight mass spectrometric method for qualitative profiling of ice wine volatile fraction: III. Relative characterization of Canadian and Czech ice wines using self-organizing maps

The determination of volatile and semi-volatile components of ice wine aroma was realized throughout the development of a rapid headspace solid-phase microextraction–gas chromatography–time-of-flight mass spectrometry (SPME–GC–TOF-MS) analytical method (Part I) and its application to the analysis of 137 samples produced in Canada and Czech Republic and collected directly from the producing wineries (Part II). In this Part III study, the complex matrix resulting from the analysis of the 58 compounds selected for each sample as described in Part II, was submitted to critical interpretation by using a self-organizing map (SOM) technique. Results were commented in terms of relative characterization of samples according to their geographical origin, grape varieties, and vintage years. When clear clustering was obtained, the most determinant compounds responsible for the observed differentiations were identified and further discussed.

Money Chasing Deals and Deals Chasing Money - The Impact of Supply and Demand on Buyout Performance

This paper analyzes the impact of differences in supply of and demand for private equity financing on the performance of buyouts. Using a unique and proprietary sample of 684 buyout investments in North America and Europe, we show that buyout performance (a) decreases when large volumes of private equity commitments are looking for suitable acquisition targets and (b) increases when macroeconomic conditions are such that demand for private equity financing is high. These findings remain unchanged if we control for the idiosyncrasies of individual investment periods, transaction size, holding period and industry sector of individual investment and the vintage year, the size or the age of the investing private equity fund. Our results support the view that the market for buyout target companies is not necessarily efficient, but that instead acquisition prices (and thereby transaction performance) depend on the competition by a limited number of private equity fund managers for a limited number of attractive investment opportunities.

Profitability of Venture Capital Investment in Europe and the United States

This paper examines the profitability of venture capital investment in Europe and the United States. It highlights the unfavourable profitability differential of European venture capital investment in comparison with the United States. The investment performance measures used are the internal rate of return (IRR) and investment multiples. The analysis covers aggregated industry returns and venture capital funds' returns aggregated by vintage year. It relies on the VentureXpert private equity and venture capital performance database, maintained by Thomson Venture Economics. It also considers developments in the private equity and venture capital markets in Europe and the United States.

Genetic and Physiological Characterization ofBrettanomyces bruxellensisStrains Isolated from Wines

<i>Brettanomyces bruxellensis</i> isolates, primarily from wine, were selected for characterization by geographic diversity, vintage year of isolation, and variety of wine. A total of 47 isolates were characterized genetically by sequencing a portion of the 26S rDNA gene. Physiological differences were tested in a subset of 35 isolates. The majority of the strains characterized by the 26S rDNA sequence were grouped into one of six clusters. Some similarities of physiology were noted, but many traits were highly variable and did not cluster into the same groupings identified by the DNA analysis. Statistical analysis found 4-ethylphenol and 4-ethylguaiacol production to be the most discriminant characters.

Morphological and taxonomic study on mycobiota of noble rotted grapes in the Tokaj wine district

Noble rot of the grape is a complex microbiological-biochemical process having grate importance in the Tokaj wine district. In this study, morphology and development of Botrytis cinerea in the berry skin as well as the presence of other moulds and yeasts on the digested exocarp of the noble rotted grapes (aszú) were investigated and presented by scanning electron microscopy. Another aim of this work was a comprehensive taxonomical characterisation of the yeasts present on the surface of the “aszú” berries in the Tokaj wine district in five vintage years. The dominant yeasts were isolated and taxonomically identified according to phenotypical properties. The most prevalent yeast species of the aszú grapes were Metschnikowia pulcherrima in the vineyard and Candida stellata in the winery (the latter species has been recently differentiated for two species, C. stellata and C. zemplinina). These two Candida species seem to be typical yeasts of Tokaj aszú berries, particularly after picking, transporting and storage of the aszú grape. These postharvest operations significantly influence mould and yeast populations of botrytized grapes.

Calambra Olive Oil (a)

Frank Lockfeld, president and founder of Calambra Olive Oil, must decide how many gallons of oil to buy for the 1994 vintage year even though the first-year marketing experiment for his fledgling business has barely begun. This case describes the history of the company and the current situation, including Lockfeld's assessments of landing Neiman Marcus and Williams-Sonoma catalog sales, of 1993 retail sales through specialty shops, and of 1994 retail sales, which are tied to the 1993 outcome. See also the B (UVA-QA-0442) and C (UVA-QA-0551) cases.

Polyphenols, anthocyanins, and trans-resveratrol in red wines from the Hungarian Villány region

Epidemiological data indicate that moderate red wine consumption leads to less coronary heart disease and shows anti-carcinogenic effects. Especially, red wine phenolics have been linked to these effects. Sixty-seven red wines from the Hungarian Villány region, of vintages from 1996 to 2003 were analysed for their polyphenolic and anthocyanin composition by means of RP-HPLC/UV–Vis. Varieties with generally high concentrations of polyphenols are Kékfrankos, Merlot and Zweigelt, while anthocyanin content was highest in Shiraz, Oportó, Kékfrankos and Zweigelt. In agreement with other authors, our results show that trans-resveratrol content is mainly dependent on variety and vintage year. Principal component analysis (PCA) revealed that flavan-3-ols and delphinidin- and petunidin-3-glucosides are mainly responsible for the separation of wines according to polyphenolic composition. We could not discriminate between varieties or wineries based on polyphenol content, but could for vintage years.

Publish to Perish: regime choices and propaganda impact in the Anti-Falungong Publications Campaign, July 1999–April 2000

This article analyses the operational choices and policy impact of the Anti-Falungong Publications Campaign in 1999–2000, in particular, the campaign strategy, publisher selection, propaganda themes, and public receptivity. It finds that the state-controlled publications industry still possesses formidable institutional capacity, producing three series of 120 titles in nine months, in a vintage year of major anniversaries and special events all requiring commemorative publications. But the campaign also reveals some basic institutional weaknesses of the propaganda system. The 120 anti-Falungong titles had only limited circulation. None of the 120 titles made it to the best publications or best-sellers list. The above findings suggest that the publications industry is more market-driven than regime driven, its operational choices informed more by best-selling trends and financial bottom-lines rather than dictates of the Propaganda Department.

Fickle Investors, Reputation, and the Clientele Effect in Venture Capital Funds

This brief Symposium Essay comments on Professor Kate Litvak's Article, The Price of Stability: Default Penalties in Venture Capital Partnership Agreements. Litvak organizes her Article around the concept that it is helpful to characterize contract default penalties as put options. Using a sample of 37 venture fund agreements, Litvak sets the harshness of the default penalty as her dependent variable. She then runs regressions against several independent variables: fund size, fund number, fund vintage year, amount of carry, and so on. Litvak finds a relationship between fund governance and the harshness of default penalties. More precisely, she finds a relationship between her proxies for the need for contractual protections against agency costs and the size of one possible contractual protection: default penalties for failing to answer a capital call. As agency costs (and the need for contractual protections) decrease, contractual penalties increase. The threat of capital withdrawal, she concludes, is a useful contractual tool to reduce agency costs between investors and low-quality venture capitalists. I argue in this Essay that while it is conceptually accurate to characterize contract default penalties as put options, it is not especially helpful to do so. Practical considerations force Litvak to exclude an important element from her model; the cost to an investor's reputation when it fails to heed a capital call. To draw any useful conclusions, Litvak should account not only for the nominal penalty written in the contract, but also the real world penalty of never being allowed to invest in venture capital again. The reputation cost varies depending on the clientele of the fund. Pension funds, university endowments, and other repeat players care deeply about their reputations, while some individuals and corporate investors might be indifferent. And so the variation in contract default penalties might, in fact, be more strongly predicted by a clientele effect that she does not, and for practical purposes, cannot measure. In my mind, then, Litvak fails to make a persuasive case that governance considerations really have the effect she suggests. Moreover, Litvak's theory does not seem to comport with recent real world experience: the lemming-like answering of VC capital calls following the NASDAQ crash of March 2000.

Venture Capital Limited Partnership Agreements: Understanding Compensation Arrangements

This paper uses a hand-collected dataset of venture capital partnership agreements to study venture capitalists' compensation. Several new findings emerge. First, VC compensation consists of three elements, not two (management fee and carried interest), as commonly believed. The third element is the value of distribution rules that specify when during the fund's life VCs receive distributions. These rules often generate an interest free loan to VCs from limited partners. A shift from the most popular distribution rule to the second most-popular rule can affect VC compensation as much or more than common variations in management fee (from 2% to 2.5% of committed capital) or carry percentage (from 20% to 25% of fund profit). Second, VC compensation is often more complex and manipulable than it could have been. However, more complex management fee provisions predict lower total compensation, thus complexity is not used to camouflage high pay. Third, common proxies for VC quality predict higher levels of the more transparent forms of VC compensation (carried interest and management fee), but do not predict the levels of opaque compensation (interest-free loan). Fourth, long-term VC performance predicts fund size (which in turn predicts VC pay controlling for fund size), but recent performance does not predict changes in fund size. Finally, VC compensation is less performance-based than commonly believed: for vintage years between 1986 and 1997 (most recent years for fully-liquidated funds), about half of total VC compensation comes from the nonrisky management fee. On average, a 1% increase in fund returns predicts a 0.47% increase in total VC compensation; this pay-performance elasticity is similar to that of public company CEOs during the same years.

European Private Equity Funds - A Cash Flow Based Performance Analysis

This paper presents a cash flow based analysis of the return and risk characteristics of European Private Equity Funds. For that purpose a comprehensive data set has been provided by Thomson Venture Economics. We document the typical time pattern of cash flows for European private equity funds. Specifically, it is recorded that the average European private equity fund draws down 23% of total committed capital on the vintage date; within the first three years 60% of the total commitment is draw down. It turned out that limited partners on average get back the money invested slightly after 7 years. Over the time period from 1980 to June 2003, we calculate various performance measures. For that purpose we use only liquidated funds or funds with a small residual net asset value. Under this restriction one specific data set consists of 200 funds. We document a cash flow based IRR of 12.7% and an average excess-IRR of 4.5% relative to the MSCI Europe equity index. In order to circumvent the problems associated with the IRR-approach we focus on the alternative public market equivalent approach. There it is assumed that cash flows generated by a private equity fund are reinvested in a public market benchmark index. We record an average PME of 0.96 and a value-weighted average PME of 1.04. Based on the PME-approach we develop a viable methodology to estimate the return and risk characteristics of European private equity funds and the correlation structure to public markets. As a benchmark index we used the MSCI Europe Equity Index as well as the J.P. Morgan Government Bond Index. Over the period 1980-2003 private equity funds generated an overperformance with respect to the bond index and two of our three samples an underperformance with respect to the equity index. Over the period 1989-2003 private equity funds generated an overperformance with respect to both indexes. Finally, we analyze to what extent performance measures are associated with specific funds characteristics, like size, payback period and vintage year, respectively. While the payback period and the vintage year seem to have a statistically significant influence on a fund's performance, the results with respect to size are inconclusive.

Multivariate classification of Montepulciano d'Abruzzo wine samples according to vintage year

AbstractSamples of Montepulciano wines from three different vintages (1994, 1995 and 1996), produced in different locations in the Abruzzo region of Italy using different yeasts and processing procedures, were subjected to 17 different chemical analyses. The data were analysed by principal component analysis (PCA) and linear discriminant analysis (LDA). From a statistical approach it is possible to point out that vintage year, closely connected with climatic conditions, was the factor that best differentiated wines as regards chemical composition, compared with other factors such as place of origin, type of yeast, fermentation vessel, clarification method and time and temperature of maceration. Copyright © 2004 Society of Chemical Industry