Final Close:Fund I- how long until carry?

Marcus Halberstram — Tue, 12 Aug 2008 17:20:48 -0400

I interviewed today with a new private equity group that just closed its 1st Fund. This firm has made only 1 acquisition to date (3 currently under LOI). If I were to start working there in the Summer (May 09), when would I expect to see any type of bonus, carry, etc? (2011?, 2012?) Does the firm have to realize some of investments before bonuses are paid, or can the mgmt. fee cover some of the junior level guys bonuses?

I am currently a 2nd Year MBA. I believe the firm would bring me on as a Senior Associate at a base of $110K - $125K. Do you think I would make more money in the next few years pursuing an IB associate position instead?

Your thoughts are much appreciated.

Net Working Capital

Marcus Halberstram — Thu, 10 Jul 2008 20:03:19 -0400

My question is whether or not you should include Cash when calculation Net Working Capital in a FCF / DCF analysis. For example, if a company increases its inventory (cash outflow) and increases its accounts receivable (cash outflow), then the Cash balance will decrease accordingly to offset these adjustments. Holding everything else constant from the year before, Current Assets will be the same and effectively so will Net Working Capital. As such, the Change in NWC would be 0 in a free cash flow analysis. However, from a free cash flow perspective, it seems we should include the cash outlfow due to the increase in inventory and AR. What has everyone else been taught?

Ex.
Year 1 Year 2
Cash 100 50
AR 50 75
Inv 50 75

AP 100 100

WC w/ cash 100 100
WC w/o cash 0 50

US News 2009 B-School Rankings

Marcus Halberstram — Fri, 28 Mar 2008 09:48:22 -0400

FYI

Little surprised about some of the schools that cracked the top 25. Also, thought Emory was a little better than 24.

1 Harvard University
1 Stanford University
3 University of Pennsylvania (Wharton)
4 Massachusetts Institute of Technology (Sloan)
4 Northwestern University (Kellogg)
4 University of Chicago
7 Dartmouth College (Tuck)

When is carried interest paid?

Marcus Halberstram — Wed, 30 Jan 2008 10:14:37 -0500

Is it paid when the Fund and ALL of its portfolio companies are realized (i.e. once every 5 - 7 years)?