A
Alternative Asset Management
Alternative asset management refers to investing in non-traditional assets. These assets fall outside the realm of traditional asset classes, such as stocks, bonds, and cash. Alternative assets can include private equity, venture capital, real estate, hedge funds, commodities, and other non-traditional investment options.
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C
Covenant
A covenant is a contractual agreement that outlines specific obligations and restrictions for the parties involved. Covenants are commonly used in private funds to protect the interests of investors and ensure compliance with agreed-upon terms.
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Credit Monitoring
Credit monitoring is a proactive process of overseeing and assessing the creditworthiness of borrowers within a private credit investment strategy. Within the realm of private credit investment, it involves the systematic tracking and evaluation of the financial health and repayment capabilities of borrowers. It encompasses continuous surveillance of credit reports, financial statements, and relevant market trends to mitigate potential risks and optimize investment decisions.
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D
Dry Powder
Dry powder refers to the cash reserves or uninvested capital that private fund managers hold to seize investment opportunities quickly.
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Distressed Debt
Distressed debt refers to securities issued by companies or entities facing financial distress or undergoing restructuring. These debt securities are typically traded at a significant discount to their face value due to the increased risk associated with the issuer’s financial situation. Distressed debt can include bonds, loans, or other debt instruments.
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Deal Pipeline Management
Deal pipeline management is the systematic approach of overseeing and tracking investment opportunities throughout their lifecycle, from initial identification and evaluation to the final stage of closure or rejection. It involves managing deal flow, analyzing key performance indicators (KPIs), valuing deals, and tracking cash flows and analytics.
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E
Exit Strategy
An exit strategy refers to a predefined plan or approach developed by private fund managers to sell or dispose of their investments and exit a specific investment opportunity. It outlines the steps and methods that will be employed to realize returns on investments within a specified timeframe.
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ESG
ESG refers to the environmental, social, and governance factors that are considered in assessing the sustainability and societal impact of investments. ESG is a framework used by investors and fund managers to evaluate the non-financial performance of companies and make informed investment decisions.
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F
Fund of Funds (FoF)
A Fund of Funds (FoF) is an investment strategy where capital from multiple investors is pooled together to invest in a portfolio of underlying investment funds. Instead of directly investing in individual securities or assets, an FoF invests in other funds, typically targeting a specific asset class or investment strategy.
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L
Limited Partner (LP)
A limited partner (LP) refers to an investor in a private fund who contributes capital but has limited liability and control over the fund’s operations. LPs typically invest in private equity, private credit, or real estate funds. Unlike general partners (GPs), who manage the fund’s day-to-day operations, LPs have a passive role and entrust the GPs with investment decisions and fund management responsibilities.
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P
Portfolio Management
Portfolio management involves the strategic allocation of assets, continuous assessment, and adjustment of investment choices to achieve specific financial goals while balancing risk and reward.
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Portfolio Monitoring
Portfolio monitoring involves the continuous observation and analysis of an investment portfolio’s performance, ensuring that it aligns with the investor’s objectives and risk tolerance, and making adjustments as necessary.
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R
Real Estate Funds
Real estate funds are investment vehicles that pool capital from multiple investors to invest in a diversified portfolio of real estate assets. These funds are typically managed by professional fund managers or investment firms specializing in real estate. The fund manager identifies and acquires various types of real estate properties such as residential, commercial, or industrial properties, and may also invest in real estate-related securities or debt instruments.
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