Internal rate of return How do private equity funds juice the internal rate of return (IRR)? IRR is calculated once clients’ money comes in. The shorter the period their money is put to work, the higher the annual IRR. So, funds borrow money for the initial investment, & ask for client money later, to make…
Month: November 2019
Winner takes all Winner-takes-all nature of modern markets means top firm benefits don’t impact the whole economy, as in the past. Bank of England data: the most-productive 1% of firms raised productivity by 8% a year from 2004 – 2014. The other 99% barely raised productivity at all. Highly successful global companies can still leave…
White elephant When it arose, Canary Wharf was called a white elephant. But in 2012, it overtook the City of London as an employer of bankers & 120,000 people now work there. New challenge: how to remain king of the jungle & adapt its fortress-like towers to the open, flexible workspace now in vogue? Guessed…
Almighty The US dollar remains almighty. It makes up 2/3 of international debt & 2/3 of global currency reserves. Oil & gold are priced in dollars. Kidnappers of ships & people demand dollars. European firms buy European planes in dollars. Even when the US is the source of the problem, as in the 2008 global financial…
Private equity What’s the big deal with private equity (PE)? PE firms use debt to buy weak companies, turn them around & sell them. They load the debt on to the acquired company & sell off its assets to create massive returns for investors quickly, while charging huge fees. PE is changing finance & the…
Guess the Word and Contact Us for Prizes! Series 51 starts soon….. 1st letter of each Post Title (in a Series) spells a business word – spelt correctly or jumbled up. Previous answers: Series 50 spelt L-I-O-N-S-M-E-E-T (MILESTONE) Series 49 spelt C-G-U-R-N-E-Y (URGENCY) Series 48 spelt T-I-C-K-S-L-O-P-E-S (STOCKPILES) Series 47 spelt F-L-A-Y-Q-U-I (QUALIFY) Series 46 spelt …
Triple bottom line TBL = people, profit, planet (3Ps). 1981: Freer Spreckley says firms should measure their TBL. 1994: John Elkington’s 3Ps suggests sustainability as a goal. 1997: his book ‘Cannibals with Forks‘ asks firms to measure/ report financial performance, social wealth creation & environmental aspects. What next for stakeholders? Quadruple bottom line, which includes…
Euro Midnight 1 Jan 1999: Launch of the virtual euro in 11 European countries. 2002: € notes & coins start to circulate, & 1st purchase using them was on the French island of Reunion in the Indian Ocean – to buy 1 kg of lychees. US$ – € exchange rate on 1 Jan 1999 was…
Exhaust Around 2000: birth of surveillance capitalism. Tech firms didn’t know how to make money from the internet. We did a search, they delivered results & ejected our details. Then Google stumbled on the answer: keep the “data exhaust” (who we are, what we seek, what we do next), render it into information to sell…
Music chart Moment that changed music forever: 1936 Billboard mag’s Chart Line lists most popular songs on 3 US major radio stations. 1940 best-selling records chart launch. 1958 sales + airplay combined to create Hot 100 Singles Chart, which now includes downloads & streaming data. Play on Guessed the Word? Series…