Inside Private Equity: The Professional Investor's Handbook -- Contents -- Foreword -- Preface -- Acknowledgments -- How to Use This Book -- About the Authors -- Part One: Setting the Foundation -- Chapter 1: Background -- OWNING COMPANIES -- VENTURE CAPITAL'S BEGINNINGS -- THE VERY RECENT PAST -- WHAT MAKES A VENTURE CAPITALIST? -- PRIVATE EQUITY IS OWNERSHIP OF A COMPANY -- COMMON FORMS OF PRIVATE INVESTING -- WHY INVEST IN PRIVATE EQUITY? -- FINALLY: THE BIG SECRET -- CONCLUSIONS -- Chapter 2: Private Equity Perspectives -- WORKING IN PRIVATE EQUITY -- THE WORLD OF PRIVATE EQUITY -- THE COMPANY PERSPECTIVE -- DEFINITION: FUND MANAGER -- THE FUND PERSPECTIVE -- GETTING DOWN TO WORK -- THE INVESTMENT PERIOD -- OTHER GPs AND ROUNDS -- LIFE AS A GP -- HOW FUND MANAGERS MAKE MONEY -- THE FUNDS OF FUNDS PERSPECTIVE -- THE INVESTOR -- THE INVESTOR'S PERSPECTIVE -- DIFFERENT POINTS OF VIEW -- MEASURING FROM DIFFERENT PERSPECTIVES -- CONCLUSIONS -- Chapter 3: Managing the Investment Process -- CYA OR PROCESS? -- GAINING ACCESS -- AN APPROACH TO PRIVATE EQUITY INVESTMENT -- THE PRIVATE EQUITY INVESTMENT POLICY -- GENERATING DEAL FLOW -- SCREENING DEAL FLOW -- QUALITATIVE DUE DILIGENCE -- MONITORING AS PART OF THE INVESTMENT PROCESS -- CONCLUSIONS -- BONUS SECTION! ANNUAL MEETINGS -- Chapter 4: Capturing a Portfolio -- HUMAN TECHNOLOGY -- MONITORING INVESTMENTS -- PERFORMANCE MONITORING OR ACCOUNTING? -- RECORDING THE COMMITMENT -- CAPTURING TRANSACTIONS -- CALLING CAPITAL IS ABOUT PREDICTING THE FUTURE -- WHAT IS IT WORTH? -- CAPTURING CURRENCY EFFECTS -- BASE AND LOCAL CASH FLOWS -- CAPTURING EXCHANGE RATES -- WHAT IS COMMITMENT DRIFT? -- THE SPREADSHEET PROBLEM -- CONCLUSIONS -- Chapter 5: Tracking Portfolio Holdings -- A BLIND POOL -- FOREST AND TREES -- NEEDED: FORENSIC ACCOUNTANTS -- THE POSSIBLE AND THE PRACTICAL -- VALUATION CHALLENGES.

CALCULATING PRO RATA OWNERSHIP -- CONCLUSIONS -- BONUS SECTION! ADVICE TO GPs (JUDGE 1993) -- Part Two: Measurements and Comparisons -- Chapter 6: Standard Measures -- MULTIPLES ARE RATIOS -- THE NAMING OF MULTIPLES -- MAKING CASH FLOWS COUNT . . . OR NOT -- THE CHALLENGES OF MEASURING A PORTFOLIO -- THE ADJUSTED VALUATION -- NEGATIVE ADJUSTED VALUATIONS -- CONCLUSIONS -- Chapter 7: The IRR -- THE IRR CONUNDRUM -- MEASURE FOR MEASURE -- THE SINCE INCEPTION IRR -- THE IRR SMELL TEST -- SIMPLE START -- PROVING THE RESULT -- FOUR FLOWS: TIME FOR A COMPUTER -- THE MICROSOFT EXCEL IRR AND XIRR FUNCTIONS -- IRR ASSUMPTIONS AND ANOMALIES -- THE IRR TRANSFORM -- THE J-CURVE -- COMPOSITE CALCULATIONS -- OTHER RELATED MEASURES -- PRIVATE EQUITY AND THE TIME-WEIGHTED RATE OF RETURN -- CONCLUSIONS -- Chapter 8: Universe Comparisons -- HOOKED ON NUMBERS -- UNIVERSE? WHOSE UNIVERSE? -- WHY COMPARE? -- WHAT IS SUCCESS? -- THE HAVES AND HAVE NOTS -- WHO ARE YOU GOING TO TRUST? -- QUARTILES ARE RANKINGS -- SUB-UNIVERSES -- INDEXES THAT ARE NOT INDEXES -- HOW THE SAUSAGE GETS MADE -- MAKING A BENCHMARK -- RETHINKING BENCHMARKS -- EARTHLY MEASURES -- FREEDOM OF INFORMATION EFFECTS -- PUBLICLY AVAILABLE SOURCES -- INDIVIDUAL FUND MEASURES -- SUMMARIZING PERFORMANCE FROM PUBLIC DATA -- HOW BIG IS BIG ENOUGH? -- SAMPLE VERSUS CENSUS -- CONCLUSIONS -- Chapter 9: Flawed Research Methodologies -- ANALYTICAL RUTS -- WHAT DOES THE STANDARD DEVIATION OF AN IRR SERIES MEASURE? -- PLAINS, FOOTHILLS, AND MOUNTAINS -- EXPLAINING IRR VOLATILITY -- VOLATILITY OF THE MULTIPLE -- THE TIME-WEIGHTED COMPARISON -- CONCLUSION -- Chapter 10: Visualizing Private Equity Performance -- PROSPECTING AND WORKING THE MINE -- DRAW A PICTURE -- RADAR CHARTS -- PLOTTING OVERALL PRIVATE EQUITY PERFORMANCE -- SAMPLE SCALING -- PLOTTING A PRIVATE EQUITY FUND -- ORDERING AXES -- OVERLAYING CHART SERIES.

CONCLUSIONS -- Chapter 11: The IRR and the Public Markets -- MEASUREMENT INNOVATION -- THE MODIFIED IRR -- INDEX RETURN COMPARISON METHOD (ICM) -- THROW THE VALUATION FROM THE TRAIN -- END OF INVESTMENT LIFE -- NEGATIVE VALUATIONS -- ANOTHER RADAR MEASURE -- CONCLUSIONS -- Part Three: Topics on Risk -- Chapter 12: Performance Attribution -- WHAT ABOUT HARRY? -- WEIGHTING DECISIONS -- PORTFOLIO CHANGES -- FOR THE SKEPTICS -- MULTIDIMENSIONAL ANALYSIS -- NEUTRALLY-WEIGHTED, TIME-ZERO IRR ANALYSIS (LONG AND NICKELS 2002) -- CONCLUSIONS -- Chapter 13: The Concentration of Wealth -- WHERE IS THE WEALTH? -- DISTILLING PERFORMANCE -- THE LORENZ CURVE -- CONCENTRATION OF WEALTH -- ADDING A PUBLIC MARKET COMPARISON -- CONCLUSIONS -- Chapter 14: The Diversification of Portfolios -- COUNT MATTERS -- WARNING: SOME PROGRAMMING AHEAD -- ONE FUND, TWO FUNDS, THREE FUNDS, FOUR -- THE OUTCOME OF A PORTFOLIO OF ONE -- ADVANCING THE ART -- CONCLUSIONS -- Chapter 15: Cash Management Models -- ALL THAT GLISTERS IS NOT GOLD -- WHY NOT CASH FLOW FORECASTING ? -- NONPROBABILISTIC: THE YALE MODEL -- EXPLANATION OF THE YALE MODEL -- CASH MANAGEMENT: OUR EXPERIENCE -- SPECIAL NOTES -- OTHER USES FOR MODELS -- YOUR MODELS -- COMPENSATION -- COMMITMENT PACING -- CONCLUSIONS -- Part Four: Conclusions -- Chapter 16: The Private Equity Professional -- THE PROFESSION -- NEW SKILLS -- CEDING THE GLORY -- LOOKING AHEAD -- FINALLY -- Chapter 17: Summary -- INSIDE PRIVATE EQUITY -- Appendix A: Proposed Venture Capital Portfolio Valuation Guidelines -- GENERAL -- PRIVATE COMPANIES -- PUBLIC COMPANIES -- Appendix B: On-Site GP Audit Program Guide -- Appendix C: Qualitative Due Diligence: Structured Interview -- Appendix D: Qualitative Due Diligence: Structured Reference Calls -- Appendix E: Request for Information (RFI) -- Appendix F: Advanced Topics: Duration of Performance.

PRACTICAL USES FOR THE DURATION OF PERFORMANCE -- Appendix G: Advanced Topics: Correlation and Opportunity Costs -- CORRELATION -- APPLICATION OF CORRELATION IN PRIVATE MARKETS -- OFF TO VOLATILITY, ON TO VARIABILITY -- SO WHAT IS NEXT? -- INDIVIDUAL FUNDS VERSUS VINTAGES VERSUS PORTFOLIOS -- Appendix H: Patent Summaries -- METHOD FOR CALCULATING PORTFOLIO SCALED IRR-PATENT NO. US 7,058,583 -- PROCESS AND SYSTEM FOR DETERMINING CORRELATION OF PUBLIC AND PRIVATE MARKETS AND RISK OF PRIVATE MARKETS-PATENT NO. US #7,421,407 -- References -- Index.