PRIVATE EQUITY EXITS

• Citation: (2013) 25 SAcLJ 361
• Published date: 01 December 2013
• Date: 01 December 2013

Book Review

David Walker ed

1 This is an unashamedly practical book written by a team of practising lawyers. The nature of the subject is highly technical and largely a minefield for those who have not learnt the trade through working at the coalface of private equity law. The reviewer envisages three groups of readers: the practitioner with some experience in the area seeking to develop and enhance his own thoughts on the subject; the industry professional seeking a more complete understanding of the legal vagaries of the system; and the academic looking for an insider's view of the system in order to further his theoretical and intellectual pursuits.

2 The Subject Matter Is Narrow, Focusing On Private Equity Exits. Private Equity Like All Commercial Ventures Has A Life Cycle. There Is Ample Literature Covering The Structuring And Formation Of The Venture. This Book Thus Fills A Particular Gap In The Literature By Concentrating On Those Corporate Transactions That Lead To The Private Equity Funds Paying Out To The Investors. Without Exits, There Can Be No Return For The Investors; Hence, The Importance Of The Subject.

3 However, where does the law come in? Are exits not merely a natural incident of the corporate venture? This book attempts to demonstrate that managing exits is not merely a matter of business, but also a matter of law.

4 The book has no chapters, properly so-labelled. There is no numbering for the arrangement of the contributions from the many contributors, and it might best be seen as a collection of essays, arranged by the editor to reflect the process leading to an exit and any potential legal and regulatory pitfall. For want of a better label, this reviewer shall refer to these essays as “chapters”.

5 Chapter 1 addresses the vital subject of how to prepare for an exit — immediately the question as to which exit route should be adopted arises. The contributor lightly alludes to the various exit routes

but is content to leave it to the other contributors to flesh out the subject in greater detail. He does, however, stresses the point that an initial public offering (“IPO”) is often ruled out as an option because of market sentiment in relation to the sector. He also refers to the popular view that there is no market appetite generally. Whether this will change in time is a somewhat interesting subject for this academic reviewer. The rest of the chapter describes the practical steps when preparing for the exit. There is also...