Glossary

Here you can find a list of the most used terms in private equity, venture capital and private debt market.
AIFI
Associazione Italiana del Private Equity, Venture Capital e Private Debt, che dal 1986 riunisce gli investitori istituzionali nel capitale di rischio presenti in Italia. Oltre a rappresentare i propri associati, AIFI svolge un importante ruolo di diffusione, verso le imprese, della cultura del capitale di rischio e delle opportunità ad esso collegate. Per potere avere informazioni più precise sugli operatori associati ad AIFI si può consultare il sito web dell’Associazione all’indirizzo www.aifi.it.
Buy Out
Acquisition of a company by a private equity player and the operating (MBO) or an external group of managers (MBI). The financial technique often includes the use of a significant amount of debt.
Cambiale finanziaria
Titolo di credito, introdotto nella normativa italiana dalla Legge 13 gennaio 1994, n. 43 e modificato dal Decreto Sviluppo. E' equiparata alle cambiali ordinarie e può essere girata esclusivamente con la clausola “senza garanzia”.
Capital gain
Difference between the purchase price of a participation and the amount realized after the exit. It represents the return of the investment for an investor in the private equity sector.
Deal
Investimento effettuato da un investitore nel capitale di rischio.
Divestment
Partial or total sale of the investment held by an investor, at the end of an investment transaction, once the objectives of value creation within the company owned has been achieved.
Early Stage
Financing provided to a company in the earliest stage of its life. It includes seed and start up financing.
Equity
Capitale proprio dell’azienda, versato, generalmente, attraverso la sottoscrizione di titoli azionari o quote. La sua remunerazione dipende dalla redditività e dal successo dell’iniziativa, sia in termini di utile prodotto e distribuito ai soci tramite dividendi, sia in termini di aumento di valore delle azioni.
Exit
Generic terms which describe the divestment.
Expansion
Financing provided for the growth and expansion of an operating company, which may or may not be breaking even or trading profitably.
Finanziamento
Strumento di finanziamento a medio/lungo termine diverso dalle obbligazioni.
Follow on
Additional investment in a company already invested by the same or another private equity firm.
private debt fund
Fondo comune di investimento, la cui politica di investimento si focalizza su strumenti finanziari di debito emessi dalle imprese, tra cui obbligazioni, cambiali finanziarie, altre tipologie di strumenti finanziari di debito, nonché finanziamenti, sotto forma di trattativa privata.
Closed-end fund
Actively managed fund that raises capital from institutional investors (banks, insurance companies, pension funds, etc.), and private ones in order to invest in companies not listed on the stock exchange.
Initial Public Offering (IPO)
Sale of a company’s shares to the public for the first time.
Captive player
Funds or investment companies totally owned by the parent organisation, which provides capital for the investments.
Independent investor
Funds or investment companies that raise capital from the market, typically from institutional investors.
Investment company
Private equity player different from closed-end funds mainly focused on Italy. From 2011, this definition replaces “country fund”.
IRR (Internal Rate of Return)
The annual compound return on an investment calculated on the basis of cash inflows and outflows.
Large deal
Equity investment with an amount between 150 and 300 million euro.
Mega deal
Equity investment with amount higher than 300 million euro.
Obbligazione
Titolo che rappresenta un debito da soddisfare alla scadenza e alle condizioni predeterminate.
Private debt
Provision of debt capital by financial investors.
Private equity
Provision of equity capital by financial investors – over the medium or long term – to non-listed companies with high growth potential.
Replacement
Purchase of existing shares in a company from another private equity investment organization or from another shareholder or shareholders.
Seed
Financing provided to research, assess and develop an initial concept before a business has reached the start up phase.
Startup
Financing provided to companies for product development and initial marketing.
Strumento ibrido
Strumento al quale sono collegate opzioni di conversione del capitale delle target (ad es.: prestito obbligazionario convertibile).
Trade sale
Divestment through the sale of the company to a trade buyer.
Turnaround financing
Financing made available to existing business, which has experienced trading difficulties, in order to re-establishing prosperity.
Venture Capital
Financing provided to seed, start up and growth companies. Strictly speaking, it refers only to seed and start up investments.
Write off
Total or partial write-down of a portfolio company’s value to zero, with the consequent exit from the company or reduction of the share owned.