the exit phase the preparation work for exiting a private Equity investment starts a long time before the exit itself.
The deal team normally includes exit scenarios in its preliminary and final investment committee memos pre-acquisition.
Thereafter the private Equity deal team along with management start executing actions and plans during the monitoring period in order to slowly move the investment to a point some years down the line when it is attractive to potential buyers.
Once the investment has been exited and funds received the private Equity Firm team will let the LPS know of the distribution that they will be receiving along with what it represents as a return on their initial Investments.
Exit preparation meetings and memos are embedded in board meetings and internal deal team meetings throughout the life of the investment often. This will include discussions around cell tactics potential bidders and advisors that can assist Updates will include specific actions left to perform in order to create more value.
Typically, the business plan will have value creation Milestones that need to be completed in order to start and exit discussion at the right time. The deal team will put together a memo on exit which will be sent to and discussed with the investment committee a decision will then be taken with regards to starting an exit process.
Once the exit has taken place internal notes will be sent to the broader private Equity Firm, especially the investment committee with details of the transaction and what return has been made by the investment a closing memo or one pager or summarize the transaction. This would include final dollar amounts including deal fees a recap of the transaction with names of all parties, including advisors and some Administration details such as the investment vehicle and structuring details once funds have been received the private Equity Firm will let the LPS know of the distribution that they will be receiving along with what it represents as a return on their initial investment.
