Mastering Private Equity, by B. White, C. Zeisberger, and M. Prahl.

Being a finance student, I've been interested in the concept of private equity (PE) for some time. In school, we mostly learn to apply what we've learned to public equities, because of their availability of information. The concept of PE seemed elusive, even after doing some online courses on it. However, this book covered most if not all there is to know.

Content: The concept of PE is not as straightforward as its name suggests. PE encompasses private equities, but has been becoming more like private capital instead, since it also includes real estate, infrastructure, distressed PE secondaries, mezzanine funds etc. Traditionally, PE looks at 3 areas - venture, growth equity and buyouts. They generally follow the same process, from deal sourcing to the 2 stages of due diligence to negotiation and documentation. However, differ in each areas. For example, equity control is crucial in buyouts more so than in venture investments, because of the need to make financial, strategic and operational decisions.

Estimated reading time needed: 25-30h. I took about 2 weeks, reading close to 2h each day.

Key takeaways: 
1) PE is not just about valuing companies, finding alpha and generating returns. PE is also a people business, and there is a need to understand the people PE companies invest with, through developing real relationships based on trust and respect.

2) In valuing companies, it is more of an art, and efforts to mitigate risks is more of a science. To get the best returns, choosing the right firms to partner with is especially important for businesses, and choosing the right firms to invest in is important for PE firms. This is why in deal sourcing, the highest bidder may not always be chosen.

3) Perhaps the most crucial part of PE investing isn't the pre-investment phase where investors source for deals and identify investment opportunities. Instead, it could be the post-investment period where value is created and realised on exit. This is where the PE firm implements a solid corporate governance model, align the teams, basically being more "hands-on". 

Recommendation: Personally, PE is an industry that I'm interested in as a career, which is why I've enjoyed reading this book. Although it is still extremely complicated to me, it helped me gain a better understanding of this concept. I will probably have to read it again some time in the future as a refresher, but I recommend it to anyone interested in this field. However, do note that this is not a short book, especially since it's very technical with some jargons.