Glossary
Tag-along Rights
If another shareholder sells his shareholding, the venture capitalist can insist that his shares are sold on the same terms to the same purchaser.Compare bring-along rights.
Takedown schedule
The plan stated in a private equity fund’s memorandum to provide for the actual transfer of funds from the limited partners to the general partner’s control.
Target company
The company that the offeror is considering investing in. In the context of a public-to-private dealthis company will be the listed company that an offeror is considering investing in with the objective of bringing the company back into private ownership.
Tax transparency
A fund structure or vehicle is tax transparent when the fund itself is not liable to taxation and the investment in an underlying company is treated as if it would be a direct investment for the initial investor (the LP), who is taxed only when the investment structure distributes its gains and revenues.
Teaser
A short company presentation sent to potential investors before a sale or auction.
Technical reserves
Technical reserves refer to the capital that insurance companies set aside to cover possible claims.
Term Sheet
A short document summarising the principal financial and other terms of a proposed investment. It is usually non-binding, but may impose some legal obligations on the investor and the company.Compare Letter of Intent.
Terms and conditions
The financial and management conditions under which private equity limited partnerships are structured.
Thin-capitalisation rules
Limitations on the deductibility of interest expenses for companies that have a debt to equity ratio in excess of a fixed threshold.
Third stage/round
Funds provided for the major expansion of a company whose sales volume is increasing and which is breaking even or profitable.
Times money earned ratio (TME)
Equivalent to the distributed to paid in ratio (D/PI ratio), measuring is defined as the sum of distributions and the most recent valuation of a given investment, divided by the sum of capital invested.
TMT
Abbreviation for Technology, Media and Telecommunications sectors.
Top Quarter
Comprises funds with an IRR equal to or above the upper quartile point.
Total value to paid-in (TV/PI)
A realisation ratio which is the sum of distributions to paid-in capital (D/PI) and residual value to paid-in capital (RV/PI). TV/PI is net of fees and carried interest.
Track record
A private equity management house’s experience, history and past performance.
Trade sale
The sale of company shares to industrial investors.
Trade secret
Information, such as a formula, pattern, device, or process, that is not known to the public and which gives the person possessing the information a competitive advantage. May sometimes include customer lists, marketing and/or business plans, and suppliers.
Turkey
An offering of securities that performed poorly.
Turnaround
See rescue.
TVPI - Total Value to Paid-In
TVPI is the sum of the DPI and the RVPI.TVPI is net of fees and carried interest.
