The ownership of a company, where the owner holds more than 50% of the total shareholding.
Glossário
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Majority share/interest
The ownership of a company, where the owner holds more than 50% of the total shareholding.
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Managed secondaries
A secondary deal involving a portfolio of companies that are relatively young (two to four years old), where the underlying companies are starting to move up the J-curve and the further potential for value creation provide the main interest for the buyer.
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Management buyin (MBI)
A buyout in which external managers take over the company. Financing is provided to enable a manager or group of managers from outside the target company to buy into the company with the support of private equity investors.
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Management buyout (MBO)
A buyout in which the target’s management team acquires an existing product line or business from the vendor with the support of private equity investors.
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Management fees
Compensation received by a private equity fund’s management firm. This annual management charge is equal to a certain percentage of investors’ initial commitments to the fund.
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Manager sponsorship
A limited partner taking a direct interest in the a general partner, in the formative stage of the fund.
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Managing underwriters
The underwriters: whose names appear on the cover page of the prospectus; who assist the company in preparation of the prospectus and the roadshow; who organise the syndicate of underwriters to sell the securities.
See lead underwriter.
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Market authority
Governing entity of a stock exchange or trading system responsible for: market regulation; approval of members; admission to and cancellation of listing; the operation of the trading system.
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Market capitalisation (or market cap)
The number of shares outstanding multiplied by the market price of the stock. Market capitalisation is a common standard for describing the worth of a public company.
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Market maker
Brokerage and securities firms that are required by the rules of a stock market/exchange to both buy and sell securities of a quoted company, for which they act as market marker, at bid and offer prices which they quote. All Nasdaq-traded companies are required to have at least two market makers.
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Mature funds
Funds that have been in existence for over two years.
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Median IRR
The Value appearing halfway in a table ranking funds by IRR in descending order.
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Memorandum
Brochure presented by a general partner in the process of raising funds. This document is dedicated to potential investors (limited partners), and usually contains (amongst other information) a presentation of the management team’s track record, terms and conditions and investment strategies.
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Mezzanine finance
Loan finance that is halfway between equity and secured debt, either unsecured or with junior access to security. Typically, some of the return on the instrument is deferred in the form of rolled-up payment-in-kind (PIK) interest and/or an equity kicker. A mezzanine fund is a fund focusing on mezzanine financing.
Compare high yield bond.
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Mid-market value
The average of bid and offer price.
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Minority share/ interest
The ownership of a company, where the owner holds less than 50% of the total shareholding.
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Multi-family office
A family office providing services to several families and its members, often integrated in a bank or financial institution.
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Multiples or Relative Valuation
This estimates the value of an asset by looking at the pricing of “comparable” assets relative to a variable such as earnings, cash flows, book value or sales.
See P/E ratio.
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Mutual fund
An open-end fund that may sell as many shares as investors demand. As money flows in, the fund grows. If money flows out of the fund, the number of the fund’s outstanding shares drops. Open-end funds are sometimes closed to new investors, but existing investors can still continue to invest money in the fund.
Compare closed-end fund.