Glossário

P/E ratio

Price/earnings ratio – the market price of a company’s ordinary share divided by earnings per share for the most recent year.
Paid-in capital

The amount of committed capital an investor has actually transferred to a fund. Also known as the cumulative takedown amount.
Pay-as-you-go (PAYG) system

A pillar one pension system under which the social security contributions by workers are used directly to pay out the benefits to retirees.
Payment in kind (PIK)

A feature of a security permitting the issuer to pay dividends or interest in the form of additional securities of the same class.

See mezzanine finance.
Permanent establishment

A permanent establishment is, according to the OECD definition, a fixed place of business through which the business of an enterprise is wholly or partly carried on. Within private equity, permanent establishment refers to the possibility that a limited partner, either owning or having a stake in a private equity or venture capital fund, is considered as a resident of that country and hence liable for the national taxation.
Permitted transfer

A transfer of shares in which it is not required to first offer them to existing shareholders.
Pillar one pension

Pillar one refers to the public pension provisions, which are provided by the government.
Pillar two pension

Pillar two refers to the occupational pension provisions, which are provided by the employer.
PIPE

Generally referring to a private investment in public equity.
Placement agent

A person or entity acting as an agent for a private equity house in raising investment funds.
Poison pill

The most famous anti-take-over device. It normally takes the form of granting existing stockholders (other than stockholders who acquire more than a certain percentage of the company) the option (which can only be exercised upon certain events) to buy more stock on very favourable terms as a way of diluting the position of the person trying to take control. See anti-dilution provisions, anti-dilution (full ratchet), anti-dilution (weighted average), blank cheque preferred stock, shark repellent.
Pooled IRR

The IRR obtained by taking cash flows from inception together with the Residual Value for each fund and aggregating them into a pool as if they were a single fund. This is superior to either the average, which can be skewed by large returns on relatively small investments, or the capital weighted IRR which weights each IRR by capital committed. This latter measure would be accurate only if all investments were made at once at the beginning of the funds life.
Portfolio at cost

The portfolio at cost is the sum of all private equity and venture capital investments (held at cost) that have been made until the end of the measurement period and that have not yet been exited.
Portfolio company (or investee company)

The company or entity into which a private equity fund invests directly.
Post-money valuation

The valuation made of a company immediately after the most recent round of financing.

See pre-money valuation.
Pre-seed stage

The investment stage before a company is at the seed level. Pre-seed investments are mainly linked to universities and to the financing of research projects, with the aim of building a commercial company around it later on.
Pre-emption rights

Rights of existing shareholders to have the first opportunity to purchase shares from a departing shareholder (pre-emption on transfer), or to subscribe for new shares issued by the company (pre-emption on issue).
Preference shares (or preferred stock)

Shares which have preference over ordinary shares, including priority in receipt of dividends and upon liquidation. In some cases these shares also have redemption rights, preferential voting rights, and rights of conversion into ordinary shares. Venture capitalists generally make investments in the form of convertible preference shares.

See cumulative preferred stock.
Preferred return

Either (i) the set rate of return that the investors must receive before the general partners can begin sharing in any distributions, or (ii) the level that the fund's net asset value must reach before the general partners can begin sharing in any distributions.
Pre-money valuation

The valuation made of a company prior to a new round of financing.

Compare post-money valuation.
Present Value

Present value is found by dividing the future payoff by a discount factor which incorporates the interest forgone for not receiving this payoff at the present time.
Price-sensitive information

Confidential information about a company, which, if made public, is likely to have a significant effect on the price of the securities of the company.
Primary distribution

A distribution of shares by the issuer itself, as opposed to a secondary distribution by an existing stockholder.
Primary loan market (or syndicated loan market)

Market in which a new loan is syndicated/sold.
Private company

A firm whose ordinary shares are owned by relatively few individuals and are generally unavailable to outsiders.
Private equity

Private equity provides equity capital to enterprises not quoted on a stock market. Private equity can be used to develop new products and technologies, to expand working capital, to make acquisitions, or to strengthen a company’s balance sheet. It can also resolve ownership and management issues. A succession in family-owned companies, or the buyout and buyin of a business by experienced managers may be achieved using private equity funding. Venture capital is, strictly speaking, a subset of private equity and refers to equity investments made for the launch, early development, or expansion of a business.

See venture capital, venture capitalist.
Prospectus

A document which must be delivered to recipients of offers to sell securities and to purchasers of securities in a public offering and which contains a detailed description of the issuer’s business. In the USA, it is included as part of the registration statement filed with the SEC and with documents required by stock markets, stock exchanges and national competent authorities.
Prospectus Directive

A Directive of the European Commission requiring the implementation of a set of common standards for securities prospectuses into the national law of all member states of the European Union. A key feature of this Directive is that of mutual recognition (a prospectus that has been approved by the appropriate competent authority of one member state is mutually recognised by the competent authorities of all other member states).

See Investment Services Directive (ISD).
Prudent person rule

A behaviourally-oriented standard of investment, rather than one based on quantitative criteria. The prudent person rule allows pension funds to include private equity and venture capital funds in their asset allocation according to their own needs, while respecting the risk profile of their clients.
Public float

See float.
Public offering

An offering of stock to the general investing public. The definition of a public offering varies from country to country, but typically implies that the offering is being made to more than a very restricted number of private investors; that road shows promoting the offering will be open to more than a very restricted audience; or that the offering is being publicised. For a public offering, registration of prospectus material with a national competent authority is generally compulsory.

See IPO.
Public to private

A transaction involving an offer for the entire share capital of a listed target company by a new company - Newco - and the subsequent re-registration of that listed target company as a private company. The shareholders of Newco usually comprise members of the target company’s management and private equity equity providers. Additional financing for the offer is normally provided by other debt providers.
Put option

The right of an investor to demand repurchase by the company or by another investor of a certain number of its shares at a fixed price within a specified time period or at a specified point in time.

See call option.

P/E ratio

Price/earnings ratio – the market price of a company’s ordinary share divided by earnings per share for the most recent year.
Paid-in capital

The amount of committed capital an investor has actually transferred to a fund. Also known as the cumulative takedown amount.
Pay-as-you-go (PAYG) system

A pillar one pension system under which the social security contributions by workers are used directly to pay out the benefits to retirees.
Payment in kind (PIK)

A feature of a security permitting the issuer to pay dividends or interest in the form of additional securities of the same class.

See mezzanine finance.
Permanent establishment

A permanent establishment is, according to the OECD definition, a fixed place of business through which the business of an enterprise is wholly or partly carried on. Within private equity, permanent establishment refers to the possibility that a limited partner, either owning or having a stake in a private equity or venture capital fund, is considered as a resident of that country and hence liable for the national taxation.
Permitted transfer

A transfer of shares in which it is not required to first offer them to existing shareholders.
Pillar one pension

Pillar one refers to the public pension provisions, which are provided by the government.
Pillar two pension

Pillar two refers to the occupational pension provisions, which are provided by the employer.
PIPE

Generally referring to a private investment in public equity.
Placement agent

A person or entity acting as an agent for a private equity house in raising investment funds.
Poison pill

The most famous anti-take-over device. It normally takes the form of granting existing stockholders (other than stockholders who acquire more than a certain percentage of the company) the option (which can only be exercised upon certain events) to buy more stock on very favourable terms as a way of diluting the position of the person trying to take control. See anti-dilution provisions, anti-dilution (full ratchet), anti-dilution (weighted average), blank cheque preferred stock, shark repellent.
Pooled IRR

The IRR obtained by taking cash flows from inception together with the Residual Value for each fund and aggregating them into a pool as if they were a single fund. This is superior to either the average, which can be skewed by large returns on relatively small investments, or the capital weighted IRR which weights each IRR by capital committed. This latter measure would be accurate only if all investments were made at once at the beginning of the funds life.
Portfolio at cost

The portfolio at cost is the sum of all private equity and venture capital investments (held at cost) that have been made until the end of the measurement period and that have not yet been exited.
Portfolio company (or investee company)

The company or entity into which a private equity fund invests directly.
Post-money valuation

The valuation made of a company immediately after the most recent round of financing.

See pre-money valuation.
Pre-seed stage

The investment stage before a company is at the seed level. Pre-seed investments are mainly linked to universities and to the financing of research projects, with the aim of building a commercial company around it later on.
Pre-emption rights

Rights of existing shareholders to have the first opportunity to purchase shares from a departing shareholder (pre-emption on transfer), or to subscribe for new shares issued by the company (pre-emption on issue).
Preference shares (or preferred stock)

Shares which have preference over ordinary shares, including priority in receipt of dividends and upon liquidation. In some cases these shares also have redemption rights, preferential voting rights, and rights of conversion into ordinary shares. Venture capitalists generally make investments in the form of convertible preference shares.

See cumulative preferred stock.
Preferred return

Either (i) the set rate of return that the investors must receive before the general partners can begin sharing in any distributions, or (ii) the level that the fund's net asset value must reach before the general partners can begin sharing in any distributions.
Pre-money valuation

The valuation made of a company prior to a new round of financing.

Compare post-money valuation.
Present Value

Present value is found by dividing the future payoff by a discount factor which incorporates the interest forgone for not receiving this payoff at the present time.
Price-sensitive information

Confidential information about a company, which, if made public, is likely to have a significant effect on the price of the securities of the company.
Primary distribution

A distribution of shares by the issuer itself, as opposed to a secondary distribution by an existing stockholder.
Primary loan market (or syndicated loan market)

Market in which a new loan is syndicated/sold.
Private company

A firm whose ordinary shares are owned by relatively few individuals and are generally unavailable to outsiders.
Private equity

Private equity provides equity capital to enterprises not quoted on a stock market. Private equity can be used to develop new products and technologies, to expand working capital, to make acquisitions, or to strengthen a company’s balance sheet. It can also resolve ownership and management issues. A succession in family-owned companies, or the buyout and buyin of a business by experienced managers may be achieved using private equity funding. Venture capital is, strictly speaking, a subset of private equity and refers to equity investments made for the launch, early development, or expansion of a business.

See venture capital, venture capitalist.
Prospectus

A document which must be delivered to recipients of offers to sell securities and to purchasers of securities in a public offering and which contains a detailed description of the issuer’s business. In the USA, it is included as part of the registration statement filed with the SEC and with documents required by stock markets, stock exchanges and national competent authorities.
Prospectus Directive

A Directive of the European Commission requiring the implementation of a set of common standards for securities prospectuses into the national law of all member states of the European Union. A key feature of this Directive is that of mutual recognition (a prospectus that has been approved by the appropriate competent authority of one member state is mutually recognised by the competent authorities of all other member states).

See Investment Services Directive (ISD).
Prudent person rule

A behaviourally-oriented standard of investment, rather than one based on quantitative criteria. The prudent person rule allows pension funds to include private equity and venture capital funds in their asset allocation according to their own needs, while respecting the risk profile of their clients.
Public float

See float.
Public offering

An offering of stock to the general investing public. The definition of a public offering varies from country to country, but typically implies that the offering is being made to more than a very restricted number of private investors; that road shows promoting the offering will be open to more than a very restricted audience; or that the offering is being publicised. For a public offering, registration of prospectus material with a national competent authority is generally compulsory.

See IPO.
Public to private

A transaction involving an offer for the entire share capital of a listed target company by a new company - Newco - and the subsequent re-registration of that listed target company as a private company. The shareholders of Newco usually comprise members of the target company’s management and private equity equity providers. Additional financing for the offer is normally provided by other debt providers.
Put option

The right of an investor to demand repurchase by the company or by another investor of a certain number of its shares at a fixed price within a specified time period or at a specified point in time.

See call option.

P/E ratio

Price/earnings ratio – the market price of a company’s ordinary share divided by earnings per share for the most recent year.
Paid-in capital

The amount of committed capital an investor has actually transferred to a fund. Also known as the cumulative takedown amount.
Pay-as-you-go (PAYG) system

A pillar one pension system under which the social security contributions by workers are used directly to pay out the benefits to retirees.
Payment in kind (PIK)

A feature of a security permitting the issuer to pay dividends or interest in the form of additional securities of the same class.

See mezzanine finance.
Permanent establishment

A permanent establishment is, according to the OECD definition, a fixed place of business through which the business of an enterprise is wholly or partly carried on. Within private equity, permanent establishment refers to the possibility that a limited partner, either owning or having a stake in a private equity or venture capital fund, is considered as a resident of that country and hence liable for the national taxation.
Permitted transfer

A transfer of shares in which it is not required to first offer them to existing shareholders.
Pillar one pension

Pillar one refers to the public pension provisions, which are provided by the government.
Pillar two pension

Pillar two refers to the occupational pension provisions, which are provided by the employer.
PIPE

Generally referring to a private investment in public equity.
Placement agent

A person or entity acting as an agent for a private equity house in raising investment funds.
Poison pill

The most famous anti-take-over device. It normally takes the form of granting existing stockholders (other than stockholders who acquire more than a certain percentage of the company) the option (which can only be exercised upon certain events) to buy more stock on very favourable terms as a way of diluting the position of the person trying to take control. See anti-dilution provisions, anti-dilution (full ratchet), anti-dilution (weighted average), blank cheque preferred stock, shark repellent.
Pooled IRR

The IRR obtained by taking cash flows from inception together with the Residual Value for each fund and aggregating them into a pool as if they were a single fund. This is superior to either the average, which can be skewed by large returns on relatively small investments, or the capital weighted IRR which weights each IRR by capital committed. This latter measure would be accurate only if all investments were made at once at the beginning of the funds life.
Portfolio at cost

The portfolio at cost is the sum of all private equity and venture capital investments (held at cost) that have been made until the end of the measurement period and that have not yet been exited.
Portfolio company (or investee company)

The company or entity into which a private equity fund invests directly.
Post-money valuation

The valuation made of a company immediately after the most recent round of financing.

See pre-money valuation.
Pre-seed stage

The investment stage before a company is at the seed level. Pre-seed investments are mainly linked to universities and to the financing of research projects, with the aim of building a commercial company around it later on.
Pre-emption rights

Rights of existing shareholders to have the first opportunity to purchase shares from a departing shareholder (pre-emption on transfer), or to subscribe for new shares issued by the company (pre-emption on issue).
Preference shares (or preferred stock)

Shares which have preference over ordinary shares, including priority in receipt of dividends and upon liquidation. In some cases these shares also have redemption rights, preferential voting rights, and rights of conversion into ordinary shares. Venture capitalists generally make investments in the form of convertible preference shares.

See cumulative preferred stock.
Preferred return

Either (i) the set rate of return that the investors must receive before the general partners can begin sharing in any distributions, or (ii) the level that the fund's net asset value must reach before the general partners can begin sharing in any distributions.
Pre-money valuation

The valuation made of a company prior to a new round of financing.

Compare post-money valuation.
Present Value

Present value is found by dividing the future payoff by a discount factor which incorporates the interest forgone for not receiving this payoff at the present time.
Price-sensitive information

Confidential information about a company, which, if made public, is likely to have a significant effect on the price of the securities of the company.
Primary distribution

A distribution of shares by the issuer itself, as opposed to a secondary distribution by an existing stockholder.
Primary loan market (or syndicated loan market)

Market in which a new loan is syndicated/sold.
Private company

A firm whose ordinary shares are owned by relatively few individuals and are generally unavailable to outsiders.
Private equity

Private equity provides equity capital to enterprises not quoted on a stock market. Private equity can be used to develop new products and technologies, to expand working capital, to make acquisitions, or to strengthen a company’s balance sheet. It can also resolve ownership and management issues. A succession in family-owned companies, or the buyout and buyin of a business by experienced managers may be achieved using private equity funding. Venture capital is, strictly speaking, a subset of private equity and refers to equity investments made for the launch, early development, or expansion of a business.

See venture capital, venture capitalist.
Prospectus

A document which must be delivered to recipients of offers to sell securities and to purchasers of securities in a public offering and which contains a detailed description of the issuer’s business. In the USA, it is included as part of the registration statement filed with the SEC and with documents required by stock markets, stock exchanges and national competent authorities.
Prospectus Directive

A Directive of the European Commission requiring the implementation of a set of common standards for securities prospectuses into the national law of all member states of the European Union. A key feature of this Directive is that of mutual recognition (a prospectus that has been approved by the appropriate competent authority of one member state is mutually recognised by the competent authorities of all other member states).

See Investment Services Directive (ISD).
Prudent person rule

A behaviourally-oriented standard of investment, rather than one based on quantitative criteria. The prudent person rule allows pension funds to include private equity and venture capital funds in their asset allocation according to their own needs, while respecting the risk profile of their clients.
Public float

See float.
Public offering

An offering of stock to the general investing public. The definition of a public offering varies from country to country, but typically implies that the offering is being made to more than a very restricted number of private investors; that road shows promoting the offering will be open to more than a very restricted audience; or that the offering is being publicised. For a public offering, registration of prospectus material with a national competent authority is generally compulsory.

See IPO.
Public to private

A transaction involving an offer for the entire share capital of a listed target company by a new company - Newco - and the subsequent re-registration of that listed target company as a private company. The shareholders of Newco usually comprise members of the target company’s management and private equity equity providers. Additional financing for the offer is normally provided by other debt providers.
Put option

The right of an investor to demand repurchase by the company or by another investor of a certain number of its shares at a fixed price within a specified time period or at a specified point in time.

See call option.

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