TN Private Equity & Value Creation

TN Investments, global partner of Tutor Negotia,is a global investment firm and has established itself as one of the most secure and trusted firms inprivate equityand alternative asset management, specializing in four key business areas: corporate private equity, real assets, global market strategies and investment solutions.

Private equity(orcapital investment) is a type of transaction in which an entity specializing in capital investment acquires a majority stake in a company. The private equity entity thus becomes the majority owner of the company, usually on a temporary basis, since after a period of time the acquired shares are typically sold. The holding period varies, usually depending on how well the business performs, because the goal of the investment is not holding the shares as such but earning a return on the transaction. This type of deal does not necessarily involve raising new funds for the company being transferred.

Private equity transactions usually target mature companies with stable cash flows, whose previous owners wish to sell their stake because of disagreements among shareholders, succession issues in family businesses, or the divestment of non-strategic subsidiaries within industrial groups. In some cases the transaction involves taking the acquired company off the stock market.

Private equity has a slightly different meaning from the previous concept. It refers to the purchase, by the investor, of the shares held by current shareholders. In this case there is no inflow of money through a capital increase; instead the investor becomes the majority owner. The most common cases are succession issues in family businesses or the divestment of divisions that are no longer a priority for large conglomerates. This group also includes management buyouts (MBO), in which the managers, backed by venture capital, buy the company from its current owners and become, together with the fund, the new owners of the business.

How We Invest

• Venture capital: investing in a new business or expanding a small one;
• Buy-out: acquiring a company, or at least a significant part of it, of considerable size;
• Special situations: investing in companies going through financial difficulties or major changes, such as regulatory shifts or changes in market trends.

Venture capital (also known as entrepreneurial capital, VC) consists of financing high-potential, high-risk start-ups in their growth phase.

Venture capital funds profit from these transactions by becoming owners of the assets of the companies they invest in, which are usually businesses with a new technology or an innovative business model in a technology sector such as biotechnology, ICT or software.

Venture capital entities may acquire stakes in companies listed on stock exchanges, provided those companies are delisted within twelve months of the acquisition. One example of this type of investment was Twitter, which was taken private by investment firms.

The goal is that, with the help of venture capital, the company increases its value and, once the investment has matured, the investor exits at a profit.

Venture investors seek stakes in companies in dynamic sectors of the economy that are expected to grow faster than average. Once the value of the company has increased enough, the funds exit the business and lock in their return. The main exit strategies for this type of investment are:

• Sale to a strategic investor.
• IPO (initial public offering) of the company's shares.
• Share buyback by the company.
• Sale to another venture capital firm.

Venture capital firms evaluate the business plans entrepreneurs present to them through Investment Committees, which analyze whether it makes sense to become shareholders in those companies. Every business sector has specialized funds that can support and financially drive a business idea, always from a business perspective, choosing the best financing option when applying to capital funds.

Get in touch with us.