Management Buyout (MBO)

An acquisition in which a significant proportion of the purchase price is funded by debt, using the target company's assets and cash flows as collateral. LBOs are a common private equity strategy for acquiring mature, cash-generative businesses.

A private equity transaction in which one PE fund sells a portfolio company to another PE fund, rather than to a strategic buyer or through an IPO. Secondary buyouts have become the most common PE exit route, accounting for over 50% of European PE exits in recent years.

An equity-based compensation structure in private equity-backed companies that aligns management's financial interests with those of the PE sponsor by giving managers the opportunity to share in the equity upside upon exit. MIPs typically allocate 10-20% of the equity to management through sweet equity, share options, or ratchet mechanisms linked to achieving specified return hurdles.

An annual fee charged by a fund manager (general partner) to cover operational costs, typically calculated as 1.5% to 2.5% of committed capital during the investment period and assets under management thereafter. Management fees are separate from carried interest.

The processes, governance, policies, and technology used to ensure that an organisation's critical shared data entities — such as customers, products, suppliers, and accounts — are accurate, consistent, and controlled across all systems and business units. MDM creates a single trusted source of master data, reducing duplication, resolving conflicts, and enabling reliable reporting and analytics.

The sale of a company to a strategic buyer, typically another company in the same or adjacent industry. Trade sales are the most common exit route for venture-backed and private equity-backed businesses and often command premium valuations due to strategic synergies.

The process of offering shares of a private company to the public for the first time through a stock exchange listing. An IPO is a major exit route for venture capital and private equity investors, and requires extensive preparation including financial audits, regulatory compliance, and valuation.

A business in which a private equity, venture capital, or growth equity fund has invested. Portfolio companies receive not only capital but also strategic support, operational guidance, and governance oversight from the fund, with the aim of accelerating value creation and achieving a profitable exit.