Evergreen Funding: The Basics You Need to Know
What is CAPM in finance?
The Capital Asset Pricing Model (CAPM) is a model used to determine the expected return of an investment based on its risk. The model takes into account the risk of the investment, as measured by its beta, and the expected return of the market, as measured by the market risk premium. The expected return of the investment is equal to the risk-free rate plus the beta of the investment times the market risk premium.
What is Evergreen accounting?
Evergreen accounting is a type of accounting in which companies do not have to report their earnings on a quarterly or annual basis. Instead, they can report their earnings on a more frequent basis, such as every month or every few weeks. This type of accounting is often used by companies that have a lot of expenses that fluctuate from month to month, such as companies that have a lot of inventory.
What does Hamilton Lane do? Hamilton Lane is a global private markets investment firm. They focus on providing strategic advice, capital raising and direct investing to help their clients build world-class private markets portfolios.
Hamilton Lane has over three decades of experience in private markets investing and has raised over $50 billion in capital for their clients. They have a team of over 150 professionals located in offices around the world.
Hamilton Lane provides a range of services to their clients, including:
-Strategic advice on building and managing a private markets portfolio
-Capital raising
-Direct investing
-Portfolio management
-Performance reporting
-Risk management
What is a hurdle rate in finance?
A hurdle rate is the minimum acceptable rate of return on a project or investment. The hurdle rate is used to evaluate new projects or investments and is used as a discount rate in discounted cash flow (DCF) analysis.
The hurdle rate should be greater than the company's cost of capital, which is the minimum rate of return that a company must earn on its projects or investments in order to create shareholder value.
There are a number of different methods that can be used to calculate the hurdle rate, which will depend on the specific project or investment being considered.
For example, the weighted average cost of capital (WACC) is a popular method for calculating the hurdle rate. The WACC takes into account the company's cost of equity and cost of debt, which are both weighted by their respective proportions of the company's total capital.
Another common method for calculating the hurdle rate is the internal rate of return (IRR), which is the rate of return that makes the present value of the cash flows from a project or investment equal to the initial investment.
The choice of method will depend on a number of factors, including the nature of the project or investment, the company's overall business strategy, and the risk profile of the company.
In general, the higher the risk of a project or investment, the higher the required rate of return (hurdle rate).
The hurdle rate is a critical tool in corporate finance and is used to make decisions about whether or not to proceed with a particular project or investment.
It is important to note that the hurdle rate is not a static number, but should be regularly reviewed and updated in line with the company's changing circumstances. What is TVPI vs Moic? TVPI stands for Terminal Value per Invested Capital. Moic stands for Multiple of Invested Capital.
TVPI is a measure of the terminal value of a firm divided by the Invested Capital. Moic is a measure of the multiple of Invested Capital.
Both TVPI and Moic are measures of the value of a firm. TVPI is a measure of the terminal value of a firm, while Moic is a measure of the multiple of Invested Capital.
TVPI is a better measure of the value of a firm than Moic because it takes into account the terminal value of a firm. Moic only takes into account the multiple of Invested Capital, which does not account for the terminal value of a firm.
TVPI is a more comprehensive measure of the value of a firm because it includes the terminal value in the calculation. Moic is a less comprehensive measure because it only includes the multiple of Invested Capital.