Unquote Data Methodology

Deal coverage overview

Unquote has been covering European private equity and venture capital deals for over 25 years. Originally, this coverage was strictly limited to those transactions carried out by institutionally-funded PE/VC funds and would exclude examples of deals backed by investors such as corporate venture units, high-net-worth individuals, family-offices and industrial holding groups and conglomerates. 

From 2017, in light of a rapidly evolving private equity investment landscape, Unquote has sought to take a more pragmatic approach. We will now cover deals that have been completed by investment groups irrespective of whether they are investing from institutionally-backed vehicles or not. This means that some deals by family offices, entrepreneur-led VCs and some industrial holdings will be covered.

The main qualifying criteria is that investments are in the form of equity or equity-related instruments (sponsorless mezzanine loans with equity warrants would qualify) and are made with the intention of financial returns, rather than strategic purposes.

Research methodology/capacity

Driven by the editorially-led research methods behind the unquote.com news site, Unquote seeks to include fully-verified deal data, confirmed by the funder and/or advisers that worked on the transaction. However, there is a sophisticated layer of secondary research capability in place to capture investments and divestments that were not openly publicised. This guarantees the highest possible coverage.

Unquote has its core primary research team in London (comprising unquote.com editorial staff and research professionals), backed up by a large offshore secondary research team based at Acuris's major hub in Mumbai.


Valuations

Many VC/PE deals are covered by strict confidentiality clauses and their values are not published. In such circumstances, Unquote seeks to estimate and input a likely value. However, users do not see this figure; instead the deal is displayed in the pre-set value range in which the estimate falls. This way, aggregate searches for the value of deals in geographical regions or sectors are a much more accurate representation of the true figure than they would be if the deals were simply left with a zero value. 

The estimation process is based on a wide variety of intelligence and research techniques. These include, but are not limited to:

          • Confidential or ‘off the record' confirmation from investors and/or advisers
          • Estimates published in reliable press sources
          • Balance sheet analysis and the application of typical entry multiples for buyouts transactions
          • Analysis of investors' typical investment profile or ‘sweet spot', overlayed with dry powder intelligence

The values held in the database vary according to deal type:

          • Buyouts: values held are confirmed or estimated Enterprise Value (EV)
          • Non-buyouts: values equate to the known/estimated value of the equity funding

Entry multiples (buyouts only): where possible, Unquote uses the deal value and EBITDA figures supplied by the financial sponsor acquiring the asset to automatically calculate an entry multiple (EV/EBITDA). However, in many situations, profit figures are not made available, In these cases our researchers make use of a wide range of internal and external sources to find the best information available. The figures sourced from external providers, especially the regulatory bodies, often refer to the latest full year of filed accounts and as such will most likely under-represent the true profitability of the asset being sold. The year to which the profits belong is an exportable field, which can help put the results into context.

In some cases the figures we publish will translate into very high or low multiples, for a number of reasons: the deals may not be 'plain vanilla' and involve the need for some operational restructuring; or the price paid is based heavily on strong future growth forecasts.  

Geographies

Unquote covers deals involving European-headquartered assets, irrespective of whether the backers are European or not. In some cases, especially on the venture side, companies are launched and funded in Europe, before re-locating elsewhere (typically the US); we continue to cover these deals in order to track the life cycle of the investments from entry to exit.

 

Data sources

As mentioned above, Unquote seeks, wherever possible, to get quality data directly from the funding entities or their advisers. However, we will also use a wide variety of reputable sources, both from within the Acuris group and externally. Key sources are:

          • Other editorial and research resources from the Acuris group
          • Regulatory filings directly from sites such as Companies House and then indirectly from aggregators such as Creditsafe
          • International press, from specialist financial and industrial publications to generalist news sources and newswires.

Deal types

 Main Deal Category

 Deal Type

 Buyout
  • Buy-and-Build
  • Buy In
  • Buy In/Buyout
  • Buyout
  • Secondary Bimbo
  • Secondary Buy In
  • Secondary Buyout
  • Secondary Buyout (Partial)
  • Turnaround/Special Situations

 Early Stage
  • Early Stage
  • Seed
  • Start Up

 Expansion
  • Acquisition Finance
  • Expansion
  • Secondary Purchase

 Subsidiary Deal Category

 Deal Type

 Other
  • Industrial Holding Investments
  • Refinancing

 PIPE
  • PIPE

 Project
  • Project

 Restructuring
  • Restructuring

 Secondaries
  • Direct
  • LP Interest

 

 

 

Deal definitions – Buyouts

Typically change-of-control situations involving the use of a newco or a similar vehicle. There are instances where the sponsor does not gain control, but if a newco is used then it is classified as a buyout (100% of the target is acquired, even if the backer does not have a majority stake in the acquiring newco). Leverage is normally, but not always, employed.

 Deal type

 Definition
  • Buyout

Normally a sponsor-led acquisition (or institutional buyout/IBO). MBOs also fall into this basic category.
  • Buy-and-Build

Platform acquisition, whereby the sponsor buys an asset or creates a ‘platform' to be used to buy other businesses
  • Buy In

Normally a sponsor-led deal in which outside management invest to replace the incumbent management
  • Buy In/Buyout

A combination deal in which outside management invests alongside incumbent management, with the backing of a financial sponsor
  • Secondary Buyout (SBO)

A deal in which one (or more) existing financial sponsor sells to a new incoming GP
  • Secondary Buyout (Partial)

As above, but with the difference that the existing sponsor(s) re-invest in the new structure, only partially exiting their holding
  • Secondary Buy In

As with an SBO, but where the new incoming sponsor backs external management
  • Secondary Bimbo

Existing sponsor sells to new GP, plus new incoming and incumbent management
  • Turnaround/Special Situations

Typically where an asset is backed out of administration or significant financial difficulties. Often involves debt for equity mechanisms as the main investment

 

Deal definitions – Non-buyouts

Typically, though not exclusively, minority positions. The main defining feature is that the investment is made via a capital increase structure, rather than via a newco. Put simply, a capital increase involves the creation of new shares which are bought by incoming (and sometimes incumbent) investors. If all new shares are bought by an incoming investor, the existing owner(s) will see a dilution in shareholding.

Deal type

Definition
  • Seed

Venture deal, normally to back and develop an idea or new technology
  • Start Up

Venture deal to bring an idea or technology to the market
  • Early Stage

Venture deal typically involving business that have been operating <3-5 years; mostly these will be pre-revenues, and in a ‘cash-burn' phase
  • Expansion

Investment in a more mature , revenue-generating business that is looking to grow both organically and by acquisition
  • Acquisition Finance

Situations where existing portfolio businesses raise new equity funding from the incumbent backer to make bolt-on acquisitions
  • Secondary Purchase

Sometimes known as replacement capital; where one GP acquired the shares held by another. No newco would be used.
  • Restructuring/Refinancing

Typically the restructuring of an asset's capital base without the use of a newco. Can be in distressed situations, but is not exclusively.
  • PIPE

Situations where a traditional financial sponsor takes a minority stake in a listed company (and does not intend to take that company private). This is not core to Unquote coverage
  • Project

Infrastructure investments made by private equity sponsors. This is not core to Unquote coverage
  • Direct

Secondaries transaction involving the purchase of multiple holdings from a financial sponsor. This is not core to Unquote coverage
  • LP Interest

The purchase of a limited partner's holding in one or more funds. This is not core to Unquote coverage

 

 

 

Funds

Unquote covers all institutionally-backed sponsor-led private equity funds with a mandate to invest in Europe. These include traditional buyout funds, alongside venture capital, generalist, secondaries, co-investment and funds-of-funds.

We use a wide range of primary and secondary research sources to track various data points on each fund, including the following:

  • Fund Events (Registration, Announcement, First Close, Interim Closes, and Final Close)

  • Fund Portfolio

  • Limited Partners in the fund and how much they have committed, and also where LPs have traded stakes in the fund via the secondaries market

  • Investment Strategy

  • Deployment Percentage - tracked over the lifetime of a fund, giving insight into the speed of deployment.

  • Fund Performance - again, tracked over time, showing how the GP has realised its investments and returned capital to its LPs.

Key Terms

  • Fundraising Status: where the fund is in the fundraising cycle (pre-launch, open, closed).

  • Fund Performance metrics explained:

    • Internal Rate of Return (IRR): an industry standard for measuring the performance of a fund, IRR takes into account the timing of distributions.

    • Total Value to Paid In (TVPI): a multiple of the total value of the funds holdings plus the amount distributed, divided by the amount of capital contributed to the fund.

    • Distributions to Paid In (DPI): a second money multiple, DPI is a ratio of the amount distributed by the fund against the amount contributed.

 

Limited Partners

Unquote tracks institutions across the globe investing into the European private equity space. For each institution we track:

  • Assets under management

  • Target and actual private equity allocations

  • Contact details for the institution and its key decision makers

  • Private equity investment preferences and strategy

  • Current investment plans, along with a detailed history of these investment plans

  • Details on the LP's private equity portfolio

Sources include:

  • Direct contact with LPs via our editorial, research and specialist events teams

  • Press releases

  • Regulatory filings from various jurisdictions across Europe

  • Market contacts, including contacts at limited partners, general partners and advisory firms

  • An extensive network of online sources

  • Freedom of Information requests