[Compagnie des Agents de Change 40 Index]
An index based on 40 of the largest and most liquid stocks traded on the Paris Stock Exchange.
See also Index.

[Compound Annual Growth Rate]

The right to buy a security at a given price (or range) within a specific time period.
See also "Put option".

Provision which protects the investor against the early repayment of a bond or debenture.

The accumulated wealth of a company, which is capable of generating income.

An increase in the market price of an asset.

The amount by which an asset's selling price exceeds its initial purchase price.
An unrealised capital gain is an investment that hasn't been sold yet but would result in a profit if sold.

The difference between the net cost of a security and the net sale price when that security is sold at a loss.

The market for trading long-term debt instruments (those that mature in more than one year).

The sum of a corporation's long-term debt, stock and retained earnings.
See also Market Capitalization.

The discount rate used to determine the present value of a stream of future earnings.

The percentage of each capital component (debt, preferred stock, common stock, other equity) represented in a company's total capitalization.

[Capital Asset Pricing Model]Capital asset pricing model, a famous financial model that relates the rate of return on an asset to its riskyness relative to the market and to the risk premium associated with the market:
R=Rf+Beta*(Rm-Rf)
where Rf is the risk free rate, Rm-Rf the risk premium associated with the market, and Beta the parameter of a linear regression between the market rate of return and the reviewed asset's rate or return, in essence, market risk of the asset.

An option with an established profit limit.
A capped-style option is automatically exercised when the underlying security closes at or above the option's cap price for a call, or at or below the option's cap or price for a put.

Portion of any gains realized by a Private Equity fund to which the fund manager is entitled after capital repayment and interest levied on capital (see hurdle rate).
Usually, such portion amounts to 20% whereas the remaining 80% is distributed to investors.

The accounting practice of recording sales and expenses only when cash is actually received or paid out (as opposed to accrual basis).

A company's cash flow is based on the cash receipts minus cash payments over a given period of time.
See also "Free cash flow".

A provision, mainly in the case of investment funds, which grants the manager the payment of an increased later compensation provided that the distribution of profits of the fund is being delayed until a hurdle rate has been reached.

A firm acting as the recorded owner ("Nominee") of securities held in street name for several major brokerage firms and other financial institutions.

See Clearstream.

Stock or rights to purchase stock issued to employees, consultants, promoters etc, of the issuer at a price lower than the public offering price, particulary if issued within one year prior to the public offering.

A lawsuit brought by one person on behalf of a group of individuals all having the same grievance (collective suit).

The division of a company's capital stock into various classes, such as Class A and Class B etc.

The right to require repayment of funds set aside for a specific purpose which have been disbursed in a manner inconsistent with or contrary to the rules or agreements governing the disbursement.
In the context of an acquisition, a buyer may have clawback rights with respect to part of the purchase price if the target company fails to meet agreed upon milestones after the acquisition.

Previously Cedel SA.
International clearing institution established in Luxemburg.
Its activities compare with those of Euroclear.

A corporation in which all of the voting stock is held by a few shareholders, such as management or family members.

A fund with a fixed number of shares.
These are offered during an initial subscription period.
Unlike open-end mutual funds, closed-end funds do not stand ready to issue and redeem shares on a continuous basis.

A corporation in which most of the stock is held by a small number of shareholders.

In the field of venture capital the management, the follow up or the assistance at strategic and operational level provided by external experts to a young company.

An investment that is made alongside with one or several other investors.

Tangible assets of the borrower, such as real estate or equipment, for which a lender has a legal entitlement until a loan obligation is fully reimbursed.

A plan under which a company grants both Incentive Stock Options and Non-Qualified Stock Options.

A confirmation delivered by the auditors for an issuer at the time of a public offering of a bond issue or stock which confirms that there have not been any material changes in the issuer's financial conditions since the last audit.

A letter prepared by the SEC setting forth its questions and comments with regard to a registration statement or prospectus.
Also issued for other filings such as annual reports or Form 10K.
See also Reporting Company Forms.

An unsecured short term obligation issued by a corporation to finance its short-term credit needs, such as accounts receivable and inventory.
Maturities typically range from 2 to 270 days.

[Commission Bancaire et Financière]
The Belgian Commission of Banking and Finance (the Belgian equivalent of the USA Securities and Exchange Commission).

The obligation of the Limited Partner to invest a certain amount of capital in a Private Equity fund when the General Partner asks for it.
See also "Drawdown".

A unit of ownership of a corporation.
In the case of a public company, the stock is traded between investors on various exchanges.
Owners of common stock are typically entitled to vote on the selection of directors and other important events and in some cases receive dividends on their holdings. Investors who purchase common stock hope that the stock price will increase so the value of their investment will appreciate.
Common stock offers no performance guarantees.
Additionally, in the event that a corporation is liquidated, the claims of secured and unsecured creditors and owners of bonds and preferred stock take precedence over the claims of those who own common stock.

Debt or equity type securities which can be converted into or exchanged for common stock of a corporation.

A company's common stock expressed as a percentage of its total capitalization.

A committee of the board of directors responsible for reviewing and setting the compensation of certain executive officers of the company.
The compensation committee may also be responsible for the allocation of stock or options to employees.

A term used within Directives produced by the European Commission to describe a body which has been designated by a member state of the European Union as being responsible for specified functions related to the securities market within the state.
Areas of competence include the recognition of firms permitted to offer investment services; the approval of prospectuses for public offerings; the recognition and surveillance of stock markets; etc.
See also Investment Services Directives and Prospectus Directive.

The state of being in accordance, within the exercice of one's activities, with the rules and regulations of the supervisory authorities.
Most large financial services companies have a unit that makes sure that those rules and regulations are followed.

An agreement in which an employee, customer or vendor agrees not to disclose confidential information to any third party or to use it in any context other than that of company business.

Equals the portion of a capital initially raised by a Private Equity fund that has been drawn down.
See also Drawdown and Commitment.

The act of exchanging one form of security for another security usually of the same company, i.e. preferred stock for common stock, debt securities for equity, etc.

The relationship between the price of a convertible security and that of the underlying security (basis value) into which it can be converted.
As an example, if a CHF 1'000 debt instrument is convertible into 50 shares of common stock, conversion parity occurs when the common stock price is at CHF 20.00 per share.

The currency or percentage amount by which the price of a convertible security exceeds the current market value of the common stock into which it is convertible.

Indicates the number of underlying securities that can be acquired upon exchange of a convertible security.

Adjective to qualify a security that can be exchanged for an other type of security (usually common shares) at the option of the holder, the issuer, or both.
Common examples include convertible bond and convertible preferred shares.

A debt obligation of a company which can be exchanged for stock under certain circumstances.

Preferred stock convertible into common stock.

The exclusive right to make and dispose of copies of a literary, musical, or artistic work.

A linear relationship between two variables.

See Tag Along Agreement.

An agreement by a company to perform or to abstain from certain activities during a certain time period.
Covenants usually remain in force for the full duration of the time a private equity investor holds a stated amount of securities and may terminate on the occurence of a certain event such as a public offering.
Affirmative covenants define acts which a company must perform and may include payment of taxes, insurance, maintenance of corporate existence, etc.
Negative covenants define acts which the company must not perform and can include the prohibition of mergers, sale or purchase of assets, issuing of securities, etc.

Participation in a company of several investors where one of them assumes the role of Lead Investor.

Financial transaction where the entrepreneur must offer to investors a large amount of stock at a price below the last financing round (Down round).

A contractual agreement in which a borrower receives a product or a service and agrees to repay the lender at a specific later date.
Also, the borrowing capacity of an individual or company.

A collateral for one loan or obligation serving also as collateral for other loans or obligations.

[Commodity Trading Adviser]
To see Managed future

Dividends which accumulate if not paid and which must be paid in full before other dividends are paid on the company's common stock ( Arrearage).

A form of preferred stock which specifies that if one or more dividends is not paid, those dividends accumulate and must be paid in full before other dividends may be paid on the company's common stock.
See also Cumulative Dividend.

Allows a shareholder to cumulate his votes based on the number of shares owned multiplied by the number od directors to be elected, and vote them all for one nominee.
The technique is intended to assure minority shareholder representation on the board of directors.