FINANCIAL GLOSSARY








Below is a glossary of financial terms written by us.
Simply click on a term to access its definition.
[For a correct use of this glossary, please consult these "notes"]

puce J-curve

The curve that shows the returns generated by a private equity fund over a period of time (usually from the date of inception to termination).
The common practice of payinf the management fee and start-up costs out of the first drawdowns results in an initial negative return.
When the first realisations are made, the return should rise distinctly.
After about 3 to 5 years the interim Internal Rate of Return (IRR) should give a reasonable indication of the difinitive IRR.
This period is generally shorter for Buy Out funds than for Early Stage and Expansion funds.
See also Internal Rate of Return and Hockey Stick.

puce Junior

Adjective to describe a security characterized by a relatively lower priority for repayment in case of liquidation.

puce Junior Debt

A loan that has a lower priority than a senior loan in case of a liquidation of the asset or borrowing company.
Also known as "subordinated debt"

puce Junk Bond

Bonds issued by companies of poor quality which combine high yield and high risk.

puce Just in Time drawdown

Agreement according to which the funds promised by the investors are paid only as they are needed.
Prevents funds from remaining unutilized and improves the net return to the investor.





 

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