[Verse 1]
When companies need capital to grow and thrive
Private equity funds keep dreams alive
Three flavors on the menu, let me break it down
Buyout, venture, growth equity in town
Buyouts take control of mature firms today
Venture backs the startups finding their way
Growth equity's the middle, scaling revenue
Each strategy different, but the goal rings true
[Chorus]
Fund life runs in cycles, three phases we know
Fundraising first, then invest and let grow
Harvest the returns when the time is right
IRR and multiples show us the light
Pre-money, post-money, tell us the worth
NAV tracks the value from fund's birth
Remember the J-curve dips before it climbs
Private equity dancing through the times
[Verse 2]
LP commitments start the funding game
General partners manage in the fund's name
Investment period lasts for years three to five
Finding deals and making companies thrive
Then comes the harvest, the exit phase begins
IPOs and trade sales, collecting the wins
Distributions flowing back to those who believed
Ten years total, goals finally achieved
[Chorus]
Fund life runs in cycles, three phases we know
Fundraising first, then invest and let grow
Harvest the returns when the time is right
IRR and multiples show us the light
Pre-money, post-money, tell us the worth
NAV tracks the value from fund's birth
Remember the J-curve dips before it climbs
Private equity dancing through the times
[Bridge]
MOIC shows the multiple on what you put in
DPI distributed, RVPI still within
TVPI combines them, the total you see
Comparables and DCF for valuation key
The J-curve tells a story of negative cash
Early years show outflows, don't be too rash
Management fees and investments drain the pot
But patient capital earns returns quite hot
[Chorus]
Fund life runs in cycles, three phases we know
Fundraising first, then invest and let grow
Harvest the returns when the time is right
IRR and multiples show us the light
Pre-money, post-money, tell us the worth
NAV tracks the value from fund's birth
Remember the J-curve dips before it climbs
Private equity dancing through the times
[Outro]
From seed to exit, PE plays its part
Building value with financial art
CFA knowledge in your toolkit now
Private equity mastered, take a bow