Preferred Return
Preferred return is a predetermined rate of return given to investors before any profits are shared with general partners, ensuring a minimum return on their investment in private equity and real estate investments.
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Related Terms
View all termsPair Trading
Pair trading is a market-neutral trading strategy that involves matching a long position with a short position in two stocks with high correlation to capitalize on their relative performance.
Performance Fee
A performance fee is a payment made to an asset manager for generating positive returns on an investment portfolio, often structured as a percentage of the profits above a set benchmark, aligning the manager’s interests with those of the investor.
Pivot
A pivot is a strategic shift in business direction to test a new approach or optimize performance.
Portfolio Company
A portfolio company is a business in which a private equity firm or venture capital fund has invested, forming part of their "portfolio" of investments.
Post-Money Valuation
Post-money valuation is the value of a company after external financing or capital injections have been added to its balance sheet, crucial for determining ownership percentages and the dilution impact on existing stakeholders.
Pre-Money Valuation
Pre-Money Valuation is the estimated value of a company before it receives external investment or financing, crucial for determining the equity stake an investor receives.
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