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What Private Equity Investors Think They Do for the Companies They Buy

Harvard Business Review

In financial engineering, PE investors provide strong equity incentives to the management teams of their portfolio companies. For instance, despite the prominent role that discounted cash flow valuation methods play in academic finance courses, few PE investors use discounted cash flow or net present value techniques to evaluate investments.

CAPM 8
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Is Your Business Biased Against Innovation?

Strategy Driven

Many conventional metrics we use to estimate value are based on faulty assumptions. Net present value [NPV] is a case in point. Your career depended on that business going forward, and the numbers that mattered had to do with the performance of that business, not with Sony as a whole.