Assets are anything that has a commercial or exchange value that is owned by a business.

Assets Under Management or AUM is the total market value of all financial assets that an individual or financial institution manages on behalf of investors.

Common equity is the value of a company’s assets minus its liabilities, which belongs to the shareholders.

Diversification is the practice of investing in a variety of investments. A diversified portfolio can be a risk management technique and contains a mix of distinct assets and investments to offset losses from any single asset class, thereby lessening the impact on the overall portfolio.

Dilutive refers to a reduction in the ownership percentage of existing shareholders due to the issuance of additional shares.

Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) is a widely used measure of corporate profitability.

Shares of ownership in a company which are listed on an exchange are referred to as equity.

Harvesting is the process during which a fund is selling its investments to realise profits (through methods like selling to another company or taking the company public).

Internal Rate of Return or IRR represents the annualised rate of return expected from the investment.

The phase when a fund actively puts money into various companies to grow its portfolio is known as investing.

The use of borrowed capital in an effort to increase the potential return of an investment is known as leverage. The use of leverage is likely to increase any losses. Furthermore, fees associated with borrowing may decrease fund performance.

Multiple on Invested Capital or MoIC is a financial metric that measures the total value generated by an investment relative to the initial capital invested. It is calculated by dividing the total cash inflows (e.g. exit value) by the total cash outflows (e.g. initial equity contribution).

Net IRR (Internal Rate of Return) is a performance metric that measures the profitability of an investment after accounting for fees, carried interest, and other expenses. It provides a more accurate reflection of an investment’s true potential compared to the traditional IRR, which does not consider these costs.

Net MoIC (Multiple on Invested Capital) is a financial metric that measures the total value generated by an investment relative to the initial capital invested, after accounting for fees, carried interest, and other expenses. It provides a clearer picture of the actual returns to investors by considering the costs associated with managing the investment

Senior debt is debt that must be repaid first if a company goes bankrupt. It has the highest priority over other debts and is often secured by collateral.

Structured debt is a customised debt arrangement designed to meet specific financial needs, often involving complex financial instrument.

Secured structured debt is structured debt that is backed by collateral, reducing the lender’s risk.

Vintage is the year when a private equity fund is launched and/or starts making significant investments.