Jon Moulton’s Private Equity Glossary

You’ve got to love Jon Moulton, the UK buyout pro who quit Alchemy Capital last year to launch a new shop called Better Capital. Well, maybe not if you’re the Alchemy partner he flogged for being unfit to lead the firm, but certainly if you’re a blogger who relishes such conflict being brought out into the open.

Anyway, Moulton has now lobbed a tongue-in-cheek grenade at the entire private equity industry, via an A-Z glossary on the Better Capital website. Here are a few highlights:

  • C: Carried interest. The percentage of the profit on a transaction that goes to the partners of the PE firm. Known as ‘carry’ as in ‘too much money to carry’.
  • E: Envy ratio. The ratio between how much money a management team makes and how many workers they make unemployed. Also: Exit. The only door a VC can see.
  • S: Ski trip. Winter activity for many megafund personnel.

Moulton also doesn’t spare his former firm, with “A” standing for:

Asset strippers and / or Alchemy, a former private equity investor. According to the Governor of the Bank of England alchemy was doomed to failure.

This is probably my favorite feature on an investment firm website since Bessemer Venture Partners launched its anti-portfolio. Feel free to suggest other glossary terms in the comment section below…