Actis: Private equity investments in a capricious market

Actis: Private equity investments in a capricious market

This case looks at the front end of a private equity (PE) deal cycle. It is set in September 2008, and begins with the Investment Principal of Actis (China), a global private equity firm, preparing to present the proposal for 7 Days Inn, the fourth largest budget hotel chain in China, to the Investm...

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Bibliographic Details
Main Authors: LIM, Meng Ann, MATHUR, Sarita
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 2014
Subjects:
Private equity
investment
finance
budget hotels
hotel industry
China
Asia
Business Administration, Management, and Operations
Finance and Financial Management
Strategic Management Policy
Online Access:https://ink.library.smu.edu.sg/cases_coll_all/79
https://cmp.smu.edu.sg/case/1761
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Institution: Singapore Management University
Language: English
Description
Summary:This case looks at the front end of a private equity (PE) deal cycle. It is set in September 2008, and begins with the Investment Principal of Actis (China), a global private equity firm, preparing to present the proposal for 7 Days Inn, the fourth largest budget hotel chain in China, to the Investment Committee (IC). Just a day before the IC meeting, he hears news about the Lehman bankruptcy. How would the news about the collapse of Lehman Brothers impact the 7 Days deal? Would it change the industry and company forecasts, which he and his team had meticulously calculated? Would Li be able to convince the IC that 7 Days Inn was still a good investment? Most importantly, should Actis go ahead with the proposal or should they re-consider?

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