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44 Fla. St. U. L. Rev. 1435 (2016-2017)
Typology of Public-Private Equity

handle is hein.journals/flsulr44 and id is 1481 raw text is: TYPOLOGY OF PUBLIC-PRIVATE EQUITY SUNG EUN (SUMMER) KIM* ABSTRACT Private equity which pools funds for investment in private businesses, is one of the largest and fastest growing investment opportunities in the markets today Private equity traditionally sought investments exclusively from sophisticated investors such as high net worth individuals and institutional investors. More recently however, a growing number of private equity businesses have gone public and opened their doors to public investors, who are drawn to these investments because of the possibility of high returns and the oppor- tunity to diversify their investment portfolios In this Article, Ireview the universe ofpub- lic-private equity (or PPE) businesses that are traded on the United States stock exchanges to map out how PPE has engaged with public investors. I find that PPE takes a variety of organizational forms, across different jurisdictions, and seeks investments from public investors at multiple levels within the private equity structure. While this variety expands the menu of options available to public investors, ignoring the fact that there are distinct types within the PPE universe can also be the source ofinvestor and regulatory confusion. In this Article, I organize the PPE universe into three types according to whether the public investor is investing in the private equity adviser, fund, or both. This typology catalogs a complex and heterogeneous universe of firms that are sometimes lumped together as one to provide a deeper understanding of the unique structural and governance features ofeach type of PPE And, by taking a segmented view of the company fund, and securities regulatory regimes which apply, this Article takes the first step towards constructing a clear framework through which to understand and regulate PPE I. INTRODUCTION.................................................... 1436 II. PRIVATE EQUITY AND PUBLIC-PRIVATE EQUITY (PPE) ........ .......1439 A. Private Equity Prim er................... ................. 1441 R Public-Private Equity ...................... ..................... 1443 C Demonstrating a Need for an Investor-Focused Typology................. 1448 III. PPE TYPOLOGY.. ........................................................1451 A. PPE Type 1: Public-Private Equity Manager .. ...................1451 1. Structure. ................................ ............ 1452 2 Governance ................................................. 1453 3. Regulation .................................................. 1453 4 Examples from PPE Review............... ....................... 1455 R PPE Type 2 Public-Private Equity Fund ................ ..... 1457 * Assistant Professor, UC Irvine, School of Law. skim@law.uci.edu. I am grateful to my colleagues Funmi Arewa, Erwin Chemerinsky, Seth Davis, Dan Deacon, Catherine Fisk, Jonathan Glater, Michele Goodwin, Rick Hasen, Sarah Lawsky, Christopher Leslie, Leah Litman, Omri Marian, David Min, Katie Porter, Song Richardson, Greg Shaffer, Ken Simons, Bob Solomon, and Chris Whytock for taking the time to read various drafts of this Article from its early to later stages and for providing helpful suggestions and feedback. I also benefitted from the opportunity to present this Article at various conferences and workshops. Special thanks are due to commentators Bill Bratton, John Coates, and Jim Cox at Duke's Culp Colloquium, organized by Guy-Uriel Charles and Dorothy Brown, as well as participants of the Southern California Business Law Workshop, organized by Da- vid Min and Elizabeth Pollman. UCI Law librarians Lisa Junghahn and Christina Tsou provided invaluable research assistance, and UCI Law students Yashina Burns (Class of 2016), Bryce Farrington (Class of 2018), Robin Gray (Class of 2017), Lawrence Liu (Class of 2016) and Kaitlin Wetz (Class of 2019) provided excellent research and editorial assistance. I also want to thank the editors of the Florida State University Law Review (Volume 44), in particular, Editor-in-Chief Elisa Walker and Executive Editor Christina Strasser for their superb leadership and dedication.

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