Iris Running Crane

Iris Running Crane

1. Overview & Question

Iris Running Crane is a Harvard Business School student, she is preparation, experience, hard work, and sheer luck. She is interested in private equity industry. After interviewed several companies, Iris received three offers. Iris Running Crane has to think about these three offers through their advantages and weaknesses, and accepts one of those at 8 o’clock tomorrow.

2. Recommendation

According to the background, investment performance in the past, future development of each company and Iris expectation of her work and career. I encourage Iris to accept Red Horse Partners’ offer. Below are reasons why I recommend her to choose this company.

3. Reasons

(1) Companies’ background and their performance

It’s obvious to find out that Sunstorm and Lepus Capital performed so well before 2000 and early 2000. Sunstorm’s SIG II(1994) and SIG IV(2003) got 37.4% and 41%, 2.2X and 2.1X in Net IRR. and capital of fund returns; Lepus’ Lepus I(1997) and Lepus III(2004) got 74.5% and 33.8%, 2.6X and 1.8X in Net IRR. and capital of fund returns. However, In 2006, they both encountered failure. Their funds unable to reached the median level return, it means that after Internet bubbles, raising private equity funds became harder, earning returns much less. Red Horse was one of the three companies which is still sustained their high-performance return in recent five years, no matter how tragic the market was.

(2) Future Development

        Operation, deal structuring, and know about cleantech are Iris’ advantages. She wants to choose a position which can let her to be on her mettle. In Sunstorm, Iris needs to spend some time with advisory team, which means she have to spend all the time doing one thing-restructuring. Also, she doesn’t see much future for the mega funds in the short term, so Sunstorm is not a good choice; Lepus is the only one company that can leverage her operational background, and Lepus will let Iris to be the partner, owning her own cleantech team in the company in a few years. However, Iris is afraid of stuck as the operations gal and doubt this strategy even work; Red Horse Partner was planning to develop cleantech field. In six to 12 months, firm was expecting a flood of opportunities, although Iris thinks of that this firm is a little bit hard to beat other giant in the cleantech battle. Iris is expected to build a new model under her cleantech knowledge, she considers she’ll do many interesting things here and there’s a nice new fund to work with. Besides, the most important thing is, she can be promoted to principal if her cleantech pracrice got going.