Title

Actis: Private Equity Investments in a Capricious Market

Publication Type

Case

Year Completed

3-2014

Abstract

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?

Keyword(s)

Private equity, investment, finance, budget hotels, hotel industry, China, Asia

Discipline

Business Administration, Management, and Operations | Finance and Financial Management | Strategic Management Policy

Data Source

Field Research

Industry

Financial Services

Geographic Coverage

China

Temporal Coverage

2006-2008

Education Level

Executive Education; Postgraduate; Undergraduate

Publisher

Singapore Management University

Case ID

SMU-13-0043

Comments

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