Publications
Publications
- May 2021 (Revised August 2021)
- HBS Case Collection
CPE and SUS Environmental: You've Got to Know When to Hold 'Em (A)
By: Josh Lerner and Franko Jira
Abstract
In July 2016, Di Yang and Grace Guo of the leading Chinese private equity group CPE faced a dilemma—a happy dilemma, but a challenge nonetheless. CPE’s investment in the waste-to-energy firm SUS Environment had proved to be exceedingly successful. This success had triggered a question, which they needed to address in a recommendation to the investment committee of the private equity group. One possibility would be to view this investment as an “early win,” and to begin the process of liquidating their equity stake. This would provide an inconvertible signal to the limited partners of the success of the fund. Alternatively, they could invest more in the company. If the next five years were as successful for SUS Environmental as the last two, this step could lead to a tremendous return. How should CPE resolve this question?
Keywords
Decision Choices and Conditions; Private Equity; Financial Liquidity; Investment Return; Growth and Development
Citation
Lerner, Josh, and Franko Jira. "CPE and SUS Environmental: You've Got to Know When to Hold 'Em (A)." Harvard Business School Case 821-085, May 2021. (Revised August 2021.)
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