For envy, do you know there is a ratio?

Sometimes, I wonder the people are so good at picking names or phrases to catch your eyes or attention. You must be of interest to know what is an envy ratio if you come across this term.

This ratio is used in the private equity acquisition.It is calculated between the price paid by the management team and that paid by the investing institution (usually private equity) for their respective share of the equity in a management buyout/in.

For example if a private equity firm paid $30m for 75% of a company's equity and management paid $5m for 25%, then the Envy Ratio would be 2x.

30/75 / 5/25 = 2x

So, the higher the ratio, the more envy will be.

It has been used in London, but it now seems to be catching on in Asia. Anyway, it is a term worth to remember. It is not surprise if to hear happy ratio, sad ratio or even hungry ratio in the future.