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Bain: Global private equity report 2010

June 22, 2010 Leave a comment

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Front cover of Bain report

Will Bain&Co's report prove accurate?

Bain & Company: “Global private equity report 2010” Bain briefs Publications.

I’ll provide some commentary when I get a chance to read it thoroughly. At first glance it looks very nicely laid out and is quite inviting for the reader, even if the corporate black and red is a little reminiscent of a casino table.

Leafing through it brings to mind the hilarious knockabout farce that was BCG and IESE’s 2008 offering The Advantage of Persistence: How the Best Private Equity Firms “Beat the Fade”, which you can read here.

It’s full of chioce tidbits that will leave you with aching sides and coffee on your monitor screen. AND it was co-authored by Heiko Meerkat.

But for those of you with a shorter attention span, how abut a quick look back to what McKinsey had to say about the buyout boom in 2007:

The recent tightening of credit markets has complicated the financing of some buyout deals and may dampen the flow of investor money into private equity firms. Skeptics on both sides of the Atlantic have been quick to proclaim that the private equity boom is over. But don’t expect private equity to suddenly fade to the background, as did the leveraged buyout boom of the 1980s. Even if growth slows in the short term, pension funds and other institutional investors will remain interested in private equity. McKinsey projects the industry’s assets under management may double by 2012, to $1.4 trillion.

Wow. AND “wow” again.

Do buyouts need more bad PR? At least the PE house is not at fault here!

August 6, 2009 Leave a comment

You can Bank on it:
Delist at that price? You’ll get
Shareholders iRate

Apax Partners (full disclosure – my team is owned by one of their portfolio companies…I like to think it’s Apax’s favourite one :)) is trying to buy Bankrate. And some share holders are not too happy at the purchase price. Apax is paying a premium, of course, but some shareholders are not convinced the premium is fair.

Rather than the concerns of the conflict of interests that may develop between a private equity owner and an incumbent management team (particularly if that management team intends to stick around after the PE house exits), it is the management team itself that may be questioned in this instance. Has the share price been artificially deflated (don’t say sabotaged!) in order to present a more attractive purchase price for the buyout house and the management team/the team’s equity in the new deal?

Does Private Equity “get” social media?

July 16, 2009 12 comments

I’m not talking about venture capital, because those guys definitely get it (well many of them, at least). I’m talking about small buyout houses, mid-market buyout houses and upwards.

1. Fundraising
In markets where LPs and consultants are overloaded with information on new funds coming to market, one would think that a new channel of communication (this is all social media, collectively, are) would be pounced on. And it is free. Have you seen anyone outside of the venture space really doing anything interesting?

2. Deal origination
Particularly in a time when operational expertise is prized over financial engineering, one might expect that a medium perfectly suited to the demonstration of expertise would be a key weapon in the arsenal of any deal origination team. I was fortunate to speak with David Teten on this topic recently and he definitely gets this, too. There is so much that COULD BE done. And so little BEING done. The first team that grasps this and runs with it is going to steal a considerable march on the competition.

I think I am going to give a little more thought to this topic and I ‘d be interested in anyone else’s views.