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November 25, 2019 3 Comments Author: Andy Jones

Private Equity Investing in Senior Care

As a generational segment, Baby Boomers (now 55 – 75 years old), have a significant impact on the demographics of the U.S. population and on the markets that serve them.

US Population by Age_2019_11_21_1333

As this population segment ages, there is an expected increased demand for elderly care and related services. According to Morningstar, the average age of admittance into a nursing home is 79. With the oldest baby boomers currently at 75 years, coupled with a ~5-year median holding period for private equity portfolio companies, I thought we should see an increased investment appetite for elderly care operators and related service providers from private equity firms. As it turns out, we do.

September 24, 2019 4 Comments Author: Andy Jones

Private Equity Portfolio Company Holding Periods – Updated

I periodically update the private equity portfolio company holding periods data study to track this trend over time.

The longest median holding period for private equity owned portfolio companies was 5.6 years, back in 2014. This is intuitive because 5 or 6 years prior to 2014 represented those portfolio companies acquired at the peak of the market, just before the last recession. Consequently, the holding periods were extended, allowing more time to recoup from ill-timed acquisitions.

Since 2014, there has been a slight-but-steady downward trend in portfolio company holding durations – until now. The last data point on the right (2019 YTD, through August), represents the first trend reversal for this metric since 2014. Based on the last 5 years, I was expecting to report a median holding period of 4.6 years, but instead, the data shows:

2019 YTD Median Holding Period = 4.8 years

Private Equity Holding Periods

September 04, 2019 No Comments Author: Kendra Jalbert

Interview – Investing in Latin America

I recently spoke with Stephen Marks at Emmersion about investing in Latin America. With some minor edits, the text below captures our conversation.

Stephen Marks

Stephen Marks

Introduction

Stephen Marks is a Managing Director at Emmersion, an investment management firm, and a Partner at Emmersion Capital, an investment fund focused on lower middle market and early stage investments in Latin America. Stephen is considered a leading voice on socio-economic and investment related issues between the Americas. He consults and converses daily with trade, business, investment and governmental leaders in Central and South America, while working with private equity, corporate and family office investors in the United States to help them scale abroad.

Why should private equity firms invest in Latin America?

Let’s start with the U.S. side where competition is massive. I spoke to a private equity investor last month who told me that on average, they are seeing 20 or more firms competing for the same deal. Searching for better deal opportunity, private equity firms have been moving down market. There is no doubt that has impacted valuations and probably has something to do with the $1.3T in private equity capital that is currently sitting on the sidelines.