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September 25, 2018 No Comments Author: Andy Jones

U.S. Private Equity Firms Investing in South & Central America

In the past 12 months, we’ve had more customer inquiries about U.S. private equity firms investing in Latin America. Our database at currently shows 87 U.S.-based PE firms with current portfolio company investments in South & Central America (I excluded Mexico for this study… which would have added another 22 PE firms).

Of these portfolio company investments, 90% are concentrated in just 7 countries. More than half are in Brazil.

September 21, 2018 No Comments Author: Andy Jones

Investment Banking – Deal Flow Challenges

The challenge for all investment banks at any given time is cultivating quality deal flow. In this case, “quality deal flow” means businesses with these attributes:

  1. Growing revenue streams, (preferably recurring)
  2. Stable, increasing cash flow
  3. Scalable
  4. Non-cyclical products or services
  5. Low CapEx required to achieve growth
  6. An excellent management team
  7. A diverse customer base
  8. A motivate seller

With corporate valuations at historic highs (in 2018), business sellers operating “quality” businesses tend to have the mindset that they should hold longer. They delay an exit because cash flows are good, and the company continues to grow. Further, using the recent historical performance of their company to forecast growth prospects plus applying recent high valuation multiples, leads many company owners to rationalize that they should continue to grow the company because it will be worth even more in a year or two.

September 07, 2018 No Comments Author: Andy Jones

Private Equity Firms – Net Exiters

Over the past 12 months, private equity firms have been net acquirers of companies, making about 2.5 platform investments for every 1 platform exit. This significant growth in portfolio company ownership is buoyed by more private equity firms in the market and larger funds with more committed capital than ever before.

Contrary to this trend, 245 private equity firms in our database have taken advantage of the recent high valuations (relative to historical standards) and have become net exiters of portfolio companies over the last 12 months. Collectively, these 245 private equity firms exited 492 platform investments and only acquired 137 new platform companies – a ratio of 3.6 exits for every investment.

August 28, 2018 No Comments Author: Andy Jones

Top Private Equity Investors by Deal Team Size

Instead of providing a general list of the Top 10 Private Equity Firms with the largest, well-known firms, I wanted to identify formidable acquirers that may be lesser-known. To do this, I normalized the number of platform acquisitions (2018 YTD) by the number of deal makers (titles of Vice President and higher) at each firm. The lists below show the top 10 most acquisitive private equity firms, grouped by deal team size.