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June 17, 2018 No Comments Author: Andy Jones

Industries Ripe for an Exit from Private Equity Firms

Portfolio companies currently held 5 – 7 years are likely ripe for an exit from their private equity owners. Industry concentrations within this aged group of portfolio companies might provide leading deal flow indicators. These industries, and certain sub-sectors within them, may have tidal changes of ownership as private equity firms convert equity to liquidity to provide returns to limited partners.

Using our database of private equity portfolio companies, I identified four industry sectors that are thematic in the U.S. portfolio companies currently held between 5 and 7 years:

  1. Manufacturing
  2. Technology
  3. Medical / Health
  4. Oil & Gas

No surprise really, since these are large industry categories. Consequently, for each industry above, I looked for sub-sector concentrations, discussed below.

June 11, 2018 1 Comment Author: Kendra Jalbert

Interview – CEO Positions at PE Portfolio Companies

Interview – CEO Positions at PE Portfolio Companies

Introduction – Mike Lorelli

Most of my career has been with PepsiCo where I was blessed to have been given the fortune to be a Division President twice. After which, I’ve been in the private equity space for 17 years. The dance card today is very interesting, colorful and rewarding. I’m an Operating Partner with Falconhead Capital, a small mid-market private equity firm in New York. I sit on four boards and I’ve got my coaching practice which goes under the heading of Faster Landings. At Faster Landings, we do two things – we coach senior executives in transition, and we also coach senior executives who are trying to land board seats.

When a company sells to a PE firm and the owner and/or C-suite is asked to stay on, how does the landscape change for these leaders?

The landscape changes for virtually everybody in the company. It begins with the timeline, which significantly shortens. Tomorrow now means this afternoon. Next year now means next week. Keep in mind, private equity executives are driven by three measures: internal rate of return, cash-on-cash return and hold period where less is more. Two of these measures are essentially time driven, hence the incredible immediacy to everything.

June 01, 2018 No Comments Author: Andy Jones

Private Equity Relationships with Select Investment Banks

Private equity firms try to develop and maintain good business relationships with the various investment banks because the I-banks drive potential deal flow to the PE firms. It’s a symbiotic relationship.

When private equity firms exit their portfolio companies, some act as their own M&A advisor (private equity executives often have prior investment banking experience), but many PE firms hire investment bankers to represent them in the sale of their portfolio companies.

Which Investment Banks Do They Engage?