Smart, Contrarian Private Equity Firms
In studying our historical data of private equity portfolio company investments & exits, I found that the private equity community, as a group, tends to miss macro-economic trends, often buying at the peak and divesting at the bottom of market cycles. But select private equity firms got the timing quite right and some contrarian firms got it really right.
Below, I list the firms that nailed the timing of macro-economic events in their investment/exit strategies relative to the last major market cycle. See who made the list…
With 20/20 hindsight, we now know it would have been great to exit portfolio companies in 2007 at the peak and begin buying again in 2010. In 2008-2010, there was a lot of uncertainty in the market and in the economy overall, but a number of firms acted decisively with a contrarian investment thesis.
In the Summer of 2009, during the early part of the great recession, I was talking to a well-known private equity investor. I distinctly remember him saying that they (as a firm) were very confident in the acquisitions they were making (buying at what we now know was the low). This struck me as a contrarian move. Keep in mind, there was a lot of uncertainty in the market at that time and no indication that we were at the bottom yet. So, I made a mental note to follow up with the contrarian thesis after the dust settled. Now, 8 years later, the dust has fully settled and we can look back and know he was right.
What other firms were right in their timing?
For the recession and subsequent recovery, there were two ways to be well-timed; exiting in 2007 and buying again circa 2010.
48 Private Equity Firms That Looked Smart Exiting Investments In 2007 (with 5+ portfolio exits)
- American Capital
- CapMan
- General Atlantic
- GIMV
- Apax Partners
- TA Associates
- 3i
- Summit Partners
- Triginta Capital
- Omnes Capital
- Riverside Company, The
- Sequoia Capital
- ArcLight Capital Partners
- Actis
- Equistone Partners Europe
- Global Finance
- Norvestor Equity
- UOB Venture Management
- Advent International
- Cipio Partners
- Indigo Capital
- Lloyds Development Capital (LDC)
- Baird Capital
- CBPE Capital
- Alpha Group
- IK Investment Partners
- Merit Capital Partners
- Abry Partners
- Beecken Petty O’Keefe & Company
- ECI Partners
- EQT Partners
- Peterson Partners
- Arle
- Aboa Venture Management Oy
- ABN AMRO Participaties
- Maj Invest Private Equity
- Charterhouse Strategic Partners
- Linsalata Capital Partners
- Long Point Capital
- Norwest Equity Partners
- Volition Capital
- Clairvest Group
- Agribusiness Management Company
- Milestone Capital Partners
- PAI Partners
- Arcapita
- Steelpoint Capital Partners
- EnCap Investments
34 Private Equity Firms That Looked Smart Buying in 2010 (with 5+ portfolio acquisitions)
(NOTE: I excluded transactions in late 2009 thinking that valuation expectations may not have been fully impacted by that time.)
- American Capital
- The Riverside Company
- GIMV
- Apax Partners
- Equistone Partners Europe
- Abry Partners
- CapMan
- Lloyds Development Capital (LDC)
- 3i
- Global Environment Fund
- KODA Enterprises Group
- Advent International
- General Atlantic
- Omnes Capital
- Energy Investors Fund
- Berkshire Partners
- TA Associates
- Welsh, Carson, Anderson & Stowe
- Draper Esprit
- Granite Partners
- CDH Investments
- Canaan Partners
- Norwest Equity Partners
- Sequoia Capital
- Weston Presidio
- BC Partners
- Comvest Partners
- Kayne Anderson Capital Advisors
- Denham Capital
- Investcorp
- Essex Woodlands
- First Analysis
- M/C Partners
- Midinvest Management
15 Firms That Seemed Omniscient (in that they were on both lists above)
There are a few select firms that were smartly-timed on both sides… sellers at the high valuation multiples and buyers after valuations had retreated.
- 3i
- Abry Partners
- Advent International
- American Capital
- Apax Partners
- CapMan
- Equistone Partners Europe
- General Atlantic
- GIMV
- Lloyds Development Capital (LDC)
- Norwest Equity Partners
- Omnes Capital
- The Riverside Company
- Sequoia Capital
- TA Associates