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October 06, 2020 No Comments Author: Andy Jones

Private Equity Investment in Cloud Computing

Before the era of personal computers, companies used “Mainframes” for large centralized computing. In the 1970s and ’80s, individual users could access the Mainframe from the terminal on their desk. The rise of the personal computer placed the computing power and storage on our desks. Hence, the term “desktop computer”.

In a sense, cloud computing is a return to the Mainframe style of computing. That is, accessing remote resources (servers, databases, digital storage capacity, software, etc.) over the internet through the terminal of our personal computers.

By sharing large pools of resources, cloud computing offers advantages of reduced cost, increased scalability, massive computing power, and greater reliability.

Cloud computing also enables flexibility with remote work practices, a common theme in 2020. This general transition to cloud computing coupled with the accelerated shift to remote work has created a surge in the already-growing, global cloud computing industry.

While there are many private equity investments in companies that offer cloud-based, SaaS solutions, surprisingly, we do not see many recent private equity investments in the pure cloud computing space.

September 16, 2020 No Comments Author: Andy Jones

Quality Deal Flow from Aged Portfolio Companies

Access to quality deal flow is the single largest determinant of success for investment banks and private equity firms. There is, however, a steady flow of potential deal intelligence that remains largely untapped.

POTENTIAL DEAL FLOW

The statistics from our private equity database show the median holding period for private equity portfolio companies is 4.8 years. That is, half of all portfolio companies are exited BEFORE they age 4.8 years under private equity ownership.

Private Equity Holding Periods

August 03, 2020 No Comments Author: Andy Jones

Private Equity Investing in SaaS Companies

Private equity platform investments in Software-as-a-Service companies increased significantly in 2020YTD as a percentage of all PE deals. Many SaaS companies have been less negatively impacted by the economic impacts of the coronavirus compared to other industries, both in terms of continued demand for their product or service as well as the agility to continuing operations, working from home. In many cases, SaaS companies have benefitted by the sudden change in industry dynamics.

June 01, 2020 No Comments Author: Andy Jones

Aged Private Equity Portfolio Companies – June 2020

The median holding period for private equity portfolio companies is currently 4.8 years, as reported in our recently updated portfolio company holding periods study.

Given this, it is reasonable to assume that portfolio companies held five years or longer might be good candidates/prospects for an exit.

Our M&A Research Database currently shows 218 portfolio companies that will reach the 5-year holding period milestone in the month of June, 2020. A few sample companies are presented below.