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October 17, 2017 5 Comments Author: Andy Jones

Private Equity Investment Trends in Manufacturing

I ran some analytics on our private equity portfolio company data to view changes in how PE firms invest in various industries over time. The graph below shows the historical investment trend for manufacturing portfolio companies by year.

Investments in manufacturing companies, as a share of the overall private equity investment pool, has decreased, but seems to have settled around 15 – 17%.

Private Equity Investment Trend: Manufacturing

October 04, 2017 No Comments Author: Andy Jones

Private Equity Holding Periods – Histogram (updated)

I previously discussed the trend in median holding periods for private equity-owned portfolio companies. However, there is a significant standard deviation in the data.

The histogram below shows the distribution of holding periods for portfolio company exits in 2017 YTD.Private Equity holding periods - histogram

While the data looks much like a normal distribution for holdings periods 0 – 8 years, there’s an unusual bump up in years 8 – 10. Read my previous explanation about this effect related to the recession of 2008 – 2010.

Also, a large portion of the longest held investments (12+ years), were European private equity firms holding European portfolio companies. Cultural difference.

September 27, 2017 No Comments Author: Andy Jones

Private Equity Holding Periods Trending Down

Holding periods for PE-owned portfolio companies correlate with macro-economic events – lengthening during recessionary periods and shortening during growth & recovery years.

The most recent data from www.PrivateEquityInfo.com shows median portfolio holding periods continue their slight downward trend as private equity firms capitalize on higher valuations.

Private Equity Holding Periods

  • Current = 5.0 years, (2017 YTD)
  • Peak = 5.7 years, (2014)
  • Low = 3.0 years, (early 2000’s dot com boom… although it went down to 3.5 years in 2008 as well)
September 11, 2017 No Comments Author: Andy Jones

Interview – Carrie DiLauro, Hamilton Robinson Capital Partners

We recently interviewed Carrie DiLauro, Director of Operations at Hamilton Robinson Capital Partners, a lower middle market private equity firm located in Stamford, CT. Carrie shared her thoughts and her firm’s strategies for generating deal flow, navigating higher valuation multiples, creating value and building businesses to weather the storm of macroeconomic or industry specific downturns.

The text below are Carrie’s comments, organized by topic.

Carrie_DiLauro

July 12, 2017 No Comments Author: Andy Jones

Interview – Glenn Oken, Mangrove Equity Partners

I recently spoke to Glenn Oken with Mangrove Equity Partners in Tampa, Florida. With some minor edits, the transcription below captures our conversation surrounding private equity investing and his firm. (Italics text are Glenn’s words.)

Glenn Oken_Mangrove Equity

Glenn Oken – Mangrove Equity

Introduction

Mangrove Equity Partners is a lower middle market private equity fund headquartered in Tampa, Florida. The team has always been keenly focused on the lower middle market, which I will define as investing in privately held companies making between $2 – $10 million of EBITDA. We invest in companies throughout the United States and Canada. We can invest overseas, but other than Canada, it’s reserved for add-on acquisitions.

The team has completed roughly 138 deals in 60 industries. A lot of our brethren who have that type of experience and have had the returns that we have migrate into larger funds. This categorically means that they have to invest in larger companies. But we are smaller deal guys. We really enjoy working with family businesses and entrepreneurs.

June 26, 2017 No Comments Author: Andy Jones

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…