Private Equity Owned Companies

Private Equity Manages Companies Best, Report Finds

A consistent point of contention over private equity concerns the impact that private equity investors have when controlling a company. A new report from the World Economic Forum aimed at answering this question and found that companies backed by private equity are "on average the best-managed ownership group." The report reveals that private equity-backed firms fared considerably better in a variety of management practices than other owners including government, family or private owners.

One reason for why private equity firms tend to manage companies better than others is the reward structure. That is, most private equity firms use merit-based hiring, firing, compensation and promotions. Additionally, private equity firms tend to have uniquely rigorous evaluation metrics, which consider both short- and long-term performance, and is well understood by the PE firm's employees. Private equity-backed companies performed especially well in operational management practices. Many private equity-owned companies employ lean manufacturing practices, "with continuous improvements and a comprehensive performance documentation process." In this way, private equity ownership implies a broad approach to improving management practices across the board.

The report concludes that "most private equity-owned firms are well managed." The impressive average levels of management practices within private equity firms can be explained by the relatively small number of badly managed firms. So, while the number of poorly managed firms owned privately or by a family is pretty normal, it is fairly rare to find a badly managed private equity-backed firm. This reflects that private equity-backed companies are consistently managed well.

Here is the full report, it is over 100 pages and provides interesting insight into how private equity investors owning a company effects its efficiency.

Tags: private equity, private equity management, world economic forum, private equity management practices, private equity owned companies, private equity owned companies performance

Link to This Resource: Private Equity Owned Companies

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Multi-Family Office Information & Articles | FamilyOfficesGroup.com

Multi-Family Offices

Top Articles on Multi-Family Offices

Many hedge funds count family offices as one group of their investor base. As the number of family offices increase and larger institutions raise their AUM minimums this segment of the market becomes even more interesting to those in charge of managing or marketing hedge funds and private equity firms.

The Family Offices Group is a 4,000+ person networking group dedicated to the family office space. Joining this group costs nothing and our website http://FamilyOfficesGroup.com produces free weekly articles on the family office industry. Below please find the top 20 most popular articles to date from FamilyOfficesGroup.com:

1. Family Office Jobs
2. Philanthropic Giving
3. Family Office Services
4. Family Office Wealth Management
5. Single Family Office
6. Hedge Fund of Funds by Family Offices
7. Family Office Marketing
8. Family Office Industry
9. Family Giving | Philanthropic Management
10. Investing Book
11. Financial Advisor Marketing
12. Private Equity for Family Offices
13. Family Office Example
14. Starting a Single or Multi-Family Office
15. Family Offices Message Board
16. Private Banking and Wealth Management
17. The Cost of Being Wealthy
18. Jobs at Hedge Funds
19. CHA Designation
    
20. Family Office Consultants

Tags: Family Office, Family Offices, Multi-Family Office, Family Office Information, facts on single family offices, family office articles, articles on multi-family offices, family office details

Link to This Resource: Multi-Family Office Information & Articles | FamilyOfficesGroup.com

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Private Equity and Banks

Private Equity Firms Want Details Before Aiding Banks

Private equity is a likely source of capital for struggling banks, but private equity firms seem less than inspired by the new Treasury Secretary Timothy Geithner's latest comments. If the government is interested in reaching out to private equity groups then Mr. Geithner did not convey this well, according to reactions from several members of the private equity industry.

The main criticism toward Geithner was that he failed to provide any specific details on how private equity will work with the government.

PE firms are clearly interested in partnering with the government to invest in banks. But after having been burned last year in the sector, they want certain assurances from the government on what it will and won't do to encourage private investment. But beyond Geithner's statement that the government needs to "mobilize and leverage private capital, not supplant or discourage it," there were no specifics in his speech. Nor is there much information yet available at a new Web site, financialStability.gov, that Geithner unveiled during his speech.

A telling response came from a partner from a financial services-focused private equity firm, “They are still talking in concept, not in substance. I wouldn’t touch a bank stock after that speech.” Private equity firms specifically wanted details on what assets would be bought and at what price, who will bare the risk and who will reap the rewards (the government or PE investors), and an idea of how the deals would be structured. Without information like this, it is doubtful that private equity firms will be very willing to help in rebuilding the banking system.

“We don’t have every detail yet,” said Mani Sadeghi, managing partner of Equifin Capital Partners, which focuses on financial services deals. “Clearly we’re interested. But the question is whether partnering with the government allows us to be value-adding…You have to understand what you are buying, at what prices, and how they are serviced.”

Source


Tags: private equity banks, private equity, private equity and banks, private equity investing in banks, private equity bailout, buyout banks, private investment, private equity banking

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Private Equity Marketing Materials | Pitch Book

Private Equity Pitch Book

Private Equity Marketing Materials Tips

Below is a list of my top 10 tips to those professionals who are looking to create a pitch book for a private equity fund. My advice to both $30M and $1M private equity funds is that you can never start this process early enough, it is an iterative, constantly evolving project which will never be complete. Here are the top 10 tips for creating your private equity marketing materials.  To help your capital raising efforts consider the Private Equity Investor Database.

1. Think long-term. Invest in creating a robust institutional quality pitch book the first time around and complete 5 drafts of it internally before showing it to a single investor.
2. Stress your team, investment process and risk management controls and how they all interact inside the operations of your private equity fund.
3. Make your competitive advantage clear and do not rely upon canned phrases such as “positive returns within bull or bear markets” anyone who reviews private equity fund materials for a living see these by the hour. Your advantage must be unique.
4. Stress the importance and individual functions of your team, your experiences and pedigree. This should be the foundation upon which everything else is built.
5. Do not send any pitchbook or marketing material out before speaking with a qualified compliance or legal counsel on your team.
6. Create a one page marketing sheet, full 13-20+ page PowerPoint presentation and one page newsletter which would be released monthly providing your view of the markets within your niche area of expertise.
7. Work with high caliber service providers so that you don’t bring extra skepticism upon a relatively new fund which may already be scrutinized by potential investors and advisors.
8. Use your whole team and prime brokerage business partners and other service providers to improve your marketing materials. Professionals who work in prime brokerage or administration see many types of marketing materials and can help provide valuable feedback at no additional cost to your fund.
9. Do not create a PowerPoint presentation that is longer than 30 pages. There are some institutional money managers who run 3 similar funds and will sometimes cover each of these within a single presentation, but this is the exception. 95% of the people who you will send the PowerPoint presentation to will not ready more than 15 pages of the material unless you are walking them through it over the phone or in person.
10. Purchase the rights to graphics, choose a unique, simple and professional layout for the presentation and use the new Windows Vista diagramming tools to create institutional quality presentation. Coming into a meeting with a word document or 25 pages of bullet points is not very effective. It is hard enough to catch an investors’ attention and bring them to the table to discuss your fund, you don’t want to lose them due to the aesthetics of your PowerPoint.

Once you have created your marketing materials you can contact potential investors.  We offer a directory of over 3,800 private equity investors, click here for more information.

Related to Private Equity Marketing Materials | Pitch Book

• Private Equity Real Estate List
• Private Equity Conference
• Private Equity Real Estate
• Private Equity Forum
• Private Equity Industry
• Private Equity Associate
• Hedge Fund List
• Private Equity Jobs

Tags: Private Equity Fund PitchBook, Private Equity Pitch Book, Private Equity Marketing Materials, Private Equity Fund PowerPoint Presentation, Fund Pitch Book

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Private Equity Job Market

Tips for Entering the Private Equity Job Market

Many Private Equity Blogger readers are MBA students/recent graduates or professionals hoping to make the switch from another finance career to private equity. I have made a point to update the site with as many resources as possible related to private equity careers. For other Private Equity Blogger career resources please refer to the list at the bottom of this post.


Speakers for the recent private equity and venture capital conference at the Harvard Business School cautioned that today, MBA grads need to have some patience--along with good grades and experience. Those who graduate with a Masters in Business Administration are faced with a very adverse private equity job market, perhaps only rivaled by the burst of the tech bubble. Many firms are imposing a freeze on hiring or even cutting jobs--see Carlyle cuts 10% of staff. This leads Rob Go, a senior associate with Boston-based VC firm Spark Capital, to warn, "Think about the funds that you want to join and then think out two to three or four years."

Interestingly, the private equity industry speakers suggested that hopefuls turn to alternate routes rather than focusing only on private equity, such as with the government or within a start-up:

"If I were looking for a job, I'd work at [the Department of Energy] for a few years and then come out and [find] a clean tech firm that has to penetrate those [regulatory] networks," said Craig Driscoll, a partner at Lexington, Mass., venture capital firm Highland Capital Partners LLC.

Another suggestion was to make an effort to separate yourself from the other job candidates with special skills: "Take an unconventional path and be okay failing," said Josh Wolfe, co-founder of Lux Capital Management, a New York venture capital firm. "Running with the herd made sense with the vast majority of the evolutionary past, but it doesn't make a lot of sense in an investment world."

The moderator of the event, a partner and head of a New York-based private equity recruiter, similarly spoke of thinking outside the box by seeking positions besides an analyst or partner. Instead, he advises to look into investor relations or risk management for private equity firms because positions such as the CFO or COO for a large firm can be highly lucrative and rewarding.

Although the panelists cautioned against working at a second- and third-tier private equity firm, they concluded on an optimistic note, with one VC remarking: "In 2001 to 2003, we saw MBAs with anxiety, but that vintage of MBAs has turned out pretty well. The people that have been through a crisis come out more battle hardened."

For other articles on private equity careers and jobs visit the following links:

• Complete Private Equity Jobs Guide
  
• Finding a private equity job
• Private equity job salaries
• Private Equity and Hedge Fund Jobs
  

Source

Tags: Private equity jobs, private equity, private equity careers, private equity job market, private equity job placement, private equity job, private equity career, finding a private equity job

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Davos 2009 | World Economic Forum

Davos 2009

Private Equity at the World Economic Forum in Davos

It may be an overstatement to say that this year's meeting in Davos for the World Economic Forum is the most important in recent years. However, with the financial crisis, a new American president and global economic uncertainty it may be an accurate statement. Significant private equity firms were represented at the World Economic Forum, among those firms are the Carlyle Group and Bain Capital.

David Rubenstein of the Carlyle Group took a few moments for an interview at the World Economic Forum. It's an interesting interview especially in light of the turbulant global economy.



To begin, Rubenstein is asked about the likelihood of regulating private equity to which he answers that hedge funds are more likely to face important changes in regulation than private equity. While Rubenstein is concerned about the ability to obtain leverage to finance big deals, he seems a bit more optimistic (consistent with his attitude over the last few months). When asked what percentage of the deals executed within the last three years will end in default or restructuring, Rubenstein concludes that very few will default but almost all will face some sort of restructuring or need some form of debt. As other industry commentators have noted, Mr. Rubenstein adds that prices still need to adjust to return to normal and attractive levels. For more information on the Carlyle Group visit the firm's private equity tracker profile.

Another great video to come from Davos is the interview with Bain Capital's Managing Director Stephen Pagliuca. This interview focuses primarily on the issue of failing banks in relation to private equity.



Mr. Pagliuca sees the solution to the banking crisis and the return to obtaining loans from banks as clearing the poor loans off the banks books. He also calls for raising the minimum capital requirements for banks because he thinks the banking system has been overleveraged. Like Mr. Rubenstein, he defends private equity from being blamed for the current financial crisis.


Tags: Private equity, private equity firms, private equity david rubenstein, private equity bain capital, private equity carlyle, private equity capital, private equity world economic forum

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Private Equity Australia

Private Equity in Australia

Private equity markets in Australia are expanding but the country is still reluctant to embrace takeover bids for Australian companies. Australia has been slow in accepting private equity firms relative to other countries like Britain, the U.S. and Western European nations. Australian private equity firms have been increasing annually but at a slower rate, showing a maturing in the market. Additionally, the average size of Australian private equity funds and investors has been growing at a quickening pace. The following graph demonstrates the increase in the average size of funds by year of formation:

The following is from Research Whitepaper on Australian Private Equity:

Private Equity markets in Australia include both private equity funds, venture capital funds and other capital providers including both equity and debt financing. The private equity market in Australia is relatively small, but nevertheless a growing market especially during the 2000-2007 era.

In the recent 5 years, a significant increase of new Asian based private equity funds operating or setting up their representative office in Australia. The leading Asian private equity funds are typically from Japan or Singapore at this stage, but other State-owned, especially Chinese owned private equity firms have been increasing their activities in Australia especially in the mining and resources sectors.

The majority of private equity firms based in Australia are interested in the traditional businesses or IT related businesses - which are mainly taken up by venture capital funds. Private Equity firms in Australia have been largely responsible to take over established businesses including retail and manufacturing industries, a lot of deals were debt funded with very high gearing ratios, which is now causing concerns to some of the acquired companies.

In 2008, there was a starting of consolidation amongst private equity firms in Australia. Some were led by wealthy Australian families, some were acquired by corporate advisory firms or investment firms from overseas as a way to diversify their interests geographically.

In the medium term, further consolidations to occur in Australia, both the medium and large sized private equity firms. We are already seeing increasing number of European and US private equity firms selling stakes to Asian based private equity funds including many State owned sovereign funds, the similar trend is also likely to occur in Australia.

Australian private equity funds tend to operate differently than other private equity funds in the world - because of the nature of the business and heavy emphasis on mining and resources. However, this is set to change because of the rapid deterioration of mining sectors in Australia.

The Australian investment market is certainly changing, and is now forming very close ties with Asia. The newly elected labour Government in particular has announced strong ties with China, and has opened for direct investments allowing Chinese nationals to invest directly in Australia - previously this was usually done through a representative or delegate in Australia.

Although the real impact is too early to predict, there has been increasing number of direct investments from Chinese financial institutions such as CITIC lately, and the recent strong investments in Australia's Rio Tinto is another good example how Chinese or Chinese Government sponsored private equity firms have now taking strong interest in Australian assets.

Source: Research Whitepaper is a global reports portal website established Money Cat Consulting, a global research and international marketing company.

Here is a link for a resource on private equity in Australia

Tags: Private equity, private equity Australia, private equity firms in australia, private equity funds australia, Australian private equity, Sydney private equity, private equity markets in Australia

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