Thursday, September 13, 2012

Private Equity Byzantium


1.              Rust in the Pipeline (2009)

Routine management off-site



My client has raised a fund, but the pipeline for new deals is poor.  Who has an idea for investing client capital?  There’s little enthusiasm and even less conviction for potential deals as we spend hours trying to figure out how we can justify our fees.

2.             What Did We Really Buy? (2008)  



Organizational meeting with the deal and operational teams of a private equity firm

Even after all the due diligence conducted before closing on the deal, my client is far from understanding what they acquired.  There’s urgency to our deliberations as the credit crisis has shut down the credit markets, and the incumbent management isn’t forthcoming.  Now that we own the business, what do we do with it?


3.              Steering a Sunken Ship (2009)



Discussing a new business model with a small group of advisors

Just taking costs out of the company (firing people) won’t turn it around.  We desperately need a completely different way of conducting business, and don’t have the time, money or buy-in from the business to do it.




4.             Mounting Pressure (2009) 



Secret session to consider a “transformative” (big) merger

Cost cutting isn’t generating enough profit and the credit crunch is strangling the business.  Would buying yet another company, and smashing the two businesses together permit us to salvage our position?  Yes, but we can’t pull off the big deal.



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