PE Value Drivers Series: An Interview with a Private Equity Operating Partner Experienced in Value Creation
May 4, 2020 11:38:28 AM — By now, most if not all Private equity firms have done some level of triage on their portfolios as a result of the COVID-19 pandemic. As expected, much of the focus has been on determining which companies are at most risk financially and operationally, and steps have been taken to shore up liquidity and protect supply chains among other things. However, scant attention has been spent on assessing the ability of holdings across the portfolio to restart commercial engines post crisis. This shortcoming jeopardizes the ability to take advantage of what may be transformative growth opportunities in my opinion. It also puts overall fund performance at risk in the long-term.
Apr 16, 2020 12:00:56 PM — At Chief Outsiders, we use the phrase “Building sustainable engines for growth” as our goal is to build an asset that can drive revenue today and be monetized by investors tomorrow. Unfortunately, many companies’ engines have been shut down because of the global pandemic as customers have stopped buying due to choice, circumstances, or government decree. Restarting those engines is not as simple as just turning a switch back to “ON” – at least it shouldn’t be.
Apr 14, 2020 12:00:00 PM — As GPs guide their portfolios through the current COVID-19 crisis, they should ensure that the marketing teams at all their investments can still function remotely, according to Chief Outsiders’ Aurora Toth, who has some tips for PE firms on how to do just that. Private equity as an asset class is now mature enough to have weathered several downturns, and even the financial crisis of 2008, with some firms emerging only stronger for it. Slowdowns can even prove friendly, lowering asset prices, sparking the sale of non-core units and creating turnaround opportunities. But COVID-19 might rattle the most veteran dealmakers. A public health crisis of this magnitude will create unique problems that will be hard for anyone to predict, or easily solve.