There is momentum in Washington to lighten the regulatory burden on private equity. That was the sentiment expressed by speakers at the Association for Corporate Growth’s 2017 Middle Market Public Policy Forum in late September. And while that momentum may be building, it doesn’t mean the industry is likely to see any wholesale rollback of […]
By Jonathan Gilbert, Crystal & Co Over the past few years, dealmakers have discovered how much representation-and-warranty insurance policies can streamline negotiations and closing deals. Under these policies, an insurance carrier promises to compensate the buyer of a company if there is an unanticipated breach of seller representations in the purchase agreement: for example, noncompliance […]
By Peter Fair, Golub Capital With the exit hurdle moving higher for tech unicorns, it’s harder for venture-backed software companies to access public equity markets. But there’s good news: Private equity has the tech sector in its sights. The multiples just might make founders and their venture backers think twice about the IPO as their […]
California Public Employees’ Retirement System is in talks under which BlackRock would take over its $26 billion private equity portfolio, according to Bloomberg. This is some weird, wild stuff. CalPERS, if you haven’t noticed, has been heavily scrutinized around PE, mostly because of its past inability to fully track the costs of the program. Like many public […]
By Chris Fay, Greenwich Strategy Investors who are doing commercial due diligence the way they’ve always done it are almost certainly missing opportunities to own great companies. Commercial due diligence used to be a confirmatory step at the end of the acquisition process. In today’s tough market it’s got to be front-loaded. It serves not […]
By James M. McKnight, Mintz Levin Your PE firm owns a small but growing life-science company with pipeline products and emerging technologies. A big strategic company offers you a fat purchase price and you jump at it. You go into sell mode. After months of negotiations and diligence, the purchase price still stands at a […]
By Alex Hicks, MHT Partners Private equity investors are looking for someone to take an Amazon approach to online education. Since the days of the frontier schoolhouse, where different ages were taught together in the same classroom, education has become more and more fragmented. Kindergarten and then elementary are separate from middle school and then high school. […]
Capital-call subscription lines is one of the most talked about issues in the industry this year. This is because many firms have now adopted the practice, ostensibly to smooth the capital-call process, with the peripheral effect of juicing a fund’s IRR and, as some LPs have described it to me, artificially getting a manager closer to […]
By Joanne Baginski, partner, EKS&H After years of record corporate profits and inexpensive credit, the price of nearly all middle-market acquisitions — from manufacturing to technology and healthcare — has soared. For private equity investors, that has made the diligence process more important than ever. Thanks to favorable macroeconomic conditions and the dry powder available […]
In today’s record-breaking fundraising market, GPs are negotiating hard to get terms they like. One of those is to ensure they get paid after exiting each investment in their fund, rather than waiting until the LPs get paid back before they can start collecting profits. In other words, GPs are pushing for deal-by-deal carried-interest-distribution structures […]