We invested in a manufacturing company that consistently missed projections quarter after quarter. Management always had an explanation. The next quarter would be better. The turnaround was just around the corner. We wanted to believe it, so we waited. And we waited some more, hoping for a turnaround. Finally, events outside of our control forced […]
Procrastination and the $20 million write-off. Read Post »
The public markets have been effectively closed for most private equity firms over the past several years, but the issue extends beyond simply waiting for IPO activity to return. That dynamic has contributed to a meaningful slowdown in exits across the industry. A recent Investopedia report noted that private equity IPO exits declined 46% in
The IPO market won’t save Private Equity Read Post »
We invested millions in a company whose power controls division focused on wireless utility meter reading and remote mission-critical control systems. At one point, the investment appeared headed toward a potential write-off: high cash burn, incapable management and unable to gain traction in the market. Following the divestiture of that division to our fund, we
From Potential Write-Off to Strategic Sale in 18 Months Read Post »
We advised a company that was a pioneer in providing media products, lead generation services, and online marketing tools to their client partners. At the time, it was generating $7.3M in revenue but losing $4.6M annually, with negative equity, and a $8M market cap. The business had no clear operating focus, a cost structure completely
A Quick Turnaround Story (60 sec read) Read Post »
Tariffs just hit 14.3% – the highest level since 1939, according to a recent Marketplace analysis. 97% of US importers are small businesses, and they’re getting crushed from multiple angles. Product-based businesses relying on imported materials like fabric, specialty paper, and art supplies are watching costs climb month after month. Some categories have seen wholesale
Tariff Impact on Small Business (With Advisory) Read Post »
PE funds routinely mark-up investments on day one. According to the Wall Street Journal, StepStone Private Markets recorded a 15% gain on 34 investments purchased the same day, using subjective NAVs from other fund managers rather than observable market prices. According to Forbes, the zombie backlog – 31,000 companies, 5.6-year average hold periods, 3:1 investment-to-exit
The Private Equity Industry is facing a Valuation Crisis. Read Post »
In the summer of 2007, Bear Stearns blew up two structured credit funds and our LP hotline lit up. Pundits and talking heads told us it was contained. We told ourselves we’re non-correlated – different strategy, different assets, insulated from the chaos. We’re good. Fourteen months later, Lehman collapsed and we learned the hardest lesson
Private Credit Markets. Non-correlated? 2007 Called. Think again. Read Post »
Artificial intelligence is now part of almost every conversation in private equity, from deal sourcing to infrastructure to portfolio operations. There’s a lot of activity, but across many portfolios, the actual impact is still limited. After years of working with operating businesses, that’s not surprising. The issue isn’t access to AI, it’s how it’s being
AI Isn’t Saving Private Equity. It’s Exposing It. Read Post »
That’s not my number. That’s from the CEO of EQT – one of the largest PE firms in the world. Here’s the math: There are 15,000+ private capital firms operating today. Only about 5,000 have successfully raised a fund in the last seven years. Half of those may not raise again. The result? Thousands of
80% of private equity firms could be zombies within a decade. Read Post »
