October 2018 issue

    Private equity’s impending disruption

    The operating model for sponsors has held steady for 30 years, but data science advances are set to change all that, say Ian Picache and Sajjad Jaffer of Two Six Capital.

    An end to the easy gains

    Maximising operational value is essential in this era of high multiples and recession planning, says Gary Hoover of TBM Consulting Group.

    The new player in the deal team

    Operating partners are increasingly involved before a transaction closes.

    Are my procurement savings hitting the bottom line?

    The lack of effective systems to record and track procurement cost reductions has long been a source of frustration for private equity owners. One answer is to invest in a technology platform capable of monitoring standalone and portfolio wide performance, says Declan Feeney of global procurement consultancy Efficio.

    The value of diversity

    Diversity is now recognised as a value-creation driver. Watch market participants talk about what can be done and read the seven steps you need to take to ensure an inclusive workplace.

    How brand integration drives value

    Developing a successful brand can bolster buy-and-build strategies by creating a platform that is more attractive to acquisition targets, says Phillip McMillan, CEO of strategic growth consultants CompleteSpectrum.

    ‘Everybody talks a good game…’

    … but what are GPs really doing to drive performance? LPs must be prepared to ask some tough questions, says Joncarlo Mark, a former senior portfolio manager at CalPERS.

    Value-creating merger strategies

    More than two-thirds of bolt-on acquisitions don’t achieve the expected synergies, largely because buyers don’t plan the integration properly, says Jon Caforio of RSM.

    OpEx Awards 2018: LeapFrog Investments ensures growth for insurance broker

    The portfolio company's focus on its poorer customers impressed the judges for the Editors' Award in Asia.

    OpEx Awards 2018: Mekong turns healthy profit with pharmaceutical business

    The lower mid-market/small-cap award in Asia went to the Vietnam-focused firm for its revitalisation of Traphaco.

    OpEx Awards 2018: Partners Group transforms local brand into global leader

    The firm helped expand Trimco International's reach and took the upper mid-market award in the process.

    Are you spending too much on sales?

    Sales leaders are too busy trying to hit their revenue targets to focus on cost inefficiencies, says Blue Ridge Partners managing partner Jim Corey.

    OpEx Awards 2018: KKR makes white goods brand sparkle

    Qingdao Haier was able to pick up a GE unit with the firm's help, garnering it the Asia large-cap award.

    OpEx Awards 2018: EQT Partners scores on the ‘source code of sport’

    A 'carefully crafted' M&A programme saw the sports statistics group grow hugely, winning EQT the Editors' Award for Europe.

    Opex Awards 2018: Cerberus drives IRR on car interiors business

    The firm carved out Visteon's failing interiors unit to make Reydel Automotive and take the EMEA upper mid-market award.

    OpEx Awards 2018: Nordic Capital creates ‘payments powerhouse’

    The winner of the large-cap award for EMEA built a new type of player in Bambora.

    Value creation in carve-out deals

    With competition for deals intense and purchase price multiples reaching all-time highs, private equity houses are increasingly turning to corporate carve-outs to generate returns. PwC partner Tobias Blaser explains how to create maximum value from these non-core assets.

    OpEx Awards 2018: Apax delivers in digital

    Apax Partners’ impressive growth strategy for GlobalLogic wins the Editors’ Award for the Americas.

    OpEx Awards 2018: L Catterton finds value in premium pet food

    L Catterton wins the upper mid-market award for the Americas after reaping an 8x return from Ainsworth Pet Nutrition

    OpEx Awards 2018: Brookfield’s ‘stunning improvement’

    Brookfield Asset Management scoops the large-cap Americas award after it turns around loss-making GrafTech.

    Meet the judges for the Operational Excellence Awards

    An influential panel of industry experts from across the three regions assessed the relative merits of the submissions.

    OpEx Awards 2018: Five things we learnt about value creation

    Our Operational Excellence Awards demonstrate the vital role played by add-on acquisitions in bolstering growth.

    The eight levers that generate growth

    Nordic Capital’s Olof Faxander and Peter Thorninger explain how sharing a ‘commercial excellence toolbox’ has added value across the portfolio.

    OpEx Awards 2018: Five things we learnt about value creation

    Our Operational Excellence Awards demonstrate the vital role played by add-on acquisitions in bolstering growth.

    OpEx Awards 2018: Riverside tastes success with cookies

    The Riverside Company picks up the lower mid-market/small-cap award for the Americas for Tate’s Bake Shop.

    OpEx Awards 2018: Carlyle’s ‘refocusing’ of data centre group pays off

    Itconic had no financial data when Carlyle took charge. But its turnaround was enough to bag the mega-firm the lower mid-market/small cap award in EMEA.

    Nordic private equity fights to be heard

    Scandinavian private equity is a positive, even if politicians and the public need to be persuaded.

    Korean PE in brief

    From its most active LPs to the biggest funds, here is private equity in the country summarised.

    Lessons for a smooth succession plan

    Hellman & Friedman and Blackstone’s Strategic Partners began transfers of power this year. Other firms should take note of some key elements.

    Global financial crisis: ‘The phone just stopped ringing’

    An LP and a GP reflect on the events of September 2008 and how it changed them as investors.

    GPs experiment with waterfalls

    Recent fund launches have seen general partners tinker with the distribution waterfall, writes Proskauer’s Andy Shore.

    Sweden’s AP7 is hungry for private equity

    Per Olofsson, head of alternatives at the Swedish pension fund, talks about its battle to get fully invested.

    Texas Municipal fights to claw back terms from GPs

    In a heady fundraising environment, GPs are pushing fund terms in their favour, and it’s up to LPs to walk them back, Texas Municipal Retirement System’s director of private equity Christopher Schelling.

    Can private equity outrun the bears?

    Private equity – and its considerable fees – does not compare well with a booming stock market, but it’s not time to give up on the asset class just yet.

    Fund terms visualised

    Management fees, hurdle rates and carried interest waterfalls; a visual guide to economic fund terms today.

    GPs get a handle on the world’s third-largest pension’s revolving door

    PEI examines the story behind the stream of senior executive changes at Korea’s National Pension Service and how this has affected business dealings.

    Pension giants drive PE activity in Canada

    Two mega-deals – both involving large Canadian pension plans – accounted for almost 70% of investment activity in the country in the first half of the year.

    Why lawyers are urging lenders to get aggressive

    With documentation strongly in favour of borrowers, financiers are being told to look for excuses to redress the balance of power.

    Hellman & Friedman IX: No hurdle, no problem

    Investor documents reveal the firm has not included a preferred return hurdle for its ninth flagship fund, which is seeking $15bn.

    Why Electra is a complex proposition

    The UK’s Electra Private Equity may have ended its search for a buyer, but its five remaining assets remain in play. Will anyone be brave enough to buy them?

    Why US pensions are tilting towards Asia

    Strong macro fundamentals, a rising middle class and consumer and technology-driven developments are attracting pensions to the region.

    ADIA steps up Asia directs with KKR hire

    Kabir Mathur, head of private equity for India and South-East Asia for the Abu Dhabi Investment Authority, will play a key role in building the SWF’s direct investing capabilities in the region.

    Why the hurdle rate needs a revamp

    For all the debate it provokes, the conventional hurdle rate has remained stubbornly untouched since the ’80s.

    If you’ve been waiting for Volcker reform, now’s your chance

    Why private equity firms should be actively engaged with the SEC over the next six weeks.