Radical Insights on Private Equity – Fall 2016

Announcing Radical Insights on Private Equity, Fall 2016.

Kicking off our quarterly Radical Insights white paper series, is the attached titled “Balancing Act.”

 

Abstract:

Summer is over and we’re heading for Fall. Like most years the summer is typically a slower season for deal making and IPOs, with folks on vacation things stretch out and that work that was supposed to take a week or two, takes three or four. Now that we’re into Q4 things will inevitably speed up to meet annual goals by December 31st This quarterly report , Radical’s first, is titled Balancing Act, and comes out of the work and conversations we have had

with our clients over the past several months. Market uncertainty due to oil price fluctuations, brexit, international politics etc. combined with recent success has led a flight to quality with investment dollars pouring into the largest and historically most successful of firms. The best GPs are also flying to acquire quality assets, which is driving up pricing and when coupled with more stringent debt financing requires GPs to invest more of their capital into fewer companies. The counterweight to all of this is a drought in the IPO market. With market conditions likely to remain the same the result will be longer holding periods and the potential for decreased returns. Funds need to not only acquire quality assets but they need minimize bad deals, improve portfolio company performance and make them acquisition targets.

 

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