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In this Knowledge@Wharton interview, Antoine Dréan, founder, chairman and CEO of Triago, a private equity firm, discusses the future of the industry. The topics covered include where the big opportunities will arise, how returns are evolving, shifting fee structures and … Continue reading
Private equity, like many industries, suffered major setbacks during the Great Recession. And while PE will continue to be profitable over the long run for well-managed firms, many others will find it difficult to hang on, according to Antoine Dréan, … Continue reading
What is private equity (“PE”)? What kinds of investors does it attract? What kinds of strategies do PE firms use to add value to their acquisitions? Professor Gultekin provides a survey of the industry, its history and current issues in a wide-ranging interview with Knowledge@Wharton.
Some private equity firms in emerging markets find it’s best to take a minority stake and work diplomatically with the management and owners that are already in place. Lopes explains why GP Investments takes the opposite approach when it acquires family-run companies in Brazil, a fast-growing country that blends the features of emerging and developed markets.
Private equity deals in emerging markets can be derailed by problems that are rare in developed countries: financial and economic crisis, political instability and government intervention. Sun explains the critical role that timing plays in making a PE deal succeed in a volatile environment.
In the Middle East and North Africa, culture and business tradition preclude some common private equity practices, such funding acquisitions with borrowed money and taking a majority stake. Arbid discusses the light touch a PE firm must employ when it tries to improve a family-owned company.
While many PE firms are “industry agnostic,” Natural Gas Partners focuses on energy-related businesses, many of them in Texas and Oklahoma. Quinn explains how NGP manages risks by seeking firms with good managers, and by smoothing out revenues with futures contracts and other derivatives.
Most private equity (“PE”) firms develop a specialty, and for the Carlyle Group it is buyouts. Mathias discusses the reasons for that strategy, recent difficulties in obtaining financing and the growing competition for the shrinking number of promising PE deals.
Many private equity firms are happy to accept investments from a range of limited partners, including pension funds, insurance companies and university endowments. Linley Capital has an unusually large reliance on wealthy families. Poerink discusses Linley’s unusual niche and how he sees the PE industry evolving.
When they invest in a private equity fund, limited partners generally agree to tie their money up for 10 to 12 years. But sometimes investors want out early. Cuvilly discusses the secondary market, where stake in PE funds can change hands discretely.