What is financial engineering in private equity?
Financial engineering refers to the representation of financial information to present a higher level of earnings or EBITDA for a company that is for sale.
What makes a good operating partner?
As a group, it is critical that operating partners can quickly build rapport and credibility with the portfolio company management team, but they also need the hard analytical skills and creativity to uncover value that other owners or the incumbent management team haven’t reached.
What will the private equity industry look like in 5 years?
The PE industry is poised for significant growth over the next five years: Our base forecast shows AUM increasing by US$1.3 trillion. While many paths exist to succeed in this growing industry, satisfying key stakeholders—employees, portfolio companies, and limited partners—will likely be the cornerstone of each strategy.
How can private equity firms help businesses in times of crisis?
Private equity (PE) firms play an important role in the economy: They can help small enterprises grow, and, in turn, generate returns for investors. In times of crisis, such as the COVID-19 pandemic, they often become even more important, providing companies with capital and industry expertise to help them weather the crisis better.
Is cost cutting a priority for private equity firms?
Initiatives to accelerate growth are a priority; cost cutting is seen as a commodity skill. 1. McKinsey first visited this topic nearly a decade ago; see Joachim Heel and Conor Kehoe, ” Why some private equity firms do better than others ,” McKinsey Quarterly, February 2005.
What is the future of private equity AUM by 2025?
The increased interest could boost PE AUM to US$5.8 trillion by year end 2025, up from US$4.5 trillion at year end 2019, based on a forecast developed by the Deloitte Center for Financial Services (for more details, see the sidebar, “Methodology”). Despite an optimistic forecast, it does not guarantee success for all PE firms.