Private Equity Funds Survey Observations

Compressed business cycles of private equity continues to be the norm, and the cycles of good or poor fundraising, debt financing and transactions increase and decrease on a regular basis.
Portfolio companies are undergoing business process re-engineering.
LPs transparancy is increasing the watch on private equity investments and the fund managers.
Investments are being held longer, and financial markets are still not back to normal.

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Private Equity Executives Survey - Fall 2011 - Observations

Contact: Peter Cogan

November 16, 2011

The Pulse of Private Equity - Fall 2011

Several observations for private equity funds emerge from the data. We encourage you to consider these observations in relation to your own.

  1. Benchmark your activity. Review the data and compare it to your firm’s outlook to identify similarities and differences from the respondents. Benchmarking is a useful methodology for comparing your firm’s activity level to a peer sample.

     
  2. Compressed business cycles are now the norm. The business of private equity continues to change and the cycles of good or poor fundraising, debt financing and transactions continue to increase and decrease on a regular basis. Implement your plan mindfully watching what’s around the corner. Solid strategic planning must lead the way.

     
  3. Portfolio companies are undergoing significant business process re-engineering. Strategic planning, financial management, revenue growth and business development are daily activities for the private equity fund and portfolio management team and their advisors. Funds are investing in their portfolio companies to ensure future reliable profit streams.

     
  4. Transparency rules. LPs continue to increase their watch on private equity investments and the fund managers. They will continue to demand more on all fronts. Transparency in all aspects of the fund’s operations is essential. With the looming SEC registration of the investment advisors to private equity funds, compliance may play a larger role in this transparency.

     
  5. Watch your business model. What worked yesterday may not work tomorrow. Investments are being held longer. Financial markets are still not ‘back to normal.’ Getting back to normal may not be in sight. Stay abreast of industry trends, government regulations and the demands of compliance, tax changes and of course, the economy and financial markets.

Fall 2011

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