We highlight the key developments and latest industry trends across the markets
- Exit environments
- M&As and roll-up strategies
- Post-merger Integration
- Private Credit
- Value creation
Pages 58 to 84 shares a very detailed look at how Investcorp successfully executed the buy-and-build strategy for its investment in Berlin Packaging
A successful case study of how the Swiss private equity manager Partners Group has defied buyout industry norms with its protracted ownership of global schooling giant ISP
How Holcim and Lafarge strategically used a series of delays and regulatory challenges to become a leading cement company in the global market.
Executing M&A within Europe can give rise to specific cross-jurisdictional challenges depending on the countries in question, which can be relevant from as early as term sheet stage.
The paper proposes a theory in which each stock’s environmental, social, and governance (ESG) score plays two roles: 1) providing information about firm fundamentals and 2) affecting investor preferences. The solution to the investor’s portfolio problem is characterized by an ESG-efficient frontier, showing the highest attainable Sharpe ratio for each ESG level.
A better understanding of the remedies that antitrust regulators may hand down in a large merger or acquisition could help executives improve their management of such deals.
Blackstone Inc. is testing a new way to bring in cash from rich Europeans. If it succeeds, the private equity powerhouse stands to draw billions to the fast-growing and risky world of private credit.
Two decades of research show that, while large deals still have their place, programmatic M&A strategies continue to create gains in excess total returns to shareholders, at lower levels of risk.
The merging of two entities will undoubtedly ruffle some feathers, and human capital should be the focus of developing an effective post-transaction strategy
Equity compensation for senior management of private equity owned companies is very different than that of publicly traded companies. While both types of companies share a common principle of rewarding management based on an increase in shareholder value, fundamental differences in the investors and their potential holding periods drive divergent equity compensation practices.
The emerging ESG due diligence best practices, and the legislative and regulatory framework informing and reinforcing these developments.
U.K.-domiciled private equity funds fall outside of the EU regulatory framework that allows general partners to market to investors across the bloc following Brexit, creating complexity for firms that previously relied on these rules.
There has been significant increase in the issuance of debt linked to environmental, social and governance (ESG) metrics, seen in almost all new private debt deals in Europe
A new book on mergers and acquisitions by two Deloitte executives argues that a positive “announcement day” reaction to a deal bodes well for future stock performance — and vice versa.
Rethinking the M&A process: Learning private equity’s secret to outperforming corporate strategic acquirers
M&A transactions often destroy shareholder value for corporate strategic buyers, but PE firms have fared much better. What is the secret sauce behind the PE M&A playbook?
Deloitte’s 2022 Future of M&A Trends Survey polled 1,300 executives at corporations and private equity investor (PEI) firms from August 26 through September 7, 2021 to glean insights about current deal activity and expectations for the next 12 months.
Study on the value creation achieved by private equity manager employing buy and build strategies. Findings show that despite paying higher premiums, PE firms generate above-average equity returns in buy and build strategiesdue to both higher top-line growth and multiple expansion.
Every sector—not just the “growthy” ones—can produce top-tier returns, but generating those returns requires matching a firm’s unique strengths to the sectors where they will bear the most fruit. Those decisions have historically come from the gut, but new data tools are finally giving firms a fact-based way to raise their game.
This study examines buy-and-build strategies in seven major European markets, and has found that the operational improvements are consistent with the synergy interpretation and indeed outperform single company growth strategies.
Every industry has a business ecosystem, which comprises dynamic groups of largely independent economic players working together to deliver solutions that they couldn’t muster on their own. Drawing upon years of research, BCG offers a step-by-step framework for developing an incumbent company’s ecosystem strategy.
Case study - Creating a post-merger integration structure for home healthcare acquisitions to reduce overhead and implement best practices
Since many businesses are digital in their core, more times than not a significant bulk of effort goes into technology merger integration.
Many companies struggle with post-merger integration (PMI). But with the right mindset, organizations can take advantage of PMI to achieve broader transformation—what BCG calls full-potential PMI
Providing the right support for staff integration is known to increase the chances of a successful merger but leaders often prioritise timescale and the finances over their people. Thom Dennis, CEO of Serenity in Leadership shares 10 methods by which leader can support their people through M&A
Strong management can make or break a deal; there’s no debate about that. Yet PE firms often struggle to put the right people in the right roles fast enough to enhance portfolio company value. Making faster, better decisions depends on linking talent strategy directly to the explicit roles and missions laid out in the value-creation plan and spelling out exactly what’s needed to execute.
Future-proof production: Next Generation Manufacturing as a solution where traditional efficiency levers fail
The traditional levers for reducing costs and increasing efficiency have in many cases been exhausted, but there are new approaches that can be used to draw on today's disruptive trends to position the industry for the future.
CEOs who helm companies owned by private equity (PE) firms face a leadership challenge unlike any other. They must master everything a great public- or private-company CEO does, all while operating at a higher metabolic rate. This article shares guidance from the experts.
Continuation funds are a rebranding of general partner-led secondaries. The purpose is twofold: to hold onto investments in the hope of making bigger returns at a later date, and to provide a potential exit for LPs.
UK mid-market private equity deal activity topped pre-pandemic levels during the first half of 2022, says KPMG
UK mid-market private equity activity in H1 2022 was above historic levels, despite a decline from record-breaking figures observed in 2021
This white paper summarizes the actions private-equity investors are beginning to take to create value through sustainability. It identifies five key organizational changes the industry must make along with the barriers and unlocks for private-equity engagement in “grey-to-green” transformation.
IFRS Foundation announces International Sustainability Standards Board, consolidation with CDSB and VRF, and publication of prototype disclosure requirements
The IFRS Foundation Trustees has announce three significant developments to provide the global financial markets with high-quality disclosures on climate and other sustainability issues.
Measuring Stakeholder Capitalism Towards Common Metrics and Consistent Reporting of Sustainable Value Creation
The World Economic Form proposes a set of common metrics based on four pillars.
This paper investigates the divergence of environmental, social, and governance (ESG) ratings based on data from six prominent ESG rating agencies: KLD, Sustainalytics, Moody’s ESG (Vigeo-Eiris), S&P Global (RobecoSAM), Refinitiv (Asset4), and MSCI.
The US Federal Trade Commission (FTC) and Department of Justice (DOJ) Antitrust Division announced a comprehensive review of horizontal and vertical merger guidelines, to assist in the identification of anticompetitive transactions and “modernise enforcement of the antitrust laws regarding mergers”.
The Securities and Exchange Commission proposed that private equity funds should provide standardised quarterly data on fees, expenses and performance, in a move that would transform disclosure standards and curtail managers’ ability to present potentially misleading information to investors.
The SEC Thinks the Lack of Transparency in Private Markets Is a Risk to Investors. The Commission Wants That to Change.
Industry experts talk about what’s next for private companies now that transparency is on the top of the regulator’s mind.
The Securities and Exchange Commission has voted to propose new rules and amendments under the Investment Advisers Act of 1940 (Advisers Act) to enhance the regulation of private fund advisers and to protect private fund investors by increasing transparency, competition, and efficiency in the $18-trillion marketplace.
ESG in direct lending is progressing from merely a high-level screening of investments to a more sophisticated incorporation of ESG considerations throughout the full investment life cycle, compelling total integration into a firm’s DNA, which often results in a permanent and significant cultural shift.
This paper examines net-of-fees private debt fund performance, performance persistence across funds managed by the same general partner and a general partner’s ability to time the market. The paper finds that private debt funds outperform bond and equity market benchmarks in the cross-section, with high performance dispersion across strategies and performance quartiles.
Using a proprietary data set of private credit agreements, the paper provides the five benefits of nonbank nonbank direct lending to private equity (PE) middle-market buyouts.
Using a proprietary dataset, the paper presents new empirical facts about direct lending funds and investigate the demand and supply drivers that have likely contributed to the growth of the asset class.
LPs are embracing ESG integration at increasing rates. Although challenges remain to accurately monitor and measure ESG, a thoughtful approach to ESG integration is becoming a must. LPs and GPs can take advantage of a growing number of tools and options as they plan concrete strategies, set priorities, balance environmental and DEI initiatives, and conduct ongoing evaluations to monitor ESG progress.
While most fund managers have never had to deal with inflation, they have certainly benefited from its absence. Now it poses the dual threat of rising costs for portfolio companies and muted multiple expansion during ownership. Firms can do a lot to mitigate inflation’s impact, but the time to start is well before it begins affecting performance.
Buying a strong platform company and building value rapidly through well-executed add-ons can generate impressive returns. It is also an increasingly popular strategy. However, it is not as easy as it looks. According to Bain & Company, getting it right hinges on three critical factors.