What do we do in Private Equity
What we Do in PE
Private equity firms face an increasingly difficult operating environment in which sound investments are harder to find and land, portfolio ownership cycles are extended, and exit valuations
Working extensively with private-equity firms and understand their unique challenges. We share their sense of urgency, their thirst for pragmatic, bottom-line answers, and their need for speed and flexibility. Most of all, we know that every investment requires its own set of solutions. In short, we understand how to work with private-equity firms to create value in a low-growth world.
Helping our clients deliver strong investment returns across the full transaction cycle from initial target acquisition screening and strategic due diligence, to post-merger integration and strategy activation, to value enhancement and exit.
Play an integral part in ensuring value-creating transactions for our clients. In addition to advising PE firms on acquisitions, we also work with our private equity firms’ portfolio companies on developing growth strategies, implementing operational enhancements, executing follow-on acquisitions, and positioning for successful exits.
Private equity firms face an increasingly difficult operating environment in which sound investments are harder to find and land, portfolio ownership cycles are extended, and exit valuations are more challenging and unpredictable. Vifco’s capabilities are honed to meet those challenges. We focus on unlocking value in the practical, real-world pursuit of greater returns on investment. We solve specific problems—from deal generation and initial due diligence to improving the operational and financial performance of portfolio companies and maximizing exit value. Our team’s rigorous analysis enables clients to make decisions confidently and effectively across all phases of the corporate and investment life cycle and all investment types and deal structures. Our senior professionals work with clients to: Use our real-world, operational experience to lead sustainable transformational change at the operational, cultural, and organizational levels and to assume interim management roles when needed until the right permanent talent can be found Unlock deep insights into untapped company value during due diligence and thereby identify potential risks and opportunities by means of on-site facility visits, functional assessments, and more-holistic analyses that assess all improvement levers across the company Drive rapid enterprise improvement and profitability improvements earlier and more quickly through our QuickStrike® assessment, which rapidly identifies opportunities for operational and financial improvements, including in mature businesses whose management may believe that all of the business’s profit improvement opportunities have already been tapped We work extensively with private-equity firms and understand their unique challenges. We share their sense of urgency, their thirst for pragmatic, bottom-line answers, and their need for speed and flexibility. Most of all, we know that every investment requires its own set of solutions. In short, we understand how to work with private-equity firms to create value in a low-growth world.
Private Equity is one of the most vaunted types of work in finance and private equity interviews are notoriously challenging. The typical route into private equity is after having spent 2 years at a top investment bank and / or completing an MBA at a top business school. For an excellent insight into the Private Equity world, read "Barbarians at the Gate" which details the LBO of R.J.R. Nabisco by KKR in the 1980s. What Is Private Equity? The definition of private equity is simply money invested into a private company, or the privatization of a company through the investment of outside money. Basically, what private equity firms attempt to do is to invest into a company, take a majority stake, improve the company and then exit their investment at a large profit. In order to magnify returns, PE firms make use of leverage (borrowed money) to conduct Leveraged Buyouts (LBOs). Private Equity firms can either focus on a specific sector (Energy, Technology, Healthcare etc.) or operate across a broad spectrum. The larger the firm, the more likely it is to cover more sectors. How Do Private Equity Firms Work? PE firms will typically acquire 100% of the target company and make use of a combination of cash and debt to finance the acquisition. The advantage of using debt is that the firm has to invest less of its own cash, and therefore the return on equity is higher and they can undertake bigger / more investments. When the target company is acquired, the future cash flows are used to pay off the debt used. If the PE firm in question is using leverage, they will require a financial sponsor (typically a bank) to loan them the money. The aim of the investment by the PE firm is to take a business, increase its value and then sell it's share in the business. Typically, PE firms will target 20% return per year. The way the firm will improve the business can be anything from replacing the management, reducing costs, improving efficiency or many other possible actions. Private Equity investments are usually not that risky (at least compared to VC) because the target firm is usually quite large and is unlikely to collapse in value. What Do You Do In Private Equity As a junior employee in PE, your work is actually quite similar to that of investment banking, but the hours are (usually) less and the pay is (usually) more. The work will involve valuing companies, modeling for mergers / LBOs, conducting DCF analysis etc.