Wealth Management

Voted #6 on Top 100 Family Business influencer on Wealth, Legacy, Finance and Investments: Jacoline Loewen My Amazon Authors' page Twitter:@ jacolineloewen Linkedin: Jacoline Loewen Profile

September 6, 2009

Does Private Equity need to re-look the people assets?

Does private equity need to re-look the way it treats the people asset?
This is one of the concerns I am increasingly hearing from business owners deciding whether to go the PE route.
I am preparing for a large strategy conference for an excellent company, and watched one of my favourite strategists, Gary Hamel, interview Eric Schmidt from Google.
At about 23 minutes in, Eric asks the audience if they are familiar with people from private equity and then comments that private equity is not interested in the assets of Google, the employees. He talks about how private equity is most interested in the cash flow.
"Yes," I thought, "Specialization of management of a business is required and many business owners really benefit from private equity's financial sophistication."
But Eric is giving an off-the-cuff, honest comment and he is an incredibly high level client/partner of private equity. This is like getting a focus group "AHA" from private equity's dream client. One thing I have learned is to listen - really listen - to these throw out lines because they contain the key to building competitive advantage.
Eric's comment should make all private equity people pause and consider. Imagine if your private equity organization made it their strategic focus? Imagine the competitive advantage you could build?
The "IT" I am talking about is the people.
Could you make that top priority in a way that would please Eric?
Talking about the strategic culture of a company made me recall McKinsey's recent report on private equity and my pod cast interview with Sacha Gaie. What sto0d out for me was how few private equity funds made the big profits and how many did very badly. These top achievers were not the big players either. I wonder now if these private equity teams were more tuned in to the culture and the people inside their partnered companies?
It all begins with the people and it all ends with the people.
Here's Gary and Eric:

September 4, 2009

US Consumer Debt

What private equity does for your business

At its recent CEO Roundtable, Loewen & Partners and the Richard Ivey School of Business recorded a podcast with Sacha Ghai, global private equity expert and the author of the McKinsey Private Equity Canada 2008 report. McKinsey's annual report is an overview of key forces affecting Canadian private equity markets. The report provides a perspective on the short and long term implications for PE players, following the economic downturn. Looking forward, PE firms will create value by focusing on attractive niche opportunities.

Listen to podcast: What Private Equity Does for Your Business -
Sacha Ghai, McKinsey & Company,
chats with Jacoline Loewen for the Financial Post Executive
Download Full Report (PDF 2.32MB)

September 3, 2009

Percent of PE by Deal Size

MID-MARKET PRIVATE EQUITY DEALS SURGE

In its analysis of private equity activity during the first six months of 2009, PitchBook Data, a private equity research firm, reveals that lower and middle-market companies continue to successfully attract PE investment. Through the first half of 2009, middle market deals accounted for 70% of all investments, more than at any time in the last six and half years.

The new emphasis on deals under $50M means more financing options for small and medium enterprise business owners.

Jacoline Loewen, Author of Money Magnet.

What you can learn from fishing

How often have you heard the story where an entrepreneur risks their business to get the big fish? Doug Trott, founder of PriceMetrix, is one of those owners and the big fish he landed happened to be one of the world’s largest diversified financial services companies - Morgan Stanley. Doug says, "We were convinced that we had a solid track record and the integrity of our product was such that Morgan Stanley would have the confidence to use our service."

However, the risk of the deal falling through was high, made even more so, given the raging financial crisis. "By the time we got into October last year, the market was tanking and then by mid-December there was talk that Morgan Stanley was going to go insolvent”, said Mr. Trott. Thankfully, the insolvency rumours were just that, and a deal was finally struck. In April 2009 PriceMetrix officially started delivery of services to Morgan Stanley. When it comes to fising, go for the big ones because you might just catch one.

Read More
Learn more about PriceMetrix