What qualities do private equity investors look for?

In addition to an outstanding management team and the firm’s performance at the transaction time, investors need to have confidence that the firm’s value is likely to increase after closing. The way a CEO communicates to the investor counts. Eric Burke, founder of Torquest Private Equity, pointed out that “investors never buy the hockey stick scenario”. If your company’s earnings have been steady in the last while but you are telling an investor that you expect earnings to go up rapidly like the shape of a hockey stick after a major capital investment, you need to provide solid information and reasonable assumptions to back up your projections.


Ultimately, an attractive deal to an investor is a business that has multiple competitive advantages that together act as a spring board to increase profits within a reasonable time frame, say 3 to 5 years. Truly outstanding competitive advantages are often unobvious to casual observers. Therefore, you as the CEO or your agent need to communicate to investors in a convincing way what the competitive advantages are and why they will be sustainable.
Jacoline Loewen, author Money Magnet

Ivey CEO Roundtable for Family Business Owners

The Ivey Business School has the Center for Family Business and David Simpson often joins with Loewen Partners to bring together family business owners for regular discussions. This time, family business owners will be discussing how private equity can work well with family business owners and survive for many generations.
The speakers are private equity experts who are Canadian but working in the US.

What Business Owners Should Know
American Investors – What They Want and How They are Different

Find out what American investors are looking for from Canadian companies and how they work with entrepreneurs north of the border. Gain insight from Canadian investment professionals working in the U.S. for American firms. Learn about their lessons and experiences.

Join us for a peer-to-peer conversation with leaders from the world of private capital as investors and entrepreneurs share their knowledge of private equity investing and cross border mergers and acquisitions activity.

Speakers

What Does American Money Seek in Canadian Companies & How Does It Work?

Monitor Clipper Partners, Boston – Bill Young, Founding and Managing Partner

As a professional engineer, Bill Young brings a practical enthusiasm to companies in Monitor Clipper Partners’ portfolio. Bill has worked with Monitor since 1989. He was a founding partner of Westbourne Management Group in Toronto, Canada, providing management services to companies requiring turnarounds. Bill began his career as a design engineer with Imperial Oil, Canada. Bill holds an M.B.A. with Distinction from the Harvard Business School and a B.A. with Honours from Queen’s University in Kingston, Ontario. Venue: The National Club, Toronto tickets $150 http//www.loewenpartners.com

7 Reasons Why Strategic Planning Can Fail

When the Japanese shocked the American car industry back in the Seventies, everyone wanted to study their strategy and methods. Surprisingly, the Japanese had embraced the American Total Quality Management methodology by Dr. Deming which had been turned down by American manufacturers. When I received Max Carbone's description of strategy, I was reminded of Dr. Deming and his TQM framework which had as the last step of the cycle - celebrate! Read below Max's comments on strategy and Number 7. I rarely see this point made in business. 

1.  Weak Market Insights

Many leaders and teams engage in strategic planning without having sufficient knowledge about market needs and competitive position.  Having independent research to identify what your customers want, what they think of your firm and how you compare to your competitors is invaluable to know what your game plan needs to be.

2.  Lack of Shared Vision & Values

Leaders that don't invest the time to craft their vision and values will inevitably have teams who waste precious energy by working at cross purposes.  Successful investors, business leaders and management gurus all agree that winning teams develop and live by a common vision and set of values to drive results. 

3.  Unfocused Targets

Leaders, individuals or teams without focused, quantified goals tend to drift and simply don't achieve what they are capable of.  Crafting an agreed upon set of goals, strategies and actions by any team is the best way to realize business potential.

4.  No Accountability

It's great to come up with a plan, but without holding team members accountable to one another, even an exceptional plan is likely to fail.  Having a disciplined process in place to ensure accountability will significantly improve performance. 

5.  Poor Implementation

Studies show that high performing teams must be in the top quartile of performance as determined by their customers to achieve exceptional results.  Creating a culture where great implementation is expected is an imperative for any business leader.

6.  Inappropriate Behavior

Surprisingly, more than 25% of team members in any company may have the education and experience, but the simply don't have the right psychological behavioral profile to play their position!  Leaders need to know the profile of their team to ensure they have the ability to perform in their role.

7.  No Fun, Adventure or Spirit

Finally, the best game plans need to be engaging, fun and adventurous.  Building a positive team spirit is probably the most important and challenging work of any leader.  Making business fun is what the greatest leaders do.  It may be the greatest single attribute between a strategic plan that works and one that doesn't.


Max Carbone, Teamworks.416.721.6359 

The Power of Iconic Brands - New Owner of Brooks Brothers Tells It All

“Put away your work, I have arranged for you to go to Brooks Brothers and choose a new shirt for the summer.” Imagine if your boss said that to you this Friday? Would you be motivated come Monday morning?

The American brand has arrived in Toronto, and upon walking across sisal mats trimmed with khaki borders and seeing slipper chairs with crisp white cotton covers, I knew this was authentic colonial style at its best.  My brother-in-law, a Brooks Brothers walking advertisement, always told me that Ralph Lauren was a poor man’s version of the Brooks Brothers brand, and once you visit the Toronto store, it is tough to look at the polo symbol the same way again.

Brooks Brothers was rescued from the bungled mis-management of Marks & Spencers by an Italian named Claudio Del Vecchio. What could an Italian add to Brooks Brothers – Gucci flash, Versace shock value? Would we see Madonna in blue seersucker now, clutching a massive silver trophy provocatively?  I was curious and jumped at the chance to attend a family business evening held at the Brookes Brothers store by the Chairman and CEO.  Claudio Del Vecchio demonstrated elegance you only find on the Continent, combined with Oliver & Bonacini serving up amuse-bouches all evening and the opportunity to experience the store - what a smart evening.

As Evan Thompson, representing Family Firm Institute, put it, "Brooks Brothers is an icon." 

Claudio picked up this theme and spoke about understanding the essence of a brand. His early years working in his family business, creating and achieving the globalization an eye-glass empire, gave him the foundation to know how to speak to the client, but then act to bring in their requests. I could see that Claudio was humble despite his global success, and loved to know how to thrill his core clients. He respects the brand of Brooks Brothers' smell of New York Wall Street success and money, but I could sense a whole new level of style elegance, lifting it from staid to - yes - Italian elegance. When I checked out the magazine, there was a great article with photographs on how to combine shirts and ties which I showed to my teenage sons, who actually spent a few minutes discussing how to dress well. Remarkable! Now that is smart brand management and Claudio’s quest for stylish perfection is being appreciated by my family's next generation. That is a legacy brand - truly an icon.

Jacoline Loewen, expert in family business and author of Money Magnet: Attracting Investors to Your Business. Invited to family business event by family business estate planning leader: Glenn M. Davis, LL.B., MTI, TEP, Principal Mercer, glenn.davis@mercer.com  www.mercer.ca

Family business is not a gift, it's an anvil

"The gift of a family business is not a gift, it is an anvil," says Tom Deans, family business owner and author of Every Family's Business. Tom reasons that second generation family businesses can slip in profits and by the third generation, the statistics tell the story, as only 10% of family businesses make that leap.
Tom agrees that a family business can pass along intellectual capital as well as the financial capital. He believes, though, that passion for living and having strong, family values count for a great deal more. Tom says, 'Wealth is not about passing along a business. It is about teaching the next generation about life lessons that matter."
The family business is a source of prosperity but if you can bring in private equity partners who are far more objective and performance driven, the business has a better chance of survival and growth. That is good for the employees and the Canadian economy. The wealth coming from the business can be put into a portfolio for the family and they have a better chance of keeping family relations the way they should be.
Strong family, strong life.
From speech given at Blakes law firm, Toronto.
Jacoline Loewen, expert in private equity for family business.