What is the ultimate objective of every private equity investment?

 The ultimate objective for every private equity investment a Private Equity firm undertakes is to create a company that produces superior products or services and operates efficiently to maximize financial growth.
To repeat that in language that the entrepreneur understands: The goal is to help companies grow.
If you want to grow your business, you have to state "Our company will grow at a xyz rate" as a corporate goal, and you have to get everyone on your business knowing this is the goal. After that, define the growth rate at 21%, or whatever you want, and why.
Give a reason for the growth rate. Do you want to be Toronto's best, Ontario's best or the world's best make of toys? Spin Master gave their vision out to public view and set an aggressive growth target. They wanted to be the world's best toy company and to make $500,000M revenue. Then they went for it. 
Spin Master is now a $900,000M revenue company and are a Canadian success story. To think that they began by making little faces out of stockings and when you added water, grass grew out of their heads. Remember those?

1 comment:

Thomas Adair said...

Traders are taught that the Holy Grail to Investing doesn't exist. Real people were taught that all the planet's move about the earth, don't go to far out into the ocean(you'll fall off the earth), on and on..........

When one looks outside the box(inventor), goes against the group(thinks for self), said they found(developed) something that is supposed to be impossible(airplanes), they were once killed. Now these people are called bad names and delegated to be unheard, and ignored group.

The ultimate business solution. The ability to cut the cost of any business expense, or just plain invest.

I developed multiple arbitrages that enable me to trade(not invest) in the financial markets, without risk(The Holy Grail to Investing), or arbitrage that anyone can do. Over 30% a year.

Thomas Adair