private equity portfolio company investments
TRANSCRIPT
Private Equity Portfolio Company Investments
Continue to Experience Turbulent Times
Are your portfolio companies performing to expectations? Is it time to be more proactive about managing your investments?
Equity funds are facing instability with continuing problems in the portfolio companies they invested in a few years ago. Returns on investments are not what were expected, and cash flows are not what they were supposed to be. Timelines are being extended and financial statements are being revised. SEC scrutiny is on the rise and investor litigation is increasing. It isn’t as easy to invest in a company, dress it up and sell it as it used to be. Private equity and distressed equity funds could easily be the next financial market crisis - if anyone admits to their problems. Investment bankers are layering debt, diluting equity and looking to litigation to recoup cash. You have to admit to yourself that you did not get what you thought you were getting - whether it be contracts, receivables or marketable technologies. You had MBAs with more attitude than experience conduct your due diligence and now they’re running your portfolio companies. MBA’s may know how to dress up financial statements but have no training or experience in identifying a business crisis and fixing the problem. You also have to admit that merging two or more companies is a lot harder than you thought it was. So, unless your ultimate plan is to pillage your portfolio companies by collecting fees, taking advantage of tax treatments and then putting it into Chapter 11, you've got a problem on your hands and there's nobody you can admit it to. Private equity has evolved in the past 10 years, but certain basics have never changed, and what you need now is an experienced turnaround/restructuring specialist, not another MBA who doesn’t know what he doesn’t know. Successful turnarounds and restructurings need interim crisis management capable of identifying problems and fixing them immediately, while working on a legitimate long-term plan based on realities, not promises and expectations. For a highly confidential assessment by real turnaround experts contact: Barry Cohen, Managing Partner 2nd Generation Financial Group 4747 Research Forest Dr., Suite 180 The Woodlands, Texas 77381 936.321.1125 [email protected]