Best Industries for small PE funds?
Hello, I wanted to ask what you think are the best industries for a small PE funds looking at targets with an EBITDA of 1-3 millions. Asking in general but would appreciate a perspective on UK based companies. What do you think are interesting subsegments of consumer goods and manufacturing for an LBO? Food & Beverage? Personal care? Beauty products? Plastic manufacturing? Glue & adhesives? Disregard the impact of the coronavirus. Thank you!
The smaller the deal the more relevant operating experience matters. That alone will drive returns more than anything so the answer is "whatever you have the most experience in".
The second factor is low entry multiples.
Agreed. But don’t you think that some are better than others ceteris Paribus
Food & beverage, personal care and beauty are all good ones because the number of different brands are skyrocketing
Thanks for your response. Could you explain to me how how the numbers of brand skyrocketing helps drive returns higher?
Also, do not you think that these sectors may be too competitive for small firms, especially given how hard it is to get shaped space in supermarkets.
Finally, what do you think about non discretionary manufacturing? Such as fire safety equipment, repair focused goods (fences, locks), water coolers, commercial plumbing products, packaging, etc.
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