What are some of the key strategies different funds utilize across acquisitions? I was reading through Bain's PE reports and in the '18 one, they described "buy-and-build" pretty extensively. So I was curious what is the nomenclature that PE veterans would describe other major strategies and examples of deals in each
Guessing "value" investing is one -i.e., identifying an undervalued target from non-systematic factors. Would love to hear what everyone else thinks or point me to any resources that talk about this in-depth
I haven't seen this anywhere systematically laid out. Here is what comes to mind:
Can't think of anything else but I am sure the WSO community will be quick to step in and come up with a few more.
Good luck,
Tamara
This is fantastic! Thanks for taking the time and sharing. Can you explain what a "roll-out" is? I wasn't able to google around and find the definition. Also what is a satellite/shipping deal?
Pleasure.
Roll-out: you take a successful concept and replicate it in other locations. Invest capex, get returns on new locations. Example: PF Changs, Chopt, Golden Goose, Moncler.
Build-a-platform: sometimes it is cheap to buy a hard cash-producing asset and then accumulate a whole portfolio of them, similar to real estate. For example, there were some PE-backed shipping companies (you literally buy vessels). Or expand satellite operations (google Inmarsat). You get paid so called "platform premium" at exit because you have created a large and well-diversified business.
Jesus, what does PE not touch these days
SPACs (Special Purpose Acquisition Co) are getting popular as well
Oh yes! Glad you mentioned it - TPG's permanent capital platform, Pace Holdings, comes to mind.
Buy the book "Mastering Private Equity". It has a good overview of the main strategies employed by firms iirc.
Thanks for the suggestion! Found a free PDF online and went through it last couple of days. Great read.
EDIT: http://library.sadjad.ac.ir/opac//temp/18979.pdf
Off-question but is there a Corporate Development Report that a well-known company provides for free, similar to Bain's PE report?
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