Industrials PE vs Services PE
If both are sector agnostic and have more or less the same transaction size, what do you see as the main differences between the two? What would make you choose one over the other? I'd like to hear both pov Would be extremely helpful as I need to take a decision
Same shit different wrapper. All look the same in excel. Only sectors that are materially different are software and FIG.
software isn't that different
Depends on what level of analysis you're willing to go to. If you're just a tourist then it can look the same. If you're a domain specialist, it's very different, though not nearly on the level of FIG.
Services assets are generally more expensive and less capex intensive, higher growth, less cyclical. Overall better. Industrials is mostly cost take out and only few do that well.
Industrials is a massive area of focus for PE firms and there are many that have done well in the space – CD&R, KPS, Jordan, HIG, AIP, Greenbriar, Lone Star, AEA, AmSec (until maybe recently), among many others. Most of the traditional megafunds have pretty sizable industrials PE efforts.
Yes, cyclicality can present challenges at times, but can also present great buying opportunities. Cost take out opportunities are often a big part of the thesis but that’s not always the case. It’s hard to categorize a space so broad. Certain subsectors have flat growth while others are growing like crazy (e.g., industrial automation).
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