Well the bank downgrades were just the icing on the cake this December. At this point I'm expecting a slice of pizza for all my hard work this year. Anyways...
I was hoping someone in private equity could shed some light on deal structuring. I have been working on the banking side with a few funds who are making asset purchases at rock bottom prices, but I am even more impressed by the deal structuring (mostly midsized industrials). What have been other's experience with deal structuring?
Has anyone ever seen derivatives for private company investments where the exit strategy is sale of the company? I was thinking maybe something based on future EBITDA, but this is highly subject to manipulation. Unlike the public equity markets, you cannot structure a derivative on an equity price, as it is not traded or observable. Is there any market out there that supports any type of guarantee from sellers?
Keep in mind that this is in the context of lower middle market where things are much less commoditized.
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