Financial Engineering and PE

Just a comment from someone so I though I should conifrm. Is it true that Financial Engineering is also used PE funds.

Like what would be the use of Financial Engineering in PE??

Can someone with specialization in Financial Engineering move into PE?

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Comments (11)

Oct 10, 2006 - 6:35am

Financial eng is also looking at restructuring the comany's balance sheet, subsidiaries and debt structure.

often by reengineering and gearing, you can achieve better ratios, also better return on equity for the core business.
selling it into parts that sum up more than the price you paid for it is also a commonly used technic

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Oct 15, 2006 - 1:50pm

just means structuring a LBO and subsequent recaps (tinkering with capital structure put in place) in order to profit instead of operationally turning around the company for profit. The big buyout funds (KKR, Bstone, etc) are known for this (somewhat hands off approach with company after they purchase). It is not financial engineering from school, just a term used in the PE industry, not really that complicated

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