Post-acquisition Operational Improvement Projects

Thanks junkbondswap, and congratulations on your promotion!

It makes sense that senior members and consultants are mostly responsible for post-acquisition ops improvement.

Let's say, one of your firm's portfolio companies is a regional supermarket chain where you happen to shop on a regular basis. As an actual customer of the supermarket, you should have some opinons on where they can improve their business, for instance, better customer service, more user-friendly website etc. Can you make these kind of suggestions to senior members? Are they willing to listen, or they wouldn't really take you seriously, cause well, you are an analyst/associate and you don't have much industry knowledge/experience.

Thanks again.

As an associate, you are paid to have an informed opinion (on everything). You won't speak up all the time, but when you feel strongly you speak up and are taken seriously.

Obviously, the senior guys are going to end up driving the decision-making process, but they appreciate perspective from associates. We are smart people, and we are closer to the numbers.

And after all, we are co-investors too...

I would add that concrete recommendations that do not require significant resource allocation and can be implemented on a short time frame are the only ones that are going to have any legs...

Thanks jmcfadden. Very helpful. When associates share their inputs and perspectives with senior members, is it usually during team meeting or do you have enough exposure to senior members and they are very approachable? I guess it differs firm by firm and its size?

I would love to hear from others, too.

Thanks.

i would agree with jbs. if you have a good idea, senior members of the team will certainly take your opinion seriously. there's a multitude of initiatives that can be undertaken post-close to improve the operations of a portfolio company. as jbs pointed out, reducing headcount in overlapping departments is an example of something an associate might be tasked with.

your level of involvement is directly correlated (and increases) with the amount of experience you have. for example - say you work at a PE firm focused on investments in the media sector. as a newly-minted associate, you're probably knowledgeable enough to look through financial statements for possible cost-cuts as well as assess the market/competition to develop a solid thesis of where you feel the company should be headed. that said, your md has a ton more experience than you do; this probably includes a mix of previous investments in the sector as well as direct media experience. case and point, he's more capable of "reading between the lines" so to speak. not saying an associate couldn't come up with a brilliant plan, but more often than not, high-level portfolio company decisions are made by the senior members of the team (as they should be, since they're essentially who the LP's are investing in).

there's been numerous occasions where i've reviewed an investment that looks promising from a financial standpoint only to find out from one of our operating partners that the company is unattractive because of reason x or reason y (both of which you wouldn't know unless you had specific industry experience).

mlamb93, thanks for your reply, very informative.

So, what are the ways for analysts/associates to gain industry knowledge/experience other than the obvious (years of PE work experience)? Following industry trends by reading news articles/magazines, attending seminars, talking to industry leaders etc?

Off the topic, what are the good PE websites to check daily? Ones that send daily email to your inbox would be a plus.

Thanks again, guys.

Is the best daily email that I know of - PE and VC news

Thanks maverickPE - yeah, I heard about PE week wire. Im gonna go ahead and sign up for a daily email.