Monday, November 21, 2011

Private equity investors making cuts to survive - Baltimore Business Journal:

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, a consulting firm based in Bloomington, surveyed about 100 seniorf executives at privateequity firms. Respondents to the onlines survey cited aweak economy, the ability to meet businesds forecasts and the potential for loan defaultss as their major concerns for 2009. Respondents represented a crosz section offund types, includinhg buyout funds (74 percent), mezzanine funds (13 and venture funds (12 Fund sizes ranged from less than $100 million to more than $3 billion.
Facintg today’s bleak dealmaking environment and a tighcredit market, private equity firms have focused theird resources on helping portfolio companies acquire new customersd and increase business with existing customers. Legal matters, information technologu and purchasing are areas receiving less attention from privat e equity executives this RSM McGladrey found that more than half of the funds represented in the survegy have yet to close a dealin 2009. Respondentes ranked “raising capital or acquisitiondebt (57 percent) and “decreasing values of acquisition targets due to declining (25 percent) as the two bigges obstacles to overcome when closing deals in 2009.
Whils most of the surveyed fund s completed two to three transactions per year in 2007 and less than 20 percent expect to sell a portfolio company or product linethis year. The survey confirmec that many private equity firms are not lookinbg to acquire new platform companies until theeconomy improves. Rather, executives hope that they can weathed the storm by managing the profitability of existinf investments until financing becomesw morereadily available. RSM McGladrey partnerecd with its global investment businesws to conductthe survey. It was compiled from Marcu 13 toApril 3.

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