An interesting trend is developing in the private equity world: the rise of “secondaries.” The business model of private-equity companies “scouring obscure corners of the business world” for undervalued firms is becoming a thing of the past.1 Instead, the idea of purchasing companies owned by other private equity firms is slowly gathering momentum. This type…
Tag: Private Equity
Touchdown or Fumble? The Risks and Returns of Investment Opportunities in Professional Athletics
The start-up company Fantex Holdings and its newly created trading exchange for investors to buy and sell interests in professional athletes have recently shed light upon the intersection of venture capital and professional athletics1 Fantex Holdings has created stocks tied directly to an athlete’s financial performance; a progressive venture that is backed by executives from…
Buy or Sell: Geithner’s New Gig
Timothy Geithner served as the United States Secretary of the Treasury until January of this year. During his past four years in office Mr. Geithner has been an extremely polarizing figure in the financial world. His tenure was defined mostly by his dealings with the fallout of the recession. He is the name, perhaps unfairly,…
To Go Public or Not to Go Public? The Pros and Cons of Publicly Traded Private Equity
In private equity, one of the main strategies employed by private equity firms when purchasing a public portfolio company, is to subsequently take that company private. This is believed to be beneficial because it allows the private equity fund and the management of the portfolio company to operate the business without pressure from shareholders, allowing…
Should Private Equity Middlemen be Worried? New Rule Could Lead to Emergence of Online Fundraising Platforms
Traditionally, most private equity funds use placement agencies to market, provide access to investors, and sell securities in their funds.1 The resulting relationship between the placement agencies and private equity funds essentially allows powerful agencies to control investor entrance to attractive funds.2 However, several start-up technology platforms have emerged in an effort to provide an…
The South Korean Private Equity Market: Transitioning from Foreign to Domestic Funds
Overview and History After the Asian Financial Crisis in 1997, South Korea’s private equity market attracted a multitude of global investors, particularly in the distressed and buyout market.1 In fact, foreign funds such as New Bridge Capital and Carlyle were major players in the corporate restructuring process after the financial crisis.2 It was only in…
(Jump)start Our Business Startups: The JOBS Act 500+ Days Later (Part 1)
One year, 7 months, and 6 days have passed since President Obama signed the Jumpstart Our Business Startups (JOBS) Act into law. The product of rare bipartisanship, the JOBS Act was praised on both sides of the aisle as improving access to capital for US small business, which could in turn drive economic growth.1 While…
Taking Back the Castle: Michael Dell, Silver Lake, and the Battle for Dell Inc.
On September 13, 2013, shareholders of the personal computer giant Dell Inc. voted to approve the proposed leveraged buyout of the company by founder Michael Dell and the private equity firm Silver Lake.1 The vote put an end to the nearly year-long saga that pitted two of the country’s wealthiest men against one another. Although…
Zombies of the Private Equity Industry Pt. II
A previous blog post discussed the existence of zombie funds in the private equity industry as well as their effect on the investor market. Approximately $116 billion is sitting in almost 1,200 zombie funds and their presence is an impediment to the growth of investor wealth while continuing to accrue management fees for ineffective managers.1…
The Impact of Media Portrayals on Private Equity and Venture Capital
Americans love their reality television. So, it is no surprise that ABC would choose to broadcast a reality competition every Friday at 9 PM. What might be more surprising is the show’s subject matter. The judges on ABC’s “Shark Tank,” are not entertainment industry insiders. Instead of looking for America’s next big star, they are…