January 2020 - PE Alpha

PE – Software Turnaround Investment Playbook (Cerberus Playbook for Tech)

Software Turnaround Investing Playbook – Translating the Cerberus Investment Approach to Tech Note – just sharing my own notes Pre-Deal / Diagnosis Financial Stress Test Model churn sensitivity (GRR -5 to -10%) Simulate CAC payback stretch (18 → 36 months) Stress-test debt service under downside ARR scenarios Product/Tech Review… Read More >

Private Equity – Record Demand for Operating Partners

According to Private Equity International, PE firms are looking to boost portfolio company valuations while operational issues are becoming increasingly more complex. Source: https://www.privateequityinternational.com/record-demand-operating-partners-gps-seek-boost-portfolio-company-value-survey/ “Operating partner roles are the fastest-growing positions in private equity…” Here is value creation in 5 charts: https://www.peievents.com/en/event/operating-partners-technology-forum/value-creation-in-5-charts/

Private Equity – Top Value Creation Initiatives for Portfolio Companies

What is the top Value Creation Area for PE Operating Partners? See the chart below – the single biggest area is: “Sales, marketing, and revenue growth”. Growing revenue will lead to EBITDA improvements and Multiple Expansion which both drive real value for PE portfolio companies. Source: PEI – Private… Read More >

CRO – The Key Role in PE Operating & Portfolio Support Group

A lot of the traditional PE firms have great Portfolio Support teams. Many of the professionals are former CEOs. Here is one example about a PE Operating group: “To enhance our own operational capabilities, we’ve developed relationships with over 100 senior industry executives, or Operating Partners, who act as independent… Read More >

PE Portfolio Growth Insights – What is GTM Strategy in PE?

What is a “GTM Strategy” & why it’s a key driver in PE? GTM is one of the terms that gets thrown around a lot but what does it actually mean from a PE context – here is a good definition of GTM Strategy: * “GTM Strategy: a fundamental business… Read More >

PE Value Creation – Sales Excellence & Revenue Acceleration

Historically, Private Equity (PE) firms looked to add value to their portfolio companies in the following ways: Financial engineering Strategic initiatives Operational improvements Over the years, financial engineering was no longer as impactful on value creation as it was in the 80’s and 90’s so PE firms started adding value with… Read More >

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