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Executive Summaries

Executive Summaries 4 Journal of Applied Corporate Finance • reworking troubled deals. As a result of that flexibility, and of the kinds of companies that get taken private in leveraged deals in the first place, most troubled PE portfolio companies should end up being restructured efficiently, thereby limiting the damage to the overall economy. Part of the restructuring process involves the use of the PE industry’s huge stockpile of capital to purchase distressed debt and inject new equity into troubled deals (in many cases, their own). At the same time the PE firms have been working hard to rescue their own deals, some have been taking significant minority positions in public companies, while gaining some measure of control. Finally, to limit overpriced and overleveraged deals in the future, and so avoid the boom-and-bust cycle that appears to have become a predictable part of the industry, the discussion explores the possibility that the limited partners and debt providers that supply most of the capital for PE investments will insist on larger commitments of equity by sponsors to their own funds and individual deals. Operational Improvement: The Key to Value Creation in Private Equity and generate attractive returns. But few PE firms http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Applied Corporate Finance Wiley

Executive Summaries

Journal of Applied Corporate Finance , Volume 21 (3) – Jun 1, 2009
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Publisher
Wiley
Copyright
Copyright © 2009 Morgan Stanley
ISSN
1078-1196
eISSN
1745-6622
DOI
10.1111/j.1745-6622.2009.00234.x
Publisher site
See Article on Publisher Site

Abstract

4 Journal of Applied Corporate Finance • reworking troubled deals. As a result of that flexibility, and of the kinds of companies that get taken private in leveraged deals in the first place, most troubled PE portfolio companies should end up being restructured efficiently, thereby limiting the damage to the overall economy. Part of the restructuring process involves the use of the PE industry’s huge stockpile of capital to purchase distressed debt and inject new equity into troubled deals (in many cases, their own). At the same time the PE firms have been working hard to rescue their own deals, some have been taking significant minority positions in public companies, while gaining some measure of control. Finally, to limit overpriced and overleveraged deals in the future, and so avoid the boom-and-bust cycle that appears to have become a predictable part of the industry, the discussion explores the possibility that the limited partners and debt providers that supply most of the capital for PE investments will insist on larger commitments of equity by sponsors to their own funds and individual deals. Operational Improvement: The Key to Value Creation in Private Equity and generate attractive returns. But few PE firms

Journal

Journal of Applied Corporate Finance – Wiley

Published: Jun 1, 2009

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