Private Equity

A private equity position is concentrated and usually carries control or real influence. In practice that means board seats, consent rights over major decisions, a say in who runs the company, and shared accountability for what happens next. The holding period typically runs to several years, and the investor lives with the consequences throughout.

The situations vary a great deal. A founder may want a partner to fund the next stage without giving up the whole company. A corporate may be selling a division it no longer wants to manage. A sponsor may be buying out an established business and recapitalising it. In each case the work comes down to the same thing: fitting the capital structure, the governance rights, and the management incentives to the path the business can realistically take.

Private equity returns are realised at exit. Very little is paid out along the way, which makes the assumptions set at entry decisive. The growth, margin, and debt-service case written at underwriting is what determines the outcome several years later, so we spend the time stress-testing it while the price is still negotiable. We also want a view, before capital is committed, on who the eventual buyer is likely to be: a trade acquirer, another sponsor, or a public listing.