growth equity investment thesis

macro idea exploration to a newly formed team dedicated specifically to that task. In addition, EQT appointed to the board how to write proposal for windows the CEO of Absolut Vodka, one of the worlds most successful brands, and Swedish Matchs former CEO, who had led two buyouts and understood the change of culture required to succeed. Finally, the firm fine-tuned its due diligence process, developing expertise specific to the thematic subsectors of interest in order to strengthen the quality and speed with which it would be able to determine whether to pull the trigger on a prospective deal and how. Berkshire saw that a straightforward investment thesisreplicating the business model in other major marketscould significantly increase the value of the business, so it immediately supplied Crown Castle with an initial 65 million investment to buy towers in other major metropolitan markets. Our advice is unequivocal: Stay out of this high-stakes game.

A 2002 Accenture study, for example, found that 83 percent of executives surveyed admitted they were unable to distinguish between the value levers of M A deals. We are focused on performance, says the head of one private-equity firm who has replaced half the CEOs of his portfolio companies. More than 40 percent had no investment thesis whatsoever (!). An accretive deal, of course, has the opposite outcomes.

Note that in Clear Channel's investment thesis (at least as we've stated it the benefits would be derived from three sources: Leveraging an existing sales force more extensively. Going private was the making of auto parts manufacturer Accuride. Having one high-level contact streamlines the relationship and avoids distractions. This time frame removes the often counterproductive focus on quarterly numbers yet still creates urgency to transform the business quickly. They know that weak performance is often the result of insufficient management drive. Applying the guidelines that the in-house analysts developed to codify each theme, the deal teams concentrate their hunt among companies and sectors poised to benefit from opportunities that track the macro themes trajectory.

The former head of Whirlpool Europe was named the COO, and the former head of Shell Sweden became the CEO. They watch cash more closely than earnings, knowing that cash remains a true barometer of financial performance, while earnings can be manipulated. 16 Unfortunately, dilution is a problem that has to be wrestled with on a regular basis. In this environment, tough-minded, highly disciplined management becomes essential to successand thats exactly the kind of management characterizing the top private-equity firms.