The thinking barbarians: how private equity has evolved - FT中文网
登录×
电子邮件/用户名
密码
记住我
请输入邮箱和密码进行绑定操作:
请输入手机号码,通过短信验证(目前仅支持中国大陆地区的手机号):
请您阅读我们的用户注册协议隐私权保护政策,点击下方按钮即视为您接受。
观点 私募基金

The thinking barbarians: how private equity has evolved

The industry cannot always be caricatured as short-termist, debt-addicted asset-strippers

George Roberts and Henry Kravis of KKR close the RJR Nabisco deal

Consider the tale of two $20bn-something companies — both of them private equity buyouts.

Thirty-five years ago, when Kohlberg Kravis Roberts pounced on the food-to-tobacco conglomerate, RJR Nabisco, the private equity industry hit mainstream headlines for probably the first time. The scale of that $25bn Nabisco deal — immortalised in the bestselling business book Barbarians at the Gate — is still totemic. (It dwarfs last year’s biggest global buyout — the $14bn paid for Toshiba by Japan Industrial Partners).

But in most other respects, private equity has been transformed over the past three decades. In 1989, it was still essentially a cottage industry — aggregate annual deal volumes from the 1980s until the end of the century rarely topped 1 per cent of GDP, even in the US, according to the OECD. Over the past four years, that ratio has ranged between 2 and 5 per cent, PitchBook data suggests. The intervening period witnessed vast leverage-fuelled expansion underpinned by an unprecedented era of ultra-low interest rates.

Few deals were more aggressive than KKR-Nabisco. But the most famous buyout in history soon became the most infamous. Over a 15-year period, as tobacco risks mounted and debt costs ballooned, the original deal rationale broke down. Ultimately KKR lost $730mn on the transaction.

Plenty of other companies have been ransacked over the years, often highly successfully for their private equity owners. But the industry today cannot be caricatured homogeneously as short-termist, debt-addicted asset-strippers.

Take the case of Visma, another $20bn company owned by private equity. First taken private by London-based HG, with an enterprise value of about $500mn in 2006, the Nordic software business is now reckoned to be worth 40 times that — and is still majority owned by HG. The 18-year recent history of Visma’s ownership is also, in exaggerated form, the story of private equity’s broader evolution — and in multiple ways.

One trend it reflects is longer hold times. In the 1990s or 2000s, a typical private equity firm would have been in and out of a deal in three or four years. Last year, the median hold time for the 1,121 companies that were sold was 6.4 years, an all-time record, according to PitchBook. This is due in part to a maturing model that goes beyond adding debt and cutting jobs. But it is also driven by private equity’s use and abuse of so-called continuation funds to extend investment horizons — either because they want to hold on to thriving portfolio companies for longer, or because they don’t want to crystallise weak valuations of underperformers.

Selling these days is tricky — particularly into public markets that are no longer receptive to listings of highly leveraged companies with inflated private valuations. Even in the voguish technology sector, the few examples of initial public offerings by private equity-owned companies have been cautionary. (Instacart in the US is down 25 per cent since last year’s float, and Deezer in Europe is down nearly 60 per cent.) Private equity exits via IPOs, once the norm, accounted for barely 1 per cent of exits in the US and Europe last year, the PitchBook data shows.

A second trend that HG’s ownership of Visma illustrates is the shift towards multiple investors. Collaboration between private equity firms has been an on-and-off feature of the sector for decades, notably via so-called club-deals when firms pool resources in an effort to take ever bigger targets private.

But a new style of joint investment has also been growing, exemplified most obviously by HG. In the case of Visma, the firm has brought in a new roster of investors every three or four years — either fellow private equity firms, or their end-investor “limited partners” directly. The Norwegian group now has more than 30 investors. PitchBook data shows that deals over the past four years, involving six or more investors, have multiplied 162 per cent compared with the prior four-year period, while standard single-investor deal volumes are up only 28 per cent.

Of course every investor needs an exit at some point. Recognising that short-term IPOs might not be realistic, stock exchanges from Nasdaq to the London Stock Exchange are innovating with platforms that will make it easier for investors in private companies to auction their holdings. The LSE’s “intermittent trading venue”, which is already wooing the likes of HG and Visma, may be one forward-thinking way to begin offsetting the string of delistings it has suffered of late.

patrick.jenkins@ft.com

版权声明:本文版权归FT中文网所有,未经允许任何单位或个人不得转载,复制或以任何其他方式使用本文全部或部分,侵权必究。

Lex专栏:特朗普动动嘴就能掀起加密货币热潮

投资者相信特朗普重返白宫将对加密货币有利,而他在实际政策方面的不可预测性并不重要。

巴菲特出售苹果股票,累积大量现金,引发人们对其动机的猜测

伯克希尔哈撒韦公司通过平仓最赚钱的交易填满了金库,投资者对此提出质疑 。

马斯克或成华尔街的“大白鲸”

美国大选和特斯拉老板地位的提升可能带来大笔交易费用。成为特斯拉最得力顾问的竞争已经开始。
8小时前

Lex专栏:亚洲将遭遇“特朗普交易”的冲击

汽车行业保护主义抬头的定价过程才刚刚开始。

马斯克对特朗普的押注得到了回报

特斯拉和X的首席执行官将成为特朗普总统身边最具影响力的政治和商业顾问之一。
设置字号×
最小
较小
默认
较大
最大
分享×