I decided to check with a Limited Partner (LP) on the questions on deal size and frequency that I had thought about at this conference:
http://randomjunkyramblings.blogspot.com/2008/03/conference-panel-investing-in-india.html
Of course, the context was different, but my take was that the issues encountered were the same. The LP smiled and said they had a great CFO. Going back to the Gary Loveman post below, you can't argue with talent:
http://randomjunkyramblings.blogspot.com/2008/04/conference-panel-portfolio-value.html
A General Partner (GP) at another panel said that an LP had mentioned that a lesser return in the depressed economic environment would still validate their investment/ asset allocation. It would be interesting to get insights into the aggregated decisions made by GPs across PE firms and the outcomes down the line.
The Usual Disclaimer: This is purely a knowledge sharing resource and I have been careful to protect panelist interests. Ethically, context is everything, and I will gladly retract anything that affects the parties mentioned. Call this my mini OpenCourseWare, if you will, where Open signifies life experiences.
Showing posts with label asset. Show all posts
Showing posts with label asset. Show all posts
Sunday, April 06, 2008
Conference Panel: Portfolio Value Creation by Improving Business
Gary Loveman, Harrah's Entertainment, was asked about how he would act if slowing economic conditions impact business despite his assertion that economic conditions would not really impact his business.
He said he had the leeway to adjust his planned capital spending (approx. $4BN) to meet debt commitments.
It was interesting to note that he would rather kill/ delay Capex than sell assets to meet commitments.
I did a quick mental check of this insight against his assessment that growth in the industry came from M&A for assets, and that the WACC was currently pretty high within the firm. It fit.
Later, I asked a panel of General Partners (GPs) how frequently, in their substantial experience of dealmaking and investing, did the GPs have such contingency planning (operations risk management, really) conversations with the portfolio company senior management? Did such conversations impact the outcomes of their investments?
The response, as I am beginning to expect from superb panelists, provided insights into GP operations.
On a tangent, a panelist was of the opinion that folks like Gary Loveman operate at a different level. As the one who raised the question, I was inclined to agree. What an insight into talent- all from a simple question put to a CEO!
The Usual Disclaimer: This is purely a knowledge sharing resource and I have been careful to protect panelist interests. Ethically, context is everything, and I will gladly retract anything that affects the parties mentioned. Call this my mini OpenCourseWare, if you will, where Open signifies life experiences.
He said he had the leeway to adjust his planned capital spending (approx. $4BN) to meet debt commitments.
It was interesting to note that he would rather kill/ delay Capex than sell assets to meet commitments.
I did a quick mental check of this insight against his assessment that growth in the industry came from M&A for assets, and that the WACC was currently pretty high within the firm. It fit.
Later, I asked a panel of General Partners (GPs) how frequently, in their substantial experience of dealmaking and investing, did the GPs have such contingency planning (operations risk management, really) conversations with the portfolio company senior management? Did such conversations impact the outcomes of their investments?
The response, as I am beginning to expect from superb panelists, provided insights into GP operations.
On a tangent, a panelist was of the opinion that folks like Gary Loveman operate at a different level. As the one who raised the question, I was inclined to agree. What an insight into talent- all from a simple question put to a CEO!
The Usual Disclaimer: This is purely a knowledge sharing resource and I have been careful to protect panelist interests. Ethically, context is everything, and I will gladly retract anything that affects the parties mentioned. Call this my mini OpenCourseWare, if you will, where Open signifies life experiences.
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