Value Add’s Post

When the CEOs of one of the largest investment firms in the world talk, I tend to listen. Key takeaways from this piece with KKR co-CEOs Scott Nuttall and Joseph Bae: ▶ The 2023 slowdown resulted in a huge backlog of unsold investments that PE firms need to get off their books ▶ A combination of demand for return from investors and more reasonable market valuations and financing is fueling an increase in activity for PE firms ▶ The increased activity will likely result in PE firms like KKR taking portfolio companies that had been shelved in 2023 public and/or privately selling off assets (which bodes well for capital markets and private M&A players) ▶ Credit, insurance and infrastructure-based businesses could be hot areas of investment activity ▶ PE firms will continue to invest in the buzzing utility, telecom, energy and tech companies spaces ▶ There may be a growing market for the purchase of loan portfolios from US lenders to free up capital to fund the new wave of acquisitions ▶ The Asian market, in particular Japan, is ripe with investment opportunity https://lnkd.in/eN7NkT3q

PRIVATE EQUITY FIRMS:- 💬Private equity firms are investment management organizations that contribute capital and invest in the private equity of new or existing businesses. Private equity funds, or capital pools, are often raised to provide the equity commitments needed for these transactions. Private equity firms employ a range of investment techniques, such as: ⭐Leveraged buyouts (LBOs): An LBO is when a private equity fund buys the majority of a company using a combination of loan and equity. A significant percentage of the purchase price is often financed with debt, while the private equity firm and its investors provide the equity. ⭐Venture capital (VC) firms invest in start-up businesses with significant room for growth. Compared to LBOs, VC investments are often smaller and are made in unprofitable businesses. ⭐Growth capital: Growth capital companies finance the expansion of existing businesses into untapped markets. 💬Investments in growth capital are frequently used to fund acquisitions, product development, and marketing initiatives. 💬After making an investment in a company, a private equity firm often collaborates with management to enhance operations and increase profitability. This could entail making adjustments to the business's financial, operational, and strategic plans. 💬When the business has reached its full potential, the private equity firm will sell or IPO it to recover its investment. 💬Private equity firms play an important role in the economy by providing capital to companies that may not be able to access traditional financing sources. They also help to create jobs and boost economic growth. #Finance #market #capital #ipo #economy #privateequityfirms #funds #shares #business #profit #vc #VentureCapitalists #LBO

European private equity groups are now holding onto their assets longer due to market conditions and economic uncertainty. This has resulted in a record 28,000 unsold companies globally. It’s a clear sign that the time for value creation is now or never. Investors need to focus intensely on strategic growth and operational improvements to keep profitability in this challenging landscape, and be ready for the exit! #PrivateEquity #InvestmentStrategy #ValueCreation

Private equity investments offer companies the opportunity to unlock their full growth potential. PE firms provide not just capital but also strategic guidance and operational expertise, helping businesses expand into new markets, develop innovative products, and improve operational efficiency. 𝗦𝗼𝗺𝗲 𝗞𝗲𝘆 𝗣𝗹𝗮𝘆𝗲𝗿𝘀 𝗶𝗻 𝘁𝗵𝗲 𝗱𝗼𝗺𝗮𝗶𝗻 𝗮𝗿𝗲- 𝐋𝐢𝐦𝐢𝐭𝐞𝐝 𝐏𝐚𝐫𝐭𝐧𝐞𝐫𝐬 (𝐋𝐏𝐬): Investors who provide capital to the private equity fund. These can be institutions like pension funds, insurance companies, or high-net-worth individuals. 𝐆𝐞𝐧𝐞𝐫𝐚𝐥 𝐏𝐚𝐫𝐭𝐧𝐞𝐫𝐬 (𝐆𝐏𝐬): The private equity firm managing the fund. They make investment decisions, manage the portfolio companies, and charge fees for their services. 𝐏𝐨𝐫𝐭𝐟𝐨𝐥𝐢𝐨 𝐂𝐨𝐦𝐩𝐚𝐧𝐢𝐞𝐬: The private companies that the fund invests in. #privateequity #pe #growthpotential #investment #venturecapital #buyouts #mergersacquisitions #strategicguidance #operationalexpertise #newmarkets #innovation #products #efficiency #investors #institutions #individuals #wealth #firms #management #companies

Discussing the current landscape of private equity exits, #Investcorp's Co-CEO, Hazem Ben-Gacem spoke to Reuters during #WEF24 emphasizing the attractiveness of Southeast Asia markets. Investcorp is strategically focusing on acquisitions in Southeast Asian markets such as Thailand, Indonesia, and Singapore, leveraging the region's favorable conditions amidst rising raw material costs. Looking ahead, Hazem expressed optimism about a vibrant Middle Eastern IPO market and the firm's plans to capitalize on local capital in China for its investments. Read more: https://lnkd.in/d9taYqSC

KKR Targets $20B Amid Tough Market 💸 KKR is seeking $20 billion from investors for its latest North America private equity fund, North America Fund XIV, launched earlier this month. This follows its predecessor fund of a similar size launched three years ago. 👉 KKR, managing $578 billion in assets, faces a tougher fundraising market due to high interest rates and hesitant investors. 👉 The new fund aims for a net internal rate of return in the high-teens and a steady annual deployment of 20%-25% of its capital. 👉 KKR's last fully deployed North American fund reported a net IRR of 20.5% as of March, outperforming rivals Carlyle Group and Bain Capital. Despite the challenging market, KKR's CFO Robert Lewin noted improved conditions recently. Additionally, KKR is expanding its employee equity program, initiated by global private equity co-head Pete Stavros, leading to significant income boosts and productivity gains at its portfolio companies. 🚀

Blackstone plans to invest 1.5 trillion yen (US$9.6 billion) by 2027, matching its total investment in Japan since 2007. President Jon Gray attributes this to "accelerated growth in the Japanese economy" driven by inflation, stock market strength, and pro-investment policies under Prime Minister Kishida. Bain Capital aims to double its investments to over 5 trillion yen by 2029. Co-managing partner David Gross sees opportunities in healthcare, automation, and robotics to address Japan's labor shortage. Bain's notable past investments include Toshiba's semiconductor business and the IPOs of Bellsystem24 and Skylark. The Carlyle Group Group raised 430 billion yen for a new Japan-focused fund, 70% larger than its 2020 fund. Carlyle recently announced a 130 billion yen tender offer for KFC Holdings Japan. Its previous Japan fund boasts a 28% internal rate of return, significantly higher than its global funds. KKR plans to invest over 1 trillion yen in Japan over the next decade, having already invested $8 billion since 2010. Co-CEO Joseph Bae highlights opportunities from conglomerate reforms and the weak yen. CVC Capital Partners launched a $6.8 billion Asia-focused fund, allocating about a fifth to Japan. Key Drivers: Tokyo Stock Exchange: Encourages companies to improve capital efficiency. Corporate Moves: Companies are divesting non-core businesses and enhancing investor communication. Market Dynamics: High fund procurement costs in the US and Europe, along with reduced investment in China, make Japan more attractive. A Bain & Company & Co. survey shows 32% of respondents now favor Japan as the top Asian market, compared to just 3% for China. New entrants like Ares Management Corporation are also expected to invest in Japan, further increasing investment activity. #Growth #Expansion #Investment #Economy #Performance #Earnings #Business #Opportunities #RealEstate #CapitalMarket #Japan #Tokyo I Nikkei I Nikkei Asia I

With equity markets continuing to be subdued, and large corporates coming under balance sheet/earnings pressure, private capital (in all its forms) has become a dominant influence in global M&A, with New Zealand being no exception. #mergers #acquisions #privatecapital #equitymarkets #deals #investment #helpingshapenewzealandsfuture #MAForecast2024

In 2023, private equity continues to be on the rise as the global economy experiences a nascent recovery. Successful investment requires PE firms to understand and activate the true business levers. This underscores the need for a strategic, data-driven, and customer-centric approach to ensure sustained success in this competitive market: #FutureOfPrivateEquity #GlobalEconomy #Opportunities

Private equity funds are those investment classes which consists of capital that are not listed on the stock exchange. These funds aim to generate high return for the investors by either acquiring, improving, or selling the companies. Institutions like pension funds, insurance companies, and high net-worth individuals invest in private equity due to their complex nature. 1) Popular sectors for PE investments include technology, healthcare, consumer goods, financial services, and infrastructure. 2) Top PE firms include Blackstone Group, KKR (Kohlberg Kravis Roberts), Warburg Pincus, Bain Capital, Carlyle Group, Apex Partners, and many more. 3) The private equity industry has grown rapidly; it tends to be most popular when stock prices are high and interest rates are low. 4) Most of the PE firms and funds invest in mature companies rather than startups. They are not subject to any regular public disclosure requirements. There are generally two categories of private equity funds: 📌 Venture Capital- It is a form of private equity and financing that deals with the funding of early-stage startups and new businesses. They generally take a minority stake in the company. 📌 Buyout or Leveraged buyout- It is a strategy that combines investment funds with borrowed money. The main purpose of this fund is to buy companies and make them profitable. #privateequity #funds #investments #buyout #venturecapital #cxoinsights #centerofexcellence #leveraged #growingindustry