Riordan Lewis & Haden used a RIDEA partnership to achieve a cash return of more than 10x its investment, while retaining a significant minority stake in one of its healthcare portfolio companies, says PE attorney Chris Manderson.
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Manufacturing has recovered strongly since the Great Recession and is likely to retain a key position in the U.S. economy, according to participants at the Association for Corporate Growth’s InterGrowth conference this week in San Diego.
This perspective should be reassuring for financial sponsors, who historically have favored sectors such as manufacturing, with its hard assets and generally reliable, if often unglamorous, financial performance.
While the sector should continue to be a mainstay of the economy, its prospects are likely to be driven more by technological investments and automation, even as its role as a job creator continues to decline.
Altus Capital Partners, a boutique buyout shop in Westport, Conn., looks for target companies that have a proprietary technology or process that can drive their growth, said Elizabeth Burgess, a senior partner at the firm, during a panel discussion on manufacturing. But the firm also must analyze the cost of maintaining the competitive edge of its portfolio companies, she said.
With battles over taxes and registration still looming in Congress, and with pot shots still being flung at PE by journalists, union leaders and others, the Association For Corporate Growth has decided to show naysayers that buyout firms can be a source of job creation and economic good for the country.
A waste of time? I’d argue it is.
Most buyout firms are first and foremost about generating high returns for investors through the buying and selling of cash-flow-positive companies. (Imagine a GP in a road show pitch: “So Ms. LP, how about we skip over the investment multiple and net IRR and just get right to the jobs growth!”) Job creation is often the happy consequence of the LBO strategy; the times when it’s not will continue to provide fodder for industry critics.
Gail Long, former executive director of ACG Boston, has joined two firms as a senior consultant. The first is national turnaround and restructuring firm Getzler Henrich & Associates, while the other is New York-based direct secondaries firm W Capital Partners. Long has been succeeded at ACG Boston by Christy Dancause, who previously was the organization’s director [...]