By Scott W Reid, Bass Berry & Sims
Recent market-wide shocks have forced investment committees of private equity sponsors to manage large portions of their portfolios while those companies spiraled toward events of default in their credit facilities. The sponsors that have emerged from these market-wide shocks with portfolio companies best-positioned to operate in the post-bust economic environment shared the following strategies:
- They were honest with themselves (and their lenders) about the scope of the portfolio companies’ financial trouble, and;
- They had a plan for deciding which portfolio companies to save.
