Bangkok Post

How Top Private Equity Firms Uncover Opportunities

In the changing private equity climate, thematic investment programs can be a key strategy for investment-sourcing and deal-vetting processes.

By Hugh MacArthur, Suvir Varma and Sharad Apte

First published on setembro 02, 2016
min read


This article originally appeared on Bangkok Post. As the major social, economic and technological macro trends that have long dominated the global investing climate shift over the coming decade, every private equity (PE) firm will need to fine-tune its radar for divining where markets are heading and zero in on the disruptions and discontinuities that will spell future investment success or failure. While there is no single template, Bain & Company's recent report found how two very different PE firms developed thematic investment programmes and built them into their investment-sourcing and deal-vetting processes. Capitalise on rented expertise: The managing directors at a midsize PE firm that focuses exclusively on growth-oriented middle-market investments in the US took a tack suited to its size and market niche. Lacking the resources to build a dedicated team to sort through the vast array of social, technological, economic and geopolitical trends that will unfold over the coming decade, the firm called in outside experts to help structure its investigation. Through an iterative process, the consultants helped identify eight themes both they and the firm believed would influence the global economy going forward. The firm broke them down into trends that would be likely to play out at a country level and the impact they would have (both positive and negative) on specific industries and subsectors. Capitalising on these insights, the firm redirected its sector focus, concentrating on those sectors that it believed would benefit the most from the new trends and where it was confident that it had an ability to invest. The next step was to embed the macro perspectives that the exercise developed in the firm's culture and deal processes. Read the full article at Bangkok Post.

This article originally appeared on Bangkok Post.

As the major social, economic and technological macro trends that have long dominated the global investing climate shift over the coming decade, every private equity (PE) firm will need to fine-tune its radar for divining where markets are heading and zero in on the disruptions and discontinuities that will spell future investment success or failure. While there is no single template, Bain & Company's recent report found how two very different PE firms developed thematic investment programmes and built them into their investment-sourcing and deal-vetting processes.

Capitalise on rented expertise: The managing directors at a midsize PE firm that focuses exclusively on growth-oriented middle-market investments in the US took a tack suited to its size and market niche. Lacking the resources to build a dedicated team to sort through the vast array of social, technological, economic and geopolitical trends that will unfold over the coming decade, the firm called in outside experts to help structure its investigation.

Through an iterative process, the consultants helped identify eight themes both they and the firm believed would influence the global economy going forward. The firm broke them down into trends that would be likely to play out at a country level and the impact they would have (both positive and negative) on specific industries and subsectors.

Capitalising on these insights, the firm redirected its sector focus, concentrating on those sectors that it believed would benefit the most from the new trends and where it was confident that it had an ability to invest. The next step was to embed the macro perspectives that the exercise developed in the firm's culture and deal processes.

Read the full article at Bangkok Post.