I am looking into Private Equity.

As the topic says. I'm trying to understand the process behind the evaluation and execution through to post (and pre? if there is some) acquisition portfolio management? I think maybe that acquisition has something to with M&A? But I'm not sure.

  • 1
    $\begingroup$ @Private equtiy. my.per-people.com/search/assignment/… $\endgroup$
    – soet irl
    Commented Jul 28, 2020 at 16:05
  • $\begingroup$ PE and M&A are different. In M&A an operating co (eg a steel company) acquires another operating company to increase the size of their operation. In PE a specialized financial institution acquires multiple operating companies temporarily, as an investment. They "restructure" or improve the business (from a profitability point of view) and then after a few years sell the company again, hopefully for a profit. The companies that the PE co owns are called the "portfolio". They are always looking to add (acquire) new companies, so you have to constantly evaluate new possible "deals" ... $\endgroup$
    – nbbo2
    Commented Jul 28, 2020 at 16:48
  • $\begingroup$ So you travel in Sweden, meeting company officials who are interested/willing, get information about the business (including financial stmts which you carefully analyze in depth) try to understand the challenges facing the business and if/how an outside addition of capital from a PE firm could solve these challenges. This is the "evaluation". If it seems promising, the "execution" is when with the help of lawyers you draw up agreements and formally acquire the company. The "post acq'tn" phase is when you do the restructuring (eg. close down an obsolete plant and build a new modern plant, etc.) $\endgroup$
    – nbbo2
    Commented Jul 28, 2020 at 16:56
  • $\begingroup$ And monitor developments to see if the profits improve or not. So you have to understand business both from a financial (accounting) point of view and from a strategy point of view (these cos usually have some serious problems that may need to be solved by a very different way of doing business), always looking at how to make money from it. (But frankly QuantFinance is probably not the best place to discuss this, there are few people here who work in PE as far as I know). $\endgroup$
    – nbbo2
    Commented Jul 28, 2020 at 17:05
  • $\begingroup$ @noob2 Thank you so much. you say in comment no2 "analyze in depth" what is the kind of variables that you analyze in the economics perspective? maybe that depends on what kind of enterprise it is. $\endgroup$
    – soet irl
    Commented Jul 28, 2020 at 17:09


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