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Dispelling the Myths of Private Equity

By Mathew Newman

Published Date: 2018/10

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Derwent and Pitcher Partners hosted a breakfast event "Dispelling the Myths of Private Equity" that was attended by over 100 senior executives and Non-Executive Directors. The panel was made up of the Chief Executive’s and Chief Financial Officers of two of the most successful Private Equity investments in recent times. The Panel Members shared their experience and the unique challenges they faced in each of these investee companies, along with how they achieved success in driving performance in preparation for sale / IPO. Mathew Newman facilitated the panel discussion, posing a number of questions to the panel before taking questions from the floor.

Michael Sonego, Partner Corporate Finance at Pitcher Partners and Global Corporate Finance Lead Baker Tilly International, welcomed the attendees and introduced the event. He provided valuable data on the size and activity of the Australian Private Equity funds compared to the global market. In response to questions from Mathew Newman and those from the floor, the panel were highly effective in sharing their experience – focusing on acquiring the best talent; the relationship with the board; how they set clear strategy; focus on dramatic change that rapidly impacts on the business; continually measuring performance and holding each other accountable. They highlighted that whilst the fundamentals for growth don’t differ greatly from a privately owned, listed or subsidiary companies, the fact that the private equity fund only own the investment for a short period supercharges the focus on growth in the bottom line and enterprise value. Whist the two investments were very different in terms of scale and business model, the themes that underpinned success were highly consistent. A key point was that Private Equity Funds position businesses for future growth and ensure that they leave value on the table for the next owner.

The overriding feedback from the attendees was that the event was highly informative and that there were a number of ‘take-aways’ that could be applied to the businesses they are associated with.