PE4FAMs Blog

We have seen many signs of re-shoring in our portfolio companies. Some of that trend is a function of China suppliers re-prioritizing their manufacturing focus towards high unit volumes where they can justify capital investment in productivity enhancing technologies. Niche manufacturers, like our fractional horsepower AC/DC motor business, have lower unit volumes and seem to […]

Recent financial news is full of warnings about a slowdown in worldwide growth. From Wal-Mart and AT&T, to IBM and Target, it appears that same store sales and unit growth are challenged. This is amazing to me in light of the highly stimulative policies employed by central banks around the world from Japan, to China,

The overwhelming response to Chris O’Dell’s news that she is retiring from CapitalWorks and taking her talents to Charlotte, NC reminds me that success in private equity, like life, is all about your people. Chris has earned the affection and goodwill of our investors, portfolio management teams, intermediaries and advisors through a consistently cheerful, friendly

Assets under management in private equity funds continue to grow and so does the desire for LP’s to see co-investment opportunities alongside these funds. Generally reserved for the most important investors, many fund managers have entered into these arrangements to get proprietary deal flow, deep industry expertise, exceptional portfolio governance or large fund commitments from

The SEC is an Uninvited Guest Title IV of the Dodd-Frank legislation enacted in 2010 requires investment advisers managing more than $150 million in assets to register with the SEC. This includes private equity firms like ours. Once registered, advisers are subject to audit and enforcement actions by the SEC (often administrative procedures, instead of

Over the past two weeks, we’ve discussed how to create a culture of accountability and what is involved in long-term incentive plans. In the final installment of our compensation series, we take a look at some recent trends in compensation and ask “What is your company’s compensation philosophy?” According to Verisight’s 2014 compensation report, 39%

At CapitalWorks, we’re constantly evaluating and debating the optimum method to align executive compensation with the long-term goals of ownership. The common theory is that executives who think like owners have greater incentive to build long-term value and less incentive to push risky short-term strategies. The most common forms of long-term incentive (LTI) plans include:

A critical factor to a successful portfolio company is attracting and retaining motivated, high-quality executives. To motivate those executives, it is imperative for private equity-backed companies to implement compensation schemes that nurture performance-based cultures and align management with ownership. High performing, middle market portfolio companies employ lean management teams focused on top line growth as

Todd Martin and I recently learned about a success story for a family office participating in a fully marketed industrial company. Our friends at Lincoln International were acting as the exclusive financial advisor for an industrial company that participates in the filtration industry. They had significant interest from Private Equity firms and were surprised that

Tax Advantaged Structuring Entity Structure Impacting Returns While uncertainty still exists with the overall U.S. tax code and rates, one thing that is not expected to change is the tax advantages of structuring a business as a flow through entity to avoid the double taxation of a C-Corp. By utilizing an LLC structure, we have