PE4FAMs Blog

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

It’s what you keep, not what you make! For the United States, the period 1982-2000 might be regaled by financial historians as one of the greatest periods of wealth creation in the history of the world.  The U.S. stock market, as measured by the S&P 500, grew at an average annual rate of 18% (including

I attended a seminar recently where the host law firm reviewed the SEC audit activity of private equity firms that has been spawned by Dodd-Frank. In attendance was a private equity professional whose firm had just completed one of these audits. His experience matched the law firm’s report that the audit was more of a fact

A recent article in the Financial Times, “Private Equity Steps Up The Pace of Pass The Parcel” (Wednesday, June 18, 2014) shows an interesting trend that may affect fund of funds specializing in the private equity asset class. Anne-Sylvaine Chassany reports that the percentage of reported M&A transactions that private equity firms are completing with