Increasing Returns for Private Equity Investors
Gavin/Solmonese focuses on the creation of value and the preservation of capital through operational improvements. In addition, Gavin/Solmonese provides a resource for turnaround and crisis management, corporate board participation, operational oversight, fund advisory, expert witness testimony, and fiduciary and post-confirmation management.
The Bad News
More equity and less leverage, longer holding periods and a terrible exit environment means that many financial engineering tools of the private equity investor are less effective than in years past. PE firms have been forced to hold portfolio companies for longer periods as decreased operating results and lack of liquidity have all but eliminated sale opportunities. The end effect: decreased returns to general and limited partners.
To combat this current environment, private equity and hedge fund Investors must put increasing focus on operations and execution in the four critical stages of a transaction’s life-cycle: pre-acquisition due diligence, post closing transition (whether a stand-alone platform company or merger integration), asset/portfolio management, and exit strategies.
The Good News
Tough operating environments are where Gavin/Solmonese operates best. Gavin/Solmonese (formerly NHB Advisors) built its reputation by providing turnaround management and consulting services on behalf of middle-market companies. The Gavin/Solmonese client portfolio has grown to include private equity and other investors who reach out for Gavin/Solmonese when they want advisors who understand management firsthand. Gavin/Solmonese professionals have a powerful blend of financial and operations expertise which add value at each stage of the M&A process, increasing returns and minimizing risk. Gavin/Solmonese professionals can act as key additional resources to overburdened management teams, to help manage through crucial stages of a transaction's life-cycle as consultants, or step in and take on critical management roles on a case–by–case basis.