Realise The Power of Private Equity and Alternative Investment

WHY WOULD A PRIVATE EQUITY FUND WANT THE PREVIOUS OWNER TO STAY INVOLVED? PE firms and alternative investment funds like to have management with a vested interest in the company’s continued success. They want people who are invested and aligned with what the next phase of the journey is. Whatever the size of the shareholding you wish to retain, KBS has the ability to bring on board a PE fund whose model you can align with to collaboratively achieve a significant return on the monies reinvested into the new ownership structure. That does not necessarily mean the onus is on you to drive the growth plans, because the PE fund is sure to provide some input about how it envisions the company’s development and expansion. PE firms and institutional investors will often bring in new leadership on the financial side of the company to implement reporting so they have good visibility of where the business is going, to make sure it’s heading in the right direction. They tend to increase the professionalism of the business. Of course, it comes down to the dynamic and which personnel are needed in the business. If there is a good team in place already, they won’t be as involved - just providing a strategic overview, investment if needed or tapping into other companies in their network to grow it out. Some PE firms and alternative investment funds will parachute managers in to run it under their guidance, so it tends to be situational dependent.

You can rest assured that when a PE firm acquires a business, they will have a clear plan of where they see it going - and ultimately they need the management team to be aligned with that.

For a lot of business owners, the bulk of their wealth is in the business. To be able to tap into some of that wealth

now, but still maintain the potential to achieve another slice of wealth in the future, is

the real value of private equity.”

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