Special Report: Why Sponsors Matter
Beginning in September 2016 The Lead Left published a series of articles on sponsors. This report consolidates those articles.
Sponsors
Why Sponsors Matter (Last of a Series)
So far in this special series we've examined the implications of lending to companies owned by private equity sponsors - and those that aren't. But there's a third category of owners that don't get much attention, and growing in importance.
So-called "fundless" sponsors - also called independent, or non-traditional sponsors - act as a hybrid of three parties. They combine the deal sourcing of investment bankers with the targeted allocation of capital by limited partners, and the expertise of GPs who perform a multitude of functions...
Why Sponsors Matter (Fourth of a Series)
Given all the benefits of having a private equity firm as your partner, why would you even finance a company without one? We put that question to Brett Hickey, the CEO of Star Mountain Capital, who specializes in this sector. “There’s a lot of hype around non-sponsored transactions,” he told us. “It’s definitely buyer beware….
Why Sponsors Matter (Third of a Series)
In our continuing special series on the value of private equity sponsors, we turn our attention to what motivates a family-run, privately-held, or even public company to sell to a private equity firm. On the face of it, it would seem challenging to convince businesses owned by families for decades to give up control to…
Why Sponsors Matter (Second of a Series)
Last week we kicked off our special series examining the differences between lending to middle market companies and those backed by private equity sponsors [link]. We discussed how these companies often are founded by visionaries with great creativity, but lack the management skills to execute the business plan to its full potential. Let’s turn to…
Why Sponsors Matter (First of a Series)
Our discussion last week of the Fed’s confusing position on interest rates drew a number of favorable comments. “This is precisely right,” one reader wrote us. “They should just go ahead and raise rates. The more they delay, the tougher it’ll get.” But our reference to the economy as a “Goldilocks environment” left at least…