31
May

Private Equity Forum 2018 Highlights Part II: Top 5 from PE US Forum

Posted by: AmberRoberts in: Financial Services -

This year’s gathering of elite private equity players at MarketsGroup’s 7th Annual Private Equity US Forum covered a lot of ground, from the impact of tax reform on valuations to the best ways to find non-correlated PE investments. Here are our top 5 takeaways:

 

  1. Despite SEC leadership changes, PE is not getting a break. While new faces are steering the ship at the SEC, it hasn’t led to fewer exams or less interest in PE firms. However, enforcement staff seem to be more open to discussions as opposed to fast tracking to the settlement stage.
  2. Conflicts of interest can’t always be solved with a “wall”: Conflict of interest is a timely issue, particularly for PE that is expanding into new areas of business, such as credit or REITs. A “wall” is an increasingly popular solution, but it does not work for all and may cause a silo effect that prevents critical collaboration and information sharing internally.
  3. Due diligence is taking new forms: New “non-traditional” types of due diligence are emerging, including anti-money laundering and know-your-customer due diligence. Such due diligence covers traditional and social media reputation, political affiliations and exposure, trading exposure and other critical pieces of intel.
  4. Organic growth a priority for portfolio companies: While add-on acquisitions remain desirable for a host of reasons, organic growth is highly coveted and still a focus for PE owners. Both artificial intelligence and predictive analytics are increasingly enabling companies to be more agile, make better decisions and expedite growth.
  5. Economic downturn inevitable, but we still have time: We should be prepared for an eventual slowdown. However, with job rates up, interest rates still relatively low and banks in good standing, the U.S. economy should be fine in 2018 and 2019.

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