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  The Glory Days of PE are Just Getting Better

April 24, 2015 Stamford, CT

The report of private equity's demise by Andy Kessler in the March 29, 2015 edition of the Wall Street Journal is much like Mark Twain's, "greatly exaggerated." Take a look at the facts:
  • GrowthEconomy.org reports from 1995-2010, private capital-backed companies grew jobs by 64.4% as compared to 18.3% for the overall economy.
  • From 1995-2010 private capital-backed businesses grew sales by 112% as opposed to 26.4% for the overall economy. 
  • According to Pitchbook, in 1Q15 over 70% of all deals were in the $100 million or less range. In 2014 only 8 deals worth $2.5 billion or higher were completed.

Private equity provides stability and growth for our overall economy. The process of buying a company, growing the business and selling it is a slow and steady process, not subject to the daily volatility of the stock market. Most importantly, private equity primarily concentrates on the middle-market, those companies with 10-499 employees.  These are the companies supporting your hometown, not the mega-deals monopolizing the media headlines.  A December 2014 Harvard Business Review article estimates 4 million privately-held businesses stand to change hands over the next two decades as baby boomers continue to retire. The outlook to partner and grow middle-market companies has never been better.  

Today, all of the market trends and economic changes are creating greater competition within the M&A landscape accelerating the best attributes of private equity - driving operational improvements as the primary source of business growth and value creation. The Boston Consulting Group conducted a deep dive into the operational performance of private equity groups.  Their conclusion was, "private equity firms have been experimenting with a variety of operating models in order to increase their capacity to create value by improving the operations of their portfolio companies.  So far, their efforts have been extraordinarily successful."

For more information on how intelligent private investment really works for all involved, please call or email at any time. And in the words of Mark Twain, "Merely just raise the American flag on our house in Hartford and let it talk."

About Hamilton Robinson
Hamilton Robinson Capital Partners was founded in 1984 to invest directly in small, privately held manufacturing, distribution and service businesses. The firm has maintained its singular focus on this dynamic market to become a valued resource for equity capital and growth strategies for small businesses. Based in Stamford, CT, the firm has completed over $1.3 billion in transactions supporting 41 companies. Investors include leading financial institutions, funds, family offices, and individuals in the United States and Europe.

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