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EquityFC Blog
Some weekend reading | 23 July 2010
Every week, I gather lots of interesting snippets about financial management, private equity and entrepreneurialism from around the web. So what's news this week?
Let's start with the Carbon Reduction Commitment. I recently did an article on the FDs of PE firms, and this is a biggie for them. As far as the Environment Agency is concerned, PE funds are conglomerates, so every "subsidiary" (i.e. portfolio business) stands to get caught by the new rules on September 30th. Worth boning up on carbon credits if you're going for a job... especially since CO2 is now the CFO's responsibility, apparently.
Then I'm recommending the Wall Street Journal PE blog. For example, this entry has a link to a PBS report on the PE takeover (and subsequent bankruptcy) of Readers' Digest. If you're getting involved with PE for the first time - don't panic. It's an extreme example. But the WSJ (and other) PE blogs are good at explaining sentiment for the industry.
Third up, more video - this time coverage of a recent Grant Thornton survey that has positive news for the UK where the firm predicts "billions" will be invested over the next 12 months. Deal churn is good - especially for FCs and FDs looking to get into a new position. And the year is looking better for MBOs in the UK, too. So keep 'em peeled...
Looking for something a bit more technical? How about a scholarly paper on why buy-outs are leveraged? This PDF download posits a model for the capital structure in MBOs and might be worth a read if you plan on getting down and dirty on the technicalities with your bakers.
Finally, stat of the week, courtesy of Reuters: "Private equity-backed M&A in the second quarter was up 125% from a year earlier to $40bn, and up by a third from the first quarter. For 2010 [H1], it totaled $70bn, more than double a year earlier." BUT... "The $70bn of PE-backed deals this year through June 22 compares with the record $542bn in the first half of 2007."