A private equity fund’s ultimate goal is to exit its investments in portfolio companies for an attractive return, known as internal rate of return (IRR) in excess of the price paid within three to five years after the acquisition for its General Partners, Limited Partners, and the MBO or MBI management teams in buy-outs.
In the last years, private equity markets continue to be highly challenging. Prices set near record levels in Germany and Europe and all-time highs in the US. As sourcing attractive deals appear to be more and more difficult and competitive it is very challenging to create value for private equity investors.
The COVID-19 crisis has further increased the complexity and risks of investment decisions and portfolio management for the private equity managers. In specific, private equity managers have to assess the risk each portfolio company faces while protecting the health of their company’s employees, managing the liquidity, identifying ways to generate additional revenues and to lower costs and stabilizing balance sheets.
The experienced partner team at EIP supports private equity investors and their management teams throughout the entire investment cycle from sourcing of deals, due diligence processes, value creation in the post-acquisition phase to preparing the portfolio companies for exit. In specific, EIP has a proven track record in supporting private equity managers at their portfolio companies that are in crisis, underperforming, or have underperforming divisions in interim management and consultant roles:
- Staffing of immediate critical senior management positions in special situations and restructurings as Chief Restructuring Officer
- Stepping in to temporally fill Chief Financial Officer, Chief Executive Officer, Chief Operating Officer or Chief Procurement Officer roles for operational and hands-on support as interim managers on top management level to
- execute value creation and transformation programs for improving cost efficiency, (e.g. in the supply chain, operations, overhead costs),
- generate top line growth (e.g. leveraging our customer contacts and network in Germany and abroad),
- improve cash flow (e.g. executing working capital reduction programs), or
- prepare portfolio companies for exit
- Supporting both commercial and operational due diligence processes by providing in depth industrial expertise and access to our extensive industrial network
Our EIP professionals are considered to be amongst the leading and most experienced interim managers for private equity funds. About 80% of our customers are leading German-based and international private equity firms who rely on EIP’s interim management services.
Please contact our EIP partners, Michael Hengstmann and Michael Hessing, for further information or for supporting your portfolio companies.