In the past, there was a public perception that venture capital and private equity meant a business would be shut down soon and its employees laid off. However, esteemed firms like Sun Capital in the USA d are changing these negative perceptions by focusing on opportunistic deals with businesses facing challenges over pristine targets that need little operational inputs. Thanks to such firms, businesses are growing faster, and they are performing much better than they had in the past.
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Ace business expert Marc Leder, the co-CEO and co-founder of Sun Capital Partners Inc., stresses the need for deal-making to make venture capital and private equity more successful. Based in Boca Raton, Fla, his firm has invested over $13 billion since its establishment in 1995 and transformed several sluggish businesses into profitable ventures.
He says deal-making should be done with the correct approach; then only can the business reap the benefits of the wide opportunities the market has to offer. Embracing close value creation helps the concern to accelerate profits and grow to the next level.
Planning and vision
The significance of close value creation should never be overlooked in the quest to seek faster profits. It entails careful planning and vision. His firm still practices paying “reasonable prices” while taking an opportunistic approach to the process of deal making since 2013. He says, “There’s been a greater onus put on how funds can create value after the deal is done.”
He candidly says that nobody is getting bargains in the present times and adds, “If you go back 10 or 15 years, you could make money on the buy and whatever you did post-closing added to your return.” However, now the trends have shifted, and both venture capital and private equity are evolving in a big way.
Developments seen in the recent years
According to his observations, over the recent years, businesses have been more focused on the post-closing stage of the deal-making process. The emphasis is on exploring new ways to enhance business efficiency, buying other businesses to bring in significant investment gains for several portfolio organizations, or boosting the way the management functions in the current-day era. The onus here is to bring in innovative changes to benefit the business from every sphere.
Quest for businesses that show promise for the future
Sun Capital continues with its endeavor to find companies with some challenges but, at the same time, show a positive potential for the future along with complete turnaround success stories. The firm has successfully made its forays into bedding, healthcare and recently enhanced its focus on technology companies.
Marc Leder of Sun Capital concludes by saying the sincere efforts of private equity firms are now dedicated to helping companies build value consistently. He is on a committed mission to break the general public perception about private equity being more centered on shutting down businesses and laying off people. The contrary is true today. Firms like his are more focused on close value creation for businesses to successfully trigger enhanced promising opportunities in the future.