The summer’s done, kids are going back to school and it seems that Private Equity – firms, LPs and the rest of the usual cast of characters – has returned ready to roll up its sleeves and make some tough choices (or risk having those choices made for it).
In some cases, the concessions private equity is contemplating are relatively mild. Just a small bit of wavering to help a firm get over the fund-raising hump in a difficult environment. In others, firms are asking their investors to make concessions to help them through difficult times – and these conversations have gone better for some than it has for others.
And conversations between LPs and GPs don’t just involve the future of the firm or its next fund: sometimes LPs are opening the books on past funds and demanding what’s coming to them from earlier commitments. In the more extreme cases, LPs themselves are actually making tough choices for their general partners.
But it’s more than just LP-GP conversations today that involve concessions. Firms are deciding that parts of the M&A market that weren’t all that important a few short years ago, merit far more attention today under the shadow of a serious capital overhang. Companies, in some cases, are making the tough decision to forego the public market today in favor of investment by private equity (even if that choice won’t necessarily lead to a public windfall in the future).
But perhaps the most surprising concession that we’ve seen in the fall is that some of Private Equity’s Masters of the Universe are admitting that they’re fallible.
For a digest of today’s top dealmaking news, please check out the DealMaker Digest.