- Christy, welcome.
Given the current market,
what concerns are private equity firms
seeing in their portfolio companies?
- Well, overall, there are a number of challenges
in the market right now.
I'll talk about two that we think
are primarily holding back the market.
The first one is the availability of credit to do the deal.
I think with rising interest rates and instability
and frankly, a lack of conviction
around the terminal interest rate,
we really have had lenders pulling back quite a bit.
You know, the other issue is that private equity firms
that are sellers are actually at a mismatch
between the bid ask around the companies
that they need to sell.
So they're still focused on hitting a certain multiple
and we have to have those two come together
before I think we'll really see some movement in the market
and get back up to the volumes that people are anticipating.
- What about the opportunities?
- There are also several opportunities.
So, you know, while we've seen fewer transactions and deals
and sort of straight down the fairway LBO deals
there have been a lot of opportunities
in the public to private markets.
People have had renewed focus on those opportunities
and there have been some great ones.
There have also been some interesting opportunities
in corporate carve outs that we may not have seen.
So that's two places that we are seeing
a lot of activity right now.
- What are investors and portfolio companies' CEOs
doing right now to drive value creation?
- Well, it's really interesting.
You would think that the focus
was on costs and bringing down costs.
Actually, it feels like the pandemic
prepared a lot of investors and portfolio companies' CEOs
with the playbook.
At the same time, you know,
companies have been dealing with problems
like inflation, supply chain issues, et cetera,
for a number of quarters now.
So many have been focusing on costs for quite some time.
We're seeing a lot more energy around the top line.
So driving revenue,
like digital marketing, sales force, pricing,
and a renewed interest in op model changes
or org changes that are needed
to support different digital initiatives.
And of course, everyone now is spending a lot of time
thinking about the impact of Gen AI as well.
- Christy, thank you so much.
- Thank you.