Working with Private Equity Partners
Pre-Fund Establishment Evaluation Assistance
Experience has taught us that Private Equity firms have a built in bias against investing in marketing communications agencies.
They are cautious and are always considering the down side of an investment commitment.
Because the major assets of an agency are its’ people and relationships, many PE firms steer their funds into companies with “hard assets” that can be sold off if disaster strikes.
Recent Example: Through the influence of an operating partner of the PE arm of a major financial institution who had begun his career at Proctor & Gamble, we were commissioned to examine the merits of marketing communications agencies as investment vehicles for his fund.
We provided an exhaustive review of the marketplace, its’ trends and the major independent agencies still working in the space. But perhaps more important, was explaining to the bankers that while an agency’s assets do “go down the elevator every night, a well managed agency throws off a large percentage of free cash with minimal “cap X” requirements.
We were engaged to assist them in putting together a major global platform in the below the line agency space and delivered a strategic plan with a detailed analysis of necessary service offerings, key target agencies and critical markets to be serviced.