How do Private Equity firms deliver a better return than the best public companies?
In this episode, Luis Senra explains:
- the PE perspective
- the 3 levels of value
- the 5 strategies that every company has to create value.
Contact Luis Senra at lsenra@peloton.group if you would like to discuss how the Private Equity Advisory can support your company value creation.
Transcript:
Hi, my name is Luis Senra and I am the head of Peloton’s Private Equity Advisory.
I’m a former CEO of PE portfolio companies and Chief Value Officer at Private Equity firms. And it is this experience in creating company value that could make a substantial difference for your company.
I would like you to consider this question.
Do you think your company could do better?
Could it be more valuable?
Could you create better returns for your shareholders?
I suspect the answer to those questions is yes. But how to do better? How to create more value for your shareholders?
Welcome to Peloton Private Equity Advisory.
We bring the same tools and strategies used by Private Equity firms to increase your company value and your shareholder’s return. We will help you to see your company as a Private Equity would do.
Do you know that Private Equities outperformed the S&P 500 by more than three times in the last 20 years?
PEs are known for delivering outstanding results.
But how do they do it?
In short, they use a different perspective. Instead of focusing only on the company financials, Private Equity focuses on value structures. Value structures refer to the company ability to create good business models and to replicate them.
There are three levels of value.
The first level is net assets. Assets minus debt is the minimum company value.
But if using those assets your company can create a cash flow better than its cost of capital it deserves a premium. This premium is the operational premium. It is the second level of value and it is there that most companies try to create value. Better operations, better value.
But the PE knows that there is more. There is the third level of value. The value structures’ premium. The company ability in refining business models and replicating them has a lot of value and it is there that Private Equity will create the most value.
Every company has five strategies to create value:
- Reduce company risk
- Optimise invested capital
- Optimise portfolio
- Improve operations and
- Grow.
Would you like to know more? Let’s have a call and discuss how Peloton Private Equity Advisory can help you grow your company.