19 06, 2018

Building a Board that Works for Middle Market PE Firms

By |2018-06-05T10:03:09+00:00June 19th, 2018|Operating Partners, Private Equity Value Creation|

High asset prices have placed enormous pressures on middle market private equity management teams to execute ‘the plan.’ While we previously focused on how an Operating Partner can help prevent the epidemic in CEO turnover plaguing many such operations, in this post we want to talk about an equally important component of the equation: identifying and building an effective Board of Directors.

It goes without saying that the BoD is critical in ensuring investor returns. And while the nature of the BoD roles and where they should invest their time and energies are somewhat dependent on the circumstances of the deal and the nature of the value creation plan, there are four areas the BoD upon must focus on irrespective of the deal nature:

  • Governance
  • Plan Execution
  • Strategy Formulation
  • Human Capital Development

Each of these areas requires some time and attention to assure the prosperity of the firm.

However, at its most extreme (or worst), the BoD expends a disproportionate amount of effort on plan execution and governance. And while plan execution is clearly […]

5 06, 2018

Making the Case for – or Against – IoT for Mid-Market Manufacturing

By |2018-06-05T10:10:10+00:00June 5th, 2018|Private Equity Value Creation|

The rapidly falling costs of sensors and cloud-based storage have more than a few B2B industrial companies wondering if it’s time to add sensors to their products, thereby opening new data (and revenue) streams.

IoT is, of course, big business. Discrete Manufacturing, Transportation and Logistics, and Utilities will lead all industries in IoT spending by 2020, averaging $40B each and Bain predicts B2B IoT segments will generate more than $300B annually by 2020, including about $85B in the industrial sector.

Which may be why I’m sensing a growing level of uneasiness over IoT strategies within the ranks of privately owned middle market companies (assuming those strategies exist at all).

Bain estimates

And who can blame them for eyeballing a piece of that considerable pie, particularly when faced with the incessant pressure to generate investor returns? Add some sensors, capture the data and, lo and behold, a new revenue stream is born, right?


The potential of IoT

Given the industry’s mounting interest in IoT and having personally worked with major public […]