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Crutchfield Capital Corporation. Fundamentals of Private Equity Markets ... Crutchfield Capital Corporation. 2700 Post Oak Blvd., Suite 975, Houston, Texas 77056 ... – PowerPoint PPT presentation

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Title: MAIN TITLE GOES HERE


1
Breakfast Forum
The Current State of the Capital Markets - 2008
2
Crutchfield Capital CorporationPresentation
toBoyar Miller Breakfast ForumAn Overview
of Institutional Private Equity MarketsHouston,
TexasOctober 17, 2007
Private Equity J.B. Dollison Managing
Director Crutchfield Capital Corporation
3
  • Fundamentals of Private Equity Markets
  • Institutions formed with Specific Investment
    Criteria
  • Growth Capital
  • Buyout
  • Most are Limited Partnerships
  • Limited Partners Typically are
  • Wealthy Individuals/Families
  • Endowments
  • Pension Funds
  • Insurance Companies
  • Examples of Private Equity Firms
  • Bain Capital Kohlberg Kravis Roberts Co.
  • The Blackstone Group The Carlyle Group

4
  • What Did We Say Last Year?
  • Private Equity Firms had Raised Extraordinary
    Sums of Capital with Much on the Sidelines
  • Large Amount of Private Equity was being Deployed
    in Leveraged Buyouts
  • Private Equity was Representing an Increasing
    Share of MA Transactions

5
  • Our 2007 Forecast for Private Equity
  • Public Equity Markets Should be Watched for Early
    Warning Signs of Deterioration
  • Current Liquidity Surplus will take Significant
    Time to Absorb
  • Sub-Prime Credit Problems will have Limited Long
    Term Effects on Private Equity Transactions
  • Valuations are Likely to Moderate Based on
    General Economic Conditions

6
  • Our 2007 Forecast vs. Actual Results
  • Public Equity Markets Should be Watched for Early
    Warning Signs of Deterioration

7
  • Our 2007 Forecast vs. Actual Results
  • Current Liquidity Surplus will take Significant
    Time to Absorb

8
  • Our 2007 Forecast vs. Actual Results
  • Sub-Prime Credit Problems will have Limited Long
    Term Effects on Private Equity Transactions

9
  • Our 2007 Forecast vs. Actual Results
  • Valuations are Likely to Moderate Based on
    General Economic Conditions

10
  • Our 2008 Forecast for Private Equity
  • Leverage Ratios are Unlikely to Increase
    Significantly prior to Resolution of Credit
    Crisis
  • Strategic Buyers will be More Competitive than in
    Previous Years (2003 2007)
  • International Buyers will Continue to
    Aggressively Pursue U.S. Assets due to Weak
    Dollar
  • Valuation Metrics Likely to Remain Flat
  • Possible Increased Supply of Businesses due to
    Baby Boomer Retirements could apply Downward
    Pricing Pressure

11
  • What Does our 2008 Forecast Mean for You?
  • If You are Raising Capital or Selling a Business
  • Significant Private Equity Capital is Available
    for Attractive Transactions
  • Valuation Metrics have Moderated Considerably
  • Adjust Expectations Accordingly
  • If You are Purchasing a Company
  • Equity Capital will Likely be a Greater
    Percentage of the Transaction Structure
  • Expect Strategic Buyer Competition for Assets
  • Lower Return Metrics Implied by Larger Equity
    Contribution could be Offset by Lower Purchase
    Multiples and/or Less Risk

12
Private Equity Take Away Sheet
  • Liquidity Remains High
  • Lower Leverage Ratios have Compressed Purchase
    Multiples
  • Attractive Transactions are still Generating
    Significant Interest
  • Consider Professional Representation to Ensure
    Best Valuation and Deal Terms

13
  • Private Equity
  • J.B. Dollison
  • Managing Director
  • Crutchfield Capital Corporation
  • 2700 Post Oak Blvd., Suite 975, Houston, Texas
    77056
  • 713.961.0496 jbd_at_crutchfieldcapital.com
    www.crutchfieldcapital.com
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