Every quarter we gather leading women in PE to discuss current industry topics and to offer smart women the chance to gather, share intel, and decompress with one another. In our most recent event, we discussed many topics and have listed our top takeaways below.
These forums are invite-only and follow Chatham House Rules, so listed below are high-level takeaways only. Are you in private equity and interested in joining fellow leading PE professionals during our next Women in PE Forum on September 15th? Please contact us at events@bluwave.net.
Deal Flow
- Panelists and table participants agreed that the current flow of deals is historic in number, but reflective of years past, particularly past-recession and pre-tax changes. Funds are constrained by tight timelines and increased competition, higher price multiples, pressured budgets, and true scarcity both from diligence providers and internal fund capacity.
- Funds have addressed this by focusing on deals they can win or where they have a unique angle for a seller. Some are even contacting banks in advance of the process with a pre-deal offering. When a “wanted” deal is identified, funds are full-court-pressing management team (including in-person meetings) and putting resources against it. Relationships with diligence providers have become more important than ever due to capacity constraints. When go-tos are not available, funds are taking the opportunity to try new providers identified through BluWave—connecting funds with specialized groups for a certain industry or geography.
- Internal capacity constraints are real, as is junior professional burnout. Funds are leaning into the softer side (happy hours, team outings, etc.) to curate a sense of team and community, helping juniors feel tied to their firm and preventing turnover.
Holding Periods and Potential Tax Change Impact
- Funds are trying to balance the opportunity to sell at significant multiples in this market, weighing the balance of higher short-term IRRs versus greater multiples of money with longer hold periods. Additionally, potential tax changes loom, encouraging companies to sell before the potential becomes a reality. BluWave is hearing from our contacts in DC that a changed capital gains rate will likely land at a lower rate than being proposed by the administration in the form of a compromise.
- Few PE firms seem to be making firm-wide changes from a holding period perspective due to the impact of potential tax changes. That said, tax changes are pushing private owners (in an unprecedented way) to look at selling, amplified by the pent-up demand from the delayed covid period. Even 20-30 yr old industrials companies are considering sale for the first time.
Other Industry-Wide Observations
- Travel: Flights are packed, and travel is generally more “pleasant” from a hospitality perspective—hotels being genuinely eager to please! That said, travel itself is more difficult due to limited flights, making the options more limited and forcing prioritization exercises. Annual meetings are split between remaining virtual (higher turnout) and in-person (more collaboration/relationship-development). The consensus on board meetings is that they will likely be ½ virtual and ½ in person.
- In-office: Offices are coming back, depending on the region, though all will be in the “new normal” mode by Labor Day. In general, most firms seem to be at least partially virtual for the foreseeable future, and there is a trend toward a more casual dress code—notably involving more color!
We thoroughly enjoyed getting to gather with other leading women in PE to discuss these current industry hot topics. Here at BluWave, we are specialized to help you find service providers when your go-tos are at capacity.
Never worked with us before? Check out our How To Vet BluWave video to learn more about us and how we can help. And if you have an immediate need, contact us here and we will be happy to help you right away.
