The public perception of private equity is mixed at best. The major reason for this is the fact that buyouts and the corresponding portfolio companies are financed with a significantly higher fraction of debt than “normal”, non-PE financed peers. Thus, many observers conclude a higher exposure of private equity owned companies to crisis events: due to the “excessive” use of debt, already smaller crises will drive portfolio companies into bankruptcy. Against the background of the Russian attack on Ukraine and the turmoil on the energy markets caused by it, this session will deal with the topic of “resilience”, i.e., the ability of companies (and especially privat equity owned companies) to master crises and overcome exogenous shocks.
This session is part of a broader lecture series surrounding the topic of private equity (PE).
Together with his guest Lukas Oswald (FTI Andersch) Prof. Bernhard Schwetzler (HHL, Chair of Financial Management) will highlight policies and measures implemented by private equity owned portfolio firms in crisis times along the most recent examples covid 19 and the Russian invasion of Ukraine. Lukas is Senior Consultant at FTI Andersch, a consulting firm specialized on turnaround, business transformation and transactions in crisis situations and thus well suited to highlight differences in crisis management between PE owned and non-PE owned companies. He has collected extensive experience in restructuring consulting over the last five years with FTI Andersch. He is currently pursuing a PhD at HHL.
The following topics will be highlighted and exploratively analyzed in the session:
- The role of debt in buyout financing
- Risk management and crisis resilience of PE owned companies
- Empirical evidence on crisis resilience of PE owned firms
The talk will be held in English