​Understanding the essentials is crucial before launching a private equity (PE) firm. Running a PE firm may not suit most finance professionals due to its demanding prerequisites.

Professionals with principal or VP experience at upper-middle-market (UMM) or mega-fund (MF) firms are good candidates for considering entering private equity. Similarly, C-level executives and mid-level bankers with deal experience and strong investor networks may pursue this path. Ideally, having at least 10 years of related work experience is recommended before starting a PE firm.

A solid track record of successful deals, with clear evidence of personal responsibility for outcomes, is critical. Establishing strong relationships with Limited Partners (LPs) at endowments, pensions, family offices, and sovereign wealth funds is essential for raising capital. Building a network of ultra-high-net-worth (UHNW) investors worth $20 to $30 million can also be beneficial.

Having a well-defined strategy in a specific, differentiated niche is important. A generic investment thesis reduces the firm’s chances of survival. Additionally, the owner must expect to contribute a few million dollars of their own capital for fundraising, legal expenses, and initial operations.

​Distressed investing involves purchasing assets, such as debt, equity, or real estate, that are undervalued due to financial difficulties or adverse market conditions. These opportunities often arise from companies on the brink of bankruptcy or those going through restructuring, providing high-risk but potentially high-reward investments.

Distressed assets fall into three main categories (debt securities, distressed equity, and real estate investments), each with unique risks and benefits. Debt securities, such as bonds or loans from troubled companies, are often purchased at a fraction of their face value. Distressed equity includes shares in struggling companies that are looking for operational recovery. Real estate assets, including foreclosed properties or undervalued commercial spaces, are those waiting for rehabilitation or resale.

Investors employ several strategies in distressed investing. One is turnaround investment, which involves acquiring underperforming companies to improve operations and restore profitability. Another is debt restructuring, which aims to purchase and renegotiate distressed debt positions and influence repayment terms or convert to equity. Finally, liquidation investments leverage a company’s individual assets for immediate returns through structured sales.

Investing in distressed opportunities can offer substantial returns, but it also carries significant risks, like legal complexities, incomplete information, and unpredictable market conditions. Successful investors mitigate these risks through thorough research, due diligence, and market insights, ensuring that their strategies can navigate these challenges effectively.

​Private equity (PE) refers to an investment strategy that focuses on acquiring private companies or delisting public companies with the goal of increasing their value over time. Unlike public market investments, PE focuses on long-term growth, operational improvements, and restructuring to deliver substantial financial returns. This asset class is often pursued by institutional investors and high-net-worth individuals who are willing to accept higher risks for the potential of greater rewards.

PE firms serve as intermediaries. They identify and acquire target businesses to optimize business performance and find room for growth and restructuring. These firms pool capital from limited partners, such as pension funds and endowments, and deploy it in high-potential businesses. General partners, on the other hand, oversee the fund’s day-to-day operations, make key investment decisions, and manage the portfolio.

PE offers several advantages, including hands-on investment management and the potential for high returns. However, PE investments also come with risks, such as illiquidity, significant capital requirements, and long holding periods. For investors with patience, resources, and high risk tolerance, private equity can provide unmatched opportunities for growth. With cautious planning and strategic execution, it can be a powerful addition to a diversified portfolio.

​LaDue Reservoir, a major fishing lake in the Chagrin River Valley, is a man-made body of water in Geauga County, Ohio, roughly 13 miles from Hunting Valley. The reservoir spans approximately 15,000 acres and reaches a maximum depth of 25 feet. Vegetation in the lake includes milfoil and curly pondweed.

Under an agreement with the city of Akron, the Ohio Department of Natural Resources Division of Wildlife has managed the fish populations in the LaDue Reservoir since 1983. The most abundant fish species in the lake are black crappie, walleye, catfish, and largemouth bass. Good bait choices for largemouth bass include plastic worms and crankbait in natural colors such as brown and green.

Woodlands and meadows surround LaDue Reservoir and offer a peaceful environment for anglers of all kinds. The most popular seasons for fishing the lake are spring through fall, but people also commonly fish in the reservoir in the winter.

​The Turnaround Management Association (TMA), an organization comprising diverse professionals in fields that relate to business restructuring and renewal, supports 54 chapters and 10,000 members around the world. It attracts attendees interested in corporate turnaround to its annual Distressed Investing Conference.

The 2025 Distressed Investing Conference will take place from February 11 through February 14 at Encore at the Wynn in Las Vegas, Nevada. This conference will be the first to offer the TMA Restructuring Boot Camp and the TMA Bankruptcy Boot Camp consecutively.

Speakers at the 2025 Distressed Investing Conference will include turnaround specialists Matthew English from the consultancy Arch + Beam, and Rachel J. Mauceri from the law firm Robinson + Cole. Noteworthy sessions at the conference will include the Joint TMA Executive Board/Board of Trustees Meeting and the Joint Education Session with SFNet. The conference will also feature a range of networking and recreational events, including the TMA NOW/IWIRC Networking Luncheon and the Wine Down Wednesday Welcome Reception.

​In negotiated deals, an owner sells a business without an auction, often leading to lower valuations. While multiple potential buyers might drive a higher sale price, negotiated deals can be more effective and efficient, allowing for a sale without sacrificing net returns.

One reason companies opt for negotiated deals is their faster closing process. Unlike auctions requiring extensive due diligence from multiple bidders, negotiated deals allow buyers and sellers to agree on key terms early, streamlining the transaction.

Negotiated deals may also benefit distressed or underperforming companies. Auctions may limit their options due to a lack of leverage, while negotiated deals give sellers access to buyers more willing to address existing business issues.

Buyers in negotiated deals typically have clear objectives, which reduces wasted time and resources. These acquirers often know their limits regarding industry type, financial metrics, and deal-breakers, which means they pursue only serious opportunities.

Furthermore, negotiated deals tend to be less disruptive. Auctions often require disclosing detailed financial and operational information, creating potential risks. Even with confidentiality agreements, sellers may face concerns about competition, employee morale, and customer relations, which can introduce uncertainty into the sale process.

​In June 2023, the Cleveland-based private equity firm Resilience Capital Partners partnered with DealerShop, Inc., in acquiring Jobbers Automotive. With a track record in the Ohio market spanning more than seven decades, Jobbers Automotive supplies an array of products that include body shop equipment, automotive paint, WeatherTech products, bulk oil, and janitorial supplies. These meet the diverse needs of mechanics, collision centers, and dealers statewide.

For DealerShop, Jobbers Automotive’s acquisition represented a unique opportunity to expand an already robust supply and distribution footprint that serves independent service centers and new-vehicle dealership franchises across North America. DealerShop’s president and CEO described the transaction as bringing an experienced team on board that would broaden the range of products and services offered and boost corporate value. The CEO of Jobbers Automotive, for his part, characterized the deal as enabling further growth of an already established brand.

Resilience Capital Partners’ CEO noted that the acquisition fit into his financial company’s template of prioritizing sensible, strategic geographic expansion moves.

​As the name suggests, Resilience Capital Partners goes beyond supplying businesses with funds to equip them to withstand adverse events and market shifts. Founded in 2001 in Cleveland, the firm selects companies that fill a unique niche, enjoy positive potential cash flows, and produce good returns on reinvested funds. Such companies are also well managed and are unlikely to experience disruptions in their field.

Resilience’s clients generally earn revenues between $25 million and $250 million in a wide range of industries such as consumer goods, manufacturing, logistics, and aviation. Advisors focus on businesses with insufficient expansion capital, those that are not central to a parent company’s main mission, or have liabilities brought on by low capitalization.

To address these problems, Resilience draws on the expertise of over 40 proven leaders in many sectors. This global Executive Advisor Network participates in due diligence and contributes members to clients’ boards of directors.

Resilience’s current client list includes companies such as Innovatus Imaging, a provider of medical diagnostic equipment, Maysteel, a manufacturer of metal enclosures for energy companies, and SIMCOM Aviation Training, which operates simulators for pilots.

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Private equity funds represent collective investments typically inaccessible to individual investors of modest means. They deploy capital to acquire dominant ownership positions in businesses. Private equity firms commonly allocate funds to small and medium-sized enterprises through financial instruments such as capital injections, debt financing, or equity. These investments aim to produce profits for shareholders over a prolonged duration.

Every private equity firm possesses backers who favor direct investment in firms over purchasing stocks. Private equity firm investors might seek to finance businesses due to personal motivations or to enhance an organization's operational efficiency. The firms usually collect management fees and are entitled to a portion of the total profits upon the firm's sale of the company. Alternatively, they might achieve their return on investment through acquisition or merger, initial public offering, and recapitalization.

A private equity firm invests in privately held businesses, anticipating growth that will yield returns within a set period. Sometimes, private equity firms purchase complete businesses and revamp their structures to enhance their effectiveness and boost their financial gains. The reorganization typically includes financial tactics aimed at deriving worth from the corporation. The firm can later trade these companies for a profit, resulting in actual earnings for investors.

Similar to all forms of businesses, private equity companies aim to generate profits, thereby producing financial gains for their stakeholders. Investment managers commonly dedicate significant effort to thoroughly researching companies and industries or doing due diligence before committing funds. They consider various elements when making investment decisions, including whether a firm operates within a sector that presents significant barriers to entry for potential competitors and consistently produces profits.

Private equity firms operate with a unique structure. Firstly, they typically take the form of limited partnerships—the general partners secure funding from institutional investors, the limited partners, to invest in the partnership. The general partner handles investments, whereas the limited partners supply the capital for investment purposes. Limited partners are only liable for the amount of money they've invested, whereas general partners have unlimited liability.

Every participating party establishes the conditions of their collaboration through a limited partnership agreement or a formal contract. Private equity firms obtain their funding from institutional investors and affluent individuals recognized as accredited investors. These organizations have received approval from the Securities and Exchange Commission to allocate funds to securities that are not publicly traded.

Private equity firms have various investment preferences. For instance, some firms adopt a passive approach as investors, depending on management to run and enhance the company's operations. While other firms engage as active investors, offering hands-on assistance to the business to foster its growth and ensure its success. Active private equity companies frequently possess extensive networks and robust bonds with executives at the C-suite level across various sectors.

Despite contributing minimal personal funds to acquisitions, private equity firms usually obtain a management fee, typically around 2 percent of the company's total assets, and a 20 percent share of the profits upon selling the company. These earnings are subject to favorable taxation by the US government through a tax benefit known as "carried interest."

​In finance and investment, private equity (PE) firms have emerged as powerful entities, driving growth, fostering innovation, and reshaping industries. These firms play a critical role in the global economy, offering a unique blend of capital infusion, strategic guidance, and operational expertise to businesses across various sectors. For seasoned investors and ambitious entrepreneurs, starting a private equity firm presents a compelling opportunity with advantages, such as the potential for attractive investment returns.

According to some studies, private equity firms employed 11.7 million people in 2023, nearly 3 million more than two years ago. There are over 18,000 PE funds, almost a 60 percent increase in the last five years. Moreover, PE manages $4.4 trillion in assets, including $1 trillion of uninvested capital.

A private equity success story is Bain Capital's acquisition of Domino's Pizza in 1998 amid declining sales and a tarnished brand image. Implementing strategic interventions, Bain Capital revitalized Domino's by changing marketing, technology, and operational efficiency. It invested in online ordering systems and enhanced the customer journey. The investment turned around the pizza chain, propelling Domino's into a global leader in the pizza delivery market.

Private equity investments typically give higher returns than traditional investment assets such as bonds and stocks. According to industry data, private equity funds have consistently outperformed public markets over the long term, delivering robust returns to investors.

Unlike public equity markets, where shareholders have limited control over management decisions, private equity firms exert significant influence over their investments. This hands-on approach allows them to drive strategic initiatives, streamline operations, and steer businesses toward sustainable growth trajectories. While public markets may be subject to short-term fluctuations and volatility, private equity firms can focus on creating long-term value without the pressure of quarterly earnings reports or market sentiment. This long-term perspective enables private equity firms to pursue strategic initiatives that may take time to materialize but ultimately result in substantial value creation.

Successful private equity firms offer operational expertise honed through years of experience and industry specialization. They can help optimize supply chains, expand market reach, or restructure organizational frameworks. These firms possess the know-how to unlock hidden value within portfolio companies. Moreover, by leveraging their operational expertise, private equity firms can drive efficiency improvements, enhance profitability, and position portfolio companies for long-term success.

Unlike publicly traded companies, where management may prioritize short-term shareholder value over long-term sustainability, private equity firms have an incentive to maximize returns for all stakeholders. By co-investing alongside limited partners, fund managers demonstrate their commitment to maximizing returns and mitigating risks, fostering a collaborative environment conducive to long-term success. Private equity presents an attractive option for investors seeking diversification beyond traditional asset classes. By assembling a diversified portfolio of companies across different industries and geographies, private equity firms can hedge against market volatility and capitalize on emerging opportunities in dynamic sectors.

In addition, investors have the opportunity to empower entrepreneurs and fuel their growth ambitions. By providing capital injections, strategic guidance, and access to extensive networks, private equity firms become catalysts for innovation, driving economic development and job creation.

Private equity firms also demonstrate remarkable adaptability and resilience. Through rigorous due diligence, proactive risk management, and agile decision-making, these firms navigate challenges adeptly while capitalizing on emerging trends and market inefficiencies. By staying ahead of the curve and embracing change, private equity firms can position themselves for long-term success in dynamic and competitive markets.