Private equity is about continuous dealmaking. But, with the wrenching credit crunch, activity has been horrible.
So, what to do? Interestingly enough, it looks like some of the top private equity operators are signing up for board duties.
Look at GM, which this week announced five new members to its board. In fact, three of them are from major private equity firms: The Carlyle Group's Daniel Akerson, S. J. Girsky & Co.'s Stephen Girsky and TPG's David Bonderman.
What's going on here? True, private equity has taken quite a few lumps over the past couple years. For example, Bonderman lost a bundle on his Washington Mutual transaction (which was one of the worst private equity deals in history).
But, who hasn't made mistakes in the financial implosion? Rather, Akerson, Girsky and Bonderman have strong long-term track records. In the case of Bonderman, he was instrumental in managing through complex restructurings, such as with Continental Airlines (NYSE: CAL).
For the most part, private equity people have a keen grasp of streamlining companies, such as through retrenching as well as selling off assets. Plus, they have a focus on generating returns on investments. And, no doubt, this is something that ailing companies like GM really need to do.
Tom Taulli is the author of various books, including The Complete M&A Handbook, You can reach him at his personal blog.
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Reader Comments (Page 1 of 1)
7-24-2009 @ 5:47PM
Dan Barnett said...
Tom,
I'll be a believer if the "Private Equity Directors" break up the insider system that has allowed Corporate Boards to pretty much run their corporations as personal fiefdoms. I include executive pay & bonuses; but there are other areas as well.