PE firms take a more strategic approach to portfolio companies than in the past

Today’s portfolio companies choose private equity funds “based on not just who's going to pay them the most money, but who's going to be more involved in helping them get to that next step, helping them to execute the strategy,” says BDO USA’s Bob Pearlman in this video interview shot at ACG InterGrowth 2018.

I think the Middle Market has changed over the last decade or so and the way that the private Equity professionals get more involved with the the the Strategic approach that the portfolio companies are taking their really looking to the next transaction.

They're getting to the point where they're saying. Okay, we need to get the prophet up.

We need to get the cash flow up and Ratchet it up to another multiple so that we can make some money on this.

I think nowadays the portfolio companies really try to approach their choice of private Equity Funds based on you know, not just who's going to pay them the most money but who's going to be more involved in helping them get to that next step helping them to execute the strategy.

So the folks that have not just the experience in that industry for instance, but also the contacts that are going to help them move to the next level.