Mark Hauser has been both a face and a name in the world of private equity investments since he first got his start at Reynolds, DeWitt & Co. Now the Managing Partner and Founder of Hauser Private Equity, Mark has developed a reputation for himself as someone who knows the ins and outs of the industry.
As an insider and an expert in the field, Hauser recently took time out of his day to outline the key aspects that we must understand to find prolonged success as private equity investors.
The Role of a Private Equity Transaction
In the words of professionals who have come before us, private equity is a description of an investment partnership between companies that buy and manage before selling them. Equity firms operate on behalf of investment funds and accredited investors. Private equity transactions can include public companies and private companies acquired through a buyout or consortium.
The goal of a private equity firm is to purchase a company to overhaul them to earn a profit before selling the business again.
Navigating Successful Private Equity Sales
Mark Hauser understands that a successful acquisition can lead to overhaul, and that can mean significant financial boons for a private equity firm. Unfortunately, finding success in such a complicated field requires a bit of preparation.
To navigate successfully toward a private equity sale, Mark Hauser believes it is of the utmost importance to perform exhaustive due diligence. Understanding the goal of a company, where it stands financially, and what it can become in the future is pivotal to a successful acquisition.
To perform due diligence, companies will reach out to analysts to investigate the financial, legal, and commercial aspects of a potential deal. A little due diligence now can save a ton of money and frustration in the future.
Making a Purchasing Decision
Once a firm’s analysis team clears a potential acquisition of any red flags, an investment team will present a deal to the committee. It is here that both parties will negotiate through their lawyers until an agreement is made, at least according to Mark Hauser.
Once a deal is made, the goal of Hauser Private Equity is simple: to improve company operations, overhaul the foundations of the business, and prepare for a sale and a timely exit. A successful private equity transaction will typically involve an exit plan that is executed between three and seven years into the trade.
When deciding on what to purchase, Mark Hauser looks at a business’s financials, how disruptive it can become in the world, and its current market position paired with avenues for potential growth.
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