Aug 31, 2020
The Private Equity Playbook w/ Adam Coffey
- BRT S01 EP 30 8-30-20
Guest: Adam Coffey, author of The Private Equity Playbook
LKIN: https://www.linkedin.com/in/adamecoffey
Things We Learned This Week
- How the Private Equity (PE) process works with valuations, & expected returns
- Waterfalls Distributions ABC, payouts, IRR of 20% / yr
- Why working in PE can give a business owner a chance to Sell their Biz 2x
- PE v Public Co’s (use P/E for valuation) – PE uses EBITDA
- Growth Levers - particularly Building thru Acquisition
Peak behind the curtain of Private Equity, and learn how companies are bought, managed, financed, plus what metrics (EBITDA) are used for valuation. Unique perspective from someone who has run companies for PE Firms for the last 20 years. Learn the secrets, and why Execs at companies should consider working or selling to a PE Firm.
Adam Coffey - CEO, board
member, best-selling author, Forbes Business Council
member, and an acclaimed guest speaker, Adam Coffey, is an
inspiring and authentic leader who creates high-performance
cultures and drives transformative growth.
Over the past 21 years, he has had
the honor of serving as President and CEO of three national private
equity-backed service companies, each in different industries. Two
of the three companies he built achieved enterprise values of $1B.
Throughout his career, Coffey has a proven track record of
achieving notable outcomes for stakeholders. His career average at
exit is 5x MOIC (Multiple of Invested Capital).
Coffey is an active mentor to MBA
candidates and is a regular, favorite guest speaker at UCLA.
Coffey, who considers himself a blue-collar CEO, has a diverse
background. He has led several commercial and industrial service
businesses, is a licensed general contractor, a pilot, a former GE
executive, an alumnus of the UCLA Anderson Executive Program, and a
veteran of the US Army.
Coffey’s first book, The
Private Equity Playbook, was released in February
2019 and became an instant #1 Amazon Best Seller and
private equity cult classic. His second book, The Exit Strategy
Playbook was released in September of 2021 and also was a #1 Amazon
Best Seller. He was named one of the “Most Influential Leaders” by
the Orange County Business Journal in 2018, 2019 and in 2020 and
2021 was named to their prestigious "OC Top 50". Coffey makes his
home in Westlake, TX with his wife and young daughter.
Private Equity is ownership or interest in an entity that is not publicly listed or traded. A source of investment capital, private equity comes from high-net-worth individuals and firms that purchase stakes in private companies or acquire control of public companies with plans to take them private, eventually delisting them from stock exchanges. The private equity industry is comprised of institutional investors such as pension funds, and large private equity firms funded by accredited investors.
Most firms have a similar structure of General Partners who run the firm, and Limited Partners who invest in the firm. The term of investment is usually for 10 years, is illiquid, and a common fee structure is 2/20 (2% mgmt fee + 20% of profits). Leveraged buyouts and venture capital (VC) investments are two key private equity investment sub-fields.
Notes:
Adam Coffey background, comparison of GE years vs private equity
Served in US Army, engineering degree, GE mgr training at Crotonville, NY during Jack Welch CEO days
Private Equity (PE) Working with Board of Directors, quick pace, managing team, budgeting
Financial and ROI numbers, EBITDA, IRR, MOIC
How private equity works with valuations, expected returns, etc
Waterfalls Distributions ABC, payouts, IRR of 20% / yr
PE v Public Co’s (use P/E for valuation) – PE uses EBITDA
Growth Levers, particularly building thru acquisition (Buy & Build)
Advice to execs and business owners for dealing with PE
Sale of Business, multiple opps to sell biz and get partial cash out
Build Equity w/ debt, UBS works bank syndication and loans for PE
Buffet is like PE, runs Family Office
Link to Adam Coffey Return to BRT – 2/2022
Coffey’s first book, The Private Equity Playbook, was released in February 2019 and became an instant #1 Amazon Best Seller and private equity cult classic. His second book, The Exit Strategy Playbook was released in September of 2021 and also was a #1 Amazon Best Seller. He was named one of the “Most Influential Leaders” by the Orange County Business Journal in 2018, 2019 and in 2020 and 2021 was named to their prestigious "OC Top 50". Coffey makes his home in Westlake, TX with his wife and young daughter.
Private Equity Topic:
https://brt-show.libsyn.com/category/Private+Equity-Valuation-MandA-Franchise-Business+Broker
Investing Topic: https://brt-show.libsyn.com/category/Investing-Stocks-Bonds-Retirement
More 'Best of Investing': Here
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