WHO WERE THE ORIGINAL PIONEERS OF PRIVATE EQUITY?
Alex RAWlings
Hiring ambitious recruiters in Leeds who want to increase their average fee and undertake GENUINE Executive Search | The Private Equity Podcast Host | Author of How to Hire | [email protected]
Raw Selection has put together a short series of blogs in order give our audience a better understanding of the Private Equity world.
The first notable leveraged buyout transaction was from Lewis Cullman, as he acquired Orkin Exterminating Company during 1964, although, financiers such as Jerome Kohlberg Jr. and Henry Kravis, who worked for Bear Stearns at this time, helped build the Private Equity world we know today.
These financiers targeted mainly family-owned businesses that were facing succession issues, due to being founded during WWII, and also lacking a viable exit for their founders, as the companies were too small, or the founders were too reluctant to sell out to their close competitors, making a sale to a financial buyer a fairly attractive move.
The bankers completed a series of buyouts in closely following years, including Stern Metals, which comprised of Thompson Wire, Eagle Motors and Barrows through this investment, as well as Incom, and Boren Clay.
In 1974, a new investment firm, Thomas H. Lee Partners, was the first independent Private Equity firm to focus on acquiring companies through leveraged buyout transactions of mature companies, companies rather than venture capital investments in growth companies. By the end of the 1990s, Thomas H. Lee Partners became one of the largest global PE firms.
Throughout the late 1970s, through to the early 1980s, multiple PE firms survived through various cycles in leveraged buyouts and also venture capital.
In our next Private Equity blog, we discuss the first ever Private Equity boom.
If you have any questions about the PE industry, or would like to share some facts of your own, then please reach out to Alex at [email protected]
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