sample private equity business plan

Business Plan Template for Private Equity Firms

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As a private equity firm, making informed investment decisions is crucial to maximizing returns for your investors. That's why having a comprehensive business plan template is an absolute game-changer. With ClickUp's Business Plan Template for Private Equity Firms, you'll have all the tools you need to evaluate and assess potential investment opportunities. This template allows you to dive deep into a company's strategy, financial projections, market analysis, and growth potential. Streamline your due diligence process, make data-driven decisions, and set your investments up for success. Take your private equity firm to new heights with ClickUp's Business Plan Template today!

Business Plan Template for Private Equity Firms Benefits

A business plan template for private equity firms offers a range of benefits, including:

• Streamlining the evaluation process by providing a structured framework to assess investment opportunities
• Ensuring all necessary information is included, such as financial projections and market analysis, for comprehensive due diligence
• Facilitating effective communication with stakeholders by presenting a clear and concise overview of the investment opportunity
• Enabling better decision-making through a systematic analysis of the company's strategy and growth potential
• Maximizing returns for investors by identifying risks and opportunities early on and developing appropriate strategies for success.

Main Elements of Private Equity Firms Business Plan Template

When it comes to evaluating potential investment opportunities, private equity firms need a comprehensive business plan template that covers all the necessary aspects. ClickUp’s Business Plan Template for Private Equity Firms offers the following key elements:

• Custom Statuses: Keep track of the progress of each section with statuses like Complete, In Progress, Needs Revision, and To Do.
• Custom Fields: Utilize custom fields such as Reference, Approved, and Section to add relevant information and track the approval process.
• Custom Views: Access five different views, including Topics, Status, Timeline, Business Plan, and Getting Started Guide, to easily navigate through different aspects of the business plan.
• Collaboration and Organization: Leverage ClickUp's collaboration features, such as assigning tasks, adding comments, and attaching files, to streamline the business planning process for private equity firms.

How To Use Business Plan Template for Private Equity Firms

If you're a private equity firm looking to create a solid business plan, ClickUp's Business Plan Template is the perfect tool to help you get started. Follow these steps to make the most of it:

1. Define your investment strategy and goals

Before diving into your business plan, it's crucial to clearly define your investment strategy and goals. Are you focused on a specific industry or region? What are your target returns? Having a clear understanding of your investment approach will guide your decision-making throughout the business plan.

Use custom fields in ClickUp to outline your investment strategy and goals.

2. Conduct thorough market research

To create a comprehensive business plan, you need a deep understanding of the market you're operating in. Research industry trends, competitive landscape, potential risks, and opportunities. This information will help you assess the viability of potential investments and make informed decisions.

Use the Table view in ClickUp to organize and analyze your market research data.

3. Develop financial projections

Financial projections are a critical component of any business plan. Use historical financial data and market research insights to forecast revenue, expenses, cash flow, and profitability. Consider various scenarios and sensitivity analyses to assess the potential risks and rewards of your investments.

Utilize the Gantt chart in ClickUp to create a timeline for your financial projections and track progress.

4. Outline your investment thesis and exit strategy

Your investment thesis outlines the rationale behind your investment decisions and identifies the value you aim to create. Clearly articulate the drivers of value, whether it's operational improvements, market expansion, or strategic partnerships. Additionally, define your exit strategy, whether it's through an IPO, sale to another firm, or management buyout.

Use the Docs feature in ClickUp to write a detailed investment thesis and exit strategy.

By following these steps and utilizing ClickUp's Business Plan Template, you'll be equipped to create a comprehensive and compelling business plan for your private equity firm.

Get Started with ClickUp’s Business Plan Template for Private Equity Firms

Private equity firms can use the Business Plan Template for Private Equity Firms in ClickUp to streamline their evaluation and assessment process for potential investment opportunities.

First, hit “Add Template” to sign up for ClickUp and add the template to your Workspace. Make sure you designate which Space or location in your Workspace you’d like this template applied.

Next, invite relevant members or guests to your Workspace to start collaborating.

Now you can take advantage of the full potential of this template to create comprehensive business plans:

• Use the Topics View to organize and structure the business plan by different sections, such as strategy, financials, market analysis, and growth potential
• The Status View will help you track the progress of each section, with statuses like Complete, In Progress, Needs Revision, and To Do
• Utilize the Timeline View to set deadlines and milestones for each section, ensuring timely completion of the business plan
• The Business Plan View provides a comprehensive overview of the entire plan, allowing you to review and analyze all sections in one place
• Use the Getting Started Guide View to provide instructions and guidance for team members on how to use the template effectively
• Customize the Reference, Approved, and Section custom fields to add additional information and categorize different aspects of the business plan
• Monitor and analyze the progress of each section and the overall business plan to ensure accuracy and quality.
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Private Equity Firm Business Plan

Mar.20, 2017

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Table of Content

A private equity firm is an organization that invests in new ventures that it sees potential in. Once these companies are fruitful, the firm gets a return on their investment. Sounds quite simple but there is a lot more to it.

Once you think of your new business idea and choose to open a private equity firm you may still find yourself thinking in actuality how to start a private investment company and an elaborate business plan can really help in this case. To help people going through the same dilemma, OGS Capital is there with the range of sample private equity firm business plan s that can aid you formulate your personal one and that can assist you with learning how to start a particular private equity firm business plan . If you want a custom plan written then the team at OGS Capital is fortunate to have a highly qualified staff that will provide you with a detailed and well-researched plan and that too in your provided deadline

How to start a private equity firm?

Private equity firm is often criticized for the fact that they make profit and formulate the firm put the amount in more beneficial areas by ending current jobs. While this may seem like a good approach, you have to realize that there are better approaches that don’t come at the cost of terminating the paid position. The most successful and established businesses produce more paid positions by re-establishing companies on the brink of collapse but that have a good premise behind them. When it comes to actually starting your equity firm to get the best out of it, you should consider the following things:

• Form the right team: Putting the right team is crucial. Investors want to see a team that has worked together, and that too in a good way.
• Give yourself some time: Give your best and show your full potential but do not expect to bloom to the fullest in a short time. Give it 3 to 5 years.
• Keep Track of Balance Sheets: Keep track your balance sheets and income flow statements.
• Give Focus to Stockholder: The center of your focus should be the stockholder, not the stock market.
• Create a Winning formula and stick to it: Once you have come up with a good operational and advertising strategy have faith and stick to it, don’t change course midway.

How OGS Capital can help?

What sets OGS Capital apart from other private equity firm business plan consultants of its sort is the highly experienced team behind it their sole aim to help people. The OGS Capital team consists of a bunch of professionals that have the kind of knowledge that makes the sample business plans very informative and that help in getting you the right idea about whatever private equity firm business plan you seek. Our main focus is helping ambitious individuals establish their private equity firm business plan . We want to take your business idea and help you turn it into the successful venture it deserves to be.

OGS Capital does not just work to get the job done, but we want to ensure that we do it in the best possible way so that the client is happy and gets the results they are looking for.

An equity firm is a company or an private equity firm business plan that provides financial cooperation on easier terms. You can say that it helps a startup or a new venture by investing in the private equity of that business. This is done by a range of financing strategies. So basically equity enterprise is a financial sponsor that will help your firm grow and prosper by funding you.

To do all of this a private equity firm raises giant amount of wealth that supply the equity contribution for all these kinds of transactions. So, what do these equity companies get as a result? Well, private equity firm in return for all of the invested amount receive a cyclic management amount along with some share in all the monetary gain particular business that they invest in earns. The private equity firm in this way acquire substantial amount of shares in an allocation, and then they figure out ways to increase the worth of the invested amount. They receive amount on all their investments by the following ways:

• IPO: In this situation assets of the client’s firms are offered to the public, which normally provides a partial asset to the equity firm which is sponsoring financially and along with the general citizens. More shares can later be sold too.
• Merging or Acquiring the new firm: In this situation a company is sold to another firm in the form of cash or shares, constituting a newly merged firm you can say.
• Recapitalization: In this situation, the earned amount is divided amongst all the firm’s shareholders, financial benefactor and the private equity funds are gotten from all the flow of income generated by the enterprise or in some cases by other securities to provide amount for the distribution.

When you are starting private equity company, you have to look for the motivation and the reasons as to why exactly are you jumping into this equity venture? Someone who has a knack for putting in money and has a nice amount well-established connections should go ahead and start a private equity firm. Why do we suggest it? Well for someone like this, a venture of this sort can bring in a lot of economic wealth, the job can be a bit demanding, but it has a lot of benefits that make up for all the challenging work.

Starting any new venture or firm especially first requires you to think it out thoroughly and to devise a road map of each step that you are likely to encounter during the course of establishing that private equity firm business plan . Whether it is an already established practice in the industry or has an industry of its own or if it is just a brilliant completely new idea that you want to implement, you first require a blueprint. This blueprint or roadmap in industry terms is called a private equity firm business plan , and today we will be looking at how to start with your very own private equity firm business plan or your very own equity firm.

Major Guidelines on What to Research Beforehand:

So if you are wondering how to start a private investment company, then you would want to research the following:

1. Gather data about the business identified:

Now that you are done with identifying the equity industry, and you have come to learn your exact place in it, then comes the tougher but more interesting part, this step involves conducting Internet research or talking to concerned people and getting all the facts figures and statistics of the industry out of all avenues possible.

The private equity industry is growing with the passing day and has become an essential part of the possession management side of the market. With an increase in demand of organizational  investors, the need for asset and incoming money management has increased considerably. Over the next few years the investing party will enlarge their money allocation to other schemes.

So you should collect facts and stats about how is the growth occurring, at what rates and how much investment is being made and how many people are putting their earned money into private equity firms.

2. Conducting Market Feasibility Research:

Next step is checking the trading status for equity venture along with conducting research on the feasibility of the equity trade and how will this venture assist you. Following things come under this:

• Making Demographics and Psychographics: Normally, a private equity firm forms collection of huge amount of cash and then uses that to buy different kinds of businesses. The aim here is to buy these businesses and to sell them at a profit in a matter of few years. So they often target small startups or businesses that are on the verge of breaking but have a good idea behind them or are in accordance with the industry trends. This relation to the trends in this field ensures that the very strong return on the contributed money will be made. So all the crucial most important points of the aimed firm are considered, which includes the merchandising, monetary and lawful aspects.
• Finding all the perfect spots in the Field: A private equity firm can have a large quantity of comfortable spots in the trade. Figure out what suits the best for your interests and what is the place where you feel like you have the ability to benefit the most out of. This depends on the magnitude of your private equity firm, your investment scheme and how you have been planning to carry out transactions in the industry. This is important because concentrating on finding a place in the industry will help pinpoint your drive towards achieving it and move your firm towards success. You can go for private equity investment in healthcare, in agriculture, shipping, airlines, science, and technology, education and insurance. Pick the one that fits your particular situation perfectly.
• Finding out potential competitors and the level of competition: Since the private equity firm industry has become a lot more famous in the past decade, quite a large number equity firms are coming into it and finding a spot. This results in the fact that the industry is becoming increasingly competitive. What you are required to do is to find out how you fit in this competitive industry and you have to identify the level of this competition. Earning a name and getting famous in the equity industry is a tough task, it will not happen overnight, you will have to give it some time and then work as hard as you can to reach an acceptable place. So make a list of your contenders, and then study their patterns and strategies.
• Conduct economic analysis: In this equity market, all the fiscal firms get the collection of funds from various investors, however all of these are distinguisable in one way or another. You have to rank them in order of evaluated assets that are being managed. Since the equity industry has expanded in the past few years so has the AUM. In the future the private equity firms will be responsible for generating even more income in the equity industry, so conduct an economic analysis of how different firms in the industry are doing. This might not include just private equity firms but other categories of firms in the industry as well, such as, hedge companies and alternative investment companies.
• Starting your firm from scrape or purchasing it: You have to build a very strong brand that stands out from the rest. So to be productive, you have to choose what is better for you. Should you start your own new brand, or buy a permit of the business that already has created some brand awareness.
• Assess Obstacles and Menace of Starting a Private Equity Firm: Since there is a big number of triumphant private equity firms these days, you will face a lot of challenges. So, you have to conduct an analysis and assess what the potential threats to your private equity firm that put you in a tough spot are. These challenges can be anything like defining a good equity firm strategy or establishing what investment vehicle you are going to choose, determining a fee structure, and the biggest thing that can act as a deal breaker if not done properly is raising funds and determining a fee structure for all your potential clients.

3. Taking Care of All The Legal Aspects:

One overlook on the part of legal aspects and you can find yourself in a tough spot. So you have to look at all the legal aspects carefully, and you have to make sure that you don’t miss a single thing that can be used against you later on. Here are the main things to do in this case:

• Finding the Best Legal Entity: A private equity firm acts as a partner or legally responsible firm for a limited amount of time. You will decide where investments go and where they come from. But the stock holders will have a part in the decision of which businesses that your private equity firm would have provided the funding for the private equity firm business plan .
• A Unique Name: Your name will set you aside from all the other firms in an aside, and this is how you will be legally enrolled. So think of a name that catches the eye, and that is something that will attract your prospective investors will find good and trustworthy.
• Choosing The Best Possible Insurance Plan: For a private equity firm, like most other equity companies out there, choosing an insurance plan is important. Discuss with all your partners and choose the insurance plan that suits your equity venture the best. There are tons of kinds such as umbrella insurance, Property insurance, Errors and omissions insurance and General Liability insurance, these help in case of bad economic events, such as bankruptcies, fallout with investors, and problems with personal assets of managers and employees. So this part has to be carefully considered.
• Trademarking your Brand and Protecting your Intellectual Property: Your intellectual property is a child of your creative juices, so it needs to be protected at all costs. Make sure you get on to protect the property of your private equity firm and file for it right away, Trademark everything right away. Patent your equity enterprise’s logo, your company name, and all other necessary documents.
• Getting a Professional Certification if needed: If the need arises, you have to get a proper certification in the area of private equity. These certifications make a point that you know what you are doing, and you are certified to do so. Other than that it will also help you comprehend the trade at a deeper level and will help you in various legal aspects. Some of these certifications include private equity expert, CFA etc.
• Gathering all the legal documents that are needed: Now comes the part where you collect all of the legal documents that are essential in legally starting a private equity firm. This consists of financial documents as well. Examples of these documents are plan, license, an agreement, Capitalization table, corporate minutes, business pitch deck, article of agreement and a few others.

4. Identifying your industry and its occupants:

First of all, you need to figure out exactly what is the exact area in which you want to enter like, and what other categories or group of firms come under it that you will have to deal with. For the private equity firms, the field is composed of finance-related firms and other funded options such as equity firms and others that deal in finances of different businesses. These companies benefit on the basis of all the return they get on their money that was invested. They help businesses and startups in establishing.

The trade does not include all fiscal and funding firms. Some of the companies that the trade excludes are coverage firms, worker benefit firms and real estate franchises.

Now that you have done all your preparation and you have a nice idea on all legal, economic and industry details of the equity venture, you can put them together in the private equity firm business plan. This will be done in a way that shows you have an idea about what you are doing and you are going to do it in the best possible way.

What to consider before STARTING A PRIVATE EQUITY FIRM?

Without a doubt, the first step in starting private equity company is getting done with an equity venture business plan. Not only will it help you in clearing everything up and mapping out guidelines it will also help you in presenting your idea to potential investors so it is a very important task and one that must be taken head on with a lot of research and serious interest.

One thing you have to realize is that just writing a private equity venture business plan is something that will get you immediate success. What gets you success is when you take all the information out of it and take full on advantage of it by implementing everything you mentioned with full force and might.

Now that we have established that when it comes to establishing an equity corporation, how to start a private equity firm, in particular, the first step is making a detailed, proposition covering everything in detail. If you are worried about what exactly constitutes a good business proposition that can wow people, and that can act as a booster for your private equity firm. Then do not worry at all, later on, we are going to describe the levels in composing the perfect proposal of a private equity firm to inspire you to create a great one for your own firm. For that first of all you have to be completely sure of what a private equity firm actually is, look into other equity firms and figure out what they are.

Starting private equity company first requires starting with the equity enterprise proposal. This is what will aid you to formulate the comprehensive proposition for the private equity firm and communicate it in a way that attracts all prospective investors to your firm. This will assist you in actually establishing the private equity firm and to completely apprehend the situation. For this you have to find out the answers to the following questions:

• Before wondering how to start a private equity firm, consider the target trade of your firm’s service and how exactly they will be targeted?
• Will there be involvement of some other business or firm in starting your private equity firm?
• What is different, that will attract the target market to your firm to get investment?
• How much time will it take in starting a private equity firm?
• What is the technical and office equipment required and how will it be gathered?
• What should the main team include to get the most success?

Writing a private equity firm business plan

Now this is a very important part of starting a private equity firm and will tell you how to start a private equity firm, and this is what we are here to guide you for. If you have a solid knowledge about all the things discussed in the previous section and have done all your research in the proper way on all the points discussed before, then writing a proposition for the equity enterprise will be a piece of cake for you. Since it is just putting together complete stuff that you have researched, and you have thought about like your objectives.

The equity enterprise plan will include a brief report of what you private equity firm plans to do, what kind of investments will it offer, how will they be different from others of their kind. It will also include a marketing analysis section. Your promotional strategy which also includes how you conduct advertisement and how will you reach people, it will also contain a brief reporting on your target trade.

Since a proposition also acts as a blueprint for your private equity firm business plan so, sometimes it has to include structural information about the equity business as well, for example, the organizing team of the private equity firm and stuff like how will all your ideas will be implemented and how much cost they will take. This helps put your ideas to work later on.

Another thing you have to take care of while composing your private equity firm business plan proposition is predicting the destiny of the equity company financially and socially. Make calculations like monetary flow, depreciation of things over time and the life of your funds, and how exactly these funds will grow with the passage of time.

It also includes an administrative synopsis which will merge everything together and will put everything in perspective by summarizing it you can say.

To help explain this further here is sample template for an equity venture proposal and which will give you an idea about how it should be written and what will it include.

Sample Template for Private activity firm Business plan

If you want to know how to start a private investment company or how to write a proposition for it the following text will give you an idea:

Write an administrative synopsis

This is the most important part of the plan, some investors form an idea about your entire business based on these two pages. So put a lot of effort into making an administrative synopsis for your private equity firm. Like the name suggests this section will summarize everything about your private equity firm, the potential startups or businesses you will fund, the basic genre of the company, you’re most probable clients and how you are intending to achieve everything you are setting out for in a way that you stay distinctive from others in your industry.

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Write a Company overview

In this section, you should write about the current private equity firm and how you fit into the situation. Briefly explain your entire private equity firm, an interpretation of all the functional facet of your equity company and what services will it provide. Begin with intro of the private equity firm, explain it a little then go ahead and write some basic facts. For example, what is the significance of a private equity firm in this day and age? In which way has the private equity trade increased financially at such a rapid pace over the last ten or more years that it is the perfect time to open a private equity firm of your own? Include how you have planned to gain advantage from the private equity firm and how it will assist you to set apart from all the competitors. Write how you will operate the equity enterprise.

Write Vision Statement, Mission Plan and Aim

A vision statement is a must for any booming venture. A strong vision statement not only helps form a vision for your private equity firm but has a strong impact on whoever comes across it. Your vision could be something along the lines of this: “to start a private equity firm that adds value to the financial funding approach in the private investment trade by acting as a pioneer in helping solve the world’s economic challenges.” Your objective should be to attain all your goal so give a short description of that. Your mission statement and vision help drive business strategy in the correct direction so clearly, mention them along with your aims.

Write about the business structure

A business structure can make or break the private equity firm business plan . It can be of no use if the structure acts as a catalyst for collapse. So clearly write down all the roles and responsibilities of all the central positions in your private equity firm. You should recruit the perfect team, and new managers looking to make a career stand a better chance of collecting money or equity. If the team has formed out of a successful firm then the investors will want to see that the team includes several individuals that have already worked together in the past and are now speaking on the same strategy now. Write about the team and essential responsibilities of all posts of the equity business. For example, the role of the chief executive will be to recruit and select individuals for jobs, and for searching and picking potential investors and firms to buy in. Specify the previous experience of all your team members as well and mention if they have worked together before.

You can write about the organizational structure of the private equity firm business plan in the form of a flow chart in order of flow of power. You also have to include the organizational budget that can help show the investors briefly how the budget is going to be distributed and if they like it then that shows that you have budget management skills, so budget wisely.

Write the Strategic and Promotional Analysis

This section contains an analysis of the equity market that you are diving into. By analyzing the trade and how it is composed and your scheme of diving into that trade. Include the following things in this section:

• Fiscal Outlook: This section should contain details of the investment management. It can include the prospective customers and the competitiveness that the private equity firm faces. Currently, the monetary state of the trade in the US, for example, is moderate.
• Trade Analysis: This includes identification of the trade that a private equity firm is a part of. Once the trade is identified, you have to write about what the trade is like some factual words and numbers about it, like the yearly income for a regular employee of the equity company. What firms and subcategories have a place in this industry and how does everything link together. In this particular case, mention the investment management trade of which a private equity firm is a part of. So you write about the place of the new venture in a particular country and how is it doing.
• Target Trade: Include the demographics related the equity market that your private equity firm will be targeting. This can be a categorized table with trade areas and categories that will be targeted using your private equity firm business plan or your potential clients. As far as private equity firm is concerned these funds are targeted to only few individuals, but it has a high rate of return.
• Competitive Analysis: This section is critical. This is where you write about your potential competitors once you enter the industry and how tough of competition will these competitors offer. In the financing industry, the size has grown considerably over the past decade and this is why the competition has also increased. One drawback is that this results in a small barrier to entry into the this trade. The expected expenses to begin the equity venture are, therefore, low.

Write your Marketing Plan

This includes how exactly you will present your equity venture to all your potential customers or your target market. While private equity marketing has been around for a long time, digital marketing has made it easier and has acted as a crucial key to marketing anything. It is easier to track all your targets using it, and it makes all your jobs a lot easier for you. A private equity firm should have extensive marketing done to ensure that it reaches all its targeted clients. Below is an overview of what should be included in this section:

• Marketing objectives: This includes what you intend to attain using your marketing, for example, a private equity firm should intend to get an online presence by making their site and putting venture’s name along with all essential information on their site. Another thing it should do is to determine relationships with other investment counselling services within their reach.
• Marketing Strategy: This should briefly tell how exactly the company has programmed to advertise their private equity firm. A private equity firm can do so by hiring a capital introduction firm that helps them in getting introduced to prospective It should also introduce itself to startups who will be interested in their services once they find out about them. Another marketing strategy is the formation of a website that helps form an online presence and helps in reaching all the targeted demographics.
• Pricing Strategy: In this portion, the pricing that you will charge for your funding services will be written. Do not forget to provide the maximum information you can about your pricing so that it gives anyone reading the plan the elaborate concept about your charges. However, if you are providing quite a few services, shorten your list based on categories. This section in any case should not span more than one page of the document. Keep it short yet full of information.

Write a Financial Plan

As the name suggests this section will help in elaborating the allotted amount and finances of your private equity firm in detail. A sound financial strategy is what exactly will help boost your private equity firm and will assist you in getting maximum return on all your investments, so it should be carefully thought out and clearly put together. Securing funds for the venture is another big issue and a quite tough thing to do, write down who you plan to do that as well, how you think you will be able to attain the required finances to begin your private equity firm. This section should contain the following things about our private equity firm:

• Theoretical Calculations: The first item to mention is the things you already feel like you know for sure. Like total monetary annual return it will earn on its . Also mention the number of equity funds the owner of the venture will get along with and the yield expansion rate of the firm annually.
• Source of Funds: In this portion of the proposition, you have to write down where you will be getting all your required funds from. This involves equity contributions such as management of gained finances, equity financing, bank and lenders funds. You can list these sources or write them in the form of a table.
• General Assumptions: For the coming years, you can make assumptions such as short-term interest rate, long term interest rate, federal tax rate, and personal tax rate and state tax rates in particular year. These assumptions are pretty generic.
• Profit and Loss Statements: Give the profit and loss statements. You can include comparison charts as well.
• Cash Flow Analysis: Give the yearly cash flows, charts of cash inflows-outflows and balance.
• Balance Sheet: Includes the balance sheet and can contain charts as well.

Advertisement Strategy

Advertisement of any new venture is critical, and this is the sole way of telling how the new venture will reach the audience. To captivate the audience to become customers, you have to come up with creative methods to let them know that your firm is the new one in town and why will it be perfect for them. Therefore like any other firm or company a private equity firm also requires a strong advertising strategy, you have to come up with a unique way of approaching customers that they will like. Once you come up with the strategy you have to write about it, so investors know you have that creative side that will help flourish the business. Here are bunch of things you ought to do to come up with an effective advertising strategy:

• A unique is what stands out in people’s mind even if they have heard of the name rarely. People tend to remember unique names so try to come up with different yet relevant names, but it should not be too difficult.
• Make unique business cards that you can hand out to all startups, small businesses and investors you are interested in working with. This way they know how to contact you the moment then need to get in touch with a private equity firm.
• Create relationships with all potential investors and startups you will be investing in. This can be done by going to investment related seminars or by going to networking events.
• This is the age of social media, all business big or small have to have a good social media presence. The advertisement is done through social media these days, so focus on that, use social media to reach your target market.
• Think of unique ways to advertise with catchy tag lines and untraditional ways that catch the public eye and have them talking.

Expansion Strategy and Sustainability plan for the Private Equity Firm

Your private equity firm business plan should elaborate the sustainability strategy of your firm. The fate of your firm depends on how you plan to sustain it to have a long term successful life. Other than that you have to focus on not only maintaining the firm but over time you have to expand it as well. So, think of a strategy to expand it as well. This shows your long-term commitment to you private equity firm and how serious you are about it. Your object should be to increase the cash flows without extra investment and profit to expand it and to branch out, to make the firm bigger and better.

Since a private equity firm is a multifaceted investment firm, to expand it and sustain it a strategy that the management can opt for is to expand each segment separately by developing limited partnerships that will help attract additional capital towards the company. Making it secure and helping expand as well.

Here is a brief overview on how to get started and what to write in a private equity firm business plan.

Operational private equity firm business plan

This part of the private equity firm business plan includes the detailed list of tasks that you have to do for the operation of the company and the respective timeline that will be required for each task to carry it out. This helps stick to a schedule and helps plan out the actual establishment of the company and each milestone that comes with it. It is also a great way for investors to know that you do have a road map planned out and you have a serious attitude about diving in the investment management industry.

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What sets OGS Capital apart from other private equity firm business plan consultants of its sort is the highly experienced team behind it. Their sole aim to help people. The OGS Capital team consists of a bunch professionals that have the kind of knowledge that makes the sample business plans very informative and that help in getting you the right idea about whatever business plan you seek. Our main focus is helping ambitious individuals establishing their business. We want to take your business idea and help you turn it into the successful venture it deserves to be.

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OGS Capital provides customers with a complete draft report, and at this point, if you feel comfortable we ask for feedback which we appreciate a lot. Since our clients are what make us, so we want to hear them out. The final draft is submitted with all issues resolved. Even if you are in a hurry and have an urgent job, you can contact OGS capital because we have the management skills and the experienced professionals that can do your work in a very short time and you can trust us with your work.

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What Is Private Equity?

Understanding private equity, private equity specialties, private equity deal types, how private equity creates value, why private equity draws criticism.

• Private Equity FAQs

The Bottom Line

• Government & Policy

Private Equity Explained With Examples and Ways to Invest

What you need to know about this alternative investment class

James Chen, CMT is an expert trader, investment adviser, and global market strategist.

Gordon Scott has been an active investor and technical analyst or 20+ years. He is a Chartered Market Technician (CMT).

Private equity describes investment partnerships that buy and manage companies before selling them. Private equity firms operate these investment funds on behalf of institutional and accredited investors .

Private equity funds may acquire private companies or public ones in their entirety, or invest in such buyouts as part of a consortium . They typically do not hold stakes in companies that remain listed on a stock exchange .

Private equity is often grouped with venture capital and hedge funds as an alternative investment . Investors in this asset class are usually required to commit significant capital for years, which is why access to such investments is limited to institutions and individuals with high net worth .

Key Takeaways

• Private equity firms buy companies and overhaul them to earn a profit when the business is sold again.
• Capital for the acquisitions comes from outside investors in the private equity funds the firms establish and manage, usually supplemented by debt.
• The private equity industry has grown rapidly; it tends to be most popular when stock prices are high and interest rates low.
• An acquisition by private equity can make a company more competitive or saddle it with unsustainable debt, depending on the private equity firm's skills and objectives. 

In contrast with venture capital , most private equity firms and funds invest in mature companies rather than startups . They manage their portfolio companies to increase their worth or to extract value before exiting the investment years later.

The private equity industry has grown rapidly amid increased allocations to alternative investments and following private equity funds' relatively strong returns since 2000. In 2022, private equity buyouts totaled $654 billion, the second-best performance in history. Private equity investing tends to grow more lucrative and popular during periods when stock markets are riding high and interest rates are low and less so when those cyclical factors turn less favorable.

Private equity firms raise client capital to launch private equity funds , and operate them as general partners, managing fund investments in exchange for fees and a share of profits above a preset minimum known as the hurdle rate .

Image by Sabrina Jiang © Investopedia 2020

Private equity funds have a finite term of 10 to 12 years, and the money invested in them isn't available for subsequent withdrawals. The funds do typically start to distribute profits to their investors after a number of years. The average holding period for a private equity portfolio company was about 5.6 years in 2023.

Several of the largest private equity firms are now publicly listed companies in the wake of the landmark initial public offering (IPO) by Blackstone Group Inc. ( BX ) in 2007. In addition to Blackstone, KKR & Co. Inc. ( KKR ), Carlyle Group Inc. ( CG ), and Apollo Global Management Inc. ( APO ) all have shares traded on U.S. exchanges. A number of smaller private equity firms have also gone public via IPOs, primarily in Europe.

Mira Norian / Investopedia

Some private equity firms and funds specialize in a particular category of private-equity deals. While venture capital is often listed as a subset of private equity, its distinct function and skillset set it apart, and have given rise to dedicated venture capital firms that dominate their sector. Other private equity specialties include:

• Distressed investing , specializing in struggling companies with critical financing needs
• Growth equity, funding expanding companies beyond their startup phase
• Sector specialists, with some private equity firms focusing solely on technology or energy deals, for example
• Secondary buyouts , involving the sale of a company owned by one private-equity firm to another such firm
• Carve-outs involving the purchase of corporate subsidiaries or units.

The deals private equity firms make to buy and sell their portfolio companies can be divided into categories according to their circumstances.

The buyout remains a staple of private equity deals, involving the acquisition of an entire company, whether public, closely held or privately owned. Private equity investors acquiring an underperforming public company will often seek to cut costs, and may restructure its operations.

Another type of private equity acquisition is the carve-out, in which private equity investors buy a division of a larger company, typically a non-core business put up for sale by its parent corporation. Examples include Carlyle's acquisition of Tyco Fire & Security Services Korea Co. Ltd. from Tyco International Ltd. in 2014, and Francisco Partners' deal to acquire corporate training platform Litmos from German software giant SAP SE ( SAP ), announced in August 2022. Carve-outs tend to fetch lower valuation multiples than other private equity acquisitions, but can be more complex and riskier.

In a secondary buyout, a private equity firm buys a company from another private equity group rather than a listed company. Such deals were assumed to constitute a distress sale but have become more common amid increased specialization by private equity firms. For instance, one firm might buy a company to cut costs before selling it to another PE partnership seeking a platform for acquiring complementary businesses.

Other exit strategies for a private-equity investment include the sale of a portfolio company to one of its competitors as well as its IPO.

By the time a private equity firm acquires a company, it will already have a plan in place to increase the investment's worth. That could include dramatic cost cuts or a restructuring, steps the company's incumbent management may have been reluctant to take. Private equity owners with a limited time to add value before exiting an investment have more of an incentive to make major changes.

The private equity firm may also have special expertise the company's prior management lacked. It may help the company develop an e-commerce strategy, adopt new technology, or enter additional markets. A private-equity firm acquiring a company may bring in its own management team to pursue such initiatives or retain prior managers to execute an agreed-upon plan.

The acquired company can make operational and financial changes without the pressure of having to meet analysts' earnings estimates or to please its public shareholders every quarter. Ownership by private equity may allow management to take a longer-term view, unless that conflicts with the new owners' goal of making the biggest possible return on investment .

Making Money the Old-Fashioned Way With Debt

Industry surveys suggest operational improvements have become private equity managers' main focus and source of added value.

But debt remains an important contributor to private equity returns, even as the increase in fundraising has made leverage less essential. Debt used to finance an acquisition reduces the size of the equity commitment and increases the potential return on that investment accordingly, albeit with increased risk .

Private equity managers can also cause the acquired company to take on more debt to accelerate their returns through a dividend recapitalization , which funds a dividend distribution to the private equity owners with borrowed money.

Dividend recaps are controversial because they allow a private equity firm to extract value quickly while saddling the portfolio company with extra debt . On the other hand, the increased debt presumably lowers the company's valuation when it is sold again, while lenders must agree with the owners that the company will be able to manage the resulting debt load .

Private equity firms have pushed back against the stereotype depicting them as strip miners of corporate assets, stressing their management expertise and examples of successful transformations of portfolio companies.

Many are touting their commitment to environmental, social, and governance (ESG) standards directing companies to mind the interests of stakeholders other than their owners.

Still, rapid changes that often follow a private equity buyout can often be difficult for a company's employees and the communities where it has operations.

Another frequent focus of controversy is the carried interest provision allowing private equity managers to be taxed at the lower capital gains tax rate on the bulk of their compensation. Legislative attempts to tax that compensation as income have met with repeated defeat, notably when this change was dropped from the Inflation Reduction Act of 2022 .

How Are Private Equity Funds Managed?

A private equity fund is managed by a general partner (GP) , typically the private equity firm that established the fund. The GP makes all of the fund's management decisions. It also contributes 1% to 3% of the fund's capital to ensure it has skin in the game . In return, the GP earns a management fee often set at 2% of fund assets, and may be entitled to 20% of fund profits above a preset minimum as incentive compensation, known in private equity jargon as carried interest.  Limited partners are clients of the private equity firm that invest in its fund; they have limited liability .

What Is the History of Private Equity Investments?

In 1901, J.P. Morgan bought Carnegie Steel Corp. for $480 million and merged it with Federal Steel Company and National Tube to create U.S. Steel in one of the earliest corporate buyouts and one of the largest relative to the size of the market and the economy.

In 1919, Henry Ford used mostly borrowed money to buy out his partners, who had sued when he slashed dividends to build a new auto plant. In 1989, KKR engineered what is still the largest leveraged buyout in history after adjusting for inflation , buying RJR Nabisco for $25 billion.

Are Private Equity Firms Regulated?

While private equity funds are exempt from regulation by the Securities and Exchange Commission (SEC) under the Investment Company Act of 1940 or the Securities Act of 1933 , their managers remain subject to the Investment Advisers Act of 1940 as well as the anti-fraud provisions of federal securities laws. In February 2022, the SEC proposed extensive new reporting and client disclosure requirements for private fund advisers including private equity fund managers. The new rules would require private fund advisers registered with the SEC to provide clients with quarterly statements detailing fund performance, fees, and expenses, and to obtain annual fund audits. All fund advisors would be barred from providing preferential terms for one client in an investment vehicle without disclosing this to the other investors in the same fund.

For a large enough company, no form of ownership is free of the conflicts of interests arising from the agency problem . Like managers of public companies, private equity firms can at times pursue self-interest at odds with those of other stakeholders, including limited partners. Still, most private equity deals create value for the funds' investors, and many of them improve the acquired company. In a market economy , the owners of the company are entitled to choose the capital structure that works best for them, subject to sensible regulation.

U.S. Securities and Exchange Commission. " "Accredited Investor" Net Worth Standard ."

CAIA Association. " Strategic Portfolio Construction with Private Equity ."

Bain & Company. " Private Equity Outlook in 2023: Anatomy of a Slowdown ."

Dealogic. " M&A Highlight: Full Year 2021 ."

Moonfare. " What We Learned About Private Equity in H1 2022 ."

S&P Dow Jones Indices. " S&P Listed Private Equity Index ." Chart View: 10Y; Compare: S&P 500.

Kohlberg Kravis Roberts & Co. " Unlocking Private Equity ."

Congressional Research Service. " Taxation of Carried Interest ." Pages 2-3.

Kohlberg Kravis Roberts & Co. " Unlocking Private Equity ." Select "Life Cycle of a Private Equity Fund."

Private Equity Info. " Holding Periods Reach Record Highs as Private Equity Recovers from COVID-19 ."

U.S. Securities and Exchange Commission. " Form S-1, The Blackstone Group L.P., As Filed with the Securities and Exchange Commission on March 22, 2007 ."

S&P Global. " Private Equity Firms Go Public as Valuations Soar, Retail Investors Buy In ."

Carlyle. " The Carlyle Group Agrees to Acquire ADT Korea from Tyco for $1.93 Billion ."

Francisco Partners. " Francisco Partners to Acquire Litmos From SAP ."

PwC. " Driving Transformative Value Creation in Private Equity Carve Outs ."

Harvard Law School Forum on Corporate Governance. " Private Equity Carve-Outs Ride Post-COVID Wave ."

PitchBook. " How Secondary Buyouts Became Ubiquitous: SBOs as an Exit and Deal Sourcing Strategy ."

PitchBook. " Specialization in Private Equity Buyout Funds and Niche Investment Strategies ."

10X. " Private Equity Buyout Strategies That Generate Superior Returns ."

McKinsey & Company. " Private Equity Exit Excellence: Getting the Story Right ."

Moonfare. " Five Real-World Examples of Private Equity Creating Value by Improving Companies ."

KPMG. " Delivering on the Promise of Value Creation ."

The New York Times. " Private Equity Firms Are Piling On Debt to Pay Dividends ."

Oaktree Capital Management, L.P. " Case Study: Elgin National Industries ."

Bain & Company. " Limited Partners and Private Equity Firms Embrace ESG ."

Davis, Steven J. and et al. " The Economic Effects of Private Equity Buyouts. " National Bureau of Economic Research , Working Paper 26371, July 2021, pp. 1-89.

The New York Times. " The Carried Interest Loophole Survives Another Political Battle ."

Fogelström, Erik and Gustafsso, Jonatan. " GP Stakes in Private Equity: An Empirical Analysis of Minority Stakes in Private Equity Firms ." MSc Thesis in Finance , Stockholm School of Economics, pp. 1.

Harvard Business School, Baker Library, Bloomberg Center. " The Founding of U.S. Steel and the Power of Public Opinion ."

Carnegie Corporation of New York. " Andrew Carnegie: Pioneer. Visionary. Innovator ."

The Henry Ford. " Henry Ford: Founder, Ford Motor Company ."

Financial Times. " Memories From Barbarians at the Gate ."

U.S. Securities and Exchange Commission. " Private Fund ."

U.S. Securities and Exchange Commission. " SEC Proposes to Enhance Private Fund Investor Protection ."

U.S. Securities and Exchange Commission. " Proposed Rule: Private Fund Advisers; Documentation of Registered Investment Adviser Compliance Reviews ."

Kirkland & Ellis. " SEC Proposes Sweeping Rule Changes for Private Fund Advisers (Part 1 of 2) ."

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Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">.

This sample plan was created for a hypothetical investment company that buys other companies as investments.  In this sample, the hypothetical Venture Capital firm starts with $20 million as an initial investment fund.  In its early months of existence, it invests $5 million each in four companies.  It receives a management fee of two percent (2%) of the fund value, paid quarterly.  It pays salaries to its partners and other employees, and office expenses, from the management fee.

The investments show up in the Cash Flow table as the purchase of long-term assets, which also puts them into the balance sheet as long-term assets.  You can see them in this sample plan, in the first few months.

In the third year, one of the target companies fails, so $5 million is written off as failure.  You’ll see how that looks as a $5 million sale of long-term assets in the cash flow, and a balancing entry of $5 million in costs of sales in the profit and loss, making for a loss and write-off that year.  The result is a tax loss, and the balance of investments goes to $15 million.

In the fifth year, one of the target companies is transacted at $50 million.  You’ll see in the sample how that shows up as a $45 million equity appreciation in the sales forecast, plus a $5 million sale of long-term assets in the cash flow.  At that point there’s been a $45 million profit, and the balance of long-term assets goes down to $10 million.

This is a simplified example.  The business model holds long-term assets and waits for them to appreciate.  It doesn’t show appreciation of assets until they are finally sold, and it doesn’t show write-down of assets until they fail.  Sales and cost of sales are the appreciation and write-down of assets, plus the management fees.

The explanation above has been broken down and copied into key topics in the outline that are linked to corresponding tables.  These topics are:

• 2.2     Start-up Summary
• 5.5.1  Sales Forecast
• 6.4     Personnel
• 7.4     Projected Profit and Loss
• 7.5     Projected Cash Flow
• 7.6     Projected Balance Sheet

Company Summary company overview ) is an overview of the most important points about your company—your history, management team, location, mission statement and legal structure.">

Content has been omitted from this sample plan topic, and following sub-topics.  This sample plan has an abbreviated plan outline.  With the exception of the Executive Summary, only those topics linked to key tables have been used.

The focus of this sample plan is to show the financials for this type of company.  Brief descriptions can be found in the topics associated with key tables.

2.1 Start-up Summary

This hypothetical Venture Capital firm starts with $20 million as an initial investment fund.  The venture capital partners invest $100,000 as working capital needed to balance the cash flow from quarter to quarter. 

Market Analysis Summary how to do a market analysis for your business plan.">

Strategy and implementation summary, sales forecast forecast sales .">.

Management Summary management summary will include information about who's on your team and why they're the right people for the job, as well as your future hiring plans.">

7.1 personnel plan.

This hypothetical company pays salaries to its partners and other employees, and office expenses, from the management fee of two percent (2%).

Financial Plan investor-ready personnel plan .">

8.1 projected profit and loss.

Please note that in the third year one investment is written off as a failure, producing a $5 million cost which ends up showing a loss for the year of nearly $5 million.  The sale of equity at the end of the period enters the sales forecast and the profit and loss statement as a $45 million gain. 

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8.2 Projected Cash Flow

The Cash Flow shows four $5 million investments made in the first few months of the plan. 

In the third year, one of the target companies fails, so $5 million is written off as failure.  You’ll see that shows as a $5 million sale of long-term assets in the cash flow, and a balancing entry of $5 million in costs of sales in the profit and loss, making for a loss and write-off that year.  The result is a tax loss, and the balance of investments goes to $15 Million.

In the fifth year, another investment is transacted at $50 million.  This shows up as a $5 million equity appreciation in the Sales Forecast, plus a $5 million sale of long-term assets in the Cash Flow.  At that point there’s been a $45 million profit and the balance of long-term assets goes down to $10 million. 

The partners invest an additional $100,000 in the fourth year as additional working capital to balance the cash flow of the company. 

8.3 Projected Balance Sheet

You can see in the balance sheet how the ending balances for long-term assets were not re-valued.  They remain at the original purchase price until they are sold, or written off as a complete loss.  There is a $5 million write-off in the third year, and a sale of $5 million worth of assets in the last year.  That sale of $5 million in assets produces the $5 million sale at book value plus the $45 million gain in the sales forecast and profit and loss table.

8.4 Business Ratios

The Standard Industry Code (SIC) for this type of business is 7389, Business Services.  The Industry Data is provided in the final column of the Ratios table. 

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The Private Equity Case Study: The Ultimate Guide

If you're new here, please click here to get my FREE 57-page investment banking recruiting guide - plus, get weekly updates so that you can break into investment banking . Thanks for visiting!

The private equity case study is an especially intimidating part of the private equity recruitment process .

You’ll get a “case study” in virtually any private equity interview process , whether you’re interviewing at the mega-funds (Blackstone, KKR, Apollo, etc.), middle-market funds , or smaller, startup funds.

The difference is that each one gives you a different type of case study, which means you need to prepare differently:

What Should You Expect in a Private Equity Case Study?

There are three different types of “case studies”:

• Type #1: A “ paper LBO ,” calculated with pen-and-paper or in your head, in which you build a simple leveraged buyout model and use round numbers to guesstimate the IRR.
• Type #2: A 1-3-hour timed LBO modeling test , either on-site or via Zoom and email. This is a pure speed test , so proficiency in the key Excel shortcuts and practice with many modeling tests are essential.
• Type #3: A “take-home” LBO model and presentation, in which you might have a few days up to a week to pick a company, research it, build a model, and make a recommendation for or against an acquisition of the company.

We will focus on the “take-home” private equity case study here because the other types already have their own articles/tutorials or will have them soon.

If you’re interviewing within the fast-paced, on-cycle recruiting process with large funds in the U.S. , you should expect timed LBO modeling tests (type #2).

If the firm interviews dozens of candidates in a single weekend, there’s no time to give everyone open-ended case studies and assess them.

You might also get time-pressured LBO modeling tests in early rounds in other financial centers, such as London .

The open-ended case studies – type #3 – are more common at smaller funds, in off-cycle recruiting, and outside the U.S.

Although you have more time to complete them, they’re significantly more difficult because they require critical thinking skills and outside research.

One common misconception is that you “need” to build a complex model for these case studies.

But that is not true at all because they’re judging you mostly on your investment thesis , your presentation, and your ability to answer questions afterward.

No one cares if your LBO model has 200 rows, 500 rows, or 5,000 rows – they care about how well you make the case for or against the company.

This open-ended private equity case study is often the final step between the interview and the job offer, so it is critically important.

The Private Equity Case Study, in Parts

This is another technical tutorial, so I’ve embedded the corresponding YouTube video below:

Table of Contents:

• 4:32: Part 1: Typical Case Study Prompt
• 6:07: Part 2: Suggested Time Split for a 1-Week Case Study
• 8:01: Part 3: Screening and Selecting a Company
• 14:16: Part 4: Gathering Data and Doing Industry Research
• 22:51: Part 5: Building a Simple But Effective Model
• 26:32: Part 6: Drafting an Investment Recommendation

Files & Resources:

• Case Study Prompt (PDF)
• Private Equity Case Study Slides (PDF)
• Cars.com – Highlighted 10-K (PDF)
• Cars.com – Investor Presentation (PDF)
• Cars.com – Excel Model (XL)
• Cars.com – Investment Recommendation Presentation (PDF)

We’re going to use Cars.com in this example, which is one of the many case studies in our Advanced Financial Modeling course:

Advanced Financial Modeling

Learn more complex "on the job" investment banking models and complete private equity, hedge fund, and credit case studies to win buy-side job offers.

The full course includes a detailed, step-by-step walkthrough rather than this summary, an additional advanced LBO model, and other complex case studies for investment banking, hedge funds, and credit.

Part 1: Typical Private Equity Case Study Prompt

In some cases, they’ll give you a company to analyze, but in others, you’ll have to screen for companies yourself and pick one.

It’s easier if they give you the company and the supporting documents like the Information Memorandum , but you’ll also have less time to complete the case study.

The prompt here is very open-ended: “We like these types of deals and companies, so pick one and present it to us.”

The instructions are helpful in one way: they tell us explicitly not to build a full 3-statement model and to focus on the market and strategy rather than an “extremely complex model.”

They also hint very strongly that the model must include sensitivities and/or scenarios:

Part 2: Suggested Time Split for a 1-Week Private Equity Case Study

You have 7 days to complete this case study, which may seem like a lot of time.

But the problem is that you probably don’t have 8-12 hours per day to work on this.

You’re likely working or studying full-time, which means you might have 2-3 hours per day at most.

So, I would suggest the following schedule:

• Day #1: Read the document, understand the PE firm’s strategy, and pick a company to analyze.
• Days #2 – 3: Gather data on the company’s industry, its financial statements, its revenue/expense drivers, etc.
• Days #4 – 6: Build a simple LBO model (<= 300 rows), ideally using an existing template to save time.
• Day #7: Outline and draft your presentation, let the numbers drive your decisions, and support them with the qualitative factors.

If the presentation is shorter (e.g., 5 slides rather than 15) or longer, you could tweak this schedule as needed.

But regardless of the presentation length, you should spend MORE time on the research, data gathering, and presentation than on the LBO model itself.

Part 3: Screening and Selecting a Company

The criteria are simple and straightforward here: “The firm aims to find undervalued companies with stagnant or declining core businesses that can be acquired at reasonable valuation multiples and then turn them around via restructuring, divestitures , and add-on acquisitions.”

The industry could be consumer, media/telecom, or software, with an ideal Purchase Enterprise Value of $500 million to $1 billion (sometimes up to $2 billion).

Reading between the lines, I would add a few criteria:

• Consistent FCF Generation and 10-20%+ FCF Yields: Strategies such as turnarounds and add-on acquisitions all require cash flow. If the company doesn’t generate much Free Cash Flow , it will have to issue Debt to fund these strategies, which is risky because it makes the deal very dependent on the exit multiple.
• Relatively Lower EBITDA Multiples: If the company has a “stagnant or declining” core business, you don’t want to pay 20x EBITDA for it. An ideal range might be 5-10x, but 10-15x could be OK if there are good growth opportunities. The IRR math also gets tougher at high EBITDA multiples because the maximum Debt in most deals is 5-6x.
• Clean Financial Statements and Enough Detail for Revenue and Expense Projections: You don’t want companies with 2-page-long Cash Flow Statements or Balance Sheets with 100 line items; you can’t spare the time required to simplify and consolidate these statements. And you need some detail on the revenue and expenses because forecasting revenue as a simple percentage Year-Over-Year (YoY) growth rate is a bad idea in this context.

We used this process to screen for companies here:

• Step 1: Do a high-level screen of companies in these 3 sectors based on industry, Equity Value or Enterprise Value, and geography.
• Step 2: Quickly review the list of ~200 companies to narrow the sector.
• Step 3: After picking a specific sector, narrow the choices to the top few companies and pick one of them.

In software , many of the companies traded at very high multiples (30x+ EBITDA), and others had negative EBITDA , so we dropped this sector.

In consumer/retail , the companies had more reasonable multiples (5-10x), but most also had low margins and weak FCF generation.

And in media/telecom , quite a few companies had lower multiples, but the FCF math was challenging because many companies had high CapEx requirements (at least on the telecom side).

We eliminated companies with very high multiples, negative EBITDA, and exorbitant CapEx, which left this set:

Within this set, we then eliminated companies with negative FCF, minimal information on revenue/expenses, somewhat-higher multiples, and those whose businesses were declining too much (e.g., 20-30% annual declines).

We settled on Cars.com because it had a 9.4x EBITDA multiple at the time of this screen, a declining business with modest projected growth, 25-30% margins, and reasonable FCF generation with FCF yields between 10% and 15%.

If you don’t have Capital IQ for this exercise, you’ll have to rely on FinViz and use P / E multiples as a proxy for EBITDA multiples.

You can click through to each company to view the P / FCF multiples, which you can flip around to get the FCF yields.

In this case, don’t even bother looking for revenue and expense information until you have your top 2-3 candidates.

Part 4: Gathering Data and Doing Industry Research

Once you have the company, you can spend the next few days skimming through its most recent annual report and investor presentation, focusing on its financial statements and revenue/expense drivers.

With Cars.com, it’s clear that the company’s “Dealer Customers” and Average Revenue per Dealer will be key drivers:

The company also has significant website traffic and earns advertising revenue from that, but it’s small next to the amount it earns from charging car dealers to use its services:

It’s clear from this quick review that we’ll need some outside research to estimate these drivers, as the company’s filings and investor presentation have little.

Fortunately, it’s easy to Google the number of new and used car dealers in the U.S. and estimate the market size and share like that:

The company’s market share has been declining , and we expect that trend to continue, but it’s not clear how rapid the decline will be.

Consumers are increasingly buying directly from other consumers, and dealers have less reason to use the company’s marketplace services than in past years.

We create an area for these key drivers, with scenarios for the most uncertain one:

You might be wondering why there’s no assumed uptick in market share since this is supposed to be a “turnaround” case study.

The short answer is that we think the company is unlikely to “turn around” its core business in this time frame, so it will have to move into new areas via bolt-on acquisitions .

For example, maybe it could acquire smaller firms that sell software and services to dealers, or it could acquire physical or online car dealerships directly.

Another option is to acquire companies that can better monetize Cars.com’s large and growing web traffic – such as companies that sell auto finance leads.

As part of this process, we also need to research smaller companies to acquire, but there isn’t much to say about this part.

It comes down to running searches on Capital IQ for smaller companies in related industries and entering keywords like “auto” in the business description field.

In terms of the other financial statement drivers , many expenses here are simple percentages of revenue, but we could also link them to the employee count.

We also link the website traffic to the sales & marketing spending to capture the spending required for growth in that area.

Finally, we need to input the financial statements for the company, which is not that hard since they’re already fairly clean:

It might be worth consolidating a few items here, but the Income Statement and partial Cash Flow Statement are mostly fine, which means the Excel versions are close to the ones in the annual report.

Part 5: Building a Simple But Effective Model

The case study instructions state that a full 3-statement model is not necessary – but even if they had not, such a model would rarely be worthwhile.

Remember that LBO models, just like DCF models , are based on cash flow and EBITDA multiples ; the full statements add almost nothing since you can track the Cash and Debt balances separately.

In terms of model complexity, a single-sheet LBO with 200-300 rows in Excel is fine for this exercise.

You’re not going to get “extra credit” for a super-complex LBO model that takes days to understand.

The key schedules here are:

• Transaction Assumptions – Including the purchase price, exit assumptions, scenarios, and tranches of debt. Skip the working capital adjustment unless they specifically ask for it. For more on these nuances, see our coverage of Enterprise Value vs. purchase price and cash-free debt-free deals .
• Sources & Uses – Short and simple but required to calculate the Investor Equity.
• Revenue, Expense, and Cash Flow Drivers – These don’t need to be super-complex; the goal is to go beyond projecting revenue as a simple percentage growth rate.
• Income Statement and Partial Cash Flow Statement – The goal is to calculate Free Cash Flow because that drives Debt repayment and Cash generation in an LBO.
• Add-On Acquisitions – These are part of the “turnaround strategy” in this deal, so they’re quite important.
• Debt Schedule – This one is quite simple here because the deal is not dependent on financial engineering.
• Returns Calculations – The IPO vs. M&A exit options add a bit of complexity.
• Sensitivity Tables – It’s difficult to draft the investment recommendation without these.

Skip anything that makes your life harder, such as circular references in Excel (to avoid these, use the beginning Cash and Debt balances to calculate interest).

We pay special attention to the add-on acquisitions here, with support for their revenue and EBITDA contributions:

The Debt Schedule features a Revolver, Term Loans, and Subordinated Notes:

The Returns Calculations are also simple; we do assume a bit of Multiple Expansion because of the company’s higher growth rate by the end:

Could we simplify this model even further?

I don’t think the M&A vs. IPO exit options mentioned above are necessary, and we could also drop the “Growth” vs. “Value” options for the add-on acquisitions:

Especially if we recommend against the deal, it’s not that important to analyze which type of add-on acquisition works best.

It would be more difficult to drop the scenarios and Excel sensitivity tables , but we could restructure them a bit and fold the scenario into a sensitivity table.

All investing is probabilistic, and there’s a huge range of potential outcomes – so it’s difficult to make a serious investment recommendation without examining several outcomes.

Even if we think this deal is spectacular, we must consider cases in which it goes poorly and how we might reduce those risks.

Part 6: Drafting an Investment Recommendation

For a 15-slide recommendation, I would recommend this structure:

• Slides 1 – 2: Recommendation for or against the deal, your criteria, and why you selected this company.
• Slides 3 – 7: Qualitative factors that support or refute the deal (market, competition, growth opportunities, etc.). You can also explain your proposed turnaround strategy, such as the add-on acquisitions, here.
• Slides 8 – 13: The numbers, including a summary of the LBO model, multiples vs. comps (not a detailed valuation), etc. Focus on the assumptions and the output from the sensitivity tables.
• Slide 14: Risk factors for a positive recommendation, and the counter-factual (“what would change your mind?”) for a negative one. You can also explain the potential impact of each risk on the returns and how you could mitigate these risks.
• Slide 15: Restate your conclusions from Slide 1 and present your best arguments here. You could also change the slide formatting or visuals to make it seem new.

“OK,” you say, “but how do you actually make an investment decision?”

The easiest method is to set criteria for the IRR or multiple of invested capital in each case and say, “Yes” if the deal achieves those numbers and “No” if it does not.

For example, maybe the targets are a 30% IRR in the Upside case, a 20% IRR in the Base case, and a 1.0x multiple in the Downside case (i.e., avoid losing money).

We do achieve those numbers in this deal, but the decision could go either way because the deal is highly dependent on the add-on acquisitions.

Without these acquisitions, the deal does not work; the IRR falls by 10%+ across all the scenarios and turns negative in the Downside case.

We need at least 5 good acquisition candidates matching very specific financial profiles ($100 million Purchase Enterprise Value and a 15x EBITDA purchase multiple with 10% revenue growth or 5x EBITDA with 3% growth).

The presentation includes some examples of potential matches:

While these examples are better than nothing, the case is not that strong because:

• Most of these companies are too big or too small to fit into the strategy proposed here of ~$100 million in annual acquisitions.
• The acquisition strategy is unclear ; acquiring and integrating dealerships (even online ones) would be very, very different from acquiring software/data/media companies.
• And since the auto software market is very niche, there’s probably not a long list of potential acquisition candidates beyond the few we found.

We end up saying, “Yes” in this recommendation, but you could easily reach the opposite conclusion because you believe the supporting data is weak.

In short: For a 1-week open-ended case study, this approach is fine, but this specific deal would probably not stand up to a more detailed on-the-job analysis.

The Private Equity Case Study: Final Thoughts

Similar to time-pressured LBO modeling tests, you can get better at the open-ended private equity case study by “putting in the reps.”

But each rep is more time-consuming, and if you have a demanding full-time job, it may be unrealistic to complete multiple practice case studies before the real thing.

Also, even with significant practice, you can’t necessarily reduce the time required to research an industry and specific companies within it.

So, it’s best to pick companies and industries you already know and have several Excel and PowerPoint templates ready to go.

If you’re targeting smaller funds that use off-cycle recruiting, the first part should be easy because you should be applying to funds that match your industry/deal/client background.

And if not, you can always make a lateral move to a bulge bracket bank and interview at the larger funds if you prefer the private equity case study in “speed test” form.

If you liked this article, you might be interested in:

• The Growth Equity Case Study: Real-Life Example and Tutorial
• The Full Guide to Healthcare Private Equity, from Careers to Contradictions
• Healthcare Investment Banking: The Best Group to Check Into When Human Civilization is Collapsing?

About the Author

Brian DeChesare is the Founder of Mergers & Inquisitions and Breaking Into Wall Street . In his spare time, he enjoys lifting weights, running, traveling, obsessively watching TV shows, and defeating Sauron.

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Five key benefits of building a value creation plan early in the deal lifecycle

More effective ways to create value for private equity firms.

As high valuations and competitive pricing continue to dominate the deals landscape, private equity (PE) firms are looking for more—and more effective—ways to create value. In this climate, the importance of developing a differentiated value creation plan reflecting the full potential of the business early in the deal lifecycle cannot be overstated. A value creation plan is an enterprise-wide look at how the target business can be improved, quantified in terms both of potential value creation upside, as well as over time, and of the cost to realize that value. Value creation plans reflect a holistic view of the specific and prioritized set of initiatives or key actions—the capabilities, gaps, internal and external resources, clearly defined accountabilities, operating and financial metrics, and the governance framework—that will be required to make the necessary improvements to realize the asset’s full potential.

Download Five key benefits of building a value creation plan early in the deal lifecycle

It seems like a simple enough idea. After all, who would construct a building without a blueprint? Whatever the asset size, industry, or sector, there is no substitute for evolving a 360-degree view well before the closing the deal, with Day 1—however close or distant—on the horizon in order to put together a winning bid.

There are at least five key benefits to be derived from developing a value creation plan early in the lifecycle of a deal.

Early planning around potential sources of value can help you to:

1. proceed with confidence, 2. establish a strong foundation, 3. ask the right questions, 4. move ahead to create value starting on day one, 5. map a realistic exit strategy.

Developing an investment thesis with a clear and comprehensive understanding of the value creation drivers helps PE sponsors arrive with greater confidence at a decision about what they can realistically pay for an asset. A good understanding of how to allocate capital and resources to create sustainable value can be an important factor in determining the upper limit of what an investor can bid. Moreover, basing this figure on a thorough, detailed assessment of what will be required to improve performance may help with financing. Lenders appreciate a thoughtful, meticulous approach to investing, including third-party validation of the potential value drivers of operational performance improvement.

Early involvement helps set the foundation for building strong relationships with the management team is critical to long-term value creation. Developing a value creation plan early in the deals process can help to clarify the potential challenges and the complexities around organizational structure and help investors begin to build trust with the existing management team, or, as may be necessary, with a new one. Laying the groundwork for effective relationships early in the process may pave the way for navigating the nuances and intricacies of change management down the road. Additionally, a detailed value creation blueprint, coupled with key operational and financial metrics for periodic reporting, helps the portfolio company’s management and staff facilitate successful execution.

One of the most significant aspects of developing a value creation plan early in the process is the impact such a plan can have while in development on the process itself.  Due diligence is, arguably, one of the most complex and challenging steps in the deals process. PE investors who have an initial investment thesis about the target asset before embarking on the diligence journey may have a clearer view of the specific information they will need from the seller in order to understand and assess the potential levers and opportunities for value creation and the associated investment. During the due diligence process, sellers may limit the amount or types of information provided to investors. While working with an experienced and trusted advisor can certainly be beneficial at any and every point in the deal lifecycle, having professional advice and assistance here may be especially useful. An experienced advisor can drive the conversation forward aggressively with sharp attention on the specific issues that contribute to development of a strategic, informed value creation plan, including identification of key low-hanging, the near-term improvements that can fund a portion of longer-term transformation initiatives. At the same time, an investor the seller perceives to be serious and methodical may help in obtaining the most relevant information.

Investors who excel at value creation never want to lose a single day. They’re in value creation mode long before the deal is signed and the funds cross the wire, and on Day 1, with a plan in place, they’re prepared to begin creating value from the get-go with relentless focus on execution, which can include:

• Negotiating contracts with suppliers –  A PE firm could begin on Day 1 to take costs out of the business by renegotiating contracts for materials, supplies, and services. They may be able to leverage existing relationships with vendors with potential for impact across their portfolio companies. It may be possible to take advantage of economies of scale around technology contracts, for example, or with the providers of employee benefits, as well as with other types of contracts.
• Implementing changes to organizational design –  To whatever degree restructuring will be necessary, PE sponsors can begin to implement changes more assertively on Day 1, mitigating some of the challenges associated with a protracted period of transition in leadership.
• Optimizing the product portfolio  – Investors may be able to announce their plans on Day 1 for discontinuing a product that is underperforming or the decision not to pursue an opportunity no longer aligned with the core business. The ability to implement these strategies on Day 1 can have a significant impact on performance, as well as on evolving product and go-to-market strategies.

Evaluating strategic add-on acquisition targets, improving working capital efficiency and cash flow management, driving salesforce and service operations, key technology upgrades to enable operational efficiency, and manufacturing and facilities footprint optimization planning are other significant areas for short-term action that can benefit from Day-1 readiness.

Developing a value creation plan early in the deal lifecycle helps investors map an exit strategy in any time frame—short or long— to realize an asset’s full potential. A value creation plan sharpens the PE investor’s viewpoint of the path to exit and the steps it will take to get there.

Developed early in the lifecycle of a deal, a value creation plan serves as a strategic blueprint to guide everything from diligence, to Day 1, to exit. A holistic view of the levers, both strategic and operational, with the potential to create value can help set, and maintain, the course for success.

How PwC can help

PwC’s private equity practice includes deals, audit, tax and advisory professionals who use a coordinated approach to help clients—managing fund operations, improving portfolio company performance and providing support throughout deal execution. Visit our main webpage for more information about digital upskilling and other private equity issues. 

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How we did it: Implementing a private-equity strategic vision

Established organizations are mostly structured to do yesterday’s work. To meet the changing needs of today’s and tomorrow’s customers, businesses must constantly reinvent their structure, human capital, processes, and technology.

In my experience, private-equity (PE) firms do this—and create value—by focusing on the medium and long term, as well as on the short term. Among the best of them, this emphasis on the classic three horizons of growth shows up in their vision, investment, governance, operations, talent, and capitalization. Over my career, I’ve worked to incorporate that basic mind-set into the culture at both Aetna and Clayton, Dubilier & Rice (CD&R). Here’s how we did it.

Vision: Clearly articulate the five- to seven-year vision and plan for the company.

A successful long-term strategy requires historical or baseline products, emerging product lines, and future growth trajectories. Public companies often focus on the first two, but the third is the hardest—even though it often has the biggest impact on long-term value creation. Private-equity firms more actively explore this third horizon and are diligent about identifying and making tactical bets against it.

I served as chairman at PharMEDium, a leader in customized pharmacy sterile compounding, after it was acquired by CD&R. We identified it as a major growth opportunity, and after extensive due diligence, we developed an investment thesis. The thesis focused on enhancing penetration of current customers, launching new products, and ramping up to serve a new customer segment: the outpatient market. Our thesis was well executed by an excellent CEO in 2013. Our $900 million investment paid off to the tune of $2.6 billion when we sold it just two years later, much sooner than expected. Public companies could make similar decisions, but managers there are often hesitant to take the short-term hit to their earnings-per-share (EPS) ratio. That limits their long-term growth investments to things they can offset by cutting costs. The lesson here for public executives is to consider making a set of focused, tactical bets on the long term, and then clearly communicate the value story to the market.

We took a similar approach during my tenure as CEO of Aetna, where we made long-term vision and the innovation cycle a key focus for our management team. This was partly because of industry regulation, which required that we write down every new product we created and file it with public agencies. That eventually allowed competitors to launch copycat products, so we had to innovate constantly to stay ahead of our peers. As a result, we emphasized a three-year planning horizon, devoting significant management attention to “white space” brainstorming on the likely evolution of the industry and ways to leverage technology to create new services and capabilities. Aetna’s market cap over the period grew to $15.3 billion, from $4.7 billion.

Investment: Determine the significant capital and operating investments required to achieve the vision, independent of impact on near-term earnings.

Making substantial investments in growth over the long term can be hard for a public-company CEO. Given that the average tenure of a Fortune 500 CEO is under five years, the returns on long-term investments can easily accrue outside the EPS timeline as CEO.

Managers of PE-backed companies are much more likely to invest in change early, particularly within the first one or two years of acquiring a portfolio company, if it will increase earnings or change the trajectory of the business at the time of exit. The new expenses of PharMEDium’s investment in the outpatient market did not have to be covered by cuts elsewhere, as they might have in an EPS environment. Instead, the board and management agreed on the costs and benefits of investment and were comfortable sacrificing short-term earnings to a tactical bet that it would drive long-term value.

Governance: Ensure alignment and cooperation in the strategic-planning process among the chairman, board, CEO, and executive team.

Public boards tend to focus on key strategic and compliance questions, such as risk management, and often come from a range of industries and backgrounds. A private-equity board, by contrast, will usually be filled with a combination of private-equity professionals and experienced former executives from the industry in which the company operates. A board chair may meet with a CEO several times a week, offering counsel on how to achieve the strategic plan, helping to assess and sponsor growth opportunities, and supervising key operational challenges. This level of board involvement and relevant experience makes it easier to reach alignment on vision, horizons, and investments.

Envision Healthcare is one good example of this. Soon after CD&R acquired Envision in 2011, the board and I approved the rollout of an ambitious revenue-growth expansion plan. Under the implementation of CEO Bill Sanger, the company eventually almost doubled its revenue to $5.45 billion, from $2.90 billion. Because of this successful growth, CD&R took Envision public two years later, in 2013. Board alignment has allowed the expansion plan to continue, with CD&R returning a fivefold multiple of capital on its investment.

Operational improvement: Assess restructuring needs with a fresh eye.

The quarterly timing of earnings that matters so much in a public company doesn’t matter in private equity, as long as earnings at exit meet or exceed the original investment. As a result, PE-backed companies are much more willing to take a restructuring charge in the near term or to weather midterm earnings volatility. This, along with different approaches to governance, also allows PE-backed companies to recover more quickly than public companies during periods of distress.

Restructuring a company in the public market is still feasible if managers clearly articulate a plan and the pathway to long-term value, similar to private equity’s approach. For example, at Aetna in 2002, Jack Rowe and I set out to transform the business and improve performance. Knowing that would take time, we made the decision to withdraw EPS guidance. This, we believed, would minimize distraction and focus the market on the turnaround story. I then did a listening tour with all of our customers to understand their preferences and unmet needs. Those conversations led to the most fundamental component of the restructuring: refocusing the business on all fronts—from product development to sales and finance—to serve customers vertically, by industry segment, rather than horizontally, by geography. This required a significant redesign and streamlining of the organization, as well as extensive value-chain analysis to break apart each segment and assess potential profit pools. It was also crucial to the long-term growth that followed, as Aetna focused on developing new products, services, and capabilities for each customer segment. In addition, it formed the basis of a compelling value-creation story for our investors.

Talent management and incentives: Tie management-performance incentives to long-term shareholder equity returns, focusing on value at exit rather than near-term liquidity.

Public companies often tie executive compensation to shares or options. Executives receive grants annually that vest at a given level of performance or length of time—usually a year. Not surprisingly, this can encourage a focus on near-term earnings.

Perspectives on the long term

In contrast, private equity typically ties executive compensation to a five- to seven-year view. The entire executive team and board receive the standard cash compensation, but their incentives have little connection to near-term liquidity. They do receive one-time equity grants at the outset of a deal, but must usually hold them for the duration of the holding of the company. That compensation structure enables them to focus on investing in and building toward value at the eventual sale or exit from a business. That, in turn, is a key element of private-equity success, because it encourages managers to act as owners, with a focus on cost efficiency, cash flow, and long-term value.

Public management teams should explore tying compensation to longer-term performance metrics and liquidity milestones. Aetna, for example, made several key changes to its compensation structure. First, the company created profit-and-loss statements for each of the end-to-end customer segments. Then it tied incentives not just to running the day-to-day business but also to a specific set of innovation metrics around expanding the products, services, and interactions with that customer segment.

Capitalization: Optimize the capital structure of the business, basing debt load on interest coverage and enterprise value rather than on EPS impact.

In contrast to the public market’s focus on post-interest EPS and retaining an investment-grade credit rating, private-equity firms often choose to utilize more leverage. This gives them increased flexibility with respect to, for example, more earnings potential for acquisitions, without equity dilution.

In fact, as McKinsey research shows, almost a third of the value created by private equity comes from the appreciation of market or sector value, plus financial leverage independent of company outperformance. For instance, CD&R purchased Envision Healthcare in 2011 for $3.2 billion, with $915 million of equity. In addition to the company’s significant operational outperformance, its use of leverage multiplied its equity return. Today, Envision Healthcare has an enterprise value of $6.7 billion, with $3.8 billion of equity.

Ron Williams is the former chairman and CEO of Aetna; a director on the boards of American Express, Boeing, and Johnson & Johnson; and an adviser to the private-equity firm Clayton, Dubilier & Rice.

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In every business venture, the opportunity cost is always something to consider. Opting your company to private equity, instead of going public, comes with several trade-offs, with the most notable change being that you will no longer be able to easily buy and sell your shares in a publicly-traded market. Make the perfect investment proposal you need for your business using any of the templates that are mentioned below.

• Google Docs

Step 1: Summary

Step 2: project and investment overview, step 3: exit strategy, step 4: business timeline, step 5: market overview and profiles.

Tips for a Great Private Equity Investment Proposal

• Add visuals: Make use of maps, layouts, and photos so you can illustrate your business plan and processes better. Your visual elements can be scattered throughout the proposal or collected in one separate section.
• Have an expansive market data: Your market data contains information that is not included in the market overview but is still important enough that it reinforces your private equity investment pitch. They do not need to be exhaustive, just a few pie graphs and charts that compare your own business to competitors as well as your projections of sales based on the market trends.

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Real Estate Investment Business Plan Template

Written by Dave Lavinsky

Real Estate Investment Business Plan

Over the past 20+ years, we have helped over 5,000 entrepreneurs and business owners create business plans to start and grow their real estate businesses. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a real estate investing business plan step-by-step so you can create your plan today.

Download our Ultimate Real Estate Investment Business Plan Template here >

What is a Real Estate Business Plan?

A successful business plan provides a snapshot of your real estate business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.

Why Successful Real Estate Investors Use a Business Plan

If you’re looking to start a real estate business or grow your existing business you need a business plan. A solid business plan will help guide your business strategy, your investment strategy and your decision-making. Having a comprehensive business plan is crucial for several reasons:

• To Secure Financing : Most lenders and investors want to see a well-reasoned business plan before they consider funding your real estate venture. Your plan should convince them that you fully understand your market, have a viable strategy and have a management team that can execute. These factors in your plan give investors the confidence that they’ll receive an adequate return on their investment, and make lenders feel that you’ll be able to pay their loan back with interest.
• To Identify Business Goals and Objectives : A business plan helps you to clearly define what you want to achieve with your real estate business over the next five years. These objectives include financial goals, such as revenue targets, or operational goals, such as property acquisition rates.
• To Understand the Market : Conducting market research and including this in your business plan gives you a deeper understanding of the real estate market you’re entering, including potential challenges and real estate investment opportunities. This knowledge helps you craft better marketing, operational, financial and strategic decisions.
• To Plan for Growth : Your business plan should outline the milestones you expect to achieve over the coming months and years. This helps keep you and your team focused and less prone to become distracted with new opportunities that may push you in the wrong direction.
• To Manage Risk : By identifying potential risks in your business plan, you can devise strategies to mitigate them. This proactive approach can save your business from potential pitfalls in the future.

In summary, developing a strategic business plan is a key step for real estate investors who want to launch or expand their business successfully. Your plan will improve and lay out your strategy and keep you focused so you can flawlessly execute it.

Finish Your Business Plan Today!

How to write a business plan for a real estate investment company.

A detailed real estate investment business plan should include 10 sections as follows:

Executive Summary

Company analysis, industry analysis, customer analysis, competitive analysis, marketing plan, operations plan, management team, financial plan.

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of real estate investing business you are operating and the status; for example, are you a startup, do you have a business that you would like to grow, or are you operating a chain of real estate investment companies?

Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the real estate industry. Discuss the type of real estate investment business you are operating. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing strategies. Identify the key team members, and offer an overview of your financial plan.

In your company analysis, you will provide a company description of the real estate investment business you are operating.

For example, you might operate one of the following types: Real estate investment companies do two basic things: invest in real estate and trade in real estate.

• Real estate investment is a long-term investment wherein you purchase real estate with the intent of keeping properties to rent out.
• Real estate trading is a short-term investment, wherein you buy a property that needs fixing up and flip it for a higher price soon after.

In addition to explaining the type of real estate investment company you operate, the Company Analysis section of your real estate business plan needs to provide background on the business. Include answers to question such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include sales goals you’ve reached, new store openings, etc.
• Your legal business structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

In your industry analysis, you need to provide an overview of the real estate investing business.

While this may seem unnecessary, it serves multiple purposes.

First, researching the real estate investment industry educates you. It helps you understand the target market in which you are operating.

Secondly, market research can improve your strategy particularly if your research identifies market trends. For example, if there was a trend towards increasing foreclosures in a particular city, it would be helpful to ensure your plan calls for an increased focus in this real estate market.

The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your real estate investing business plan:

• How big is the real estate investment industry (in dollars)?
• Is the real estate market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the target market for your real estate investment business. You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

The customer analysis section of your real estate investing business plan must detail the customers you serve and/or expect to serve. The following are examples of customer segments: mortgage holders, home buyers, renters, etc.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of real estate investment business you operate. Clearly first-time home buyers would want different pricing and product options, and would respond to different marketing efforts than banks.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve. Because most real estate investment businesses primarily serve customers living in their same city or town, such demographic information is easy to find on government websites.

Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.  

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Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other real estate investment businesses.

Indirect competitors are other options that customers have to purchase from that aren’t direct competitors. This includes property management companies, realtors, and DIY home fixer-uppers. You need to mention such competition to show you understand that not everyone who purchases or leases real estate uses a real estate investment business to do so.

With regards to direct competition, you want to detail the other real estate investment businesses with which you compete. Most likely, your direct competitors will be real estate investment businesses located very close to your location.

For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:

• What types of customers do they serve?
• What products do they offer?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your competitive advantages. For example:

• Will you specialize in a particular real estate type or market?
• Will you provide services that your competitors don’t offer?
• Will you make it easier or faster for customers to acquire your real estate?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a real estate investing business, your marketing plan should include the following:

Product : in the product section you should reiterate the type of real estate investment company that you documented in your Company Analysis. Then, detail the specific products you will be offering. For example, will you offer residential properties, or commercial properties?

Price : Document the prices you will offer and how they compare to your competitors. In this section, you are presenting the types of real estate you offer and the current price ranges.

Place : Place refers to the location of your business. Document your location and mention how the location will impact your success. For example, is your real estate investment business located in a market with a high foreclosure rate, or with a low inventory of office space. Discuss how your location might provide a steady stream of customers.

Promotions : Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:

• Advertising in local papers and magazines
• Reaching out to local bloggers and websites
• Social media advertising
• Local radio advertising
• Banner ads at local venues

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your real estate investment business such as finding properties to acquire, marketing completed properties, overseeing renovations, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to flip your 25th house, or when you hope to reach $X in sales. It could also be when you expect to hire your Xth employee or launch in a new market.

While the earlier sections of your real estate business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.

Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets

While balance sheets include much information, to simplify them to the key items you need to know about, balance sheets show your assets and liabilities. For instance, if you spend $100,000 on building out your real estate investment business, that will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $100.000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement

Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt. For example, let’s say you signed a commercial tenant that needs an extensive build out, that would cost you $50,000 to complete. Well, in most cases, you would have to pay that $50,000 now for materials, equipment rentals, employee salaries, etc. But rent will not cover build-out costs for 180 days. During that 180 day period, you could run out of money.

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a real estate investment business:

• Location build-out including design fees, construction, etc.
• Renovation costs
• Cost of depreciation
• Payroll or salaries paid to staff
• Business insurance
• Property management software
• Taxes and permits
• Legal expenses

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your store design blueprint or location lease.

Free Business Plan Template for Real Estate Investors

You can download our real estate investment business plan PDF template here.

Real Estate Investment Business Plan Summary

Putting together a business plan for your real estate investment company will improve your company’s chances of success. The process of developing your plan will help you better understand the real estate investment market, your competition, and your customers. You will also gain a marketing plan to better attract and serve customers, an operations plan to focus your efforts, and financial projections that give you goals to strive for and keep your company focused.

Growthink’s Ultimate Real Estate Business Plan Template is the quickest and easiest way to complete a business plan for your real estate investing business.  

Additional Resources For Starting a Real Estate Investment Business

• How To Find Investment Opportunities
• Estimating Rehab Costs for Real Estate Investors
• How To Become a Real Estate Investor
• How To Start a Real Estate Investment Business
• Real Estate Investor Marketing Strategies

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Private equity – Navigating manager exits and management incentives in challenging times

This article discusses the key issues to be considered where a senior executive’s employment is to be terminated and the management incentive plan needs a reset, all in the context of operating in times of economic stress. This article is the second in a series of articles focusing on private equity backed companies in times of economic stress.

A common feature of private equity backed companies is that members of the management team hold shares alongside the private equity house – the economic interests of management and the private equity house are aligned.

When a portfolio company is experiencing financial stress, the alignment of interests between management and the private equity house can break down. The financial stress brings the performance of the management team into sharper focus. One or more key members of the management team may need to be replaced to take the company forward. In addition, a fall in the portfolio company’s value can leave management’s equity “underwater”, impacting the incentives of the continuing management team.

Manager exits

In dealing with the removal of a senior executive from a portfolio company the private equity house will need to consider the departing manager’s employment rights and rights as a shareholder, including rights regarding the treatment of the leaver’s equity shareholding.

Employment rights

The leaver’s rights as an employee will be governed by the leaver’s employment contract with the company as supplemented by applicable employment law.

Termination of employment

If a decision is taken that a senior manager should be replaced, should the leaver be removed immediately, or retained in position while a replacement is identified? In most circumstances, immediate removal will be desirable. If a permanent replacement has not been identified, the leaver can be replaced by another member of the existing management team or an interim hire.

Assuming a well-drafted executive employment contract, the private equity house will need to decide whether to terminate the leaver’s employment without notice under a PILON (payment in lieu of notice) clause, or to give the leaver notice and at the same time put the leaver on garden leave.

During garden leave, a manager cannot attend the workplace, work elsewhere, or contact clients, suppliers or staff and therefore acts as a guaranteed period of non-competition.

Review of restrictive covenants

It will be necessary to consider the restrictive covenants in the employment contract and their relationship with the garden leave clause. Are the restrictive covenants in the employment agreement reduced by the length of any garden leave for example? Also, what are the terms of the leaver’s restrictive covenants in the shareholders’ agreement (which typically run from the date the shareholder ceases to hold shares)?

Restrictive covenants restricting an employee’s activities after termination of employment are void under English law for being in restraint of trade, unless it can be shown that they are reasonable in the circumstances of the parties and the public interest to protect a legitimate business interest of the employing company.

Restrictive covenants in employment contracts are generally considered more critically by the courts than equivalent covenants in a commercial contract such as a shareholders’ agreement. Generally speaking, an employment covenant that exceeds 12 months will not be upheld by the courts.

Restrictive covenants will not be invalidated by virtue of the leaver’s employment being terminated, provided that the termination occurs in accordance with the leaver’s employment contract and the employer is not otherwise in repudiatory breach of the employment contract. Immediate termination with payment in lieu of notice in accordance with the leaver’s employment contract will not be a breach of contract.

Managing reputational risk: confidentiality and announcements

Managing the message to the market of the leaver’s departure and reputational risk will be of concern to the private equity house. The settlement agreement should therefore set out the agreed position (including confirmations that the parties will not “bad mouth” each other on social media). Post #MeToo, there are strict rules around how far an employer can go in gagging a departing manager under an “NDA” and blanket prohibitions are now unenforceable as managers will always have the right to blow the whistle and/or speak to the authorities around issues of material concern.

Settlement agreement

The private equity house will want the leaver to enter into a settlement agreement providing for full and final settlement of certain matters on which the leaver has to take independent legal advice.

The settlement agreement will include waivers of any contractual claims against the company and waivers of statutory employment claims including claims for unfair dismissal. Save in cases of serious misconduct, generally speaking, the majority of senior executive exits will trigger unfair dismissal rights as they are usually presented as a fait accomplis with no right of appeal. In contested terminations, it is also common to see allegations of discrimination and/or whistleblowing being made where the damages are uncapped to increase the quantum on any settlement package. It is also common for managers in dispute with their employer to issue a Subject Access Request for their personal data. Such requests are time consuming and expensive to deal with and are a further incentive for an employer to reach an amicable agreement with a departing manager.

In addition to the above waiver of claims, the settlement agreement should cover confidentiality and announcements, as discussed above, and deal with the leaver’s entitlements as regards to management equity (discussed below). The settlement agreement may also reproduce in full, or at least draw the attention of the leaver, to the leaver’s obligations under restrictive covenants and other post-termination of employment obligations regarding intellectual and company property.

A review should be undertaken to identify whether the leaver is a key person under any of the portfolio company’s financing documents or other key contracts, or whether the leaver holds a key function under any regulatory regime to which the portfolio company is subject. The settlement agreement should provide for cooperation from the leaver in relation to all such matters, as well as dealing with resignations from directorships and company-nominated positions on industry bodies.

The leaver may need to be persuaded to enter into a settlement agreement, most obviously by being treated more generously regarding termination payment than the contractual position justifies. Other important issues for the leaver will be the value of the shares subject to compulsory transfer (although this will not have the same importance where the value of the shares clearly have no value, as discussed below) and the terms of any employee reference to be given by the employing company.

Management equity – leaver provisions

The “leaver provisions,” which stipulate what happens to a manager’s shares upon ceasing to be an employee of the portfolio company’s group, can be among the most keenly negotiated provisions of the “equity documents” in a buyout transaction.

The key concerns of the private equity house in relation to the leaver provisions are to prevent valuable “sweet equity” being retained by managers who are no longer working in the business, and ensuring that leavers are not over rewarded for selling their equity.

The key concerns the managers will have in relation to the leaver provisions are the extent to which they are required to sell their equity and the possibility that they will not receive full market value (or, if greater, cost) for their shares, as a result of ceasing to be employed prior to an exit.

The following principal matters will be addressed by leaver provisions:

• Good Leaver/Bad Leaver – these provisions treat managers differently depending on how or why they have become a leaver. Often “Bad Leaver” includes managers who have been summarily dismissed for “cause” and “Good Leaver” includes managers who have ceased to be employed because they die or have become seriously ill. An “Intermediate Leaver” definition can catch leavers who do not fall within the “Good Leaver” or “Bad Leaver” category. Understanding and drafting these leaver definitions is critical as they will establish the procedure, timelines, and prices for the transfer of shares.
• Vesting – vesting provisions whereby over time fewer of the manager’s “sweet equity” shares are required to be sold at the lower of cost and market value rather than at the greater of cost and market value.
• Price – Bad Leavers will only receive the lower of what they have paid for their “sweet equity" shares and market value, whereas Good Leavers will generally receive the greater of market value and cost. If the leaver provisions provide for an Intermediate Leaver category, with vesting, the leaver will receive greater of market value and cost for their vested sweet equity shares. If “rollover equity” (issued as consideration for a sale of shares on an earlier buyout) is subject to compulsory transfer, it is likely to be provided that those shares are sold at market value.
• Timing – there will be pressure to deal with the manager’s exit as quickly as possible to minimize disruption. The procedure in the constitutional documents for the compulsory transfer of the manager’s shares may take more time than it will take to deal with the exiting manager’s departure. The main negotiation on exit of a manager happens around the settlement agreement and so the private equity house will want to ensure that the settlement agreement grants flexibility for the company to deal with the compulsory share transfers without needing any further agreement from a potentially recalcitrant former employee.

In addition to leaver provisions, there may also be malus and clawback provisions in the investment documentation which may, particularly in the case of Bad Leavers, either reduce the consideration payable to or the number of shares retained by the leavers and/or enable the company to require the leaver to repay all or part of such consideration in certain circumstances (for example, where a restrictive covenant is subsequently breached, a hole in the accounts is subsequently discovered, or where misconduct is later identified).

Operation of leaver provisions in a distressed situation

As outlined above, a private equity house in a buyout transaction will typically expect that the investment documentation will provide that leavers have to sell all of their sweet equity shares, with the price determined by the leaver being “Good,” “Bad” or (if applicable) “Intermediate”.

Managers will argue that a leaver should be entitled to retain all of any rollover equity, but this will be a matter for negotiation. If it is accepted that the leaver’s rollover equity should be sold, the managers will argue that the leaver should receive market value, whatever the applicable category of leaver.

In a situation where the portfolio company is in a situation of financial stress, it is likely that there is no value in the equity. If this is the case, then reaching an agreement on valuation should be less of a challenge than it otherwise might be, but the leaver may not recognize the stark reality of the situation, and may not be in a cooperative frame of mind.

The provisions of a well-drafted set of articles of association dealing with shares subject to a leaver’s compulsory transfer notice will include a suspension of voting rights and waiver of pre-emptive rights in respect of any new issue of shares (and on transfer of shares if applicable). Equivalent provisions should apply to any shares the leaver is entitled to retain, for example because the shares are rollover equity from an earlier buyout. Such provisions mean that passing shareholder resolutions will not be delayed or made more difficult by a delay in transferring a leaver’s shares.

If the articles do not contain a suspension of voting rights provision, there is a risk that the leaver’s negotiating position is enhanced by delaying the compulsory transfer of shares process, particularly where a capital restructuring is imminent, and the leaver holds a significant proportion of the management equity.

If a settlement agreement can be agreed while any share valuation issue is outstanding, it should, wherever possible, include a power of attorney in respect of the shares which the leaver is required to transfer, and an obligation to deliver signed blank stock transfer forms and share certificates (or indemnities), prior to payment of any sums payable under the settlement agreement.

Even in a distressed context, there may be circumstances in which a leaver sells their equity for more than market value for UK tax purposes, for example, where leavers are entitled to receive the greater of cost and market value for their shares. If this is the case, they will be subject to employment taxes on the excess over market value. It is the responsibility of the relevant employer to account for employment taxes via payroll, although employee taxes may usually be recovered from leavers pursuant to the tax indemnity in the investment documentation.

Resetting management equity

If the difficulties the portfolio company is facing are such that there is no meaningful prospect of the management equity accruing value in the reasonably near future (the relevant exit horizon) then the private equity house will need to consider how to ensure the continuing management team (including any new hires) are incentivized to work through a turnaround and towards a successful exit.

Although a cash exit bonus scheme may be considered, this is inefficient for tax purposes and doesn’t align incentives in the same way as share ownership by the management team.

Capital restructuring

In practice, a portfolio company’s financial difficulties may dictate that there is a debt for equity swap, or other form of debt restructuring. Any management incentive plan must be integrated into any wider capital restructuring.

The potential value of management’s equity can be increased by reducing the overall debt burden (third-party debt and shareholder debt) which must be satisfied before value accrues to equity and by increasing the share of the sweet equity to the overall equity proceeds. The latter can be achieved either by amending the terms of any existing ratchet shares, or issuing new shares providing a ratchet with a realistically achievable exit value hurdle. The latter will be more appropriate where new key managers have been added to the team and not all existing (and continuing) managers are intended to benefit from the new scheme.

The tax consequences of any capital restructuring will have to be considered, including the consequences of any debt restructuring/debt for equity swap.

As regards an amendment to the terms of any existing ratchet shares, or the creation of a new class of ratchet shares, the parties will want to ensure that no immediate “dry” tax charge arises under employment tax rules. In order to avoid this in relation to the amendment of existing ratchet shares, no value should arise in the relevant shares as a result of the change to the ratchet provisions. For new ratchet shares, the shares must not be issued for less than their relevant tax market value. A balance will have to be found between ensuring that no value immediately accrues from any revised or new ratchet shares creating a dry tax charge, and creating an incentive which is attractive to the continuing management team.

Dealing with manager exits can be disruptive and emotive. Getting a new management incentive scheme in place to reset the management team after a company has faced financial stress is essential. Dealing with the complexity involved, in conjunction with any wider capital restructuring, requires a multi-disciplinary team of lawyers to identify and mitigate the various potential pitfalls.

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Doctors vs. hospitals: A bid to regulate hedge funds is dividing California medical groups

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Some of the most influential and wealthy groups in California politics are squaring off over legislation that would give California’s attorney general oversight of private equity firms and hedge funds acquiring major health care institutions.

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The most influential players in the health industry are fighting over a controversial plan to let the attorney general block hedge funds and private equity firms from acquiring health care facilities.

The Legislature’s analysis of the bill says “private equity acquisitions in health care have exploded” and studies show that the trend results “in higher health care costs, poor quality and less access to care.”

“We believe that the health care system should serve patients,” Attorney General Rob Bonta said when the bill was introduced in February. “Too often, private equity has served corporate profiteers by maximizing their profits at the expense of access, quality, and affordability of health care for Californians.” 

The battle involves some of the heaviest hitters in the state’s big-money political influence game.

In one corner: Hospitals, the California Chamber of Commerce and private equity investment firms. Joining Bonta in the other are groups representing hospital workers at every level: The state’s physicians’ association, nurses and public employee unions.

Combined, the groups and their affiliates have given more $4 million to sitting legislators’ reelection campaigns in the past two years, according to the Digital Democracy database.

Since its introduction in February, the bill has coasted through two Democratic-controlled Assembly committees on party-line votes, but that’s no guarantee it will reach Gov. Gavin Newsom’s desk. Several previous attempts at similar legislation died quietly.

This year’s legislation, Assembly Bill 3129 , is authored by Assembly’s second-highest ranking Democrat, Jim Wood. The dentist and former Healdsburg mayor has announced he’s leaving office at the end of this year . Before he leaves, he said he feels it’s important to appoint a watchdog to prevent hedge funds and private equity firms from buying large health care institutions and squeezing them for profits at the expense of patients. “This is my last year in the Legislature, and I would forever regret not trying to take this one on,” Wood told CalMatters.

Bonta, who is considering a campaign for governor in 2026 , is the bill’s sponsor.

Health care business groups oppose bill

The bill faces fierce objections from the California Hospital Association, which has donated at least $42,300 to lawmakers in the past two years. 

Rony Berdugo, the association’s lobbyist, told the Assembly Health Committee earlier this month that private investment is sometimes key to saving struggling local health care institutions. “Access to all financial tools is critical,” he said , “particularly in vulnerable communities where investments are needed.”

Plus, he argued that the bill is redundant to another law that created the recently formed Office of Health Care Affordability . Founded in 2022, the law allows the new agency to conduct a review of a health care transaction and its impacts on the local health care market. The law prohibits a deal from closing for 60 days after the review, giving regulators “plenty of time … to investigate anticompetitive behavior,” he said.

The powerful California Chamber of Commerce, which has donated at least $229,000 to sitting lawmakers in the past two years, also opposes the bill. The organization warned lawmakers in a letter that the government shouldn’t have the power to “unilaterally determine which private transactions are good or bad.” The chamber warned of a slippery slope if the attorney general is allowed to have so much say over private businesses.

Nationally, from 2013 to 2016, private equity firms acquired 355 physician practices. In the four years that followed, the acquired 578 additional practices, while pouring nearly $1 trillion into nearly 8,000 health care transactions during the past decade, according to the bill’s non-partisan legislative analysis. 

Almost all of the consolidations fall below the $101 million threshold that triggers an antitrust review by the Federal Trade Commission and the U.S. Justice Department, the analysis said.

Unions, doctors support private equity oversight

The bill is supported “in concept” by the California Medical Association, a lobbying powerhouse that represents the state’s physicians. Other doctors groups in support include the American Academy of Emergency Medicine, California Physicians Alliance and the California State Association of Psychiatrists. Unions representing nurses, teachers and public employees also support the bill. Combined, the groups have donated more than $3 million to Democratic lawmakers the past two years. The bill also has the support of Health Access California, an influential health care consumer advocacy group that advocates for universal health care . The group’s lobbyist, Katie Van Deynze, told the Assembly Health Committee that California attorneys general have had the authority to place restrictions on the mergers of nonprofit health care institutions for decades. Why not extend that oversight over private equity firms and hedge funds, she asked?

“What kind of conditions have AGs asked for?” she asked the committee . “To keep emergency rooms open; to keep labor and delivery rooms open; to keep cardiac care and other services open; to not hike up prices for consumers and to not end managed care contracts for consumers for Medi-Cal and to not close hospitals. These are the exact kind of conditions that communities need.” The argument resonated with the health committee’s chair, Assemblymember Mia Bonta, the wife of Attorney General Bonta, who’s been criticized for not recusing herself in votes relating to her husband’s agency.

“I believe that it is well-situated to ensure that the Department of Justice has the ability to remark on these kinds of acquisitions, given their prior experience doing so in the nonprofit context,” Bonta said, before voting “yes” with the 11 other Democrats on her committee.

Learn more about legislators mentioned in this story.

Democrat, State Assembly, District 2 (Ukiah)

Democrat, State Assembly, District 18 (Oakland)

Will bill die a quiet death?

Despite the bill advancing as far as it has and having the support of influential groups, Thad Kousser, a political science professor at UC San Diego , said that’s no guarantee the bill will end up making its way through the Democratic-controlled Legislature. In fact, he predicts the legislation quietly dies without Democratic lawmakers attaching their names to a “no” vote, given the powerful business interests opposing the bill.

“You’re going to make as many enemies as friends when you vote on this bill, so the thing you’d love to see is for it to quietly go away,” he said. “You would like to see this bill die a quiet death without anyone having to cast a vote on it.”

Wood previously authored bills similar to the one under discussion, one in 2022 and another 2021, that both died through inaction. The most recent one died because it couldn’t get a hearing in the Senate Health Committee after passing the Assembly. The older bill died after it was changed into unrelated legislation. In 2020, similar legislation by former Assemblymember Ed Monning, a Democrat from Carmel, also died after it wasn’t taken up by the full Assembly. This year, Wood said, “I’m still giving it a chance to get it done.”

Thomas Gerrity, data scientist and product manager for Digital Democracy, contributed to this story.

For the record: This story has been updated to correct the spelling of Katie Van Deynze and to clarify the role the Office of Health Care Affordability plays in overseeing major health care transactions.

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Ryan Sabalow Digital Democracy Reporter

Ryan Sabalow is a Digital Democracy reporter for CalMatters. A graduate of Chico State University, he began his career covering local news for the Auburn Journal in Placer County and The Record Searchlight... More by Ryan Sabalow

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Private Equity, Businesses Rip Trudeau’s Capital-Gains Hike (2)

By Erik Hertzberg

Some of Canada’s biggest business groups are urging Prime Minister Justin Trudeau to reverse his government’s plan to raise the tax inclusion rate on capital gains.

The government should cancel the proposed tax hike, six major industry associations, including the Canadian Chamber of Commerce and the Canadian Venture Capital and Private Equity Association , wrote in a letter Thursday to Finance Minister Chrystia Freeland .

“We are calling on the government to heed the advice of many of Canada’s most respected leaders and commit to scrapping the ill-advised inclusion rate increase,” the groups wrote.

In last month’s budget, Freeland unveiled ...

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Insolvency Diversity and Inclusion Steering Group launches 2024 Action Plan

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The Insolvency Diversity and Inclusion Steering Group, a joint initiative between the insolvency and restructuring trade body R3 and the Insolvency Service, has published its Action Plan for 2024.

Building on the work done in previous years, 2024’s Plan focuses on three specific areas of activity:

• Promoting careers in the profession through outreach to universities and educational institutions and the development of materials that highlight the opportunities presented by career in insolvency and restructuring.
• Collating and sharing best practice on equity, diversity and inclusion in the profession.
• Engaging with those at the early stages of their careers in insolvency and restructuring to identify and address barriers to entry and progression.

Steering Group co-chair and R3 chief executive officer, Caroline Sumner , said: “This year’s Action Plan builds on the work we’ve done over the last two years to understand and begin to address the challenges the profession faces when it comes to equity, diversity and inclusion.

“Its workstreams aim to use this foundation to ensure that the profession’s talent pool is as broad and deep as possible and that we understand and address any issues that could potentially deter someone from joining, remaining or progressing in the profession.”

Steering Group co-chair and Insolvency Service director of strategy, policy, and analysis, Angela Crossley , added: “It has been great to see so many parts of the sector coming together to share good practice and encouraging a wide range of talented people to join the profession.”

The Steering Group’s network of diversity and inclusion Champions, senior members of the profession who support the Group’s activities, will be central to the success of its work. Work is underway on a round table event in June which will enable them to come together, share best practice and discuss the Group’s plans for the next 12 months and how they can best support them.

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