On last Friday, Frank Berger and I hosted a PE roundtable discussion in Munich with 15 participants at the well received event. Managing directors of private equity firms later wrote us: Thanks a lot for the fantastic breakfast session today. Again it was a great discussion and some interesting news of the m+a market. Thanks for the opportunity to participate at the very successful event. It was a very interesting and informative session in a great location!
Our thesis: the spike in mega deals and other leading indicators foreshadow a fertile environment in which to execute an exit strategy within the short term.
At the same time, we brought forth some points for consideration of the group in regard to mid- or longer term risks.
There was a great amount of discussion amidst the interactive group including, among others, representatives of renowned firms such as Cipio (the largest investor in ByuVIP, sold just last week to Amazon), HgCapital and Wellington Partners.
In conclusion, the group consensus was: 2011 looks like a very good year to proactively market portfolio assets.
The group also concluded that VC backed firms often missed great times to sell as for instance in the last 2006-2007 up cycle while the responsible investment manager was waiting for just a bit more return; having to then wait another four or more years for the next opportunity to exit after being too late to the market the first time around. The group also noted that, of course, there are always examples of companies selling for great multiples during down cycles a la the Gomez sale to CA for 5x revenues in Q3/09, or Q-Layer sold to SUN at an astronomical double-digit revenue multiple in Q1/09. Nevertheless, the advice of the group was clearly to take advantage of the very positive outlook for M&A exit in 2011 and to make sure not miss the train once again while waiting for .