Equicapita Update –Why Invest in Private Companies That are Off Limits to You?
FOR IMMEDIATE RELEASE,
December 8th, 2013 -...
new capital
to be held for the long term;
where there is some potential to grow sustainable free cash flow, but where
that...
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Equicapita - Why Invest in Private Companies That Are Off Limits To You?

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Greg Tooth, a partner at private equity buy-out firm Equicapita notes, "publicly traded PE investments focus on much larger transactions leaving the so-called SME or small medium enterprise PE market underserved and investors with few options for accessing the returns that can be generated in this segment – my partners and I created Equicapita to be RRSP eligible with a low minimum to allow qualified investors access to SME investments that are difficult to reach through traditional channels. Because of the compelling mismatch between the amount of business owners seeking exits in relation to the amount of dedicated SME private equity capital we believe this space could provide superior returns over the next decade while the imbalance is rectified and the demographic pressures begin to ease.”

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Transcript of "Equicapita - Why Invest in Private Companies That Are Off Limits To You?"

  1. 1. Equicapita Update –Why Invest in Private Companies That are Off Limits to You? FOR IMMEDIATE RELEASE, December 8th, 2013 - Calgary ATTENTION INVESTMENT EDITORS – According to Canadian Business “A study out of the Stern School of Business and Harvard University found that private firms grow faster than public ones. The average investment rate among private companies is nearly twice as high as public firms—6.8% compared to 3.7% of total assets per year.” Canadian Business went on to report that the Stern research found “There are three reasons why private businesses grow faster, the authors write. First, public companies have an “agency problem,” the inherent conflict of interest between executives wanting to create wealth for themselves and doing what’s best for shareholders… The second issue is what the academics call the “quiet life”; managers of public companies sometimes avoid making investment decisions because they don’t want to rock the boat. The third concern is “short-termism” or the focus on short-term profits.” Greg Tooth, a partner at private equity buy-out firm Equicapita notes, "publicly traded PE investments focus on much larger transactions leaving the so-called SME or small medium enterprise PE market underserved and investors with few options for accessing the returns that can be generated in this segment – my partners and I created Equicapita to be RRSP eligible with a low minimum to allow qualified investors access to SME investments that are difficult to reach through traditional channels. Because of the compelling mismatch between the amount of business owners seeking exits in relation to the amount of dedicated SME private equity capital we believe this space could provide superior returns over the next decade while the imbalance is rectified and the demographic pressures begin to ease.” Equicapita is a Calgary-based buy-out fund focusing on acquiring Canadian private businesses that can generate strong, sustainable cash flow from their operations in niche markets. Equicapita generally seeks to acquire businesses: at what it believes are reasonable prices; with a demonstrated history of cash flow greater than $1 million per annum; with a durable competitive advantage; that operate in industries that Equicapita believes have sound long-term macro prospects; with ongoing participation of senior personnel; with the ability to maintain the cash flow without disproportionate amounts of
  2. 2. new capital to be held for the long term; where there is some potential to grow sustainable free cash flow, but where that growth is not essential to generate suitable returns.” This news release may contain certain information that is forward looking and, by its nature, such forward-looking information is subject to important risks and uncertainties. The words "anticipate," "expect," "may," "should" "estimate," "project," "outlook," "forecast" or other similar words are used to identify such forward looking information. Those forward-looking statements herein made by Equicapita, if any, reflect Equicapita's beliefs and assumptions based on information available at the time the statements were made. Actual results or events may differ from those anticipated or predicted in these forward-looking statements, and the differences may be material. Factors which could cause actual results or events to differ materially from current expectations include, among other things: risks associated with the ownership and operation of businesses, including fluctuations in interest rates; general economic conditions; supply and demand for businesses; competition for available businesses; changes in legislation and the regulatory environment; and international trade and global political conditions. Readers are cautioned not to place undue reliance on any forward-looking information contained in this news release (if any), which is given as of the date it is expressed herein. Equicapita undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise.

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