La crisis en el año 2012, la clave de la semana en Wall Street

02 ene 2012 • Monica Coronatti, Sala de Inversión América 

Wall Street inicia el año 2012 con los mercados cerrados el lunes debido a los festejos del Anni Novi del calendario gregoriano. Sin embargo, comienza un año que, en el sentido más estrictamente financiero, tiene poco o nada de nuevo a raíz de la herencia que recibe: la crisis de deuda europea y un débil sistema financiero que no ha logrado recuperarse desde el estallido de la crisis en 2008, a lo que hay que sumar la pérdida de confianza en la clase política para encontrar soluciones que garanticen una salida de la crisis en el Viejo Continente y que además consigan la estabilización de las cuentas públicas en los Estados Unidos.

Cuando la recesión parece ya una nueva realidad en la eurozona, las expectativas para apuntalar el crecimiento en los EE.UU. recaen sobre la Reserva Federal, aunque la entidad monetaria estadounidense tampoco cuenta con demasiado margen de acción con sus tasas de interés rozando el 0% y tras haber aplicado dos programas de expansión cuantitativa, el QE1 y QE2, que arrojaron dudas en cuanto a sus efectos económicos se refiere.

Tampoco hay que olvidar que comenzamos un año de elecciones presidenciales con la Casa Blanca a merced de que el Congreso incremente el techo de deuda del país en 1,2 billones de dólares adicionales a la cantidad acordada en agosto de 2011.

Sin embargo, si se centra la mirada en el corto plazo, la agenda macroeconómica durante los próximos días girará en torno a dos referencias clave: el dato del desempleo y el ISM manufacturero de los EE.UU, que vendrán añadidos con la publicación de las Actas de la última reunión de la Fed. Respecto al desempleo, los analistas esperan un ligero aumento de la tasa a 8,7% así como la creación de 165.000 puestos de trabajo, lo que serian 25.000 más que el mes anterior.

En cuanto al sector industrial, las previsiones apuntan a un modesto aumento del ISM a 53,1 puntos en el mes de diciembre. Mientras, en el sector servicios, el ISM podría repuntar hasta 53,4 puntos. El rubro inmobiliario, en el que se reflejan los últimos datos de vivienda, se está produciendo una gradual mejora: según el consenso, el gasto en construcción en noviembre se mantendrá sin cambios. Por último, con la cifra de ventas de vehículos de diciembre se podrá comprobar si el reciente repunte del crédito bancario está impulsando el consumo. Los expertos anticipan que en diciembre se vendieron 13,5 millones de automóviles.

En el ámbito empresarial habrá que estar atentos a los resultados trimestrales de Monsanto, los de la biotecnológica Amgen, la minorista de descuento Family Dollar y los del líder internacional de la industria de vinos y licores, Constellation Brands.

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Estrategia de inversión Setiembre 2011

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Getting from “The World” to “Customer” in Only 42 Touches

Frequently, CEOs at my prospect companies will say to me, "We've called every prospect on our list once but no one wants to buy. Now what do we do?"

I ask them to tell me about the other 41 things they are doing to move a prospect through the pipeline into a paying customer. You see, it would be great if all we had to do in the business-to-business, enterprise sales & BD world was make one phone call and close a deal, but the reality is that it might take up to 41 more touches to move a one-time unknown prospect to a customer. For starters, potential customers will only buy if they have a relationship with your business. Every time a prospect comes into contact with the business a marketing relationship can be strengthened.

Let's discuss where the 42 touches occur through the sales and BD process:

Converting "The World" into a "Suspect":

The "World" includes the tens of thousands of organizations that spend money on "things." The things might be what you sell or they might not be. We have limited information on these companies and they usually enter our selling process off of lists that we've purchased, random names of companies that might have met our firm at an event, or any other lead generation activity. It takes an average of five touches to move from "The World" to Suspect, which we define as an entity that (1) should take action and (2) we have their info.

In general terms, some of the touches in this stage may include mass marketing activities such as emailing, web site content push, e-newsletters, networking at targeted events where your prospects congregate, and low-cost telemarketing. It's difficult at this stage to devote expensive outbound sales resources, so most of the focus should be on lower cost marketing activities.

At this stage, companies also need to tighten their positioning and vertical market focus. You only get a shot, maybe two if you're lucky, to make an impression at this stage.

Converting "Suspects" into "Prospects":

It takes an average of 7-13 touches to move from "Suspect" to "Prospect," which is a defined as an entity that wants to take action such as "make a buying selection in a certain period of time."  At this point, you're shifting them from entities that you know little about to real targets that you have data on, have contact information, perhaps a referral partner, or an understanding that there may be a need for the service or product. The marketing strategy here becomes a little more intense and focused. Depending on what we offer, we need to develop the relationship deeper. Perhaps we combine targeted marketing efforts, such as in-house seminars or specific-topic webinars into the mix in order to get the suspect to meet our sales people face to face. Maybe we get deeper with our referral partners here to get introductions or to conduct joint meetings.

At this stage, we should really have some specific information on these organizations and their needs and how likely they are to need our solution.

Going from "Prospect" to "Proposal"

It takes an average of 9-13 touches to move from "Prospect" to "Proposal."  Depending on the size of the deal, you will have multiple people to influence. The marketing activities give way to more involved sales tactics, such as demonstrations, referrals, and executive meetings, which are still touches. Marketing can play a big role here by producing evidence that might sway a specific target, such as directed white papers or case studies. The reality is some customers might be more demanding than others at this point, however there may be a dozen or so tactics that might have to happen for the deal to move to a realistic proposal.

"Proposal" to "Close":

As the great Alec Baldwin said in Glengarry Glen Ross, "Always be closing." In her seminal piece, "You Submitted the Proposal. Now What?" Ilise Benun noted, "Once you submit your proposal, there is more work to be done. There is more marketing, more nurturing of the relationship, and more showing what a pleasant and productive experience it would be to work with you."

We agree. The customer may ask for more referrals or conversations with your developers, engineers, or other partners. You may need to do a little more proactive networking to get the customer to select you as well. In this stage, it may require as many as eight more touches to move to the final stage.

By understanding that there are at least 42 touches required to move the prospect to a customer, you'll be able to implement a more realistic sales and marketing plan of attack.

FRED DIAMOND is committed to ensuring that his clients' BD and marketing strategy is sound, workable, and targeted properly.  He has years of marketing and business development success with a wide range of leading high tech and professional services companies including Apple, Compaq, Compuware, and high-flying start-ups in e-commerce and data storage.  His marketing experience spans market planning, product marketing, marketing communications, lead generation, and customer development.  With DIAMOND Marketing, since 2001, he has created and implemented marketing and sales programs for dozens of professional services, software, government contracting, software reselling, Internet hardware, and voice over IP, electronics, physical security, protective services, and computer security systems companies. He has been a guest speaker at Forum meetings in Virginia. He also is the co-founder of the Institute for Excellence in Sales & Business Development (IES&BD). 

Email address: 
fdiamond@diamondstrategicmarketing.com
Website: 
www.diamondstrategicmarketing.com

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PRIVATE EQUITY MANAGEMENT FEES REMAIN PROBLEMATIC

July 26, 2011 -   The latest Private Equity Spotlight published by Preqin has shown that management fees are still causing significant unrest amongst investors, but almost two-thirds are willing to pay more to access fund managers with strong track records. Other areas of contention include GP contributions, carry, hurdle rates and rebates.  The latest study was conducted for the 2011 Preqin Fund Terms Advisor, which shows the benchmark terms and conditions and also the actual terms employed by individual investment funds.
 
One finding of the study was that 69% of LPs would consider not investing in a fund if it did not conform to the ILPA Principles.
 
"In the difficult fundraising market, negotiating favorable fund terms and conditions are of the upmost importance to investors. That such a large proportion of LPs will not consider investing in a fund that does not conform to the ILPA principles is clear evidence of this," said Helen Kenyon of Preqin.
Another finding was that 61% of investors stated that they would be willing to pay higher fees for access to fund managers that they perceive to have the best track records.
"LPs are not necessarily demanding a specific management fee level; what is far more important is that the fees make sense in the context of the management of the fund. Our recent conversations with LPs have revealed that many will consider paying higher fees if this can be justified by higher performance, and if higher management fees are necessary to operate a superior firm effectively then many investors will see this as a price worth paying," said Ms. Kenyon.
 
Other Findings:
• 50% of LPs feel that there is a misalignment of interests between themselves and fund managers when it comes to management fees.
• 71% of investors are considering new GP relationships in 2011, and just 29% will only invest with existing fund managers.
• The mean management fee during the investment period for the largest funds has dropped to 1.71% in the past year.
• The mean rebate of transaction and other fees by buyout fund managers to LPs is now 83%, the highest level ever.
• A significant number of investors believe that GPs should invest more in their own funds in order to achieve a greater alignment of interests.
 
Preqin is a source of information for the alternative assets industry. The firm provides data and analysis via online databases, publications and bespoke data requests. Preqin has offices in London, UK; New York, NY and Singapore (www.preqin.com).
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7 Habits That Make Great Opportunities Happen

Liz Strauss

Everyone hears about that person who is "in the right place at the right time."  Maybe you know someone who seems to be that person all of the time. We have those friends who walk right into the perfect job and achieve the right promotions as if they have a crystal pointing them in the right direction. They get awarded the best projects and their presentations get praise and standing ovations from the special guests who showed up to hear them. How do they do that?

It's not fate or a great gene pool. It's not an accident. It's not even a lucky star. People who enjoy consistent success know what it takes to make great opportunities happen. Change a few habits and people might be wondering how you get so many opportunities, too.

It's true. You don't need luck if you can make things happen; you need strategy. Simply stated, strategy is a realistic plan to move forward by taking advantage of the opportunities that suit your unique abilities. It's a matter of having control. It takes time and some attention, but buying a lottery ticket takes that and money, too.

Want to make good things happen for you? Here are seven habits that make great opportunities happen.

1. Pay attention

Value curiosity and collect information. Make a habit of interacting with your environment. Notice things that happen around you. People who notice things know more than people who don't.

Notice the kind of preparation and responses people value.

Notice how you can make processes and meetings work better.

Notice what makes people's lives easier, faster and more meaningful.

Notice ways that you can add value without taking something away from those around you.

Develop a habit of paying attention. You'll grow as a person and you'll become a natural resource to the people who work with you. It will become natural for them to think of you when new opportunities happen.

2. Think of your work as important

No matter how dull, uninteresting, or seemingly useless the project, assume a higher purpose is driving it. Bring your best talents and most dedicated attitude to it. What you think changes how you feel and what you do. People will respond to the importance you place on the work that you're executing. Develop a habit of honoring your work. People will place more value on the work you do and start to look for opportunities where they might use your higher-level abilities.

3. Be aware of the potential of your impact

The way you look, the smile you give, the way you answer on your cellphone—each causes a response in someone you might never be told. Everything you do has an impact. When you make decisions, think them through to understand how they will affect other people. Develop a habit of considering how your actions affect the people around you. People will see that you make work easier, rather than making more work for them.

4. Imagine opportunities everywhere you look

Lucky people know that opportunity is always present. Look for ideas and trends that match your interests and your skill set. Bend and twist those ideas to make them uniquely yours. Develop a habit of looking at everything to see how you might improve it—how you'll make it more fun, faster, cooler, friendlier, easier, quieter, more musical, lighter, more romantic, more exciting, more inviting, more anything. Choose the opportunities that benefit other people and they will support your offer to take advantage of an opportunity.

5. Make yourself a magnet for jobs you do well

Be generous offering your help and counsel. When people help you, suggest your best skills as a way you might return the favors. Be on alert for the tiniest ways to match your best work with what the people around you might be doing. Talk about your favorite projects. Develop a habit of letting people know how much you love doing what you do well. People get impressed by folks who love their work and want to help.

6. Count and record the opportunities that suit you

Small ideas and opportunities have a way of getting bigger. Research shows that things we watch and measure get bigger and more plentiful. Develop a habit of attending to what suits you. People will notice that you record ideas and opportunities. They'll start listening and looking to find more. Soon you'll have a network of people who are offering you ideas they've collected for you.

7. Decide

When an opportunity is set before you, don't hesitate. Take the opportunity and use it to grow the skills that got you that far. You know which opportunities fit your interests and skills and which don't. Develop a habit of taking on new opportunities as a way of growing. Be clear that you'll always be noticing and learning and people will feel secure in offering you opportunities that grow with you.

So if you want to be the lucky someone, you can make great opportunities happen. Develop the seven habits that will get you seeing opportunities and other people seeing you. Once you start, you might be surprised who starts pitching in to help you. Seguir leyendo

Private Equity Fundraising Rebounds in 2011

By Paula Schaap 
April 11, 2011

Driven by a small number of funds that held large closes, U.S. and European private equity fund-raising rebounded in 2011, according to a new report.

According to figures from Dow Jones LP Source, U.S. private equity funds secured $31.6 billion for 89 funds during the first quarter, more than double the $13.5 billion raised for 81 funds during the same period last year. All sectors except mezzanine raised more capital than the same period last year.

European firms collected $8.2 billion during the quarter, up 39% from the $5.9 billion raised a year earlier, although the number of closings declined to 22 from 32, according to the data.

"In 2010, many private equity firms focused on trying to return capital and those efforts are starting to bring their investors back to the party," said Laura Kreutzer, managing editor of Dow Jones Private Equity Analyst. "But limited partners are still like bouncers at an exclusive night club. They're only letting the best looking groups behind the velvet rope. Everyone else still has to  Seguir leyendo

11 Stages of Selling a Company

by Peter Lehrman 

Selling a company is a long and complex process. Preparing for a sales process takes at least 12 months, and then the actual process itself can take another 12 months. If you think of selling your business as something similar to a very long multi-year enterprise sales cycle, you'll begin to realize that a business sales process is like any other sale process in that it can be broken down into its core component stages and elements.

This article provides an overview of the key stages of an M&A sale process, whether it's for a lower middle market company, a large public company, or anything in between.

Stage 1: Defining Potential Options and Exit Strategies

When considering the sale of a business, there are potentially a wide variety of transaction options. These options must be understood and evaluated by the CEO, owner, and/or board. Understanding these options and the decisions they lead are the most strategic decisions a company will ever make when it comes to realizing value. Leveraged buyout, strategic M&A sale, minority recapitalization, ESOP, etc — these are all fancy investment banker terms but they essentially boil down to various methods by which a company sells itself or part of itself or to whom it sells. Buyers break down at a high level into two categories:financial buyers and strategic buyers. They both have their pros and cons. Neither one is better by nature, it's highly situational. A good M&A banker will work with the business owner to understand the selling requirements, the range of valuation expectations, and strategic goals. This also includes defining: exit strategy alternatives; thinking through the most appropriate types of acquirers; timing of sale; tax consequences and owner's desire for future involvement with the company (or lack thereof).

Stage 2: Determining a Valuation Range For The Company

Determining a reasonable valuation range is a critical step in the process. If the banker thinks they can achieve a valuation range that isn't acceptable to the owner, the process should stop right there. Too many deals get derailed by sellers and buyers having completely different expectations about business value. While it's the job of the banker to close that gap with negotiation prowess and transactional expertise, immense gaps can't be bridged no matter how skilled you are. Valuation technique ranges from the highly academic and analytical methods of discounted cash flow and dividend discount models (DCF and DDM) to the more pragmatic comparable company valuation methodologies. Unfortunately, none of them is a replacement for the actual process of engaging with high quality and highly relevant buyers. Analysis and number-crunching is necessary but not sufficient, and will only take you so far. In the end, the price is determined in the market by the buyers and the quality of your engagement with them.

Stage 3: Pre-Marketing Value Enhancement

Often, Advisory firms will review a company's strategic and financial condition and have suggestions for how the company, over a 6-12 month period, can make some changes to make it more desirable. These should not be massive changes in strategy because those take too long and are risky, but should be valuable changes to management team or business strategy that make the business more attractive in a reasonably short period. Sometimes a trigger-happy CEO just wants to sell the company, but the best thing to do is make some changes and adjustments first before going to market. Again, working with a knowledgeable banker or informed board members that have relevant industry experience and business strategy context can be very valuable.

Stage 4: Information Gathering, Data Collection, and Presentation

Spending the time to properly aggregate, interpret, and present a company's financial and business history and future projections is a crucial element of the sale process. This requires trust between a business owner and his M&A Advisor because at this point, the kimono is being opened. The engagement letter should reflect the confidentiality that an investment bank commits to before they have access to such sensitive information. Business owners typically prepare their financial statements for tax purposes, not for business sale purposes. Using tax statements for business sale presentation is a major mistake, as it usually obscures the earnings capability of a business. Taking the time properly present a company's earnings power can have a big impact on how the buyers view the opportunity. Of course, the seller can go too far here and lose credibility, which is also a big mistake in the other direction. However, making sure that the appropriate financial adjustments are made is an important step and takes time and analysis by the CPA and the M&A team.

Stage 5: Marketing Materials Preparation

When potential acquirers evaluate a company, they expect the records and facts to be properly organized and documented. Disorganized or poorly collated material on a business delays the process, looks sloppy, and therefore hurts the seller tremendously. It's another area where many sellers are pennywise and pound-foolish and pay a terrible price for trying to save money in the wrong place. Well-packaged and presented business summaries increase a buyer's confidence and comfort level and increase the likelihood of a successful sale. A business owner spends years establishing name recognition, market niche, vendor relationships, operation & production systems, management, personnel, distribution channels, customer loyalty and numerous other intangibles. This is a story that needs to be properly told to educate potential buyers.

Stage 6: Buyer Research and Buyer Outreach Strategy

While large multi-billion dollar companies often have only a handful of relevant and sufficiently capitalized potential acquirers, lower middle market companies (this generally refers to businesses whose value ranges generally between $10M and $250M) often have an enormous number of potential buyers. Some of these potential buyers are known to the business owner, some might be known by the Advisor, but no one's rolodex is usually broad enough to know every potential buyer. This means that the banker and the business owner must have tools and resources to research and access the largest and most qualified data set of relevant buyers. Databases and tools of varying qualities exist out there, but there is no silver bullet. This research process should be exhaustive, not rushed. The banker should review competitors, customers, strategic buyers, private equity firms with relevant expertise, and other sources of highly suitable capital and partnership. This is one of the most time-intensive elements of the process but it often determines the overall success of the sale process. If you don't approach the best buyers, how can you get the best outcome?

Stage 7: Qualification of Potential Buyers

Many potential buyers that express interest in a business will not be qualified to purchase the company. These companies are referred to as tire-kickers. A good banker will know the right questions and have enough market intelligence and expertise to smoke these buyers out and pre-qualify the right potential acquirers before the tire-kickers impact the CEO or management team's time and attention. This isn't a particularly complex or time-intensive step, but if it isn't done, the CEO will waste a lot of time and effort speaking with unqualified buyers and increasing the confidentiality risk of the entire process.

Stage 8: Negotiation Process

There are many schools of thought on how to run the negotiation and buyer engagement process. Some Advisory firms suggest a negotiated process with only one highly targeted buyer. This strategy has tremendously high risk but can be extremely expedient if it works out. In general, Sellers are more likely to achieve a stronger outcome when negotiating with multiple qualified buyers, rather than just one or a handful. This can of course be taken too far as well, where every buyer feels like they are part of a huge auction process, in which case they walk away for fear of over-paying. Competition in a sale process does typically drive up purchase price and quicken the pace and accountability of buyers, but it should be handled carefully, respectfully and professionally.

Stage 9: Transaction Structure

The sale of a business has many financial and professional considerations for the management team / owner. The purchase price is only one component of the overall result. Other decisions and considerations include: stock sale versus asset sale; earnout; terms and interest rate on financing; liabilities assumed by the acquirer; employment contracts; non-compete agreements; current assets retained by the seller; stock ownership and equity options packages; relocation; employee preservation versus redundancy layoffs, etc.

Stage 10: IOIs, LOIs, and Purchase Agreements and Closing

Typically, buyers express interest in a company at three stages through three documents: the IOI, LOI and Purchase Agreement. The IOI is non-binding and provides the proposed terms, valuation and structure for a transaction. The owner will review this with their banker and make a determination as to whether or not to invite the buyer to learn more about the company and become more serious. LOIs (letters of intent) are a more serious signal of interest by the buyer; once they are jointly executed, the seller is typically under exclusivity with that buyer, such that they are not able to meet with other buyers during a stated period of time. Meanwhile, that buyer is beginning to conduct heavy due diligence on the business with the intent of acquiring it. During the exclusivity period, the buyer must move quickly to determine if they want to proceed. If so, the purchase agreement must be drafted to define all the details of the transaction: legal, financial, representations, warranties, etc. The purchase agreement is the definitive document outlining the terms of the sale.

Stage 11: Post-Closing Issues & Business Transition

The transition period typically involves a period of cooperation during which time the seller will assist the acquirer in transition. There are instances in which the seller is specifically not interested in doing this, however a lack of willingness to ease the transition typically lead to a lower valuation and in plenty of cases can derail the deal process entirely. Sellers should proceed with extreme caution if they elect to have no post-closing commitment. Post-closing commitments often include transferring customer relationships, explaining key management or market dynamics, and other proprietary information and trade secrets needed to operate the business optimally.

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