For years, private equity firms treated the middle market, firms with $50 to $500 million in revenue, as a goldmine. Smaller, family-owned businesses were easier to understand, had less competition from mega-funds, and required relatively simple operational changes to generate outsized returns. It seemed like an ideal formula. Then reality hit. Middle-market PE deals are […]
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Levered Monkeys
As Oxford’s poet-philosopher Ludovic Phalippou once put it, “we are all just levered monkeys!” What did Phalippou mean by this comment? Well, as I explained to my corporate finance students this week, the use of debt by companies is called “financial leverage”. That is, debt acts like a lever which can magnify the size of both gains […]
A picture says a thousand words BACK IN 1995, which country had the second highest 10 year government bond yield? As Europe’s third largest economy, Italy is too big to bail out. Past performance is not a predictor or future performance. However, if historical bond yields provide us with any insight about the Europe’s future, […]