Thursday, June 21, 2007


You know, it occurred to me today that I have been banging on about private equity and leveraged buyouts for months in these pages without taking into account how educated all of you may be about the particulars of the business. Some of you may have been quietly mumbling to yourselves, "Yes, I see what he's getting at, but bankers? Buyouts? What's the connection?"

For those of you Dear Readers who may be a little fuzzy on the role investment bankers play in the LBO game, here are some stills from a French documentary on the subject that should be enlightening.

You see? It really is that simple.

The entire instructional video1, 2 showing you "How does this works?" can be found here, courtesy of IBD Monkey at The All Nighter.


1 A minor quibble with the Franglish translation: Sous LBO means "under, or subject to an LBO," not "victim of an LBO."
2 Another thing: If anyone finds out who this mysterious Mr. X and Mrs. Y are, please let me know. The fact that they made 10x on their initial equity investment in Construct is pretty impressive, considering that they sold all the equipment in the business, cut safety spending, and slashed the workforce in half. I would like to put a few million euros of their "investement fund" in the Dealmaker portfolio.

© 2007 The Epicurean Dealmaker. All rights reserved.