Summary of Private-Equity Minority Investments

Can Less Be More?

Antoon Schneider and Cristina Henrik

Boston Consulting Group, 2015

Private-Equity Minority Investments summary

Though they give private equity firms less control, minority interests offer certain advantages to both buyers and sellers.

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Taking a minority shareholding is becoming more common for large private equity (PE) funds, according to Boston Consulting Group professionals Antoon Schneider and Cristina Henrik. As PE firms seek to deploy roughly $1.2 trillion of uninvested capital, they’re more open to atypical deals, while sellers like the control they retain and the know-how they gain from minority investors. However, PE funds need to do their homework to ensure the success of their minority stakes. getAbstract recommends this study’s insights on this little-reported phenomenon to private equity investors as well as to companies considering working with them.

In this summary, you will learn

Why minority investments are growing as a proportion of private equity deals
Why buyers and sellers might prefer minority stakes
What approaches private equity firms can take to help ensure success in minority shareholdings

Summary

Large private equity (PE) funds are increasingly taking minority stakes in target companies. Since 2008, the proportion of deals involving minority investments has averaged 27%, compared to 13% between 2004 and 2007. In Asia and Europe, minority ownership appeals to the large number of family-owned ...

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