Customer Reviews

The Private Equity Edge: How Private Equity Players and the World's Top Companies Build Value and Wealth

5 star:		(7)
4 star:		(1)
3 star:		(1)
2 star:		(3)
1 star:		(1)

 

 

I was quite disappointed that 3 such illustrious authors managed to put together such a mediocre tome.

The book shows little cohesion between chapters and goes back and forth between anecdotal evidence on success or failure of various businesses with some tenuous links to private equity and high-brow macro-economic chapters whose purpose and positioning is not always clear.

It is almost as if each of the 3 authors wrote their own book and then a (not very good) editor wove the 3 (or at least 2) strands together into one book.

This is a comprehensive book on the economics and real-world dos and don'ts of the private capital world. Especially telling are the anecdotes and pitfalls about deals that have succeeded and those that have tanked. A must read for those who have ever been on either side of private equity deals or those who would like to be.

I found the Private Equity Edge to be insightful with useful nuggets of wisdom about how to increase the value of a company based on the traits of institutional investors. The book is written from an economics perspective and supports its arguments with a wealth of data. This is a good read for those that desire to look at value creation top-down from a macro view. Nice Job!

Good read for business owners or managers at any level. A little thick at times but the basic subject matter is pertinent across industries and functional levels.

The main problem of the book is that it presents an obvious fact which is a common sense to everybody (something along the: "You have to dig deeper, be faster than your competitors, do your homework before taking action, companies shouldn't pursue smaller short-term gains at the cost of the bigger long-term ones and so on") and then just keeps repeating the idea for the rest of the chapter supporting it by some anecdotical evidence. The anecdotical examples given in the book are so general that cannot be used as guidance (normally it is in the form of: "This CEO dug dipper, made some crucial changes to the company which as a result brought value to the shareholders"). Moreover the book is full of authors' philosophical discourse on economic and political topics usually not related to the main topic of the book - the private equity edge. More or less the content can be summarized in one sentence: Private companies are more efficient than public, the US should introduce flat tax rate, the Fed is to blame for all the recent recessions because of the poor monetary policy (using the book terms the Fed didn't dig dipper, didn't act faster and didn't do the homework).

This book isn't really about the Private Equity Edge -- it offers some simplistic suggestions about how private equity firms create value (dig deeper, move faster) without offering any insights into how to put those high-level concepts into practice. But the REAL point of the book is that the authors believe the US tax system should be revised to encourage small business growth and entrepreneurship.
Take a close look at the table of contents:
chapter 1: Rules of Thumb are Often Wrong (no real insights here, the chapter title says it all)
chapter 2: Wealth, Tax Rates and Income (this has nothing to do with "how private equity players build value"--the chapter is about how tax rates incentivize or disincentivize economic growth)
chapter 3: Risk, Life is Not a Straight Line

I gave up half-way through Chapter 3 because the text is so repetitive and I had yet to read anything insightful about how private equity firms create value.
As an alternative, I strongy recommend Bain's short book "Lessons from Private Equity that any CEO can Use." It was so good that I sent it to some colleagues in the industry.

When i think back, there were some really good points in this book; however, i've never read a book more in need of a strong edit. There are meandering chapters espousing the author's political views, which i agree with, but are tangential to the core messages. In fact, it reads as though someone told him this and he went back and added a summary page to each chapter.
One note on content-the author essentially believes PE is the best ownership model for everything, which strikes me as incomplete.

The Private Equity Edge is a very unique busines book which should apeal to business leaders,investors and all those interested in business wealth creation, corporate governance, setting appropiate business incentives & goals, compensation, and general economic issues including tax policies, economic risk and the impact of Federal Reserves policies on the economy. The book is well written and easy to understand and incorporates over 100 years of business experience by the authors. What is truely amazing is the breath of knowledge by the authors. Key take aways include:
- How is economic value created
- Consideration of the "people effect" in all decisions
- The impact of taxe rates on all economic activity and corporate value
- The importance to aline incentives with business goals to have good outcomes
- The importance of Cash Flows, Capital Investment,and cash returns exceeding the cost of capital to creat wealth & value
- Stock prices do not produce normal distributions
- Causes of the 2007 economic collapse
- 100's of real life business examples of value creation & distruction

This very readable book details the behind the scenes actions of successful deal-making by the professionals. It describes the how's and why's of their thinking with real examples complete with easy to read charts and graphs. How to grow a deal and preserve it's success is a unique aspect of the authors presentation. Laffer, Hass and Pryor do even more. They describe bad deals and why they went bad. It's a blueprint for anyone in or wishing to enter the mine-field blocking successful private equity deals.

If you are a Senior Executive or member of the Board of a publicly traded company you will gain new insights to creating value from this book.

Art Laffer (a former Advisor of President Reagan and a practical economist with years of real world experience) partnered with Hass and Pryor to share their findings from years of business experience as Directors and Business Advisors to leading Corporations.

Why do publicly traded company executives fail in their acquisition strategies while private equity investors tend to succeed? This book provides key insights to corporate executives and directors who want to understand how they can apply the strategies of successful private equity investors and create greater value for shareholders. If you want to increase your stock price...this book is filled with insights, frameworks, and inspiring stories.

If you are an executive with stock options and care about your shareholders including the many pension funds who hold your stock, this book is worth your time...its a quick read.