1) Private Equity: Plenty of cash
In fact they are in a de-leveraging process in which they have to cut costs themselves. Banks are in a similar situation. However, Many private equity funds have a big advantage vs. banks and large companies due to the fact that their (debt to equity) leverage ratios are much lower (typically between 1 and 2) than those of larger private equity funds (typically higher than 10) and other financial institutions. According to media investment bank Jordan Edmiston Group, they are sitting on $500 billion of uninvested capital. Investors continue to be interested in funding them as the example of Hispania Capital Partners shows. The Chicago based private equity firm just announced that it got committed capital of $105 million for its second fund from investors including Verizon's Pension Fund, Credit
Private Equity Funds tend to make equity and buyout investments in strategically positioned lower-middle market companies predominantly engaged in providing goods and services to the rapidly growing Hispanic demographic in the U.S. and Puerto Rico. Hispania´s new fund is designed to invest in companies with compelling value propositions, proven management teams, positive cash flow, and annual revenues in excess of $10 million. It will invest up to approximately $20 million per platform investment.
Particularly in times of economic weakness, they tend to focus on the non-cyclical drivers of U.S. Hispanic business growth. Palladium Equity Partners, a New York based investment fund whose investments include Todobebe, recently made investments in California and Michigan based community banks with heavy Hispanic exposure. The firm will soon announce another financial services deal. Victor Maruri, Managing Partner at Hispania recently told Portada that interesting sectors are Business Services, Education Services with a Hispanic specific angle (English as a Second Language, Tradeschools and Adult Education). One of the companies Hispania owns is CSA Group: Founded in 1956, it has grown to become the largest Hispanic-owned A/E/P&E firm in the U.S., with offices throughout the United States, Caribbean, and Latin America, including Panama City, Panama.
·Cash down payment of 20% to 30% of the purchase price.
·Balance paid over 5 to 10 years at 5% to 7% interest per annum.
·Part of the balance may be in the form of a non-compete agreement which does not bear interest.