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Brazos 1. What is Brazos' investment strategy? Does it seem well suited for its position as a first-time fund? How do you assess the merits of the GTT transaction?
years of my life, my family and I have been camping all over the state. We have traveled from Brazos Bend State Park to setting up tents at the beach. My parents
contentamente sin estar con ella. Tiene un gran amor por ella. Necesita sentir ella en los brazos de el o su alma moriria. En el principio de el Poema 20, Neruda
really is. For the past 1 ? years I have worked through the Boys & Girl Club of the Brazos Valley for an after school program at a middle school. Last August, the
Austin to carry out his father's colonization plan between the rivers of San Antonio and the Brazos River. The colonization plan arranged for six hundred forty acres
Submitted by ryfong on April 16, 2008
Category: Business
Words: 668 | Pages: 3
Views: 55
Popularity Rank: 117,669
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1. What is Brazos’ investment strategy? Does it seem well suited for its position as a first-time fund? How do you assess the merits of the GTT transaction?
Brazos’ investment strategy emphasizes buyouts of mid-size companies that show predictable cash flows, have good management teams in place, have well-developed niche markets, and are located in Texas and the Southwest. This strategy suits its position as a first-time fund because this geographic area is underserved by LBO firms. Additionally, the existence of dependable cash flow and management make it easier to acquire debt financing and increase leverage. GTT offered merits for both sellers and Brazos. It gave sellers a way to cash out if they desired, while allowing them to retain significant equity ownership. The structure of this deal also delayed taxation until shares were liquidated. It gave Brazos minority ownership with significant board representation, supermajority rights to block major changes, and the right to take control of the board in the case of severe underperformance.
2. How has the current recessionary climate affected Brazos’ investment strategy, in both favorable and unfavorable ways?
Favorable: Brazos’ strategy matched well with new strategies in the industry, including investing in smaller companies, establishing a specialty investment focus (niches), developing operating expertise to aid the companies after acquisition (good management), and diversifying geographically (TX and Southwest).
Unfavorable: Tightened regulations and increased risk aversion among lenders meant less opportunity for debt leverage and increased reliance on equity contributions. Recessions make this worse since less equity is available to be invested. Fund-raising fell from $63.5 billion to $35 billion in 2001. Furthermore, rising operating productivity makes it harder for buyout firms to add value while also leading to better earnings and higher...
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