Corporate Governance Should Combine the Best of Private Equity and Family Firms

Harvard Business

Samsung is a global leader renowned for innovation talent, yet with strong family control. In addition to the hybrid alternative, Western governance models are being challenged by a mutation of the classic private equity–leveraged buy-out model. From its earliest days, 3G set out to ensure that its businesses became magnets for top talent, emphasizing culture change and best practices in recruitment, training, and retention as much as financial transformation.

Private Equity’s New Phase

Harvard Business

In phase one (buy and sell), PE investors looked for the equivalent of a “fixer-upper house” — a dilapidated company in a good industry that could be purchased at a discount and, after the business equivalent of some fresh paint and new appliances, resold for a profit. This phase was loosely called leverage buy out (LBO) from about 1979 to 1990 and included over 2,000 LBOs.

LBO 44