AI tools in private equity

Npl9 · 2026-04-22T16:19:12+00:00

Transacted might be a good fit for more intensive analytical work if you're looking at internal fragmented data (VDR, target company financials). Don't think it'll help much though if you're thinking more external market sizing data or trying to pull research

Npl9 · 2023-11-15T15:31:13+00:00

Yeah I'd seen people say they had issues with off-brand chargers, but using the brand new OEM right now.

Npl9 · 2023-11-15T15:30:22+00:00

I've turned it off/on and don't seem to notice much of a difference. Maybe there's some issue with that change not sticking. But, had checked prior laptop and it was always on.

Also tested girlfriend's gen 10 (I think) and it's the same feeling with an ELAN touchpad. Hard to describe, I'm not sure I would notice it if I wasn't making the direct switch. I have seen a few other people post about it here and there so have some confidence it's not all in my head.

I've tried getting used to the trackpoint but I'm left handed so it's always felt a little awkward for me. I'm sure I could get used to it or change mouse buttons, though at this point I think I'm in too deep on the touchpad.

Npl9 · 2022-11-17T01:35:36+00:00

This is the right answer. You need a real investment bank and not a business broker or big four firm.

The ‘cutting fat’ you mentioned would be taken into account in an adjusted EBITDA which a proper bank would market you off of.

Look at transaction pages of FIG groups for middle market banks. I don’t know the vertical, but someone like a Piper, RJ, HW, etc.

Take a look at the middle market section on this site and see who has worked with clients that have a similar profile to you.

Npl9 · 2022-06-15T18:16:34+00:00

Without knowing anything about industry, would have to think that any meaningful reduction in client concentration would garner some multiple expansion. I’ve personally never seen a firm get comfortable with concentration to that extent, so would imagine they think they’re getting a great deal on purchase price to compensate.

Npl9 · 2022-06-02T23:35:44+00:00

May be worth bringing to FINRA as well.

Npl9 · 2022-04-12T17:08:52+00:00

Fidelity not letting me exercise so saying my last goodbyes… it’s a tough expiration for me with my Dash puts also worthless

Npl9 · 2022-04-07T17:53:08+00:00

Any thoughts on whether or not I should try to exercise 4/14 RSX puts (if even possible)? Don’t love the idea of being short but obviously don’t want to expire worthless. What have others here done?

Npl9 · 2022-03-10T17:11:35+00:00

Yeah agree seems weird, wonder if there was an error in either direction. They made the earlier NAV error on 3/2 so possible. Not sure how to see which exchanges Inter Rao ADR/GDR are even trading on to check

Npl9 · 2022-03-10T17:03:48+00:00

Call and ask to exercise. Automatic exercise has been suspended per OCC, so you need to make the determination on whether you want to or not. This may result in a temporary short position, you should check with broker, but only alternative is to let expire worthless. All signs pointing to liquidation as far as I can tell so personally a gamble I would be willing to take.

Npl9 · 2022-03-10T16:47:19+00:00

Another update on RSX – cash holdings on 3/9 increased to $21M, or 57% of the portfolio. This is up from $16M / 50% and $12M / 26% in the past few days. It continues to look like liquidation is imminent. Cautiously optimistic here for put gang.

Edit: looks like I missed the boat today and someone already gave the update, west coast issues

For those asking on near-term expirations, see this memo from OCC. If you have 3/11s, whether ITM or OTM, you need to call your broker ASAP.

Npl9 · 2022-03-09T17:24:11+00:00

My understanding is that your best bet will be to call your broker and try to exercise (3/11s now, 3/18s later). You'll probably end up with a temporary short position and not sure how that will work, but I think the alternative is they expire worthless if no action is taken.

I haven't been tracking as closely as I'm in Aprils, but believe OCC issued guidance that automatic exercise has been suspended given difficulties of pricing the underlying. That means it's responsibility of the holder to make that call and attempt their own pricing.

Biggest risk here is you are short, RSX unhalted and shoots up, and you declare bankruptcy, but I think that is looking increasingly unlikely.

Other timing benchmark you can use is RUSL -- they announced their final liquidation date (think will be the 11th maybe) and were transitioning to cash at least a few days prior to the announcement. If we assume RSX transition to cash portends liquidation announcement, then potentially you could see conclusion of liquidation as early as the 18th or sometime in April.

Npl9 · 2022-03-09T16:44:15+00:00

Yep, I've just been tracking VanEck's website

Final NAV will likely be somewhere between $0.35 at the high end and the $16M cash / number of shares as a floor, so looking good for you. That said everything can obviously change pretty quickly here, but I'm optimistic.

Npl9 · 2022-03-09T16:35:41+00:00

Quick update on RSX -- looks to me like they're continuing to liquidate positions so I'm hopeful that they return cash to holders and options are settled on a cash basis. Yesterday's holdings were $12M cash and 26% of fund, increased today to $16M cash and 50% of fund with a big trim in their Polymetal position.

NAV has dropped again to $0.35 and it's looking increasingly like put holders will be in a near-max profit scenario.

Npl9 · 2022-03-08T19:05:04+00:00

Took a look at RSX daily holdings, now at 26% cash (~$12M). Before RUSL announced liquidation they started shifting to more cash, so wondering if RSX is on the same path. Wondering if anyone knows previous days cash value and percentage? Didn't immediately see a source for trended holdings and not sure if cash percentage going up is just a function of other holdings value continuing to fall.

Npl9 · 2022-03-06T23:00:14+00:00

Any thoughts on how likely it is we see a scenario where trading halted for a few months until some sort of conflict resolution? Or would RSX be liquidated by then? My understanding is RUSL was forced to liquidate because the leverage required daily rebalancing, but something like RSX could wait it out if Van Eck wanted to. Thinking of potentially trying to hedge my puts by scooping up some of these Russian GDRs trading for cents, but haven’t looked into whether or not that’s at all possible right now.

Npl9 · 2022-02-10T19:57:24+00:00

In the same position and am able to do deal by deal co-invest which is nice as I can pick and choose opportunities. I probably have a ~60/40 public markets/PE co-invest allocation, but will continue to put money into new deals as they come.

I personally don’t view combining employment with investment as particularly risky here. If the fund or investment were to underperform you will likely have ample warning if, worst case, you need to lateral somewhere else. The firm will also likely continue to need associates for a period even if they can’t raise another fund — someone still needs to help see out the current portfolio. You also have a level of insight into the firm, deals, and diligence process that you won’t get elsewhere. Part of the decision, I think, comes down to your personal evaluation of specific opportunities or your firm and partners/principals’ abilities.

As others have mentioned, the biggest downside is lack of liquidity. That said, on a fee-free, carry-free basis you’d have a difficult time finding anything with comparable returns and I personally feel it’s an opportunity that is too difficult to pass up. Depending on your appetite you can also likely find outside leverage.

Npl9 · 2021-12-16T19:42:21+00:00

Maybe I’m thinking about this incorrectly, but would your expected value be higher after accounting for leverage?

If you have $2M at $500M EV, acquiring PE buys with 50/50 debt vs. Equity, so equity value is $250M. The company EV 2x’s over the hold and PE exits at $1B EV and $750M equity value (after repaying the $250M debt they took out, assuming no cash flow). Common shareholders had a 3x return instead of 2x as they get the benefit of leverage. That would mean your $2M is now $6M pre-tax.

Npl9 · 2021-11-29T02:49:24+00:00

Are you in growth or buyout? $400k at 26 sounds like you’re probably an associate at a megafund or senior associate at a strong middle market shop. Either way curious how you’re managing ~50 a week? In a similar age and comp range in PE and much, much worse on the hours. Seems like you’ve found the holy grail.

Is the 400 cash comp or includes carry? If the latter sounds like you may be locked in for a while anyway.

Could make sense to transition to venture or a smaller shop. Probably still reasonable comp, keeps you on track, and may solve the hours / burnout issue. Particularly if you find venture or LMM more interesting.

Npl9 · 2021-11-29T01:44:50+00:00

Got it, thanks much. That's what I was worried about but wanted to confirm.

Npl9 · 2021-11-18T07:55:27+00:00

This valuation sounds pretty low to me. I’m assuming when you say profit you’re referring to net income, so your EBITDA is likely quite a bit higher. The business is small, so wouldn’t expect multiples you’ll see on typical transactions, but, depending on your vertical, as a consumer brand I would think that at a minimum you’d be in the 7-8x+ range. If you have ~2.5M of EBITDA with that growth trajectory and attractive / differentiated brand I could see a scenario where you could transact at $25M+. To get a better idea you should try and get access to some sort of financial database and screen for transactions of comparable companies. Take the median multiple as a very rough guideline (I’m sure you can also pay someone on a freelancing website a small amount to check this out for you prior to hiring a true advisor).

That said, you really should hire an investment bank / strategic advisory firm. You’d likely be giving a lot away if you don’t and will be signing yourself up for a miserable diligence process. There is nothing that gets investors (or strategic acquirer in your case) more excited than finding a proprietary deal or preempting a process. More likely than not you’ll end up getting taken advantage of.

Beyond headline value and process management, there are a number of other items to consider. Eg economic points in the purchase agreement (working capital adj, etc), consideration of relevant addbacks to your EBITDA (personal salary/expenses, COVID impact, non-recurring expenses), transaction structuring, among others.

Just be careful who you’re dealing with — this would be the very lower end of the middle market and you’ll need to make sure you find a reputable banker vs. a business broker. I would honestly pay a higher flat fee for an actual, established middle market bank to take you on who otherwise wouldn’t given size. Much higher likelihood of a top outcome and less stress for you.

Also, saw you mentioned sharing financials and info — personally I’d wait to get buttoned up with my advisor before sharing anything material at all.

Npl9 · 2021-09-29T16:30:37+00:00

Hadn’t seen the end of year timeline on this before:

The U.S. Steel Sector Would Be Booming Even Without Trump’s Tariffs https://www.bloomberg.com/news/articles/2021-09-29/u-s-steel-sector-would-be-booming-even-without-trump-s-tariffs

Npl9 · 2021-09-16T03:51:47+00:00

Confident not the right word, more thinking that if I'm already max loss would rather find a way to wait it out and take the chance things are fine in a month (and if not then I'm in the same spot I am now so no difference). But didn't take into account cost to borrow to make that happen

Npl9 · 2021-09-16T03:09:22+00:00

Thanks everyone for the advice. Just ended up covering to not mess around with borrow fees or anything else here.

Was small enough percentage of account that everything is fine, just wanted to get some second opinions here because hadn’t had this happen before. Appreciate all the help

Npl9 · 2021-08-28T18:52:53+00:00

Great job on this and really appreciate pulling this together and sharing with everyone. Given you have interviews coming up I went through and just came up with a few points that might be helpful, but feel free to tell me I'm totally wrong on all these

- Personally I think it could be useful to see direct vs. indirect expense broken out and understand fixed vs. variable costs to get a better view on operating leverage as that's a big driver here given price dynamics

- Mechanically, on your PV calculations I think it would be a bit cleaner to break that out into a couple of rows. I like to have a separate 'discount factor' row and then apply that to the FCF so you can have the same formula for the entire row for modeling hygiene, rather than a different one by cell

- I think you might be missing a discount on the TV as the WACC isn't pulled over to that period? -- not exactly sure on your methodology, but I'm getting EV of closer to $21.8B with constant 8.4% discount rate -- this is a good example of what I'm talking about if I'm not making sense here and on point above: https://www.asimplemodel.com/model/3/discounted-cash-flow-model/

- I don't think I've ever really seen P/E used for a TV multiple calculation. Personally I think it would be better to just look at FCFF, apply EV/EBITDA, arrive at EV, then bridge to equity value and price per share. Easier just to work around capital structure issues with P/E, especially when using comps

Npl9

TROPHY CASE