To Buy or Not To Buy - The Agony of Choice: A Day in the Life of a Private Equity Partner

This experiential case simulates an investment committee (IC) meeting at the private equity (PE) firm Bridgepoint, a leading European mid-market private equity firm. In the first quarter of 2011, with Europe in a recession following the global financial crisis, forecasters are predicting the start of an economic recovery. The firm is midway through investing its €4.85 billion fund, Bridgepoint Europe IV (“BEIV”), looking specifically for market-leading European companies with potential to grow through geographic expansion or operational improvement, strategy refocusing and add-on acquisitions. Three senior partners (Charlotte, Andrew and Bengt) from its offices in Germany, London and Sweden are preparing to present potential investment opportunities to the committee – respectively, Charlie, a German chemicals company with global plants; Alpha, an industrial firm listed on the London Stock Exchange; and Bravo, an elderly-care company based in Sweden. All three have submitted written papers to the members of the IC, including Harriet, a senior partner at Bridgepoint, who regularly spends her weekends analyzing information in preparation for the Monday morning meeting. Students are asked to either pitch one of three companies to Bridgepoint’s investment committee or to play the role of the IC and ask their classmates questions to clarify the rationale for putting them forward.

To expose students to the reality of a private equity investment fund and the challenges faced by partners when making investment decisions, i.e. - real-world considerations in a PE or M&A setting - different types of investment in PE - the decision-making process of an investment committee - how to present an investee company to the committee - how to analyse investment proposals - how to respond to critical questions from partners on the committee