+1(805) 568 7317

describe some of the risks encountered by a firm such as harvest partners 658948

Harvest Partners Grows Its Investments

Is it possible to have too much money to spend in too little time? Harvest Partners and other private equity firms have just a few years to invest about $500 billion.

Harvest Partners, based in New York City, is a private equity firm that specializes in leveraged buyouts and growth financing. It focuses on companies in the United States, the rest of North America, and western Europe that have well established sales or operations in the United States. The firm manages funds emphasizing private equity and debt investments. Harvest Partners makes equity investments of anywhere from $30 million to $100 million in companies whose revenues run between $100 million and $750 million. It prefers to be a control investor and become a partner in the companies it finances. Those companies tend to be middle market firms that need investment to adapt to changing times and markets.

Private equity firms usually have three to six years to reinvest funds they have raised from client investors. If they cannot or do not, they must return that money. During the boom years, Harvest Partners raised $815 million from client investors. So far it has reinvested about $293 million. Now the firm is facing a 2012 deadline to reinvest the remaining $522 million.

Not all private equity investments are successful. Harvest Partners had owned the equity of the Natural Products Group, a manufacturer of organic shampoos and soaps. But when NPG went bankrupt, Harvest Partners lost its entire investment.

Recently Harvest Partners joined MTP Energy Management to invest $80 million in Regency Energy Partners, a middle market natural gas company. Michael DeFlorio, a senior managing director of Harvest Partners, said that Regency embodies our investment strategy focused on exceptionally managed . . . midstream service providers participating in the most promising resource plays in the industry.”

Questions for Critical Thinking

1. Describe some of the risks encountered by a firm such as Harvest Partners.

2. Why do you think Harvest Partners and other equity firms are required to invest their clients’ funds within a limited time frame?

"Order a similar paper and get 15% discount on your first order with us
Use the following coupon

Order Now