Alas, private equity deals do not fall into one’s lap, like manna from heaven. Identifying potential deals may be quite simple, given the number of companies seeking funding in the corporate jungle. Yet identifying the ones that are worth pursuing is a different matter altogether. This may explain why a typical PE company such as Bridgepoint will review 800 opportunities each year, yet only analyze 150 in some detail (preliminary due diligence), and only take 35 to its investment committee for discussion and approval. Of those 800 initial options, only 5 investment deals will be finalized; so a meagre 0.6% (page 73). Yet this deal flow is critical to the livelihood of the PE fund, with deals being identified by both internal staff, and by intermediaries.
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