Here's a great post from The Private Equiteer about the hidden value of the bank credit team.
The most important insight is this: Maybe you don’t need to be doing those deals that are borderline with the banks.
I have a seriously nasty memory of a BIG deal our team badly wanted to win in the weeks just before the GFC took hold. To our surprise, our two primary bank lenders both turned it down. We thought they were being too conservative, or had failed to really understand the opportunity, so we decided to keep shopping it.
Three weeks later we believed we had approval from a European bank, and were about to get started on the legal docs. But to our shock, and the shock of the bank's lending manager, their credit officer stood firm and said no. That was it. Deal dead.
Thank God. Without exaggeration, that deal would have killed our entire fund, and maybe our firm.
Comments