Asset Management and Private Equity

Private equity management firms have often faced criticism and disapproval from industry theorists. The primary reason being most equity management firms thrive on business acquisition or mergers. However, mergers and acquisitions can prove to be beneficial for the industry itself.

On the surface of it, the entire business activity seems to be driven by the notion of profit. Theorists often argue that private equity firms often prey on weaker and financially underfunded companies. They acquire these companies with stakeholder investment and then sell these firms at a profit. However, what one overlooks is the effort put in by the equity management firm to restructure, rebuild and reorganize the acquired firm to ensure that it becomes a thriving success.

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Anthony Munk, Senior Managing Director, ONEX Corporation have been closely associated with equity management. Munk opines that a large part of equity management depends on strategizing excellent asset supervision methodologies. Munk an alumnus of the prestigious Queen’s University has been closely associated with various aspects of business management as the. He began his career as a Research Analyst for ‘Guardian Capital’ and then worked his way up the corporate ladder. According to Munk some of the aspects of asset management are as follows:

  • After acquisition the equity management firm must view the acquired company as an asset. Hence, to ensure that the company’s performance is enhanced, the equity management firm must play an active role in restructuring, funding and if need be reorganizing the hierarchy of the acquired firm.
  • ONEX Corporation has successfully completed many mergers under the aegis of Munk. He was instrumental in initiating the merger process. According to Munk it is essential to develop a strong relationship with the companies that the equity management firm wishes to merge. Only then can the merger become a success and increase the productivity.
  • According to Munk all investment management firms are answerable to the stakeholders. Hence it is essential to ensure that the money of the stakeholders are invested successfully to ensure the expected dividends.
  • An important part of asset management is reinvestment. Munk opines that depending solely on increased productivity to ensure greater profit margin is not logical. The capital invested by stakeholders can be reinvested in various sectors to ensure higher returns. This too can boost the profit margin.

Thus, Munk believes that an equity management firm has to ensure that the capital invested is well managed to produce high revenue.

Anthony Munk has been born and brought up in a business family. His father Peter Munk is the founder of Barrick Gold Corporation. Hence, Munk has developed a shrewd business sense since childhood. Additionally, he has works as a board member or associated board member of various companies like Cineplex, SIG Combibloc and many more such firms. Thus, Munk is well positioned to give business solutions and advice to corporates. Munk strongly believes that the work of a private equity management firms begins with an acquisition or a merger and the venture’s success depends on proper asset management.

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