Private Equity Sees a Pony

By Peter Allen, Partner & Managing Director, TPI

I wonder if others have noticed the recent activity levels of private equity investors. They have internalized the idea that innovation emerges from recessions.

There are a fair number of initiatives underway where PE investors have proposed carving out back-office functions from companies in certain industries, combining them with technology enablement investments, creating platform companies to service a broader market.

Of course, what I tend to see are situations in which the carved-out operation continues to provide services to the parent company.  The service agreements take the form of outsourcing contracts, but also have the characteristics of a joint venture or other shared go-to-market activities.

In my discussions with private equity players, they are sensing that the current economic dip is the ideal time to set up new creative businesses that benefit from a large cornerstone client and leverage new technological capabilities.  The result?  We’re likely to see some interesting new industry-specific BPO offerings emerge.

I think we should monitor these occurrences to help gauge how the outsourcing market will look when the return to growth arrives.

Comments

[Ruth]

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Ruth

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