23
July
2009
|
08:30 AM
America/Los_Angeles

Silver Lake Says It's a Risk Taker And Looking For "Misunderstood" Companies

Forbes reports on "What private equity investors want."


DavidRoux.jpg
Beth Kowitt writes that David Roux, co-founder and co-chief executive at Silver Lake said that the firm has more than $9 billion to invest. He's looking for companies that have:

- predictable business model.

- scalable business model.

- a misunderstood business model "therefore undervalued by the marketplace."

Basically, he's looking for a company with a solid business model with recurring revenue and a low valuation. That sounds like a low risk set of features, yet he sees Silver Lake as a risk taker.


"We're at a point in the cycle where we feel like we're being paid to take risks."


But he wants to moderate the risk by making sure valuations are low.


While companies would like to keep their valuations from July 2007, Roux said that a term of art in the industry now applies: "the valuations have begun to season."


He doesn't sound like a risk taker to me. And with $9 billion to invest, he won't be investing in startups.