Friday, April 26, 2024

PEU Ownership Risk

 The Carlyle Group and Insight Partners will acquire a majority stake in Exinger.  Intelligent CIO reported:

“Exiger’s AI technology transforms the way organizations identify and manage risk, reduce cost and increase resilience across their supplier and third-party ecosystems. We are thrilled to partner with Carlyle and Insight Partners as we continue to invest in our 1Exiger platform which empowers our customers to make confident, deliberate decisions informed by real-time insights,” said Brandon Daniels, Exiger CEO.

The 1ExigerAI platform addresses the entire risk landscape, including foreign ownership, control or influence, environmental, social and governance, cyber, financial health, reputational, national security, regulatory, product and operational risks.
And what if the risk is private equity underwriter (PEU) ownership?  What if a supplier just experienced a liquidity recapitalization, where their PEU owner just pulled a yacht-load of cash out and saddled the firm with even more debt?  
Companies bought by private equity firms are far more likely to go bankrupt than companies that aren't.
That came from an April 2023 NYT piece, "Private Equity is Gutting America and Getting Away With It"

Supplier bankruptcies could be very disruptive to supply chains.  Would Carlyle/Insight ensure that gets written out of the algorithms?  

It's AI, but its our PEU AI.....would you like to buy?

Update 4-28-24:  HedgeEye's Keith McCullought interviewed Dan Rasmussen of Verdad Capital.  Dan clearly states the risks of PEU investments.