Dry Powder: The Private Equity Podcast
Macro Update: I'm From the Government and I'm Here to Invest
Sep 21, 2023
Exploring risks and rewards of government-private partnerships, emphasizing transparency and understanding motivations. Discussing challenges in domestic investment, highlighting localized knowledge and engagement. Emphasizing the importance of government engagement for business executives. Navigating uncertain impacts of consumer behavior and governmental policies on industries.
15:03
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Quick takeaways
- Investors must consider the risks and rewards of government partnerships when governments increasingly step into the private sector.
- Understanding the local concerns, negative externalities, and political dynamics of a specific region or sector is vital for successful deal structures and mitigating investment risks in infrastructure investments.
Deep dives
The Risks and Rewards of Government Partnership
As governments increasingly step into the private sector, investors must consider the risks and rewards of government partnerships. This shift presents opportunities for de-risking investments, especially when aligned with government policies. However, it also comes with challenges, such as the potential for policy changes affecting investments, as seen in the solar industry in 2008. Understanding different sectors and geographies where governments are becoming more active is crucial for investors to evaluate potential new partners in deal making. Additionally, combining an understanding of the local concerns and political environment with a future-oriented perspective on market direction is essential for successful underwriting deals.
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