Inside the Strategy Room
17. Active portfolio management: An interview with Andy West
Jun 4, 2019
Andy West, an expert in M&A strategies, discusses the trends in conglomerates, challenges in divesting assets, and the strategy of active portfolio management in M&A deals. Emphasizes the importance of proactive decision-making, CEO responsibility in portfolio rebalancing, and investing in overall strategy.
24:07
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Quick takeaways
- The original rationale for conglomerates is diminishing with changing trends in the market, such as more capital and increased scale through technology.
- CEOs should prioritize portfolio rebalancing and invest in corporate development functions to successfully reallocate resources.
Deep dives
Historical Existence and Evolution of Conglomerates
Conglomerates have historically arisen due to economies of scale, regulations, capital efficiency, and economies of scope. They have emerged from industries like auto manufacturing and large industrials. The ability to expand and innovate has made conglomerates successful. However, with changing trends, such as more capital in the markets and increased scale through technology, the original rationale for conglomerates is diminishing.
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