RT Journal Article
SR Electronic
T1 Making Lemonade from a Bumper Lemon Crop:
Choose Your Ingredients Wisely
JF The Journal of Private Equity
FD Institutional Investor Journals
SP 12
OP 18
DO 10.3905/jpe.2012.15.3.012
VO 15
IS 3
A1 Robert Feeney
A1 Harry Gray
A1 Jay Lucas
YR 2012
UL https://pm-research.com/content/15/3/12.abstract
AB Buy low, sell high, put capital where it generates the highest risk-adjusted rates of return, and pursue those most attractive investment opportunities first. These maxims should be without debate and apply regardless of venue. Yet, too often subjectivity and agendas countermand objectivity, and this phenomenon often creeps into the capital budgeting process. In this article, we will contrast capital deployment in different environments and illustrate how, particularly in a corporate setting, certain factors—some systemic, others political—conspire to obscure and limit the availability of data necessary to ensure the intelligent allocation of resources. At this unpredicted economic juncture when capital budgets have been curtailed and a spectrum of companies and competitors lick their wounds, boards, management, and investors should seize upon the extraordinary opportunity to recast frameworks for growth through capital budgeting best practices.TOPICS: Private equity, portfolio construction, manager selection