CFO in focus - Staying alive

“Down but Not Out”

By Vincent Ryan

Humbled by the credit crunch, private-equity firms are not the hard-charging dealmakers they once were. Still, they will continue to play an important role in the finance world in 2008 and beyond, with private equity remaining a force for companies looking to buy, sell or attract capital. “Most experts see private equity's current condition as a cyclical, and temporary, adjustment.”

Two case studies offer a glimpse into how private equity might operate if the crunch persists. One describes an agreement between Sun Microsystems and KKR, a private-equity firm, which opened up new opportunities for Sun, providing “an acid test of our vision, strategy and execution plans,” according to its finance chief. The other describes Sun Capital's (no relation) takeover of Friendly Ice Cream Corporation, which involved the private-equity group shouldering more risk than usual and financing the purchase in part by a sale-leaseback of Friendly's property assets.Read more...

CFO in focus - Location, location, location...

A look at recent articles from CFO, an Economist Group series of magazines for senior finance executives

“A Tale of Six Cities”

By Alix Stuart

December's cover story for CFO magazine is a thorough study of six cities across America at a time when companies are taking real-estate issues increasingly into account when making expansion or operational decisions. The perks and incentives offered to corporate tenants in three established financial centres—New York, Chicago and San Francisco—and three up-and-coming cities—Charlotte, Austin and Las Vegas—are explored.

A host of executives go on record to advise on the benefits and drawbacks of the cities they’ve chosen. As such, this is a useful primer for executives considering a move, especially as “the advantage is likely to swing back to the tenant side, if only slightly, as new construction reaches the final stages in many big cities and private-equity owners face the prospect of leasing (or selling) at a discount if they can't refinance short-term loans.” A useful checklist for dealing with landlords is included. More...