Why do some private equity companies fail and others succeed? This is a question that has been asked by some of the most astute business minds on the planet. A definitive answer has yet to be determined. However, there are many theories that have been created by financial experts. One theory involves some companies having a better ability to foresee key market changes than their competitors. This skill has definitely benefited HGGC over the years. They have repeatedly demonstrated a talent for having a long view that is unmatched in the private equity world.
The ability of HGGC to be able to predict when certain industries are ripe for investing does not happen by accident. In fact, nothing could be further from the truth. The reality is that the company does many things to improve their odds of choosing winning investments that will be profitable for many years to come. Their preparation before committing funds to an investment is much more involved than most of the other private equity companies. They will dig deep into the companies and industries they are thinking about investing in. They will get the most advanced industry projections to help guide their decisions. Information is everything when you are trying to decide if you are going to invest literally millions of dollars.
One of the main reasons why HGGC has been able to avoid some of the disastrous investments that have plagued their competitors has been their reluctance to invest overseas. They prefer to stay inside the confines of the stable American and Canadian economies. There is a lot more risk and unpredictability when you start investing in countries with unstable governments. This could lead to economies collapsing and your big investment going down the tubes. HGGC is well aware of this risk and they choose to not get involved in foreign investing to any great degree.
HGGC has made a lot of money over the years getting involved in leveraged buyouts. They have identified many companies over the years that would be perfect for a leveraged buyout. The results have been better than anyone could have hoped.