Friday’s Headlines: An Insider Look at One Private Equity Firm’s Turnaround Strategy

For those considering a career in private equity, be sure to check out Businessweek’s feature, “My Week at a Private Equity Boot Camp." The story’s reporter is invited along with a group of managers from the industrial refrigeration manufacturer Heat Transfer Products Group, which was bought a few years ago by Monomoy Capital. The camp is designed to drive efficiencies on the manufacturing floor, and the reporter notes with glowing accolades the improvements the private equity firm has made to its investment:

Since buying HTPG, Monomoy has moved roughly 15 tractor-trailer loads of machines and inventory off the floor and consolidated into the same space an entire plant from Yuma, Ariz. “It’s the best thing that’s happened to this plant,” [an employee] says. At her station, a boot camp team removed the clutter, ran time studies, created more space to work, defined a precise job for everyone, and improved productivity from two units per shift to five units a shift. “People are nicer now,” she says. “It used to be so stressful. You’re searching for parts, trying to get sheet metal, everyone’s at each others’ throat. It’s not as stressful now.”

Even firings get a high-five:

In 2010, Monomoy cut 86 workers from HTPG’s payroll in Scottsboro. Then a funny thing happened. A year of boot camps has helped the company beat industry lead times, the weeks that pass between sale and delivery. On-time delivery ran at 72 percent before Monomoy bought the plant; so far for 2012 it’s at 96 percent. Deb Farrister’s V-series now take two weeks to build, a quarter of the industry average. In 2011 sales grew by 10 percent. And overall, since Monomoy bought HTPG in 2010, head count is up in Scottsboro and sales are up 19 percent.

 

Other News:

KKR’s Q1 profit rose 5 percent despite a drop in fees. [NY Times]

Ally Financial posted Q1 profit of $310 million. [WSJ]

Normura’s Q1 profits rose 86 percent. [DealBook]

Lazard posted a Q1 9 percent rise in revenues on a jump in advisory mandates. [NY Times]

MetLife will sell its mortgage unit to Nationstar Mortgage. [Reuters]

The Barclays-Deutsche Bank group bought the AIG MAX C.D.O. portfolio, which has a face value of $7.5 billion. [DealBook]

AIG may not be as healthy as it looks. [Businessweek]

Mitsubishi UFJ will hire as many as 3,000 people to expand its retail banking operations in Asia and North America. [Bloomberg]

The number of Brazil’s wealthy is expected to double in 11 years. [Financial Times]

Kelvin Woo and Joe Zhang in Hong Kong are leaving Man Group’s GLG Partners to start a macro hedge fund focused on Asia. [Bloomberg]

Studies show that women control family finances yet less than half of advisories employ female investment advisors. [Investment News]