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Private Equity and Practicing Due Diligence With Mark Hauser

by Ray Niklaus

Mark Hauser is the co-managing partner and founder of Hauser Private Equity. Born and raised in Cincinnati, Mark Hauser would grow into his position under the guidance of his former pro football player father, Art Hauser. After attending and graduating from Miami University of Ohio with his degree in finance, Hauser would enter the field as the VP for Reynolds, DeWitt & Co.

Now a decorated thought leader and investor with experience in private equity, Mark Hauser has taken extensive time out of his day to share the thoughts, insights, and tricks that have brought him so much success throughout the years.

The World of Private Equity

Private equity firms are focused on earning a return on every investment that they undertake. To accomplish this goal, people like Mark Hauser must carefully select and target assets that they know can deliver a positive return. While this may sound akin to gambling, experts like Mark Hauser have learned the ins and outs of the industry so that they may minimize risk while maximizing potential profit.

To find prolonged success in this industry, Hauser has had to make himself an expert on due diligence. Private equity funds will begin their search by looking at three potential outlets for information: business reputation, incoming contact requests, and proprietary networking.

Mark Hauser describes due diligence as one of three potential areas of focus.

  • Commercial Due Diligence – Focuses on the company’s trends and market positioning within the industry.
  • Financial Due Diligence – Focuses on the accuracy of the financial information provided by the company. Equity firms like Hauser often turn to privately hired accountants and auditors for this process.
  • Legal Due Diligence – Involves the exploration of potential liability issues, including in-process lawsuits or potential regulatory problems.

Considerations When Making an Acquisition

Companies like Hauser Private Equity work diligently to make sure that they are making the correct maneuvers in a highly competitive field. Private equity firms will often look at a few critical areas of consideration before making their final move on a deal.

  • Disruptive – Private equity firms often avoid seasonal businesses that are otherwise non-disruptive. Instead, firms like HAUSER focus on emerging and disruptive companies that can transform an industry.
  • Market Position – An acquisition target high on desirability will have strong market positioning backed by a track record of success.
  • Avenues for Growth – Private equity firms are focused on businesses with multiple active income streams and a forward-thinking mindset for the market.
  • Solid Management – A professional management team can go a long way toward allowing a private equity firm to remain ‘hands-off’ with its portfolio. Private equity firms can inject their teams but would rather not.

Mark Hauser has been working in the industry for decades following the founding of Hauser Private Equity. Hauser Private Equity is a hybrid equity fund management firm based in Los Angeles.

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