Investing Model Implemented By Stephen Murray Still Working For CCMP Capital
There’s a huge reason that private equity has become one of the most popular asset classes for institutional investors like pensions. In a ten year period ending in 2013, private equity returned an annualized return of 12.5%. No other asset class even came close. Large institutional investors look for investment opportunities that are not completely risky and that can bring in a decent return. That’s exactly what private equity does. Private equity firms like Stephen Murray CCMP Capital make large investments in companies that they have researched extensively.
Stephen Murray was the chief architect of the current investing model that is still used by CCMP Capital. The company is willing to cooperate with current management and they will also deal directly with other private equity partners. A number of their most recent public deals shows their willingness to do that. Murray came up through JP Morgan Partners and was named CEO when they spun CCMP Capital out as a separate entity. JP Morgan was active in the business since JP Morgan himself first started combining companies for massive growth. CCMP Capital, under Murray, used many of the tactics that Murray had learned while working for JP Morgan Partners. His track record was so successful that many of the companies he invested in are still yielding big returns for CCMP Capital.
Stephen Murray CCMP Capital has seen a huge influx of funds in the past few years, like many other companies in the private equity arena. The consistent returns that have been delivered are very attractive to the huge investments funds that rely on steady streams of income. Of course, private equity carries a number of risks also. However, making investments in existing companies that have already show track records for performance can be a reasonably safe bet if done right. CCMP Capital has taken Milacron Holdings Corp and Ollie’s Bargain Outlet public this year. Combined, the two companies will bring in over $400 million from their IPOs. In both cases, the money from the IPO was earmarked to pay off debt. This means an instant increase in profitability as the debts are retired. Milacron is to pay a $145 million dividend to shareholders, of which CCMP is the largest by far with a 79% stake. Milacron has been operating since 1860. Both of these deals look to be exceptional ones for CCMP Capital. When a private equity company takes a company public they have a legitimate shot at a huge return. Many companies will appreciate rapidly after an IPO. They use the money to pay down debt and fund their business plans, which generally means more growth and higher profits. CCMP has over 3 dozen active investments in their portfolio. Murray’s investments are doing well.