[Industry Analysis] Current Status and Outlook of the Global Private Equity Industry in 2021

The COVID-19 pandemic that erupted in 2020 dealt a substantial blow to the global private equity (PE) industry (hereinafter referred to as “PE”). This notoriously elite industry saw virtually all transactions suspended by the end of summer 2020. Representative examples include Sycamore Partners’ withdrawal from its acquisition of Victoria’s Secret, and Carlyle Group’s exit from its planned purchase of a 20% stake in American Express Global Business Travel. However, starting in autumn 2020, business rebounded rapidly—a trend that has continued to the present day. In the first five months of 2021, PE transaction volume surged 21.9% year-on-year, reflecting remarkable momentum. In fact, since 2020, the PE industry has undergone significant transformation compared with the preceding five years. The most notable shifts can be briefly summarized as follows: (1) the rise of SPACs; (2) an environment of near-zero interest rates; (3) a gradual shift from traditional acquisition, spin-off, and divestiture models toward value-creation–centric operating models; (4) tax reform; and (5) heightened emphasis on ESG (Environmental, Social, and Governance) considerations. Below, Yanan Jieluote will discuss each of these five points in detail. Embracing SPACs: When discussing 2020, one cannot overlook SPACs (Special Purpose Acquisition Companies). In simple terms, a SPAC is an innovative financing vehicle for reverse mergers—i.e., a shell company formed specifically for the purpose of going public via IPO without any underlying business operations or assets. After raising capital through its IPO, the SPAC then uses those funds to acquire or merge with an existing target company within a set timeframe (typically 12–24 months). Prior to 2020, this unconventional listing method was primarily adopted to accelerate the listing process and circumvent cumbersome regulatory requirements. Yet over the past year and a half, buoyed by massive inflows of speculative capital, SPACs have experienced a dramatic resurgence. In 2020 alone, SPACs completed 248 IPOs, raising $83.4 billion—representing an explosive 613% increase over 2019. Such extraordinary enthusiasm, amplified by celebrity endorsements associated with many SPACs, attracted not only investors but also speculators and fraudsters. For a time, hearing the phrase “SPAC + electric vehicles or new energy” was almost a surefire indicator of a scam (should readers be interested, Yanan Jieluote will write a separate article detailing SPACs and their associated absurdities). Nevertheless, for PE firms, SPACs have clearly emerged as an ideal exit channel to monetize portfolio companies and realize profits. A typical example is CVC Capital Partners and Bain Capital abandoning the IPO of Advantage Solutions in September 2020, opting instead to sell the company to a SPAC sponsored by Centerview Capital. In the coming period, SPACs are expected to drive even more pronounced transformation across the PE industry. Low-Interest-Rate Environment: Since the 2008 financial crisis, central banks in Europe and the United States have continuously injected massive liquidity into markets through quantitative easing (QE).

Part V of Security Analysis: Key Summaries (1)

Third, valuation. After completing analyses of both quantity and quality, Graham and Dodd raise the issue of valuation. They emphasize the importance of average earnings—so as not to be misled by abnormal performance in recent years—and urge caution in interpreting price-to-earnings (P/E) ratios. (Graham and Dodd’s methodology: third, valuation.) Fourth, cultivation of human character. If Graham and Dodd’s works are so widely circulated and highly respected, why do only a few disciplined practitioners heed their advice? I believe the answer lies in three inherent human traits: aversion to tedium, a tendency to favor emotion over reason, and greed. Fifth, I have increasingly come to believe that rational investing—though appealing only to a small minority—nonetheless enables both us and our clients to sleep soundly at night and live confidently by day. II. Chapter 31: Income Statement Analysis (Security Analysis, 6th Edition, pp. 501–514) 1. First, establish two key principles: First, excessive emphasis on profitability can lead to erroneous valuations. Second, profit manipulation must be rigorously avoided. Analysts must dissect profitability components and exclude non-recurring items. 2. The intrinsic linkage between the balance sheet and the income statement provides investors with a secondary check when assessing a company’s intrinsic value—akin to the creditworthiness evaluation conducted by banks and lending institutions before extending loans to a company. (The balance sheet is more important than the income statement.) 3. All non-recurring items must be excluded when analyzing profits. Only then can one gain a clear understanding of the company’s current operational condition. 4. Investors often mistakenly treat gains realized on securities holdings during bull markets (i.e., changes in the market value of invested securities) as part of the company’s “profitability,” and accordingly assign valuations to its stock. This inevitably leads to overvaluation—and subsequently, value collapse and severe depreciation. (During bull markets, all stocks are overvalued; stocks of companies holding large portfolios of securities are doubly overvalued.) III. Chapter 32: Non-Recurring Losses and Other Special Items in the Income Statement (Security Analysis, 6th Edition, pp. 515–524) Reading suggestion: This chapter continues the discussion on non-recurring losses and how they may artificially inflate profits. It focuses primarily on inventory write-downs and expenses related to idle assets. First, inventory write-downs are business activities directly tied to operations; thus, by nature, they are decidedly not “special.” Second, provisions are typically deducted from retained earnings. In theory, one function of the retained earnings account is precisely to serve as an emergency reserve absorbing future abnormal losses. As a result, inventory write-downs are not reflected in the income statement for any given year—even though such write-downs, like declines in sales prices, adversely affect the company’s operations. Third, analysts should classify expenses related to idle assets separately from ordinary expenses directly chargeable to the income statement. (1) At least theoretically, such expenses are temporary and therefore qualify as non-recurring items. (2) If management chooses to continue funding the retention of these assets on the grounds that their projected future value will offset current expenditures, it would be illogical to treat these assets as equivalent to long-term debt.

Glenbrook Capital Management Acquires 30,000 SenesTech (SNES) Shares

2 days ago

Glenbrook Capital Management purchased 30,000 common shares of SenesTech Inc., increasing its indirect holdings to over 2.1 million shares. The firm holds warrants for an additional 180,000 shares, currently unexercisable due to ownership limits.

Stock Titan

2026-03-12

SenesTech Inc. (SNES) Stock Falls on Q4 2025 Earnings

2026-03-18

Glenbrook Reports 16.8% Stake in SenesTech (SNES) via Affiliated Vehicles

2026-05-01

Glenbrook Entities Add SenesTech (SNES) Stake With 3,000-Share Open-Market Buy

2026-05-01

Glenbrook Capital Management Buys $4,407 in SenesTech Stock

2026-05-19

Glenbrook Capital ups SenesTech (SNES) stake with new share buys