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Capital Roundtable: Private Equity Investing for Automotive Companies

From Self-Driving Cars To Tariffs & Consolidations -- How Should Private Equity Invest In the Future of Driving?

As the auto industry undergoes dramatic upheaval, how soon is too soon for private equity firms to make bets on new technologies like self-driving, semi-autonomous, or electric cars?

What’s more, these new technologies are only a few of the disruptive forces rocking the auto industry and its investors.

For example, look at the megamergers that are creating auto parts titans, such as Tenneco’s $5.4 billion deal to acquire Federal-Mogul, and LKQ Corp.’s ongoing acquisition sprees,
and the growing influence of other large players that create ripple effects in the middle-market.

As all this consolidation shifts the industry’s power dynamics, private equity investors are asking whether their own platforms must grow and innovate -- or else must they exit and join the wave.

And look at how new tariffs on aluminum and steel and how new trade negotiations with key automotive industry partners call for more nimble supply chain strategies.

Here Are Three Key Reasons Why You Should Join Us

  • Technology change will create winners and losers in the automotive industry. Hear our experts’ views on how to stay ahead of the curve without stumbling into overly risky investments that are better suited for strategics or venture capital firms.
  • Consolidation is going strong, especially in the aftermarket. Learn strategies for navigating the “consolidate or be consolidated” atmosphere, and get new investment ideas.
  • An uncertain regulatory and political environment creates challenges across the auto industry and impacts M&A. Speakers will discuss tariffs and trade wars and beyond, as well as ways to position portfolio companies to weather a variety of outcomes.

Outsized rewards may accrue to firms who scale up before their competitors do, but cautionary tales abound for early adopters --

  • Despite the potential for self-driving cars to transform the industry, fatal crashes by Tesla and Uber, and Waymo vehicles using semi-autonomous systems demonstrated that the technology needs improved safeguards.
  • Cars collect ever-increasing troves of information about their drivers, but a battle is brewing over who owns that data, raising questions for investors hoping to extract value from it.
  • The growing popularity of electric and hybrid vehicles is pressuring the auto part and aftermarket segments to adapt. Handicapping the rate of market penetration is crucial for suppliers, servicers, and sponsors determining how much to invest.
  • E-commerce is changing the way the auto industry does business. For example, Amazon already has a significant presence in the auto parts segment, and brick-and-mortar-focused players can learn from other industries’ experiences facing down the giant.
  • Enthusiasm about the ride-hailing segment has stoked heady valuations for Uber and Lyft and inspired a slew of start-ups. Are private equity firms better off courting ride-hailing companies and other vehicle fleets as customers in the aftermarket, or are there attractive opportunities for direct investments?

Date: September 27

Location: New York City

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