Gary McGaghey

Gary McGaghey is a CFO with more than 20 years of experience in the private equity industry. He is currently the CFO of Solera Holdings, recently acquired by Apollo Global Management (APO). Before joining Solera, Gary worked at Credit Suisse and Morgan Stanley. He graduated from Harvard Business School and received his undergraduate degree from the University of Connecticut. Learn more information about Gary McGaghey

  1. Get to Grips with Complex Cash Flow Requirements

In private equity, the cash flow requirements can be pretty complex. For example, a company might have to pay back its debt in one year and then pay dividends to investors in two years. That means that the company has to start generating cash before paying back its debt. This is why private equity firms tend to like companies that generate free cash flow very quickly, as this shows the potential for rapid growth and the ability to pay back debt quickly.

  1. Get an Investment Grade Rating

Private equity firms only invest in companies with a high-quality rating from Standard & Poor’s or Moody’s Investor Service, which means they are “investment grade” companies. The ratings are important because they show that a company has good management and strong financials, making it attractive to private equity firms looking for long-term investments with high growth potential. Gary McGaghey London-based private equity firm Solera Holdings is a notable example of a private equity firm that has been able to do well with companies with “investment grade” ratings.

  1. Use the Right Amount of Debt

Private equity firms tend to prefer companies with low debt levels because it shows that they have the financial flexibility to grow their business. If a company has too much debt, it will be difficult for the company to grow and might find itself in financial trouble if interest rates rise or the economy weakens. Therefore, private equity firms tend to prefer companies with low debt levels.

Gary McGaghey has a lot of experience in the private equity industry, which is essential because he can provide a good overview of the industry. He also notes that private equity firms tend to prefer companies with “investment grade” ratings because they can grow their businesses more quickly.