For the following question, I do not fully understand the meaning behind “capable managers.”
Q) A leveraged buyout fund is evaluating Company A relative to its peer companies. Comp A is most likely a good candidate for a mgmt buy-in if it has:
A) higher cash flow and less capable managers than its peers.
- In management buy-in, is it Company A’s management buying in? If so, then the the management is “less capable” than its peers so shouldn’t more qualified people take over? I’m guessing that management buy-in is a 3rd party?