The use of P2P systems also ties into another area we’re beginning to see early interest and curiosity about within forward thinking firms: creative uses of working capital strategies. For example, an approach here might entail using a fund’s capital that would otherwise be in cash, short-term high rated debt or commercial paper to fund early payment discounts to suppliers within the portfolio itself. In fact, some hedge funds are already using their own free cash to invest in short-term maturity instruments tied to receivables (with APRs based off of the credit rating of the buying organization). We believe PE firms will investigate similar options.
Private Equity and Procurement: Building a Lasting Savings Foundation Requires Getting Operational (Part 2) [Plus+]
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