Refocus on Core Operations
Many companies have increased their private equity investment programs, for both strategic and financial reasons. The gains and losses from these partnerships have become a significant part of the earnings volatility of many corporations. As the losses in this asset class, particularly in venture capital, adversely affect bottom-line profitability, shareholders are increasingly calling for management to focus more on core operations and less on private equity investment activities. Therefore, many corporations scale back or eliminate their alternative investment programs, and in the process, liquidating all or a portion of their portfolios.