Automotive Case Study: Investment Consideration for a Private Equity Firm

A New York-based global private equity firm asked us to evaluate their investment in an automotive specialty retail indirect lender. This lender had flourished during the few years after the financial crisis of 2008-2009 by financing certain categories of borrowers with blemished credit histories. The private equity firm was considering two different strategies: 1) divest itself of the investment; or 2) double down on its investment by making an additional investment in a chain of used car stores that was one of the primary originators of loans for the lender.

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