1. Describe recent trends in the hedge fund and private equity industry and the growing overlap between the two.
A: Hedge funds, historically, were more interested in the buying and short selling of defaulted or near-default bonds within a few weeks or months. This strategy was more of a short-term, exit-focused strategy. Now, however, some hedge funds are becoming more interested in the restructuring and long-term controlling of attractive assets. Hedge funds’ stakes in these companies are then transformed into equity from the arising new entity. Private equity is split up into Venture Capital and Leveraged Buyout funds, with a little made up of …show more content…
It’s very unlikely that Sears could have competed and succeeded as a standalone retailer: 1) Sears’ loyal customer base had begun moving out to more rural areas, away from Sears’ locations and into Walmart and Target store locations; 2) without the necessary capital and resources, Sears would have had to take the immense risk of leveraging more and building stores in more removed locations; and 3) Sears’s business revolved around mall shopping, an old and archaic way of shopping.
4. Evaluate Lampert’s strategy and the benefits for Sears’s shareholders.
A: Lampert saw synergistic opportunities with the M&A of Sears and Kmart. By so doing, Sears would reach its target audience, while