Five Questions With…Jon W. Salveson Managing Director, Head of Investment Banking, Piper Jaffray & Co.

1. You guys have considerable experience in technology. Is tech a good place to be doing deals for LBO firms?

If you’re talking about specifically what we term the “tech” sector, which is Internet, hardware and software, we’re most definitely seeing more activity…We’ve seen big changes within the tech market. Within tech hardware and software we are seeing buyout groups much more interested. A lot of segments have matured, and there are significantly profitable, cash-flow [positive] companies [that match up with] the expertise of buyout firms, and for that reason the buyout activity has increased substantially.

2. What other single industry is most popular right now among buyout shops?

There is so much capital available for buyouts and so much expertise that has developed around relevant industries. It would be fair to say there’s nothing across the radar screen that is not of interest. There are no industries escaping the attention of the buyout community. It’s very broad-based. I think you’ve seen the evolution of the buyout industry from its focus more on general industry and consumer companies to almost every segment of the economy, including those that have significant, unique risks like technology, [consumer] brands and intellectual property. The buyout community now has significant expertise to understand the particular risks [in those new segments] and has had a lot of success investing in [them].

3. In a recent meeting with Buyouts you spoke about the high-octane auction environment. How can LBO firms generate value in the midst of so much bidding?

Without a doubt, good companies and great assets create an incredible volume of demand. The net result of that is that you can be assured as a seller you’re clearing the market with the best price—and it’s no secret to the buyout community that when they win an auction they’re clearing the market price. But the real challenge is to improve operations, grow portfolio companies and create value. That’s still a formula that is working for the buyout shops. Even in very competitive auctions they’re earning great returns on the assets they’re buying.

4. How much of your advisory business do buyout firms account for? How is that different than a few years ago?

It’s hard to measure because the private equity community is involved in so many different situations now, from early-stage venture type companies to publicly held companies. It’s a very hard number to come by, but there’s no question for our middle-market M&A practice it’s been an increasingly important source of our business over the past 10 years. Today it may be our most important customer in the middle-market.

5. What was your favorite movie last year?

On my own time, I’m with my wife and four young kids. So most of my movie [outings] include kids, animation and managing the popcorn supply. I’m all about the deeper meaning of Happy Feet and Over the Hedge. Apocalypto? Not so much.