The current stage of the business cycle is a good time for turnaround specialists to be cashed up, according to Tony Duthie, managing director at Pacific Equity partners.Speaking at the Citibank investment conference in Sydney yesterday, Duthie said that the mid-market in Australia has been very robust for quite some time. Among his tips for running a successful turnaround and exit strategy were to look for exposure to the real economy -  find companies that made perennially popular products such as ice cream."It's not hard to find suitable companies in Australia and New Zealand," Duthie said.In almost two out of three investments, PEP has replaced the CEO and the CFO of the company,  as "we don't want rock star CEOs, we want to find executives to execute our plan," he said.There are exceptions of course, as he was reminded by another participant who mentioned Greg Pritchard, the combative CEO of Energy Developments (a company PEP took an 80 per cent major stake in, in 2010). Pritchard told a dinner at a venture capital conference back in 2012 that he spent a lot of time reminding the PEP team they were not the only shareholders in the company. "Overall it has been a very positive experience, but they are a real pain in the arse sometimes," Pritchard said at the time. The biggest point of friction was maintaining the balance between governance and transparency for a listed company, and the demands of a private equity majority owner, Pritchard added by way of explanation on the pain  caused to him by PEP. (He will collect a reported $11 million from the trade sale of Energy Developments.)Earlier in the two-day conference, Matt King, Citi's global head of credit products strategy, argued that the correlation between emerging economies and the developed markets of the advanced economies was stronger than generally believed under conventional investment theory.He laid out his thesis that control of the money supply was not the only way of controlling debt.Credit is created not only by banks but by markets - for example the bond market creates both assets and leverage. Debt that was not there before is added to the system and can affect economic activity in three ways: increase GDP, raise the inflation rate and asset prices, King said.King also said that at this stage of the cycle it was more likely that funds raised in emerging markets would be applied to job creation rather than share buyback, which had been the case recently in developed markets.There are quite a few large, well-established corporates having what he called "Tesco moments", where they re-examine their asset base. Tesco in the UK recently announced it was selling off a large number of its land holdings that had been earmarked as future large shopping centres in response to what it has interpreted as a permanent change in British shopping habits.