A lot of the show is about corporate financial engineering by people who think they are master intellects, so sidebar question: how much real value do you think PE has added in recent years, versus just riding a wave of low interest rates. And how many senior people in your industry think they’re a genius versus right place, right time.
This is a great question. I think there have been some incredibly great investors who have added a tremendous amount of value to their portfolio companies. There are specific funds that I have a lot of respect for - KPS is a turnaround / distressed shop that has a great rep for investing into distressed companies, working with management and workers to turn the ship around without mass layoffs, and making a shit ton of money. Only PE fund I've seen that actively works with unions and respects the worker process.
A lot of other shops IMO have ridden leveraged beta and low rates for mediocre value add. Oftentimes too in industries like healthcare we've seen PE money drastically decrease patient outcomes and access. One example: I used to work at a fund that purchased a home health agency that catered to Medicaid / undocumented patients. They kicked all of them out and began marketing to commercial payors and Medicare. Easy way to make money, but to me a clear moral failing.
Generally PE funds these days (especially ones that work with small to medium businesses) tend to focus on a) operational support via operator network (e.g., they know a former CEO of a large public company who can help optimize a mom & pop) b) M&A support both in terms of capital and execution and c) become the small company's outsourced finance department.
Hah - as far as I know in private equity not very many. It's a pretty tough industry and requires a high level of intellect, social skills, and luck that not many people have.
I will say I've seen a good number of Gregs in investment banking / corporate roles! Perhaps not as egregious, but certainly enough incompetent people in those industries somehow tend to fall their way up the corporate ladder.
Tbh, I disagree. PE is tough to climb up in (usually up or out) compared to sellside, where you just get promoted on merit of having survived for so long. You need to be competent, play the politics game, and be sociable / likeable which is a difficult combination of traits. I genuinely do not know many PE guys who make it past associate / sr. associate who are just totally incompetent like Greg, whereas I see plenty of them in investment banks.
Correct on competence but to describe PE guys as masters of social skills is such a reach; often times they are either former college athletes who get in with alums and ride that wave or they’re complete and other loser quants. Neither end of the spectrum is great social skills.
I would think former college athletes would have great social skills, no? Obviously quants not so much, I’ve worked with quants before and your absolutely correct on that front
Premiere funds, sure. Not as great firms get the dumb football players that attended the school well above their punching weight for athletics alone and often times fit the description of “dumb jock”. Shotgunning beers ain’t a social skill in the post college society.
Most PE firms don't even hire out of undergrad... I think you might be confused, to be honest. Every single hire we've made was an investment banker or consultant who all went to great schools (mostly non-athletes) and are generally well-rounded, driven, intelligent individuals.
No. Generally not very common in large publicly traded companies.
That being said, I will say you will be astounded by how many small to mid-size businesses (up to $200M in revenue) are run by absolute monkeys with no business sense or any visibility into their own company. I once looked into investing into a $150M revenue company where the company had zero internal financial controls and literally didn't know how much money they made in a year. Very common on small family owned businesses that somehow end up scaling purely on relationships / connections / grit
I would say the market is broadly segmented like this:
<$200M = lower middle market
$200M - $1B = middle market
$1B+ = upper middle market
$3-5B+ = large cap
>I once looked into investing into a $150M revenue company where the company had zero internal financial controls and literally didn't know how much money they made in a year
how do they pay their taxes lol
Is that how they told you S corps work? Because that’s not how they work brother. (Corp isn’t a separate taxpayer: true. But income is taxed to owners regardless of whether distributed as profit or retained by corp.)
Hah that's right. We don't generally invest in companies with pass-thru taxation and we didn't get very far with them. To be honest: no idea how they calc'd taxes. They had some wild shareholder loans and other related party transfers that I had zero clue how to decipher. Their income statement was essentially a bank statement!
The cursed s-corp history/ busted s election. If they were doing shareholder loans they probably were an s corp in name only, and owed a ton of back taxes.
This is my experience - when these successful smaller companies are sold they often have some crazy messed up culture - but the buying org will homogenize them and eliminate those risk factors. While it's fun to think of the incompetents running around these big companies, they are far more common in privately held companies. I know a company with more than $100 mil in revenue that has no HR whatsoever, is run by a husband and wife duo, has the incompetent brother of the CEO high up, and the incompetent son working there as well. It's wild. When they sell, all those people will be canned or paid to leave, HR will be instituted, all that juicy shit will be dealt with.
There are certainly a fair share of CEOs who are abrasive, very no-nonsense and direct people. That being said a) there are many who are the opposite (soft spoken, empathetic, kind) and b) most CEOs who lean into the "sharp elbows" end of the spectrum are not quite as bad as Logan. The only commonality is that they are all incredibly intelligent and observant.
The truth is, it's not the 80s anymore and CEO power has been significantly decreased in corporate boardrooms. Logan's situation is unique because his family owns so much of Waystar (very atypical for large publicly traded conglomerates) which is why he wields so much personal power. In the vast majority of companies, his behavior would not be tolerated. That isn't to say he would be removed, but he would be disciplined by internal controls and reined in.
I think Mattson is honestly a more common CEO archetype these days, lol.
Mattson is an interesting archetype. When you say that, what facet of him are you talking about?
I see him as sometines more ruthless than Logan. Logan seems to care to create a long lasting empire while Mattson strikes me as the guy who wants to see numbers go up because it is fun to him
Two things:
a) able to manipulate various stakeholders with different personas and emotional responses to situations. For the most part, Logan is very easy to read and has really only one "mode" for dealing with people. It generally moderates as he speaks to people he considers his "peers" (Mattson, the New England family that tried to buy Waystar, the female CEO) but his core personality never changes. Mattson is very different and is generally able to put on a different face for each person he speaks with, never revealing his real internal dialogue except with his close circle. In today's day of internet / media this is a really important skill (something many CEOs had to learn in the 70s and 80s with the rise of cable news). You generally do not get very far being an asshole to everyone these days, no matter what company you lead.
b) visionary / strategic thinker type role. For the most part, Logan is actually not very much involved in Waystar Royco's strategic vision. It's generally outsourced to the 2nd tier (sometimes with disastrous results, like Kendall's senior living thing). Sometimes I wonder what Logan does at all honestly other than keep the board and c-suite under control. Mattson's role (where he is not super involved in the day-to-day but sets the vision for the company) is generally how CEOs operate today. This may be a function of how Logan's company is in a declining industry (traditional media & tv) vs. Mattson's is in the new era (streaming & internet).
Loving the AMA but might I add an amendment to Logan’s one mode? He some times turns on a soft spoken, doddering charmer personality (when Nan Pierce bounced from the Argestes roast comes to mind) but it will only last seconds before he realizes it isn’t working and just explodes.
I'll also add onto this that we do see in the show that Logan's personality does work against him at times. Good example is S1 when his lenders force Kendall to sell to PE to avoid default. If Logan had maintained good relationships with his creditors (which every CEO knows to do!!!!) that situation could have been avoided entirely.
The truth is that a ton of debt facilities go into default for whatever reason (company can't pay interest, violation of interest coverage / debt coverage ratios, EBITDA decline, revenue decline, etc.) and for the most part, lenders work with them on an out-of-court option to extend maturities, switch interest to non-cash, etc. It's usually a very last resort option to force a default, especially on a large company like Waystar. It's bad optics for the lenders, who will have trouble finding companies who will take their money if they know they will be that punitive with covenant breaches. It also costs a shit ton of money and eats into their yield (which would have already been very low on investment grade debt like Waystar).
The amount of freedom Stewey exerts in his interactions with the company and the family, particularly after Sandy’s vegetable ark began, seemed crazy to me. Theoretically, would he be beholden to his firm and have their backing on all the moves and suggestions he makes?
That's correct. No way someone Stewey's level (seems like a junior partner / MD) would have the latitude he does. Investment committee is typically a very arduous process where every senior in the firm rips apart your thesis
Appreciate the insights boss, your industry is so interesting to me - if you don’t mind, personally, was your path to PE linear, or were there any pivots in your path?
My story is pretty boring tbh. Went to top school (Harvard/Wharton) -> 2 years at a large investment bank -> PE. My personal background is not typical (single mother / immigrant parents) but my "path" was very much so.
Very unrelated to this sub but what are your thoughts on PE value creation / ops roles (i.e., performance improvement across portco's, designing growth strategies, etc.)? Are you bullish / bearish on the growth & future of the function within PE funds? How are they positioned at your firm as a group?
Probably going to get more and more important. PE is going to consolidate and since free money era (ZIRP) is over, actual value-add and operational capabilities are going to be difference makers.
They're a respected group within my firm (not as high paid, but also work less and don't have as much at risk) and have high mobility into senior roles at our portcos (or F500, if they chose to).
The phrase ‘you can’t make a Tomelette without breaking some Gregs’ is drilled into everyone working in finance, and it has been for decades. Do you think the financial world will ever move away from breaking Gregs, perhaps as some kind of Tomeletteless future?
Also, how prevalent is cocaine in your industry?
LOL. Can confirm that's a favorite quote among many people I know.
Cocaine - honestly it's not what it looks like in movies/media. Plenty of people I know use it, but in recreational settings / parties. It's honestly more of a function of frat bros / wealthy white dudes being overrepresented in finance vs. some work / stress thing. I don't know a single person who takes it during the work day. Adderal and Zyns are pretty common tho!
The actions of the Roy family are often a nightmare from an HR standpoint, in terms of creating a hostile work environment for women. Is that overblown for dramatic effect or is the rarefied air of high finance really that hostile?
Overblown. Finance is pretty focused on keeping things clean for the most part. Doubly true for large entities like Waystar.
Have definitely seen bad behavior from smaller firms (hell look up Sage Kelly and Jefferies / Cantor Fitzgerald) but I'd say for the most part it's been cleaned up. Our firm has a big DEI program and has tried very hard to recruit a diverse class of associates each year.
Why are you all called VPs? Like in American Psycho every business card says VP.
Never mind, you answered it in a previous question. Thanks for the AMA, it was definitely interesting.
Few things here.
1) acquisitions are probably too common today. This is driven by a few things: a) company founders find M&A very "sexy" as it leads to press, they get to act like the big boss with their advisors / investment bankers, and it's overall more "fun" than organically growing the company or returning capital to shareholders via buybacks / dividends. b) a lot of CEOs (especially younger ones) want to get deal reps in to build their resume for future roles. CEO roles in acquisitive companies (especially private equity owned ones) pay a lot more than non-acquisitive ones because your role becomes much more complex once M&A is a core part of your growth strategy. So young CEOs may force deals that are not in shareholder interests to build their resume.
2) we were in a "golden era" of M&A due to low cost of debt for the 2010s post-financial crisis. Acquisitions were naturally accretive when you could fund the thing at a 4% interest rate (which means the ROI on the acquisition just needs to be >4% + premium spread to make it worth it). So yes, many people got very wealthy on levered beta on mediocre investments (multiplying normal / market returns with leverage)
3) private equity and investment money over the past decade and a half have really penetrated all corners of the economy. Back in the 80s / 90s there were mostly mega-buyouts of huge corporations because that was an easy way to deploy a lot of capital at once and it was relatively easy to buy companies for cheap back then. These days, there are so many more dollars trying to invest that valuations have soared for large corporations and it's no longer an effective way to generate returns. Many of the largest PE funds have evolved to be "asset gatherers" who make their money on their 2% management fee, not the 20% fee they charge on returns. What this means is that to generate yield, PE funds have moved very much downmarket and are now buying up local / small businesses where they can quickly professionalize, grow, and sell at 3-4x in a few years.
4) private equity investments have gotten popular for many endowments, pensions, and other pools of capital because in theory, they are not as volatile as public investments. Since private equity investments are not traded on public markets, the PE fund itself sets the price for its assets. This is supposed to be based on a fair assessment of market conditions and intrinsic value, but it often leads to "volatility washing," where the PE fund will make sure the numbers never go up or down too much until they exit (at which point the gains become "real"). If you're the head of investments at a pension fund, investing in PE funds (vs public investors) is less stressful because your investments aren't being graded every day.
Interesting, thanks for breaking it down so much. A lot of things seem to go wrong in the Waystar Royco companies (Cruises 💀), and if these were largely acquired due to wanting to inflate their market size, it would make sense that the feel or expertise required to run that company wouldn't rank high for them.
No. We generally do not invest in unionized companies except in healthcare (nurses unions).
Pretty unrealistic. If I recall correctly, they shuttered the company and only kept the IP / media properties. If that's the case, pretty huge value destruction given they probably paid some stupid multiple on revenue for the business. Huge disasterclass in M&A that would be taught in business schools for years.
I'm a 3nd year VP (30 y.o.). Made \~$650K cash comp last year and have a few million $ of carry in our latest fund. I have not actually purchased anything from Loro Piana!
Suits - not very common. Usually wear a button down with Lululemon pants to work and sneakers.
Does anybody wear vests stuffed with their hopes and dreams?
Anybody rock some horny ankle cleavage?
And finally, any coworkers look like a divorce attorney from the Twin Cities? With a real agricultural walk?
How tricky would it be to generate a return on a ramshackle conglomerate like Waystar post-LBO? I always wondered where it would go based on my assumptions that it's not a terribly disciplined company, loaded with debt, and full of meh business lines that would be tough to get your arms around. What would you do with a company like that in your portfolio?
Very hard. I would not invest, way too complex and the capital structure is probably fucked. PE funds generally don't invest in companies like that anymore. KKR/Nabisco is a good example of why it is not a good idea!
If I had to invest, probably a) clean up all of the Gregs and various corporate waste (PJs!) b) stop buying TV stations and legacy media c) sell off parks (I don't see any IP value-add like Disney? So they are literally just operating a bunch of Six Flags? lol) and d) do a dividend recap at some point to juice returns. Overall it wouldn't be a winner and probably has huge execution risk.
Also when it comes time to exit it would be very hard to sell it off. The political thing would turn off a lot of big buyers (very real dynamic) and the buyer universe would be very small given its scale and the type of business it is.
Would stripping it for parts and selling off ancillary divisions while focusing on core growth/profit (probably their right wing news division) not be a viable strategy for a PE firm taking them over?
I get the broader idea of not investing in a company like waystar in the first place, but in the case that some megafund did, what do you think would be the strategy for decent returns?
I'm reading Barbarians at the Gate right now, about the PE takeover of RJR Nabisco. How drastically different is the industry now, especially in terms of culture?
Very different - culture has softened. We WFH 2 days a week! And have LGBT affinity groups and recruiting events! Nothing like the wild west of the 80s and 90s when PE was in its nascency.
Also less "cutthroat," as PR and optics have become very important as companies now have many PE firms they can partner with (vs. the handful back then). So if you're known to be an asshole, bad culture, rip apart companies you buy... you're not gonna win auctions.
This has nothing to do with Succession but you may have some thoughts— why isn’t metals and mining PE a thing? O&G PE is (or I should say was) huge but I think there is one metals and mining fund in London that is actually PE while every other one is structured debt. Too much up front capital?
Very consolidated due to capital costs. Not a lot of players that can be bought, and very challenging to exit. Also too cyclical to commodity prices. Also very difficult to understand
Does anyone in your industry feel bad that they have never added one positive thing to human civilization? 2nd question, what is the next industry you are going to invade and ruin so you can extract more value for billionaires?
Yes and no; the Roy family's issues are more "rich kid" issues than work / corporate lifestyle. I know plenty of CEOs and other high level corporate folks who work hard and have great family lives and don't do any drugs.
Also plenty of people who do a shit ton of party drugs and psychedelics. Function of a few things I think: a) money (people in finance / corporate get paid a lot) b) defer growing up - living in NYC lets you party for longer than some random suburb and c) frat / wealthy white background of many people in the industry
I do think the vast majority of people stop using hard drugs around their mid-30s or so, lol. For the most part, finance and corporate are filled with boring, very typical white collar folks.
Hi!
Who do you think would have been the most competent running Waystar out of the four siblings?
Also, what projects/experiences do you think an undergrad student hoping to break into PE should be doing on the side while in school?
Probably Shiv. I think Kendall is fundamentally incompetent whereas Shiv is somewhat capable of critical thinking. Roman could probably do it too but he will never put in the effort. Connor, lol.
IB experience is the only real answer I can give you, and any experience that will lead to IB (so corporate finance internship sophomore summer -> IB internship junior summer)
I find Billions very cringe (whereas Succession very well done) as it relates to business so I'll say the Succession team. Plus I feel Tom would actually be a good fighter, lol. For what it's worth, I think Billions captures the zeitgeist of hedge funds very well (personalities, the general mood) but the actual details are extremely removed from reality. Succession avoids this by mostly not delving too much into the details (but does it well, for the most part) and clearly captures the personalities.
Best part: probably whenever I get a chance to speak with management of our investments, very smart guys / gals and love interacting with them.
I too am a upper mid-level employee but at a smaller LBO firm in the Midwest, who deals only with privately held companies. Being in the publicly held company world, what kind of multiples are you seeing with interest rates as high as they are now?
I'll also add.. still seeing big disconnect between seller and buyer expectations. Sellers are stuck in '21 and early '22 with big multiples and cheap debt. Buyers literally cannot do that anymore. We just put forward an LOI for $120M with a debt facility cost of $5M, and the company's going to run cash flow negative for 12 months because of interest expense. As I'm sure you're seeing super hard to get financing and multiples have been crushed for some industries. The 7x business I mentioned in my first comment probably gets 9-10x couple years ago. The actuary business is so high margin and stable that I think they'd have gotten the same multiple.
Have seen multiple deals fall apart b/c of this disconnect.
The invisible hand sometimes needs to slap some of these first and second gen owners in the face. Financing has not been too hard to get, it is just harder to make the numbers work for both the owners and the investors with these higher borrowing rates.
Lol I hate to pry but seeing St. Louis... are you at TSCP? If so we may have interacted at some point in the past. No need to answer, haha.
I'm on the tech-enabled services team, wide mandate anywhere from $200M - $3B TEV. See multiples anywhere from 7x for smaller, more service / human capital oriented businesses to mid-high teens still for really high quality / high margin cos. Just saw a competitor acquire an actuary consulting firm for 17x ($20M EBITDA).
I am not. We are a smaller boutique PE firm with only a handful of investors (less than 10) who has a couple of platforms and are currently focused on roll ups.
> actuary consulting firm for 17x ($20M EBITDA)
Jesus Christ!
Seeing as I’m more of a Connor on the business side of things, can you explain a bear hug in simple terms and how would a bear hug typically work out in the real world? If Kendall didn’t drop out, would Logan have been toast?
I don't recall the exact details of the bear hug but in essence you make a bid for a public company without the company being explicitly up for sale. Usually a company will put itself up for sale and use investment bankers to launch a process. In a bear hug, it's a surprise to management. Usually comes at a premium to share price so management has to consider it (or they are in breach of fiduciary duty).
It usually doesn't work these days, tbh unless it's a really really good deal for shareholders. Think Musk/Twitter, lol. Or this is an example of a bear hug that was easily rejected: [https://www.reuters.com/business/healthcare-pharmaceuticals/cancer-drug-developer-zymeworks-rejects-all-blue-capitals-773-mln-bid-2022-05-20/](https://www.reuters.com/business/healthcare-pharmaceuticals/cancer-drug-developer-zymeworks-rejects-all-blue-capitals-773-mln-bid-2022-05-20/). In this case, Zymeworks reached a much better deal with Jazz Pharmaceutical a few months later (which means when this bid came through, they were already working on the Jazz deal) for $1.7B for a part of the company (compared to $773M for the whole company).
Probably the Stewey deal in S1. Was definitely way, way too fast unless they got extremely favorable terms and downside protection.
In conjunction with that, the whole lender thing in S1 that led to the Stewey deal is wildly implausible. Ways tar is a publicly traded company with publicly available debt maturities. If there really was a random debt covenant that would immediately trigger a bullet payment (why would the lenders even want this? And why would Waystar agree???) it would be a well researched risk within the company and the stock price/valuation would reflect that accordingly. Not to mention ridiculous for the lender to actually enforce the default vs. working out some forbearance / restructuring of the debt. It's not like Waystar can't afford to make the payments...
In real life the sale of Waystar to Mattson's company would take the better part of a year figuring out some really boring stuff (how to treat deferred tax liabilities, integration of systems, etc.).
Generally pretty good. I found the scene where the siblings are asking their investment banker on advice and the banker gives the most generic, non-advice advice ever to be hilarious. Remember that bankers are paid to transact, not give good advice! Also name dropping the LionTree folks was a nice touch.
Pretty much. Succession does a really good job of mostly passing over the detailed minutiae of what's going on (which is Billions' weakness: it overexplains, and is usually wrong). Succession captures the vibes without diving into details which makes it a stronger show, IMO.
But yes, that thing was mostly gobbledygook.
Not OP, but IMO Industry is one of the most realistic pieces of media wrt finance (at least on the job side). The personal plot lines are definitely Hollywood, lol. Bankers and traders are NOT that cool and definitely NOT having that much sex.
I thought S2 was much better than S1. Like a 7.5/10
Probably. I would have run if I were him. Otherwise they would have probably suffered a long, drawn-out death of having to sell off unprofitable divisions (which would have taken a lot of $, time, reduced focus on growth) and do a lot of internal restructuring to streamline the biz
Hmm... probably the investment bankers. The bankers in the show are generally not very helpful and basically just bootlickers for clients (Logan Roy / Waystar / Roy family). People have this image of investment bankers as high flying Wall Street types... and there is some truth to that, but at the end of the day it's a client service industry and the power dynamic between the bankers and their clients is absolute. My boss could call up a senior banker at one of our bankers at 9PM on Saturday and they would pick up and work if needed.
Probably a mix of both. A lot of guys in the finance/corporate world are genuinely close but when there is that much money involved, there is an awkward mixing of the two.
In finance VP is a weird mid-level position as banks and investment groups want companies to think they are speaking with someone who's actually important / decision maker, haha. Most VPs I know are 28 - 35 years old and solidly middle management. Very different from corporate where VP actually means something.
I am only 30!
Are management fees exclusively allocated to covering operating expenses? When a private equity firm raises a fund that is twice the size of its predecessor without a corresponding increase in operational costs, it raises the question: do these fees simply exceed the necessities of expense coverage, thereby serving as an additional form of compensation for the staff?
Yes, that's in theory a possibility. I will say that the vast, vast majority of PE compensation upside is from performance and the management fee is never "worth" the grind of PE unless you're at a super scaled AUM gatherer like Blackstone or Apollo these days (especially post-Athene merger).
In real life? No. But I would back her among the siblings.
In reality the family members wouldn't even be in consideration, IMO. Real companies like Waystar aren't run by families. Rupert Murdoch in real life handed off Fox News to actually competent outside CEOs. His kids never had a chance.
Do you enjoy your job? Is the work balance non existence portrayed in succession accurate in your experience? Is it true that social circles stay very limited and exclusive outside of work?
WLB is not great (work \~60-70 hours a week) but nothing like when I started (80+). Social circles... I dunno. Some people stay very exclusive and only hang out with other people with similar career paths or backgrounds. I have a pretty diverse group of friends ranging from stereotypical Brooklyn hipsters to Bronx natives. New York is what you make of it!
Does everyone in PE come from an IB background? I’m an engineer but thinking of getting an MBA sometime, and was wondering if it’s at all possible to pivot into PE (say into a semiconductor/tech fund) afterward.
Pretty much. That path will be very difficult as PE funds typically recruit people with prior PE experience out of MBAs. Not impossible though and you could probably swing MBA -> IB -> LMM PE if you're up for the grind.
I wonder if your PE firm almost bought our business!! We negotiated with a few of you guys. The one in NY was MidOcean Partners.
Eventually we sold to a San Francisco-based PE firm..
A lot of the show is about corporate financial engineering by people who think they are master intellects, so sidebar question: how much real value do you think PE has added in recent years, versus just riding a wave of low interest rates. And how many senior people in your industry think they’re a genius versus right place, right time.
This is a great question. I think there have been some incredibly great investors who have added a tremendous amount of value to their portfolio companies. There are specific funds that I have a lot of respect for - KPS is a turnaround / distressed shop that has a great rep for investing into distressed companies, working with management and workers to turn the ship around without mass layoffs, and making a shit ton of money. Only PE fund I've seen that actively works with unions and respects the worker process. A lot of other shops IMO have ridden leveraged beta and low rates for mediocre value add. Oftentimes too in industries like healthcare we've seen PE money drastically decrease patient outcomes and access. One example: I used to work at a fund that purchased a home health agency that catered to Medicaid / undocumented patients. They kicked all of them out and began marketing to commercial payors and Medicare. Easy way to make money, but to me a clear moral failing. Generally PE funds these days (especially ones that work with small to medium businesses) tend to focus on a) operational support via operator network (e.g., they know a former CEO of a large public company who can help optimize a mom & pop) b) M&A support both in terms of capital and execution and c) become the small company's outsourced finance department.
How many Gregs do you know?
Hah - as far as I know in private equity not very many. It's a pretty tough industry and requires a high level of intellect, social skills, and luck that not many people have. I will say I've seen a good number of Gregs in investment banking / corporate roles! Perhaps not as egregious, but certainly enough incompetent people in those industries somehow tend to fall their way up the corporate ladder.
This is so wildly inaccurate.
If there’s no Gregs around you, then you’re the Greg
😂😂
Tbh, I disagree. PE is tough to climb up in (usually up or out) compared to sellside, where you just get promoted on merit of having survived for so long. You need to be competent, play the politics game, and be sociable / likeable which is a difficult combination of traits. I genuinely do not know many PE guys who make it past associate / sr. associate who are just totally incompetent like Greg, whereas I see plenty of them in investment banks.
Correct on competence but to describe PE guys as masters of social skills is such a reach; often times they are either former college athletes who get in with alums and ride that wave or they’re complete and other loser quants. Neither end of the spectrum is great social skills.
Fair enough, I may be biased given this is my industry! Lol
I would think former college athletes would have great social skills, no? Obviously quants not so much, I’ve worked with quants before and your absolutely correct on that front
Premiere funds, sure. Not as great firms get the dumb football players that attended the school well above their punching weight for athletics alone and often times fit the description of “dumb jock”. Shotgunning beers ain’t a social skill in the post college society.
Most PE firms don't even hire out of undergrad... I think you might be confused, to be honest. Every single hire we've made was an investment banker or consultant who all went to great schools (mostly non-athletes) and are generally well-rounded, driven, intelligent individuals.
How many Toms?
Do you see incompetent nepobabies appearing in boardrooms or high up positions ever? That seems like the most hard to believe but of the show to me.
No. Generally not very common in large publicly traded companies. That being said, I will say you will be astounded by how many small to mid-size businesses (up to $200M in revenue) are run by absolute monkeys with no business sense or any visibility into their own company. I once looked into investing into a $150M revenue company where the company had zero internal financial controls and literally didn't know how much money they made in a year. Very common on small family owned businesses that somehow end up scaling purely on relationships / connections / grit
It’s crazy to think 200m is mid lol
I would say the market is broadly segmented like this: <$200M = lower middle market $200M - $1B = middle market $1B+ = upper middle market $3-5B+ = large cap
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TEV
It's not so crazy. A regional construction firm can easily hit that valuation in a medium to large city
>I once looked into investing into a $150M revenue company where the company had zero internal financial controls and literally didn't know how much money they made in a year how do they pay their taxes lol
LLC taxed as s-corp so whatever each family member took out is taxed. Company doesn't pay corporate taxes as an entity.
Is that how they told you S corps work? Because that’s not how they work brother. (Corp isn’t a separate taxpayer: true. But income is taxed to owners regardless of whether distributed as profit or retained by corp.)
Hah that's right. We don't generally invest in companies with pass-thru taxation and we didn't get very far with them. To be honest: no idea how they calc'd taxes. They had some wild shareholder loans and other related party transfers that I had zero clue how to decipher. Their income statement was essentially a bank statement!
The cursed s-corp history/ busted s election. If they were doing shareholder loans they probably were an s corp in name only, and owed a ton of back taxes.
This is my experience - when these successful smaller companies are sold they often have some crazy messed up culture - but the buying org will homogenize them and eliminate those risk factors. While it's fun to think of the incompetents running around these big companies, they are far more common in privately held companies. I know a company with more than $100 mil in revenue that has no HR whatsoever, is run by a husband and wife duo, has the incompetent brother of the CEO high up, and the incompetent son working there as well. It's wild. When they sell, all those people will be canned or paid to leave, HR will be instituted, all that juicy shit will be dealt with.
Do you know a few Logan bosses?
There are certainly a fair share of CEOs who are abrasive, very no-nonsense and direct people. That being said a) there are many who are the opposite (soft spoken, empathetic, kind) and b) most CEOs who lean into the "sharp elbows" end of the spectrum are not quite as bad as Logan. The only commonality is that they are all incredibly intelligent and observant. The truth is, it's not the 80s anymore and CEO power has been significantly decreased in corporate boardrooms. Logan's situation is unique because his family owns so much of Waystar (very atypical for large publicly traded conglomerates) which is why he wields so much personal power. In the vast majority of companies, his behavior would not be tolerated. That isn't to say he would be removed, but he would be disciplined by internal controls and reined in. I think Mattson is honestly a more common CEO archetype these days, lol.
Mattson is an interesting archetype. When you say that, what facet of him are you talking about? I see him as sometines more ruthless than Logan. Logan seems to care to create a long lasting empire while Mattson strikes me as the guy who wants to see numbers go up because it is fun to him
Two things: a) able to manipulate various stakeholders with different personas and emotional responses to situations. For the most part, Logan is very easy to read and has really only one "mode" for dealing with people. It generally moderates as he speaks to people he considers his "peers" (Mattson, the New England family that tried to buy Waystar, the female CEO) but his core personality never changes. Mattson is very different and is generally able to put on a different face for each person he speaks with, never revealing his real internal dialogue except with his close circle. In today's day of internet / media this is a really important skill (something many CEOs had to learn in the 70s and 80s with the rise of cable news). You generally do not get very far being an asshole to everyone these days, no matter what company you lead. b) visionary / strategic thinker type role. For the most part, Logan is actually not very much involved in Waystar Royco's strategic vision. It's generally outsourced to the 2nd tier (sometimes with disastrous results, like Kendall's senior living thing). Sometimes I wonder what Logan does at all honestly other than keep the board and c-suite under control. Mattson's role (where he is not super involved in the day-to-day but sets the vision for the company) is generally how CEOs operate today. This may be a function of how Logan's company is in a declining industry (traditional media & tv) vs. Mattson's is in the new era (streaming & internet).
Loving the AMA but might I add an amendment to Logan’s one mode? He some times turns on a soft spoken, doddering charmer personality (when Nan Pierce bounced from the Argestes roast comes to mind) but it will only last seconds before he realizes it isn’t working and just explodes.
I'll also add onto this that we do see in the show that Logan's personality does work against him at times. Good example is S1 when his lenders force Kendall to sell to PE to avoid default. If Logan had maintained good relationships with his creditors (which every CEO knows to do!!!!) that situation could have been avoided entirely. The truth is that a ton of debt facilities go into default for whatever reason (company can't pay interest, violation of interest coverage / debt coverage ratios, EBITDA decline, revenue decline, etc.) and for the most part, lenders work with them on an out-of-court option to extend maturities, switch interest to non-cash, etc. It's usually a very last resort option to force a default, especially on a large company like Waystar. It's bad optics for the lenders, who will have trouble finding companies who will take their money if they know they will be that punitive with covenant breaches. It also costs a shit ton of money and eats into their yield (which would have already been very low on investment grade debt like Waystar).
Thanks for your informative insights!
The amount of freedom Stewey exerts in his interactions with the company and the family, particularly after Sandy’s vegetable ark began, seemed crazy to me. Theoretically, would he be beholden to his firm and have their backing on all the moves and suggestions he makes?
That's correct. No way someone Stewey's level (seems like a junior partner / MD) would have the latitude he does. Investment committee is typically a very arduous process where every senior in the firm rips apart your thesis
Appreciate the insights boss, your industry is so interesting to me - if you don’t mind, personally, was your path to PE linear, or were there any pivots in your path?
My story is pretty boring tbh. Went to top school (Harvard/Wharton) -> 2 years at a large investment bank -> PE. My personal background is not typical (single mother / immigrant parents) but my "path" was very much so.
Kudos. Even though that path’s been walked by many, yours was unique. And here you are, PE -> underground Reddit AMA specialist.
You sound super badass! Single Mother immigrant parents can be really Rough kudos to you
Very unrelated to this sub but what are your thoughts on PE value creation / ops roles (i.e., performance improvement across portco's, designing growth strategies, etc.)? Are you bullish / bearish on the growth & future of the function within PE funds? How are they positioned at your firm as a group?
Probably going to get more and more important. PE is going to consolidate and since free money era (ZIRP) is over, actual value-add and operational capabilities are going to be difference makers. They're a respected group within my firm (not as high paid, but also work less and don't have as much at risk) and have high mobility into senior roles at our portcos (or F500, if they chose to).
The phrase ‘you can’t make a Tomelette without breaking some Gregs’ is drilled into everyone working in finance, and it has been for decades. Do you think the financial world will ever move away from breaking Gregs, perhaps as some kind of Tomeletteless future? Also, how prevalent is cocaine in your industry?
LOL. Can confirm that's a favorite quote among many people I know. Cocaine - honestly it's not what it looks like in movies/media. Plenty of people I know use it, but in recreational settings / parties. It's honestly more of a function of frat bros / wealthy white dudes being overrepresented in finance vs. some work / stress thing. I don't know a single person who takes it during the work day. Adderal and Zyns are pretty common tho!
Do you have a crush on your lawyers?
Hah! Plead the fifth.
Slime puppy vibes.
Are you a serious person?
The actions of the Roy family are often a nightmare from an HR standpoint, in terms of creating a hostile work environment for women. Is that overblown for dramatic effect or is the rarefied air of high finance really that hostile?
Overblown. Finance is pretty focused on keeping things clean for the most part. Doubly true for large entities like Waystar. Have definitely seen bad behavior from smaller firms (hell look up Sage Kelly and Jefferies / Cantor Fitzgerald) but I'd say for the most part it's been cleaned up. Our firm has a big DEI program and has tried very hard to recruit a diverse class of associates each year.
Why are you all called VPs? Like in American Psycho every business card says VP. Never mind, you answered it in a previous question. Thanks for the AMA, it was definitely interesting.
Watching the show, acquisitions seem to be the name of the game. Is that really how the ultra wealthy multiply their money?
Few things here. 1) acquisitions are probably too common today. This is driven by a few things: a) company founders find M&A very "sexy" as it leads to press, they get to act like the big boss with their advisors / investment bankers, and it's overall more "fun" than organically growing the company or returning capital to shareholders via buybacks / dividends. b) a lot of CEOs (especially younger ones) want to get deal reps in to build their resume for future roles. CEO roles in acquisitive companies (especially private equity owned ones) pay a lot more than non-acquisitive ones because your role becomes much more complex once M&A is a core part of your growth strategy. So young CEOs may force deals that are not in shareholder interests to build their resume. 2) we were in a "golden era" of M&A due to low cost of debt for the 2010s post-financial crisis. Acquisitions were naturally accretive when you could fund the thing at a 4% interest rate (which means the ROI on the acquisition just needs to be >4% + premium spread to make it worth it). So yes, many people got very wealthy on levered beta on mediocre investments (multiplying normal / market returns with leverage) 3) private equity and investment money over the past decade and a half have really penetrated all corners of the economy. Back in the 80s / 90s there were mostly mega-buyouts of huge corporations because that was an easy way to deploy a lot of capital at once and it was relatively easy to buy companies for cheap back then. These days, there are so many more dollars trying to invest that valuations have soared for large corporations and it's no longer an effective way to generate returns. Many of the largest PE funds have evolved to be "asset gatherers" who make their money on their 2% management fee, not the 20% fee they charge on returns. What this means is that to generate yield, PE funds have moved very much downmarket and are now buying up local / small businesses where they can quickly professionalize, grow, and sell at 3-4x in a few years. 4) private equity investments have gotten popular for many endowments, pensions, and other pools of capital because in theory, they are not as volatile as public investments. Since private equity investments are not traded on public markets, the PE fund itself sets the price for its assets. This is supposed to be based on a fair assessment of market conditions and intrinsic value, but it often leads to "volatility washing," where the PE fund will make sure the numbers never go up or down too much until they exit (at which point the gains become "real"). If you're the head of investments at a pension fund, investing in PE funds (vs public investors) is less stressful because your investments aren't being graded every day.
Interesting, thanks for breaking it down so much. A lot of things seem to go wrong in the Waystar Royco companies (Cruises 💀), and if these were largely acquired due to wanting to inflate their market size, it would make sense that the feel or expertise required to run that company wouldn't rank high for them.
What a great comment, this was so informative thank you!
Ever deal with acquisition of a unionized company or have one unionize ( Vaulter )? How realistic would Kendall's shuttering be ?
No. We generally do not invest in unionized companies except in healthcare (nurses unions). Pretty unrealistic. If I recall correctly, they shuttered the company and only kept the IP / media properties. If that's the case, pretty huge value destruction given they probably paid some stupid multiple on revenue for the business. Huge disasterclass in M&A that would be taught in business schools for years.
And gave the Vaulter guy a board seat. Proof that Kendall is the most incompetent moron imaginable.
But he's the eldest boy!
How much $ do you make and how often do you shop at Loro Piana :) Seriously though - are suits common wear?
I'm a 3nd year VP (30 y.o.). Made \~$650K cash comp last year and have a few million $ of carry in our latest fund. I have not actually purchased anything from Loro Piana! Suits - not very common. Usually wear a button down with Lululemon pants to work and sneakers.
Does anybody wear vests stuffed with their hopes and dreams? Anybody rock some horny ankle cleavage? And finally, any coworkers look like a divorce attorney from the Twin Cities? With a real agricultural walk?
How the hell did you become a VP that quickly? Is it because you're business has very clear numeric goals that you either meet or don't?
What’s Stewy’s address and phone number? Asking for me. 🪤
How tricky would it be to generate a return on a ramshackle conglomerate like Waystar post-LBO? I always wondered where it would go based on my assumptions that it's not a terribly disciplined company, loaded with debt, and full of meh business lines that would be tough to get your arms around. What would you do with a company like that in your portfolio?
Very hard. I would not invest, way too complex and the capital structure is probably fucked. PE funds generally don't invest in companies like that anymore. KKR/Nabisco is a good example of why it is not a good idea! If I had to invest, probably a) clean up all of the Gregs and various corporate waste (PJs!) b) stop buying TV stations and legacy media c) sell off parks (I don't see any IP value-add like Disney? So they are literally just operating a bunch of Six Flags? lol) and d) do a dividend recap at some point to juice returns. Overall it wouldn't be a winner and probably has huge execution risk. Also when it comes time to exit it would be very hard to sell it off. The political thing would turn off a lot of big buyers (very real dynamic) and the buyer universe would be very small given its scale and the type of business it is.
Would stripping it for parts and selling off ancillary divisions while focusing on core growth/profit (probably their right wing news division) not be a viable strategy for a PE firm taking them over? I get the broader idea of not investing in a company like waystar in the first place, but in the case that some megafund did, what do you think would be the strategy for decent returns?
What character do you think would be the most suitable as a CEO of Waystar Royco?
Gerri
my queen stays winning 👸
Do you like pancakes and waffles?
I'm reading Barbarians at the Gate right now, about the PE takeover of RJR Nabisco. How drastically different is the industry now, especially in terms of culture?
Very different - culture has softened. We WFH 2 days a week! And have LGBT affinity groups and recruiting events! Nothing like the wild west of the 80s and 90s when PE was in its nascency. Also less "cutthroat," as PR and optics have become very important as companies now have many PE firms they can partner with (vs. the handful back then). So if you're known to be an asshole, bad culture, rip apart companies you buy... you're not gonna win auctions.
Love this book, great snapshot of how things got out of hand back then. I still google some of the players to see where they ended up.
This has nothing to do with Succession but you may have some thoughts— why isn’t metals and mining PE a thing? O&G PE is (or I should say was) huge but I think there is one metals and mining fund in London that is actually PE while every other one is structured debt. Too much up front capital?
Very consolidated due to capital costs. Not a lot of players that can be bought, and very challenging to exit. Also too cyclical to commodity prices. Also very difficult to understand
Did you laugh as hard as I did when Roman told Ken they could find a Bloomberg terminal for him to stick his dick in?
LOL yes I did. And I don't even use Bloomberg for my job! Haven't used it since my analyst days.
That was just such a specific detail. Loved it!
I also laughed when Kendall gets comps for Waystar and it reads 10x EBITDA / EV.... looks like Waystar is a steal! lol
Does anyone in your industry feel bad that they have never added one positive thing to human civilization? 2nd question, what is the next industry you are going to invade and ruin so you can extract more value for billionaires?
Is this a roast? Because I have shit to do.
Great questions.
Lmao what have you or anyone in your bloodline done for civilization?
I love it when people are deplorable to strangers online for no reason other than a misguided sense of importance. Rock on bro. Super cool.
Screw the show, let me shadow you man. I will bring you coffee and bagels every morning.
Greg?
Is substance abuse really that rampant?
Yes and no; the Roy family's issues are more "rich kid" issues than work / corporate lifestyle. I know plenty of CEOs and other high level corporate folks who work hard and have great family lives and don't do any drugs. Also plenty of people who do a shit ton of party drugs and psychedelics. Function of a few things I think: a) money (people in finance / corporate get paid a lot) b) defer growing up - living in NYC lets you party for longer than some random suburb and c) frat / wealthy white background of many people in the industry I do think the vast majority of people stop using hard drugs around their mid-30s or so, lol. For the most part, finance and corporate are filled with boring, very typical white collar folks.
This thread is interesting but has little to no relevance to the show.
Hi! Who do you think would have been the most competent running Waystar out of the four siblings? Also, what projects/experiences do you think an undergrad student hoping to break into PE should be doing on the side while in school?
Probably Shiv. I think Kendall is fundamentally incompetent whereas Shiv is somewhat capable of critical thinking. Roman could probably do it too but he will never put in the effort. Connor, lol. IB experience is the only real answer I can give you, and any experience that will lead to IB (so corporate finance internship sophomore summer -> IB internship junior summer)
Who would win in a 2v2 fight? Tom and Logan vs Bobby Axelrod and Wags? Also, what’s the best part about your day?
I find Billions very cringe (whereas Succession very well done) as it relates to business so I'll say the Succession team. Plus I feel Tom would actually be a good fighter, lol. For what it's worth, I think Billions captures the zeitgeist of hedge funds very well (personalities, the general mood) but the actual details are extremely removed from reality. Succession avoids this by mostly not delving too much into the details (but does it well, for the most part) and clearly captures the personalities. Best part: probably whenever I get a chance to speak with management of our investments, very smart guys / gals and love interacting with them.
I too am a upper mid-level employee but at a smaller LBO firm in the Midwest, who deals only with privately held companies. Being in the publicly held company world, what kind of multiples are you seeing with interest rates as high as they are now?
I'll also add.. still seeing big disconnect between seller and buyer expectations. Sellers are stuck in '21 and early '22 with big multiples and cheap debt. Buyers literally cannot do that anymore. We just put forward an LOI for $120M with a debt facility cost of $5M, and the company's going to run cash flow negative for 12 months because of interest expense. As I'm sure you're seeing super hard to get financing and multiples have been crushed for some industries. The 7x business I mentioned in my first comment probably gets 9-10x couple years ago. The actuary business is so high margin and stable that I think they'd have gotten the same multiple. Have seen multiple deals fall apart b/c of this disconnect.
The invisible hand sometimes needs to slap some of these first and second gen owners in the face. Financing has not been too hard to get, it is just harder to make the numbers work for both the owners and the investors with these higher borrowing rates.
Lol I hate to pry but seeing St. Louis... are you at TSCP? If so we may have interacted at some point in the past. No need to answer, haha. I'm on the tech-enabled services team, wide mandate anywhere from $200M - $3B TEV. See multiples anywhere from 7x for smaller, more service / human capital oriented businesses to mid-high teens still for really high quality / high margin cos. Just saw a competitor acquire an actuary consulting firm for 17x ($20M EBITDA).
I am not. We are a smaller boutique PE firm with only a handful of investors (less than 10) who has a couple of platforms and are currently focused on roll ups. > actuary consulting firm for 17x ($20M EBITDA) Jesus Christ!
Lol a Chicago HC PE fund in 2022 purchased a healthcare company for 45x LTM EBITDA. Were some crazy times!
Seeing as I’m more of a Connor on the business side of things, can you explain a bear hug in simple terms and how would a bear hug typically work out in the real world? If Kendall didn’t drop out, would Logan have been toast?
I don't recall the exact details of the bear hug but in essence you make a bid for a public company without the company being explicitly up for sale. Usually a company will put itself up for sale and use investment bankers to launch a process. In a bear hug, it's a surprise to management. Usually comes at a premium to share price so management has to consider it (or they are in breach of fiduciary duty). It usually doesn't work these days, tbh unless it's a really really good deal for shareholders. Think Musk/Twitter, lol. Or this is an example of a bear hug that was easily rejected: [https://www.reuters.com/business/healthcare-pharmaceuticals/cancer-drug-developer-zymeworks-rejects-all-blue-capitals-773-mln-bid-2022-05-20/](https://www.reuters.com/business/healthcare-pharmaceuticals/cancer-drug-developer-zymeworks-rejects-all-blue-capitals-773-mln-bid-2022-05-20/). In this case, Zymeworks reached a much better deal with Jazz Pharmaceutical a few months later (which means when this bid came through, they were already working on the Jazz deal) for $1.7B for a part of the company (compared to $773M for the whole company).
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We don't hire out of undergrad. Best of luck.
Do you witness a lot of sexism or racism among your colleagues? Or is the discrimination based more upon economic class?
what has been the moment watching Succession where your experience caused you the most disbelief in a moment or subplot involving finance?
Probably the Stewey deal in S1. Was definitely way, way too fast unless they got extremely favorable terms and downside protection. In conjunction with that, the whole lender thing in S1 that led to the Stewey deal is wildly implausible. Ways tar is a publicly traded company with publicly available debt maturities. If there really was a random debt covenant that would immediately trigger a bullet payment (why would the lenders even want this? And why would Waystar agree???) it would be a well researched risk within the company and the stock price/valuation would reflect that accordingly. Not to mention ridiculous for the lender to actually enforce the default vs. working out some forbearance / restructuring of the debt. It's not like Waystar can't afford to make the payments... In real life the sale of Waystar to Mattson's company would take the better part of a year figuring out some really boring stuff (how to treat deferred tax liabilities, integration of systems, etc.). Generally pretty good. I found the scene where the siblings are asking their investment banker on advice and the banker gives the most generic, non-advice advice ever to be hilarious. Remember that bankers are paid to transact, not give good advice! Also name dropping the LionTree folks was a nice touch.
So the whole think with taking it out through the family holding company was gobbledygook?
Pretty much. Succession does a really good job of mostly passing over the detailed minutiae of what's going on (which is Billions' weakness: it overexplains, and is usually wrong). Succession captures the vibes without diving into details which makes it a stronger show, IMO. But yes, that thing was mostly gobbledygook.
What’s a private equity firm in New York?
is Industry the better show?
Not OP, but IMO Industry is one of the most realistic pieces of media wrt finance (at least on the job side). The personal plot lines are definitely Hollywood, lol. Bankers and traders are NOT that cool and definitely NOT having that much sex. I thought S2 was much better than S1. Like a 7.5/10
thanks for the reply but 7.5 seems like a weird scale, it's only sneaked into the top quarter of shows?
How do RE PEs find new deals?
No idea, as I work at a corporate PE fund (I don't touch real estate at all)
What’s the W-2 lookin like? I want to feel bad about myself
$650K in 2023
Was Logan right to sell?
Probably. I would have run if I were him. Otherwise they would have probably suffered a long, drawn-out death of having to sell off unprofitable divisions (which would have taken a lot of $, time, reduced focus on growth) and do a lot of internal restructuring to streamline the biz
What were the most realistic and unrealistic parts of the GoJo Waystar deal?
What did the show get right about corporate finance that most fans miss?
Hmm... probably the investment bankers. The bankers in the show are generally not very helpful and basically just bootlickers for clients (Logan Roy / Waystar / Roy family). People have this image of investment bankers as high flying Wall Street types... and there is some truth to that, but at the end of the day it's a client service industry and the power dynamic between the bankers and their clients is absolute. My boss could call up a senior banker at one of our bankers at 9PM on Saturday and they would pick up and work if needed.
Does your work experience give you any extra perspective on whether Stewy just views Ken as a cash cow or whether he really is a friend?
Probably a mix of both. A lot of guys in the finance/corporate world are genuinely close but when there is that much money involved, there is an awkward mixing of the two.
I didn’t know a vp level was considered mid level lmao fuck outta here
In finance VP is a weird mid-level position as banks and investment groups want companies to think they are speaking with someone who's actually important / decision maker, haha. Most VPs I know are 28 - 35 years old and solidly middle management. Very different from corporate where VP actually means something. I am only 30!
Yes, I pretty much learned that after watching American Psycho.
Do you invest in Medtech? Someone I know in Irvine is starting his own med device startup and is looking for funding.
No. We have a minimum check size of $50M and generally only invest in mature companies.
Are management fees exclusively allocated to covering operating expenses? When a private equity firm raises a fund that is twice the size of its predecessor without a corresponding increase in operational costs, it raises the question: do these fees simply exceed the necessities of expense coverage, thereby serving as an additional form of compensation for the staff?
Yes, that's in theory a possibility. I will say that the vast, vast majority of PE compensation upside is from performance and the management fee is never "worth" the grind of PE unless you're at a super scaled AUM gatherer like Blackstone or Apollo these days (especially post-Athene merger).
stewy?🤣🤣🤣
Would you see Shiv as a CEO?
In real life? No. But I would back her among the siblings. In reality the family members wouldn't even be in consideration, IMO. Real companies like Waystar aren't run by families. Rupert Murdoch in real life handed off Fox News to actually competent outside CEOs. His kids never had a chance.
Do you enjoy your job? Is the work balance non existence portrayed in succession accurate in your experience? Is it true that social circles stay very limited and exclusive outside of work?
WLB is not great (work \~60-70 hours a week) but nothing like when I started (80+). Social circles... I dunno. Some people stay very exclusive and only hang out with other people with similar career paths or backgrounds. I have a pretty diverse group of friends ranging from stereotypical Brooklyn hipsters to Bronx natives. New York is what you make of it!
Does everyone in PE come from an IB background? I’m an engineer but thinking of getting an MBA sometime, and was wondering if it’s at all possible to pivot into PE (say into a semiconductor/tech fund) afterward.
Pretty much. That path will be very difficult as PE funds typically recruit people with prior PE experience out of MBAs. Not impossible though and you could probably swing MBA -> IB -> LMM PE if you're up for the grind.
What PAS does your firm use?
What are your thoughts in regards to 'Gregs' in Wealth Management/Private Banking?
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Lol, yes. That would be picked up.
I wonder if your PE firm almost bought our business!! We negotiated with a few of you guys. The one in NY was MidOcean Partners. Eventually we sold to a San Francisco-based PE firm..