Episode 287: A Practical Look at Private Equity w/ Steve Balaban & Epic Life w/ Justin Breen
The Rational Reminder Podcast
The Trend Towards Permanent Equity Vehicles
This chapter of the podcast discusses a trend in the private equity industry towards permanent equity vehicles, which involve working with insurance companies or owning insurance companies to create long-term capital. It explores the challenges of these vehicles in terms of the structure of how private equity professionals are paid, particularly in terms of performance fees. The chapter also explores different types of waterfalls in private equity and how they affect cash flows.
It’s the start of a new year and with it comes an opportunity to re-evaluate your trajectory and set your goals for the months to come, whether they be financial, personal, or all of the above. Kicking things off for today’s episode is our conversation with Steve Balaban, a private equity insider with a refreshingly realistic and practical perspective on private equity. We talk with Steve about investing in private equity, the benefits and drawbacks every investor should know about, why due diligence is essential, how private equity interacts with investor psychology, and much more. Tuning in you’ll also learn about the Private Equity Certificate offered by CFA Society Toronto in collaboration with Mink Learning and how listeners can gain special access to these training tools. Next, we take a look back at our conversation with Ayelet Fishbach from the Booth School of Business on the science of motivation and goal setting and the contents of her new TEDxChicago Talk The Science of Getting Motivated. We wrap things up with a review of Justin Breen’s book titled, Epic Life: How to Build Collaborative Global Companies While Putting Your Loved Ones First, followed by our conversation with the author on the transformational power of naming your year, the power of networking, and other key lessons from his book. For all this and much more, be sure to tune in and start 2024 armed with insights from some of the best thinkers around!
Key Points From This Episode:
(0:01:26) Use discount code RATIONAL to watch the award-winning documentary Tune Out The Noise, free of charge (valid until the end of January 2024, so make sure you don’t miss out!)
(0:03:44) An introduction to Steve Balaban and Mink Learning, a private equity education company he founded in 2019.
(0:07:29) Steve’s insights on aggregate public market equivalent (PME) benchmarking and key issues that arise when using Internal Rate of Return (IRR) to benchmark private equity.
(0:17:58) The best arguments in favour of private equity, the downsides you need to know about, and a rundown of the fees involved.
(0:23:38) Top reasons Steve has come across for why people want to invest in private equity, and what he considers to be the right reasons.
(0:29:38) How private equity interacts with investor psychology and the importance of having different vintages in your portfolio.
(0:35:15) Why private equity is typically illiquid, how liquid private equity works, and the tradeoffs for investors with liquid private equity as opposed to more direct illiquid approaches.
(0:42:59) The differences between private and public equity; advice on how investors should interpret private equity marketing materials and the importance of doing due diligence.
(0:51:59) Trends in the industry towards permanent equity, rather than rolling over every few years.
(0:59:55) Details on the Private Equity Certificate offered by CFA Society Toronto in collaboration with Mink Learning and how to use the discount code RationalReminderPEC.
(01:02:21) A look back at our conversation with Professor Ayelet Fishbach and her newly released TEDxChicago Talk The Science of Getting Motivated.
(01:03:58) Our book review of Epic Life: How to Build Collaborative Global Companies While Putting Your Loved Ones First, and our conversation with the author, Justin Breen.
(01:07:12) The transformational impact of naming your year, finding your purpose, and the power of networking.
(01:25:47) An update on our new podcast Money Scope, the content you can expect from it, and its success on the Canadian Apple Podcast charts.
(01:28:43) What we’ve been experiencing on LinkedIn, book recommendations for the start of 2024, and exciting upcoming guests!
Links From Today’s Episode:
Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder Website — https://rationalreminder.ca/
Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/
Rational Reminder on X — https://twitter.com/RationalRemind
Rational Reminder on YouTube — https://www.youtube.com/channel/
Rational Reminder Email — info@rationalreminder.ca Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/
Benjamin on X — https://twitter.com/benjaminwfelix
Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/
Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/
Cameron on X — https://twitter.com/CameronPassmore
Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/
Tune Out The Noise — https://film.dimensional.com/podcast/login?redirect=%2Fpodcast
Discount Code for Tune Out The Noise — RATIONAL
Steve Balaban — https://www.stevebalaban.com/
Steve Balaban on LinkedIn — https://training.minklearning.com/
Mink Learning — https://training.minklearning.com/
Private Equity Certificate offered by CFA Society Toronto in collaboration with Mink Learning — https://web.cvent.com/event/10af7f03-e05c-465a-803e-3e8ac3864120/summary
Discount Code for Private Equity Certificate — RationalReminderPEC
Justin Breen on LinkedIn — https://www.linkedin.com/in/justinbreen1/
BrEpic Communications LLC — https://www.brepicllc.com/
BrEpic Network — https://brepicnetwork.org/
Episode 188: Prof. Ayelet Fishbach — https://rationalreminder.ca/podcast/188
Professor Ayelet Fishbach's TEDxChicago Talk, The Science of Getting Motivated — https://www.youtube.com/watch?v=T8CegN1xssY
Episode 286: Errol Morris — https://rationalreminder.ca/podcast/286
Episode 210: Prof. Ludovic Phalippou — https://rationalreminder.ca/podcast/210
Episode 237: Who are you, and who do you want to be? — https://rationalreminder.ca/podcast/237
Episode 224: Prof. Scott Cederburg — https://rationalreminder.ca/podcast/224
Episode 284: Prof. Scott Cederburg — https://rationalreminder.ca/podcast/284
Money Scope Podcast — https://moneyscope.ca/
Books From Today’s Episode:
Epic Life: How to Build Collaborative Global Companies While Putting Your Loved Ones First — https://www.amazon.com/Epic-Life-Collaborative-Companies-Putting/dp/1544532555
Same as Ever: A Guide to What Never Changes — https://www.amazon.com/Same-Ever-Guide-Never-Changes/dp/0593332709
The Geek Way — https://www.amazon.com/Geek-Way-Radical-Transforming-Business/dp/0316436704
Tightwads and Spendthrifts: Navigating the Money Minefield in Real Relationships — https://www.amazon.com/Tightwads-Spendthrifts-Navigating-Minefield-Relationships/dp/1250280079
Flow: The Psychology of Optimal Experience — https://www.amazon.com/Flow-Psychology-Experience-Perennial-Classics/dp/0061339202
Get It Done: Surprising Lessons from the Science of Motivation — https://www.amazon.com/Get-Done-Surprising-Lessons-Motivation/dp/0316538345
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