TIP663: The Truth About Private Equity w/ Ted Seides
We Study Billionaires - The Investor’s Podcast Network
The Changing Dynamics of Private Equity
This chapter examines the rise of mega funds in private equity and the hurdles faced by newcomers in this mature market. It reflects on the historical growth of the industry and the importance of brand reputation while offering resources for further exploration.
On today’s episode, Clay is joined by Ted Seides to discuss his new book — Private Equity Deals: Lessons in investing, dealmaking, and operations from private equity professionals.
Over the past 20 years, the private equity industry has gone from a cottage industry to a powerful juggernaut that touches every corner of the global economy — now totaling over $6 trillion.
Ted is the former president and Co-CIO of Protege Partners, and prior to that, he was a senior associate, working under investing legend David Swensen at Yale. He is the host of the popular podcast — Capital Allocators.
IN THIS EPISODE YOU’LL LEARN:
00:00 - Intro
02:04 - What has led to the growth in private equity over the past few decades?
06:39 - Why David Swensen referred to private equity as a superior form of capitalism.
08:47 - Why private equity has outperformed public equities as an industry.
14:19 - How the lock-up period in private equity impacts returns.
18:03 - Ted’s take on why private equity has been given a poor reputation.
28:34 - The importance of pricing to the seller in a private equity deal.
30:17 - How interest rate hikes have impacted private equity.
32:17 - An overview of KKR’s “perfect private equity deal.”
38:27 - An overview of Apollo’s purchase of Yahoo in 2021.
49:34 - An overview KPS Partners’ purchase of TaylorMade.
57:24 - What types of investors should consider an allocation to private equity?
59:18 - Ted’s portfolio allocation.
And so much more!
Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.
BOOKS AND RESOURCES
- Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, Kyle, and the other community members.
- Ted’s book: Private Equity Deals.
- Ted’s book Capital Allocators.
- Capital Allocators Website & Podcast.
- Follow Ted on Twitter & LinkedIn.
- Related Episode: TIP444: The Changing World of Endowments & ESG Investing w/ Ted Seides.
- Mentioned Episode: TIP654: Investing Across the Lifecycle w/ Aswath Damodaran.
- Follow Clay on Twitter.
- Check out all the books mentioned and discussed in our podcast episodes here.
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