The Full Ratchet (TFR): Venture Capital and Startup Investing Demystified 458. Lessons from Top Allocators, David Swensen’s Principles for Investment, Insights on Private Equity Deals, and What Strategies are Timeless vs. Fleeting (Ted Seides)
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Nov 4, 2024 
Ted Seides, Managing Partner of Capital Allocators and author of 'Private Equity Deals,' shares invaluable insights into the evolving world of private equity. He discusses David Swensen’s investment principles and the importance of alignment between limited and general partners. The conversation touches on effective time management strategies inspired by military principles, as well as innovative asset allocation models that enhance risk assessment. Seides also explores key traits of successful dealmakers, emphasizing empathy and negotiation skills.
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RJR Nabisco Buyout
- In 1989, KKR's $12 billion RJR Nabisco buyout represented half of the entire PE industry's $24 billion raised that year.
- This deal, while massive, did not immediately institutionalize PE due to subsequent market challenges.
PE's Current Cycle
- Private equity returns rely on operational improvements, especially given current high valuations and rising interest rates.
- This cyclical challenge may impact short-term performance, but PE's long-term prospects remain relatively strong.
Emerging PE Sectors
- While software investments have thrived on growth, the current focus is shifting towards sectors like Japan and sports.
- Japan's changing corporate governance and the opening of sports leagues to PE capital create new opportunities.