Deal Talk: Interviews with Private Equity Leaders

Founded in 1985, Permira has invested around €75 billion in hundreds of businesses worldwide from a platform that spans large-cap private equity, growth equity and credit strategies.Brian and Dipan have played key roles in expanding the firm’s global presence and diversifying its investment strategies.In their conversation with Steffen, they shared insights into their transition to co-leadership, their outlook on the private equity market and Permira’s approach to take-private opportunities.Here’re some of the highlights: Benefits of a co-CEO model“The art of leading is about how to make high-quality decisions in a reasonable period of time. A co-CEO model allows us to share ideas, challenge each other and ultimately helps us make better decisions faster."The appeal of private equity “Private markets have been successful because they offer high alignment and control in how businesses operate. Their timeframes — typically a 7-year-plus horizon for creating value — is hard to achieve in public markets where shareholders want to see quarterly progress on pretty much every initiative.”Opportunities in take-privates “Public markets are great if you’re in private equity. There’s a level of inherent ‘short-termism’ in public markets where 70% of activity is driven by computers. Meanwhile, the world of long-only fund management is becoming smaller, which creates more volatility but also generates many interesting opportunities for take-privates.”Success in the consumer sector“We are looking for brands with great products that people love and where we see the opportunity to do something fundamentally different. Golden Goose, for example, had only a small presence in the US when we invested. It’s now a significant part of the business. Previously, the company's revenue came almost entirely from footwear, but now a meaningful percentage is generated from non-footwear products.”Important notice: This content is for informational purposes only. The opinions expressed by the interviewee are their own. They do not purport to reflect the opinions or views of Moonfare. Moonfare does not provide investment advice. You should not construe any information or other material provided as legal, tax, investment, financial, or other advice. If you are unsure about anything, you should seek financial advice from an authorised advisor. Past performance is not a reliable guide to future returns. Don’t invest unless you’re prepared to lose all the money you invest. Private equity is a high-risk investment and you are unlikely to be protected if something goes wrong. Subject to eligibility. Please see https://www.moonfare.com/disclaimers.

Robert F. Smith is the Founder, Chairman and CEO of Vista Equity Partners, an investment firm that specialises in enterprise software. Originally from Colorado, Smith began his career as an engineer before moving into finance, where he developed a focus on the tech industry.Under Smith's leadership, Vista Equity Partners has grown significantly, currently managing over $100 billion in assets. The firm is known for its approach to improving operations and driving growth in its portfolio companies.In a conversation with Steffen Pauls, Moonfare’s Founder and CEO, Smith shared his views on the rise of generative AI, the future of enterprise software, market trends in private equity and the advice he would give his younger self. Here are some of the highlights:The vast potential of software “Software continues to be the most productive tool introduced in the business economy in the last 50 years. Businesses have found that their next best purchase is to buy more software which can enable them to increase productivity and efficiency.  I thought that would be a good place to start investing capital. That’s why I started Vista.”Seizing take-private opportunities “For the first time in quite some time, enterprise software companies have become more affordable in public markets. That’s why we have completed many take-privates in the last 18 months. We look for companies that have product superiority and execution excellence capabilities but have, in some respects, fallen out of favour with public market investors who have turned their attention to generative AI-focused companies.”Investing in private markets “About 97% of software companies are private, and the vast majority of investors and consumers don’t really know that because people don’t necessarily talk about enterprise software. Privately owned software companies can take a longer-term view on the application of tools like generative AI, enabling them to better navigate innovation cycles.”The importance of being curious “The advice that I continue to support is to remain curious. Continue to expand the aperture of relationships early and learn from people who apply new thoughts and technologies, and see how you can apply them to the work you’re in.”Important notice: This content is for informational purposes only. The opinions expressed by the interviewee are their own. They do not purport to reflect the opinions or views of Moonfare. Moonfare does not provide investment advice. You should not construe any information or other material provided as legal, tax, investment, financial, or other advice. If you are unsure about anything, you should seek financial advice from an authorised advisor. Past performance is not a reliable guide to future returns. Don’t invest unless you’re prepared to lose all the money you invest. Private equity is a high-risk investment and you are unlikely to be protected if something goes wrong. Subject to eligibility. Please see https://www.moonfare.com/disclaimers.

Hugh MacArthur is the Chairman of Bain & Company’s Global Private Equity Practice, which he helped establish over 25 years ago. With a wealth of experience advising private equity funds worldwide, he has been involved in hundreds of projects focusing on deals, strategy and operations. A recognised thought leader, Hugh is also the host of “Dry Powder: The Private Equity Podcast”, dedicated to discussing key industry trends with leading experts.In a conversation with Steffen Pauls, CEO and Founder of Moonfare, Hugh shared his thoughts on how the private equity world has changed and what’s coming next. They covered everything from current market conditions and secondaries to fundraising trends and emerging managers.Here are a couple of highlights from the interview: Public vs. private markets“In the public markets, you get 90% of the money but only 10% of the global investment opportunities. In the private markets, it’s the opposite. The room for growth in private markets is absolutely massive. The question is, what education is required to give people the confidence to invest in these markets with names they don’t necessarily know or understand?”The liquidity question“Markets need to recover. There needs to be an acceleration in exits, which would put money back in LPs' pockets. It’s a multiyear issue, and it’s not going to get better in three or four months. There are too many companies, and too much value needs to come back. It doesn’t have to be fully solved though, but we need to be on the path of solving it.”On investing in secondaries“It’s a fantastic time to invest in secondaries. It is absolutely a growth market with an asset class where even the entire fourth quartile generates positive returns. When we do surveys with institutional investors, they all tell us they’re planning to increase allocation to secondaries.”The power of AI“I have no doubt that in a few years, some industries will be fundamentally reshaped by the ways AI is being deployed. But for now, it’s important to understand what technology can and still can’t do for businesses. This is what many GPs are exploring in partnership with management teams.”Capital at risk. Moonfare does not provide investment advice. All views expressed by the interviewees remain their own.Important notice: This content is for informational purposes only. The opinions expressed by the interviewee are their own. They do not purport to reflect the opinions or views of Moonfare. Moonfare does not provide investment advice. You should not construe any information or other material provided as legal, tax, investment, financial, or other advice. If you are unsure about anything, you should seek financial advice from an authorised advisor. Past performance is not a reliable guide to future returns. Don’t invest unless you’re prepared to lose all the money you invest. Private equity is a high-risk investment and you are unlikely to be protected if something goes wrong. Subject to eligibility. Please see https://www.moonfare.com/disclaimers.

In this engaging discussion, Mike O’Sullivan, Moonfare’s Chief Economist and veteran investor, teams up with co-CEO Steffen Pauls to delve into the transformative impact of AI on private markets. They explore the parallels between AI's rise and the internet boom, analyzing the unique financial framework surrounding AI investments. Key topics include the urgent need for private equity to adapt to technological disruptions and the growing focus on data centers and AI tools. O'Sullivan emphasizes the importance of innovation in securing returns in this dynamic landscape.

Christian Sinding, CEO of EQT, discusses EQT's growth and sustainability focus. Topics include Scandinavian curiosity, American mindset, making businesses better, challenges in private equity leadership, selling off credit business for growth, democratizing private equity investments, maintaining culture in global offices, harnessing AI for value creation, and emphasizing innovation in private equity.

The iconic private equity leader was the guest of our first Deal Talk in 2024, hosted by Steffen Pauls, Moonfare’s co-CEO and Founder.David Rubenstein is the Co-Founder and Co-Chairman of Carlyle, one of the world’s largest and most successful private investment firms. Established in 1987, Carlyle now manages $382 billion from 28 offices around the world.Rubenstein's career spans law, government service and finance. Before co-founding Carlyle, he practised law in New York and served as a domestic policy advisor to President Jimmy Carter.In a conversation with Steffen Pauls, the iconic investor shared his thoughts on a wide range of topics, from private equity’s outlook to evergreen investing principles and leadership traits. Here are some of the highlights:Private equity in today’s economy. “It’s harder to get loans than it used to be because of the interest rates. It’s also harder for buyers and sellers to agree on a price — there’s been a mismatch of 10 to 20% in terms of valuations. But I think buyers and sellers will come closer this year as interest rates come down. I also think you’ll see more deal activity.”The future of the asset class. “As a general rule of thumb, if you go with good private equity people, you are likely to outperform public equity. This trend will likely continue. There’s also going to be more private equity in the emerging markets such as Latin America, Middle East, Africa and Asia. You’ll see more private equity there over the next 10 years and therefore more opportunities for people to make private equity returns.”Democratisation of private equity. “You're going to see people invest a certain amount of money in private equity through 401(k)s, IRA or equivalent retirement accounts in Europe and elsewhere. These won’t be large amounts and likely won’t do poorly. In the next 10 years, almost everyone will have the ability to invest in private equity if they want to. But democratisation is not easy to achieve and it takes time.”Key investing principles. “Most important principles are diversification and having realistic expectations about rates of returns — don’t believe they will be as high as someone might tell you. If you expect a 50% internal rate of return, it’s more likely to get a zero rate of return. Also, rely on good money managers. These managers have reasonable fees, are transparent, have a track record, reputation for integrity and are able to retain good people. Examine the people you’re investing with but give money to good ones to manage.”Skills for success. “Specialisation is very important. If you really want to make a mark in private equity, take a small area and make it your own, become an expert in it. In addition, treat your investors with respect through good and bad times, don’t be arrogant with them when you’re doing well. Be humble and make sure to give them information all the time.”‍Powerful leadership traits. “Persistence is everything. If you fail, pick yourself up and get back in the game. You typically need to have communication skills — to talk well, write well or to lead by example. Great leaders also know how to get things done. And they persist, persist, persist.”Important notice: This content is for informational purposes only. The opinions expressed by the interviewee are their own. They do not purport to reflect the opinions or views of Moonfare. Moonfare does not provide investment advice. You should not construe any information or other material provided as legal, tax, investment, financial, or other advice. If you are unsure about anything, you should seek financial advice from an authorised advisor. Past performance is not a reliable guide to future returns. Don’t invest unless you’re prepared to lose all the money you invest. Private equity is a high-risk investment and you are unlikely to be protected if something goes wrong. Subject to eligibility. Please see https://www.moonfare.com/disclaimers.

In conversation with Moonfare, General David Petraeus, the former Director of the CIA and decorated US Army leader (Ret.), spoke about current geopolitical frictions, economic uncertainty, the implications of artificial intelligence and more. Now serving as a Partner at KKR and Chairman of the KKR Global Institute, General Petraeus recently joined us for a macro-themed episode of our Deal Talk series, hosted by Steffen Pauls, the Founder and co-CEO of Moonfare. The pair discussed current geopolitical developments, their broader context and the impact these have on economic stability and private markets. The main highlights of this fascinating conversation include:  The success of Europe in easing economic woes. “In the case of war in Ukraine, there were worries of significant [economic] ramifications — in Germany, in particular, given its dependence on natural gas pipelines from Russia. The country had to go through a considerable effort to reduce this dependency. And has done that very impressively, cushioning the blow of higher costs of electricity for citizens and sought to do the same for major manufacturers. (...) By and large, Europe has done quite an impressive job responding to the sudden change to Russian energy exports.” Making NATO great again. “Truth is that Putin set out to make Russia great again. But he made NATO great again by pushing historically neutral countries into seeking NATO membership, one already in Finland, the other one [Sweden] on the threshold of that membership.”  On the US relationship with China. “We continue to compete where we have to and strive to deter. Deterrence is the function of two elements — the potential adversary’s assessment of your capabilities on the one hand, and your willingness to employ them on the other. We have to ensure there is no question of that in the minds of decision-makers in Beijing. Not that we’re looking for a fight, we want to avoid a fight or conflict.”  The transformative nature of AI. “By and large, artificial intelligence (AI) will be transformative. We’ve gone through various exercises at KKR where we looked at every sector in which we invest. [...] AI will have transformative effects in many of these. It will dramatically improve productivity and efficiency and literally how we do everything, not just in our work but also in our daily lives. But it's going to take time, it will be uneven and it’s not always as predictable as one might think.”  The importance of information for investors. “We’re in an era that can be described as renewed great power rivalries. Barriers are going back up. There are great economic concerns and geopolitical risks. Globalisation has become “slowbalisation” and regionalisation. In this world, you have to have a very informed view of different trends and how they affect investment opportunities.”   Important notice: This content is for informational purposes only. The opinions expressed by the interviewee are their own. They do not purport to reflect the opinions or views of Moonfare. Moonfare does not provide investment advice. You should not construe any information or other material provided as legal, tax, investment, financial, or other advice. If you are unsure about anything, you should seek financial advice from an authorised advisor. Past performance is not a reliable guide to future returns. Don’t invest unless you’re prepared to lose all the money you invest. Private equity is a high-risk investment and you are unlikely to be protected if something goes wrong. Subject to eligibility. Please see https://www.moonfare.com/disclaimers.

Søren Vestergaard-Poulsen was the guest of our 12th edition of the Deal Talk series, in which Moonfare’s CEO and founder, Steffen Pauls, talks to some of the world’s most prominent names in private equity dealmaking. Søren, who joined CVC in 1998, is a managing partner and co-chairs CVC's private equity board and oversees private equity activities in Greece and the Nordics. He plays a pivotal role in managing a firm with 25 local offices and €161 billion of assets under management. In their conversation, Steffen and Søren discussed a wide range of topics, from CVC’s approach to sustainability to its distinct organisational culture. Here are some of the highlights: CVC’s investment playbook“We’re trying to find investments that are robust and where we have a clear value creation program to make these businesses better. If we can do that, we’re more than likely to make a good investment.” The superiority of the PE ownership model“The alignment of interest with management, the long-term approach to value creation, and the drive from the board level to create value are much better in private equity than in any other ownership model. Compared to when I joined, not much has changed either. It continues to be a superior ownership model and will stay that way in the years to come.” Immediate outlook“I think we’ll see a pick-up in 2024. We are already seeing the divergence in price expectations between buyers and sellers narrowing. And in terms of financing, banks are coming back to the market. We’re starting to see improvements.” What you need for success in private equity“It comes down to whether managers making investments know what they’re doing. If you are a sector fund, you need deep expertise in the sector. If you are a generalist fund, you need to be able to source the right deals and generate the value creation plan again and again.” Important Notice: This content is for informational purposes only. Moonfare does not provide investment advice. You should not construe any information or other material provided as legal, tax, investment, financial, or other advice. If you are unsure about anything, you should seek financial advice from an authorised advisor. Opinions in this interview are not Moonfare's and Moonfare do not take responsibility for this. Past performance is not a reliable guide to future returns. Your capital is at risk.

Dipanjan ‘DJ’ Deb, Co-Founder and CEO at Francisco Partners, joined Moonfare’s Co-CEO, Lorenz Jüngling, for the latest episode of the Deal Talk series — our regular fireside chats with leading global private equity dealmakers. Based in San Francisco, Dipanjan ‘DJ’ Deb leads one of the most active and largest technology-focused investment firms in the world. To date, Francisco Partners has invested in or acquired over 400 technology companies. In a conversation with Jüngling, ‘DJ’ Deb discussed lessons learned as a top dealmaker, provided his insights on technology investing and offered advice for first-time investors in private equity. ‍Complexity arbitrage: “Our strategy is straightforward — it's complexity arbitrage. We buy confusion, hopefully at a discount, and sell clarity, hopefully at a premium. This involves acquiring solid technology companies with strong customer bases that are not yet optimised. A common scenario in technology is companies losing focus on their core strengths and pursuing growth at any cost. We try to arbitrage this.” On technology: “People always ask me if they have too much exposure to technology. And I tell them they don’t have enough exposure. Tech is horizontal, whether it’s in the government space, aerospace, fintech, healthtech or consumer, tech is pervasive and will displace anything that was done by hand before.”  Investing in private equity: “If you're going to invest in private equity make sure to take a long term view and don’t panic. The worst people can do is invest money at the top and take it out when things hit the bottom. There will be fits and starts along the way but I think equities are still the best asset class  long term and I think technology is the best asset class within equity.” Important notice: This content is for informational purposes only. The opinions expressed by the interviewee are their own. They do not purport to reflect the opinions or views of Moonfare. Moonfare does not provide investment advice. You should not construe any information or other material provided as legal, tax, investment, financial, or other advice. If you are unsure about anything, you should seek financial advice from an authorised advisor. Past performance is not a reliable guide to future returns. Don’t invest unless you’re prepared to lose all the money you invest. Private equity is a high-risk investment and you are unlikely to be protected if something goes wrong. Subject to eligibility. Please see https://www.moonfare.com/disclaimers.

Moonfare’s founder and CEO, Steffen Pauls, hosted Henry Kravis, Co-Founder and Co-Executive Chairman of KKR and one of the most influential people in the private equity industry. Kravis talked about the power of curiosity, showing courage in the face of uncertainty, lessons learned from past crises, his views on investing in the current economic climate and much more.