A Quote by Bill Ackman
I think good private equity investors create a lot more economic value than they destroy.
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We really wake up every day trying to build businesses. That is the goal of private equity. It's a misnomer out there that private equity profits by shrinking companies. In fact, it's just the opposite. Private equity creates value by growing great companies.
It's clear to me when you do private equity well, you're making companies more efficient and helping them grow and become more profitable. That success means our investors - such as public pension funds - benefit, which contributes to the economic wealth of society.
State funds, private equity, venture capital, and institutional lending all have their role in the lifecycle of a high tech startup, but angel capital is crucial for first-time entrepreneurs. Angel investors provide more than just cash; they bring years of expertise as both founders of businesses and as seasoned investors.
Being a good private equity investor is more complicated than it seems. I would say that there are a few characteristics that are important. If you look at the skill set that you need to ultimately be a successful private equity investor, at least at the senior level, you have to be, in this business, a good investor. You have to be able to help companies perform and you have to have judgment around exiting investments. If you look at the skill sets there, they include some things you can teach and some that you can't.
I've probably done more venture capital deals and expansion financings than I have done private equity deals. But both are the same. Private equity companies have also built jobs.
When I was a CEO, I thought I understood private equity. I didn't. And what I've learned since my retirement, and since becoming directly involved in the world of private equity, points the way to a new career path for thousands of talented senior executives - and a new engine for value creation.
Private equity investors are an integral part of the economy and should be celebrated for making our country wealthier.
Founders are usually very stingy with equity to employees and very generous with equity to investors. I think this is totally backwards.
Value investors look at cash flows. If a company can maintain present cash flows for 5 or 6 years, it’s a good investment. Investors then just hope that those cash flows - and thus the company’s value - don’t decrease faster than they anticipate.
Private equity has absolutely no reason to exist. The private equity holder has all the upside and the banks all the downside.
Value investing is simple to understand but difficult to implement. Value investors are not supersophisticated analytical wizards who create and apply intricate computer models to find attractive opportunities or assess underlying value. The hard part is discipline, patience, and judgment. Investors need discipline to avoid the many unattractive pitches that are thrown, patience to wait for the right pitch, and judgment to know when it is time to swing.
I believe that good investors are successful not because of their IQ, but because they have an investing discipline. But, what is more disciplined than a machine? A well-researched machine can make many average investors redundant, leaving behind only the really good human investors with exceptional intuition and skill.
Perhaps sooner than we think, African innovations will help the rest of the world create lasting social and economic value.
Private equity firms aren't necessarily evil by definition. There are many stories of successful turnarounds fueled by private equity, often involving multiple floundering businesses that are rolled into a single entity, eliminating duplicative overhead.
In the 1930s, there was a stretch where you could borrow more against the real estate than you could sell it for. I think that's what's going on in today's private-equity world.
Most of India's 300 odd news channels are making losses and are dependent on dubious cross holding, black money and dodgy private equity investors, both foreign and Indian.
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