TIP663: The Truth About Private Equity w/ Ted Seides

We Study Billionaires - The Investor’s Podcast Network

Stig Brodersen

Education, Investing, Business

4.6 • 3.6K Ratings

🗓️ 27 September 2024

⏱️ 64 minutes

🔗️ Recording | iTunes | RSS

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Summary

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. Enjoy ad-free episodes when you subscribe to our Premium Feed. NEW TO THE SHOW? Follow our official social media accounts: X (Twitter) | LinkedIn | Instagram | Facebook | TikTok. Check out our We Study Billionaires Starter Packs. Browse through all our episodes (complete with transcripts) here. Try our tool for picking stock winners and managing our portfolios: TIP Finance Tool. Enjoy exclusive perks from our favorite Apps and Services. Stay up-to-date on financial markets and investing strategies through our daily newsletter, We Study Markets. Learn how to better start, manage, and grow your business with the best business podcasts. SPONSORS Support our free podcast by supporting our sponsors: River Toyota Range Rover SimpleMining TastyTrade Daloopa American Express The Bitcoin Way Fundrise USPS Found Onramp Facet Public Shopify HELP US OUT! Help us reach new listeners by leaving us a rating and review on Apple Podcasts! It takes less than 30 seconds, and really helps our show grow, which allows us to bring on even better guests for you all! Thank you – we really appreciate it! Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Learn more about your ad choices. Visit megaphone.fm/adchoices Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm

Transcript

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0:00.0	You're listening to TIP.
0:03.0	On today's episode, I'm joined by Ted Cides.
0:06.0	Ted is the host of the popular podcast, Capital Allocators,
0:10.0	and the author of the new book Private Equity Deals.
0:13.2	Over the past 20 years, Private Equity has grown from a cottage industry to a powerful
0:17.8	juggernaut that touches every corner of the global economy.
0:21.5	Totling over $5 trillion of investments,
0:24.3	private equity constitutes an important investment
0:26.8	allocation for public and corporate pension funds,
0:29.6	university endowments, nonprofit foundations,, Insurance Companies, Families, and Sovereign Wealth Funds
0:35.6	Worldwide.
0:36.6	According to Hamilton Lane Data via Cobalt, over the 20 years ending December 31st,
0:42.0	2022, the entire private equity industry generated a compounded
0:46.7	time-weight of 14.6% per annum, surpassing the 9.8% return of the S&P 500 net of all fees and expenses.
0:56.0	During this episode, Ted and I chat about what has led to the growth in private equity
0:59.8	over the past few decades, why David Swinson referred to private equity as a superior form of capitalism.
1:06.3	Ted's take on why private equity has been given a poor reputation.
1:10.0	An overview of KKKR's perfect private equity deal, Apollo's purchase of Yahoo, and KPS Partners Purchase of
1:17.1	Taylor-Made, what types of investors should consider an allocation to private equity and so much more. With that I hope you
1:23.8	enjoy today's conversation with Ted Sidis.
1:28.6	Celebrating 10 years and more than 150 million downloads.
1:34.0	You are listening to the Investors Podcast Network.
	...

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