December 15, 2025 • 49 mins
Merryn Somerset Webb speaks with Kurt Björklund, Executive Chairman of Permira, about where we are in the private equity cycle after several tough years and why he still believes in the asset class for the right kind of investor.
They discuss what “real” private equity is, how governance and long-term value creation—not just leverage—drive returns, and the impact of higher rates, tech and AI on future opportunities. Kurt also explains who private equity is (and isn’t) suitable for, and what the shift from public to private markets means for savers, pension funds and wealthy individuals.
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. If you'd like to
hear more from us in our wonderful colleagues at Bloomberg
don't forget, You can sign up to subscribe to Bloomberg.
See the link in the show notes. Welcome to Meren
(00:27):
Talks Money, the podcast in which people who know the
markets explain the markets. I'm Maren zums Web. This week
I'm speaking with Kurt Bejuckland, executive chairman at Pamira, one
of the world's leading private capital firms. Premier managers over
eighty billion euros and led two of the largest tech
deals in twenty twenty four, taking both Squarespace and Adminter
private for seven point two billion and fourteen billion euros respectively.
(00:51):
Kurt became executive chairman in twenty twenty four. Haven't been
the managing partner since twenty twenty one and co managing
partner since two thousand and eight. Kurt is joining us
today to talk about exactly where we are in the
private equity cycle after a couple of fairly dismal years,
and also to discuss the themes over the next ten
years and exactly who private equity is suitable for. Kurt
(01:18):
thank you so much for joining us today. We really
appreciate it.
Speaker 2 (01:22):
Marian, thank you for having me. It's a great pleasure.
Speaker 1 (01:25):
We'll find out.
Speaker 2 (01:26):
I'm looking forward to this conversation right now.
Speaker 1 (01:30):
We've talked a lot about private equity on this podcast
over the last few years, and we've watched it go
from a sector that has regular reported outperformance to regular
report it under performance. And we've seen three years of
difficulties in this sector pretty much since interest rates started rising.
So why don't we start by talking about the sector
(01:51):
as a whole. Set the scene for us. Are we
near the end of this difficult period? What happens next?
Speaker 2 (01:56):
Yeah? So I think that's a profound question which which
needs to be looked at through a long period of time.
So I joined what became Premiere twenty nine years ago,
and this is the third megacycle. If I use that expression,
then I see now and they actually have turned out
to be relatively predictable in how they roll out. So
(02:18):
you have a period of performance, then some exuberants, you
have a lot of capital coming in, and then some
sort of art attach, typically in markets or macro And
in the end of the dot com period, it was
excessive capex investment into telecom stuff, and then in the
financial crisis it was excessive leverage in some corners of
(02:39):
the financial markets coupled with valuations driving too high in
some areas. And what we see now is this period
through COVID, then the great inflation bump leading to rates
resetting from kind of zero to kind of four percent,
and the industry having in some corners discipline in that
(03:01):
period of time, and then a very significant reset in evaluations,
and that has then led to an exit digestion problem,
which you've seen in the industry not driving enough exits
in twenty two, twenty three going to twenty four. And
then at the same time you've had this remarkable period
of public markets performance where over the last three years,
(03:25):
I don't know how many people would have guessed in
twenty twenty two that were set up for three years
or continued ball market, but that's what's happened in the
public markets. You know, whether that's we can talk about
what there's bubbles, whether there's not bubbles, but that's a fact.
So you look at the private equity industry, which over
the very long term, has done I would argue a
(03:46):
really good job for the right investors in that ASA class.
We'll talk about why. But over the last three years
or so has not looked good enough comparatively in terms
of ail equidity lock up that it does compared to
what the public markets have delivered.
Speaker 1 (04:02):
Yeah, I mean, I think it's worth saying that the
major underperformance has come in the last three years, and
in particularly with this extraordinary performance from the US equity markets.
But we now see there was lots of reporting earlier
in the year about the State Street Private Equity Index,
which now has been out performed by the S and
P over pretty much every time period out to ten years,
and so that was a bit of a shot for
(04:23):
the private equity industry those performance numbers. I know that's
listed private equity funds, but nonetheless.
Speaker 2 (04:29):
Well it's listed private equity funds. I think there's a
lot of stuff that masquerades as private equity in the
markets today, and we should talk about what private equity
actually means. Private equity is a governance model with a
very significant competitive advantage compared to In my opinion may
be biased, but I've seen that play through for a
(04:49):
long period of time over in many cases, the public
governance model and that advantage governance model leads, when apployed
properly in the right situations, to an alpha that is
really undeniable over time.
Speaker 1 (05:03):
Why don't we stop there then, just to tour bin
rather than let's lose the flow that we had of
talking about where we are in the cycle and stop
briefly to talk about what that governance model is in
your few Because, as you say, there's an awful lot
of stuff out there calling itself private equity. The spectrum
is huge. What does it mean to you?
Speaker 2 (05:21):
Yeah, what private equity means to me is controlled by
out governance. So private equity GP.
Speaker 1 (05:27):
So, just before we go any further, because not all
of our listeners a completely expert in this area, GP
sends for general Partner, which in the world of private
equity refers to the active manager of the private equity
investment fund.
Speaker 2 (05:40):
So private equity GP buys first of all, does great
assets selection, so picks out of one hundred companies that
you could buy, you pick the one or the five
that really fits your capabilities. The markets become super specialized
these days, so you know, some firms are phenomenal at
FARMA investing and other firms are phenomenal B to B
services invested thing and third ones that let's say real
(06:02):
estate development. But you pick the one, three or five
assets out of one hundred that you think are a
great fit with what you do, and then after that
you set out to transform the businesses strategically, tactically, operationally,
organizationally over the next five years. And the thing that
really matters is that you have enough time to drive
(06:24):
through long term evolutionary businesses. But it's not like an
it's not an open checkbook where you can own a
business for ten to fifteen years, so there's a sense
of urgency. By the time year, four year, five years,
six maybe takes by, you're starting to run out of time.
So it creates this sense of patients, but at the
same time urgency in all the stakeholders. And the third
(06:48):
element is very strong alignment. So you have a management
team that tends to have a significant ownership in the companies.
You have a private equity GP that is incentivized by
the outcomes through carried interest, and then you have the
investors that provided that this formula works well and the
right assets are selected and the patient capital does it
(07:09):
governor's job, you will get very strong outcomes. So that's
private equity now. The moment you then start blending into
that buying small stakes in companies in the same way
as the public markets can do. You know, you buy
a one percent stake, a five percent stake in a company.
The moment you start going into places in the capital
(07:29):
structure where you don't have the governance control, you might
get attractive returns, but you typically take risk that is
commensurate with that. You don't transform the companies and you're
not in charge. So that for me, start shifting away
from real private equity, if you will, towards the broader
alternatives basket. In all of these assets, I mean, the
(07:50):
real question is we ask our investors to forego their liquidity.
So instead of investing in Nvidia stock or you know
in a UK any publicly listed company, we ask investors
to lock up their capital in substance for a period
of years. And for us to make that ask, we
then need to deliver out performance in return for that.
(08:12):
For some investors they can take that trade, for other
investors they can't take that trade.
Speaker 1 (08:17):
Okay, so let's just pick up that. I think what
is your main point there, which is that for you.
Owning stakes in private companies is not the same as
being a private equity investor.
Speaker 2 (08:27):
No, you can be a private equity investor owning stakes
in private companies, but control private equity is an ESSETT
class which is designed to be accountable and in charge
for driving transformation in businesses in addition to picking great
companies to invest in, and that's where you then get
the out performance.
Speaker 1 (08:48):
Okay, and the role of debt in all this, because
when we talked about that the three things that are
important to you when it comes to finding private equity.
Financial engineering isn't mentioned, but it's usually a big part
of this, isn't it.
Speaker 2 (09:01):
I think that it's a part that can modestly amplify
the outcomes, but it should never be an existential reason
for making an investment. So that's really important. I think.
So on average when we buy companies, our LTV is
like forty percent forty fifty percent, and that helps, especially
with the current environment where the cost of debt might
(09:24):
be all in, you know, six eight percent. Even that
helps amplify your performance a bit. But fundamentally what matters
is that your EBITA or your operating hashflow in the
portfolio is growing. So we have around sixty companies in
our buyout portfolio. The EBITA is growing sixteen percent per
year organically, and it's that compounding of those profit poors
(09:48):
that is actually driving the performance. And then you put
a bit of debt financing on that and it amplifies
the sixteen percent somewhere into the twenties with other things
going on as well, and that's what the private ecutive
returns then than come from.
Speaker 1 (10:02):
So again, this is I'm actually going to saying old
fashioned method of private equity. And there's quite a few
academic studies knocking around at the moment suggesting that the
majority of the returns across private equity as a whole
over the last fifteen twenty years or so have come
from debt.
Speaker 2 (10:18):
I don't necessarily agree with their studies because I don't
know all the cooking that goes into them. But what
I do see and do know is that those private
equity firms that consistently deliver real ALFHA to their investors,
they are phenomenal at identifying great businesses and driving through
(10:38):
patient long term transformation of those businesses. I think the time,
you know, when I joined the industry in the mid
nineteen nineties. You're absolutely right that financial engineering at the
time would allow you to drive and create good returns,
and that was kind of the decade that led up
to the financial crisis. I think all of that has
been commoditized out of the industry practice twenty years ago.
(11:01):
So for the last fifteen twenty years in the industry,
what has driven differentiated returns is firms that have biged
great long term structurally growing themes to back and have
then either backed or created number one market leaders that
have benefited from this long term profit waar compounding. And
that's what, in my view, great control private equity is about.
Speaker 1 (11:25):
Okay, all right, we've got our definitions straight.
Speaker 2 (11:27):
Now, I think we're okay, So.
Speaker 1 (11:29):
Let's go back to Let's go back to where we were.
You were in wonderful flow about where the industry is
at the moment after a difficult period, and I interrupted you,
for which I apologize, But can I get that flow back?
Speaker 2 (11:41):
Yes, let's get the flow back, and you're welcome to
interrupted at any point in time. So these three megacycles
that I was talking about, basically the way it happens
is is, you know, the industry gets a little bit
over exuberant, there's a shock to the system that appears
from somewhere. Liquidity drives up because it's harder to it,
and you probably see backwards looking performance weaker because there's
(12:05):
been exuberants in the system at some point in time
with too much capital chasing chasing deals, and then there's
a shakeout in the industry. And that's what's happening at
the moment. We love shakeouts in the industry because what
that's proper shumpedy and destruction competition where those gps that
have not performed, they struggle in raising funds. The funds
(12:26):
might be smaller, they might not raise any funds, and
the teams therefore shrink or disappear from the market. Whereas
those firms that have had a good strategy and that
are backing the right types of companies with a great team,
a good strategy, they will they will raise funds a bigger, smaller,
same size, that doesn't matter, but they will raise funds
(12:46):
that will allow them to continue executing on their strategy
and continue thriving. So and this you see every time
when you get these megacycles where we are now, I
think the cycles tend to be like or to five
year cycles when they happen, and we're probably somewhere in
year three four. So what you're seeing now is a
(13:09):
rapid pickup, very bifurcated, but rapid pickup in the exit
velocity of those firms that have built the right portfolios
of the last let's call it a decade, last five
to ten years. They are now in a position where
they can sell those businesses, and firms like US are
having very significant liquidity performance of at last year or two,
(13:33):
and that will then feedback into the system. It'll start
creating more capital coming back, it'll demonstrate the performance of
the funds, and then who knows what happens with the
public markets. I mean, you and I have been around
for long enough to know that what today looks like
phenomenal public markets performance tomorrow might look more of the
same more it might look much weaker. So what you
(13:55):
get in private equity is that sort of decade long
perspectiveive on returns, which, by the way, then means that
as private investors will get back to that topic. As
private investors, you need to be very patient, that you
need to be prepared to invest into that dynamic.
Speaker 1 (14:14):
The excess that are coming through at the moment. And
one of the things that you wait for in a
cycle like this in the first few years of it
is an acceptance of a shift in valuations right, and
that has been quite a long wait in private equity
for possibly some investors to realize that the valuations they've
put on some of their holdings weren't quite right. We
get that immediately in the public markets, which is of
course the wonderful thing about the public markets, but the
(14:36):
private markets there's a lag in valuation acceptance, not on
the upside, but certainly on the downside.
Speaker 2 (14:42):
It's always very tempting to talk about averages on topics
like this, but of course we know that averages are
actually never what the experience we experience distributions and what
I see at our end of the industry is when
your profit walls are growing at fifteen to twenty percent
per year. Even if you get fifteen or twenty percent
(15:03):
correction in private market valuations, it's only a matter of
a year until the companies have grown back into the
same baseline that you might have held them at, or
papes of them, let's say a year ago. So the
problem really emerges if you are stuck in a portfolio
which is not growing, and especially if it's not growing
(15:25):
and you have a lot of leverage on the companies,
and if it's faintly cyclical. So that's when private equity
firms get into trouble. It's private equity firms that are
or portfolios that are too dependent on leverage, and then
leverage becomes more expensive and maybe less accessible if the
companies don't grow. That means that if your baseline shifts downwards,
(15:46):
you kind of can't grow out of it. Time is
not your friend. And then if a macro cycle hits,
you get an adverse current and you need to swim upriver.
So that's when I've seen private equity go really peer
shaped in this kind of environment. The opposite side of
that applies to most of a portfolio like ours, which
(16:10):
is we own these long term compounders where revenue is
growing somewhere in the teens, the profits are growing somewhere
in the mid teens to even twenty percent, and the
revenues are consisting mostly requiring revenue models where the macro
sensitivity is less and as I said earlier, forty fifty
(16:34):
percent learn to value only, so were less sensitive to
interest rate shifts, So that kind of portfolio, Yes, we
might lose in years. Sometimes with the market correct so
we might lose eighteen months, but it will come out
of it. And in this sort of environment, I know
that people are very focused on owning real assets. You
can look at what's happened with the price of gold,
(16:55):
for example. But for me, what you really want to
own is scarce things that everyone in the world wants
to own. In fact, an increasing share of the world
wants to own that are growing. And the most attractive
things of that definition are scarce companies that are market leaders,
that make product services that people really want to buy,
(17:21):
and that are growing, that are growing from year to year.
So if you own those, it's a fantastic protection against inflation,
it's a great protection against what interest rates might do.
And time is on your side, so over time you
will be fine. You'll be even better than fine.
Speaker 1 (17:40):
Is that also the case if you own a portfolio
of excellent listed companies over a ten year period, you'll
be fine.
Speaker 2 (17:45):
Yes, So if you were fifteen years ago or even
ten years ago, if you were smart enough, which I wasn't,
to pick the companies that became the Magnificent seven today,
you would have done phenomenally well. Now if you picked
the four hundred and ninety three companies in the SMP
(18:07):
five hundred that didn't become the Magnificent seven, then your
performance will be kind of pretty lackluster. And you know this,
we all know this. It's really the SMP five hundred
is really driven by these seven ish companies that have
performed fantastically well, and especially now over the last three years.
(18:27):
If you have owned anything that touches AI, you've seen
a great kick in your evaluations. But if you're outside,
that screwed. If you weren't good enough ten years ago
to pick pick that, you would actually have done better
in other places of the financial market. So I think
it's a there's a survivor bias, as psychologists would call it.
(18:49):
In looking at if you had earned the best SMP
five hundred companies, you'd be you'd be doing really well.
Speaker 1 (18:56):
But I mean the same problem exist in private equity.
You've got even more companies you from presumly then a
listed manager you have to make more decisions rather than fewer.
Speaker 2 (19:05):
I don't think so. If you look at the number
of real persistent performance in private equity. Persistent performance in
private equity is more, much more than it is in
public equities. The first point and the second point. If
you look at gps that have the scale and the
(19:27):
capabilities to really compete and become one of the best
investors in pharma platforms or B to B services or
enterprise software in the world, there's not that many of
them terms that can write large commitments to back phenomenal
market leading companies that become these long term compounders. I
(19:51):
mean you can in each of those themes, you can
pick I don't know amongst ten gps fifteen gps, and
out of those ten fifteen, maybe five or ten will
stand out. And then you pick your themes and you
build your portfolio. You pick amongst five ten firms that
you back the funds on, and you see the persistence
(20:12):
of the returns you will do and you will have
done really well with that strategy. And by the way,
it'll be more absolute return than relative return, and it'll
be a super nice diversified portfolio of the sort of
companies that you typically can't access in the public markets.
Speaker 1 (20:30):
It's just harder cut than it was at the beginning
of your career in that the sector has grown a lot.
The competition has grown enormously, paying higher evaluations for companies
when you find them. Is it harder than it was
twenty years ago?
Speaker 2 (20:44):
So I'll tell you a story thirty years ago. Yeah,
when I joined the firm in nineteen ninety six, I
got I was a kid from Finland and I got
a job offer to join this firm that I didn't
know much about. So I called a friend who worked
at Goldman in London and asked him, Hey, can you
find out about this firm and these people? So he
(21:06):
went around, called a few people and called me back
and said, hey, yeah, it's a really good firm, smart people.
But you need to know that it's too late to
join the private equity industry. The best times of private
equity are passed, and today there's too much competition and
too much capital chasing too few opportunities. This was in
nineteen ninety six. And then when myself, together with a
(21:30):
gentleman called Tom Lister, we then took on the co
managing partner role at Permira in two thousand and eight.
There was an article kind of announcing this, and the
journalist in an unnamed publication said so and so times
too have been appointed to this job. The golden age
of private equities, however, passed, and they will have a
(21:51):
tough time in driving the firm going forward. So I'm
telling you this because nothing has been more persistent in
my journey for three decades in private equity other than
our returns, has been people thinking that the golden years
are past. And the thing that that sort of misses
(22:11):
is that we're insanely entrepreneurial industry. So we attract great talent,
great young talent, and the incentive model, the governance model
is really strong. We have the whole time. So what
you think, well, what might appear like a relatively steady
state evolution is really this constant buzz under the water
(22:34):
of in our own firm trying and discarding themes and ideas,
and a constant evolution of the talent and this sort
of collaborative but the Vinian model of the best entrepreneurial
investors emerging inside our firm and inside out the gps
that come up with great ideas that combine capital and
(22:57):
decisive governance and patients to outcomes, and kind of that's
what investors are backing. They're not backing the static let
us look backwards five to ten years and assume that
you're going to do the same over the next five
to ten years. But they back our platforms that are
super nimble and able to adopt with great talent and
(23:19):
depth of capabilities into an ever changing environment. And yeah,
I mean, you're right that on average it's really hard,
but it's kind of never felt easy, Like it really
really has never felt easy. It's always felt tough on
the margin.
Speaker 1 (23:56):
Here we are in what year four or five of
the tricky bit? You think, so nearly at the end
from the open view, what.
Speaker 2 (24:03):
Do you think three before? I think I said, out
of kind of.
Speaker 1 (24:06):
Four three, four, sorry, out of four or five? Okay,
so kind of halfway there, nearly that When you look
out over the next decade, and you said that you're
constantly pivoting, constantly changing, what does the next decade look
for you? Where are you pivoting to? What is the
change and what are the themes that will come out?
Speaker 2 (24:24):
First of all, I think, what's going to happen over
the next two to three years, You'll live like this
creative destruction or pain that the industry will in some
corners suffer because fundraising is harder and performance comes to
the fourth. It will lead to a healthier competitive environment
I want, I don't say easy, but healthier competitive environment.
(24:44):
So you'll have a few firms, fewer firms with greater
clarity and more concentration of capital that that will continue
developing and executing on their strategy. And I of course
think that we will be in our chosen themes of
those firms that are strongly benefiting from this. So that's
that's the first thing. Then the second thing that we
(25:07):
must talk about is the impact of technology AI and
this rapid acceleration of the pace of change driven by technology.
So again you know, we are sort of tech first,
but not tech only. We've been invested in that space
for dotal firms and existence of over forty years and
(25:27):
have backed you know, we were early capital into many
of the great tech stories. So for the last last decades,
and you know, there was there was a dot com revolution,
and then there was a there was a mobile telephony revolution,
and there was a cloud compute and software transitioning into
the cloud revolution, and now we're seeing this ar revolution
(25:48):
and each of these create amazing opportunities for driving rapid
positive shift and growth, and they of course also create
amazing opportunities to get it very wrong if on the
wrong side of that transformative watershed. And what is so
exciting about this shift is that, in very much the
(26:09):
same way as let's say, in the dot com revolution
twenty five even thirty years ago, we're so complete transitioning
of many industries, whether it's consumer facing businesses or enterprise
facing businesses. Here we are seeing an even broader and
more rapid impact. So the farmer industry is going to
get completely transformed driven by AI over the next three
(26:33):
four or five years, three two ten years, I should say,
the B to B services space, you will be able
to drive better services, more growth, better customer outcomes and
better therefore customer loyalty, and do so with better productivity.
And of course the impact directly on the kind of
tech space and the consumer internet space and so forth
(26:55):
is very significant. Now there are aspects of this which
are clearly in bubble territory. So I mean, I'm sure
you will have discussed with many others.
Speaker 1 (27:07):
Much every week every week there we go.
Speaker 2 (27:10):
So so the sort of you know, just like adding
up the big numbers is very clearly hard in some
of these aspects. But what we see in our portfolio
in terms of what we can do in real life
in terms of driving additional revenues and better outcomes for
customers and so forth and so forth, is transformational. And
(27:31):
it actually helps that you have intense competition at the
foundation model end and at the data center en and
so forth, because that drives rapidly down the cost for
the users being us in the application end that can
then use that to drive change in our businesses and
offer that to the customers and in our portfolio companies.
(27:52):
So that's a really big deal. And getting that right
is existential. It's not only attractive, it's existential. And then
I think I think the third one that is gonna
I think the industry is going to do a little
bit full circle back to you know what we've started
our conversation with, back to kind of the boots. So
(28:14):
when you start calling everything that's not publicly listed alternatives
and equating that to private equity, I think we are
maybe in a in a sort of obfuscation zone. Sometimes
for fun with my hedge fund friends, I will call
hedge funds a fee model masquerading as an asset class.
Speaker 1 (28:37):
And what will they call you kat, They will.
Speaker 2 (28:40):
They will come up with lots of appropriate insults in return.
Speaker 1 (28:44):
I mean they can say the same about a lot
of private equity thumbs.
Speaker 2 (28:47):
Where I was going with this is, so know, when
you talk about what private equity really is in terms
of the governor's model and the patient capital and all that,
all of that stuff that we talked about, But then
when you when you start buying into the same companies
that you might have bought in with a public portfolio,
(29:08):
with small non governance stakes, in a very diversified portfolio,
then you can I think it's a very fair criticism
like what's the right way of buying this and how
much should investors pay for that? And how So that
that's where I was going with this, and so I
think you're going to see a bit of a circling
back to the roots and to the core essence of
(29:30):
what should private equity really be? Why has it over
the long long term delivered consistent both both absolute and
relative returns. With accepting the critique that at the moment,
with where public markets are and with like effects and
other things, the performance on sometime series doesn't look good enough.
(29:51):
I do think strongly that that will self correct, especially
when you look at private equity that's doing what kind
of private equity was created to do, which is the
asset sect and government great companies for long term better
outcomes and creating better businesses. By doing that, I think
you're going to see a circle back to this and
some fluffy is going to go out of the industry
(30:11):
and the true performers are going to attract the capital
and take more share.
Speaker 1 (30:17):
And in that model is the expectation that the improved
company is that the exitus onto a listed market, that
the exit is in IPO. Because that's what seems to
make sense. You get the company, improve it, you build it,
you set it on the correct path, and then you
effectively gift it to the retail a vesta viron ipo.
Speaker 2 (30:36):
But what says that the ultimate destiny of a company
must be in the public markets? Right? So I won't
get this number exactly right, but approximately right. So the
number of public companies in the United States has fallen
from let's call it eight and a half thousand and
nine thousand two, let's call it four and a half thousand,
four eight hundred or something like that. Last when I
(30:57):
saw the number. So you've had a very significant deep
public market deification. You know, that's not the word, but
let's use it as a word now.
Speaker 1 (31:05):
The agatization, Yes, but it's still not quite it's still
equity because it's still equity private equity, right, So it
just is not public anymore.
Speaker 2 (31:16):
And what's happened is that whereas the case used to
be that venture capital funds and private equity funds would
own the kind of really small and small medium sized
companies and maybe medium sized companies, and then the natural
home would become the public markets once they're medium sized
and larger, what's happening now in the markets is that
the public markets, in my opinion, are really only takers
(31:38):
of the really like fifteen twenty thirty billion dollar euro
Sterling companies and upwards, because that's when these public market
investment machines can really put the brain power into understanding
and analyzing and creating a liquid market and so forth.
So what's happening is that this space in company size
(32:02):
is being filled by different forms of private equity and alternatives. So,
you know, I would never have dreamed of when I
joined the industry in the in the nineteen nineties that
we would be owning companies that are worth ten or
fifteen or whatever billion dollars. But we do, and we
do so consistently, and we buy and we sell them.
And that's because our industry has become a longer term
(32:26):
holder and evolver of these companies. And what that means
is that for investors, be they institutional investors or are
trying networth individuals, they get to own companies through private
equity that the otherwise could not own because they're not accessed,
like you can't own that three one or three or
(32:48):
five billion dollar company through the public markets because the
public markets actually didn't want to earn them. So it's
created a space we as an industry are feeling and
have feel that, and I think that's just going to continue.
So therefore to your question, coming full loop to that,
I don't think the end game always is that this
(33:10):
must be a company that goes into being a public company,
because because okay, you know, do you make the four
and a half thousand companies in the US that are public.
Maybe you do, maybe you don't. But if you don't,
if you have a fantastic company that's market meeting and
it's growing and all of that stuff, and it's generating cashflow.
You can sell it to strategics. We if I look
at our exits up at last twelve eighteen months, it's
(33:32):
actually the largest category of selling has been to strategics.
We can sell it to all kinds of.
Speaker 1 (33:39):
Sorry, cat, go back. What do you mean by strategics.
Speaker 2 (33:42):
I mean a large company another enterprise buying a smaller
company because it feels maybe a gap in a product
portfolio or a geographic portfolio or otherwise is highly symingistic
to what they do. So that's one exit route, and
the other one is this So many variants today of
financial ownership that is not public markets. It's of course
(34:07):
everything that is private equity and broader alternative assets. It's
family offices, it's this semi liquid private ownership vehicles that
are emerging and so forth and so forth, and those
become exit roots for also great companies that sit in
private equity. But it's super bifurcated. So if you own
(34:28):
again a kind of small medium sized company that doesn't
grow and doesn't generate cash and is faintly cyclical, this
is like zero exit market for that rightly, so, so
you shouldn't earn those companies But if you own a
fantastic market leader that's worth one billion, and tomorrow it
might be worth two billion, and it's compounding in a
very predictable way and taking share of the world economy
(34:52):
if you will, then there's lots of ways of exiting that,
whether it's worth a billion or three or five.
Speaker 1 (35:00):
Okay, I would love to spend some time talking about
whether the decline of public markets is a good or
a bad thing, But times moving on, So I think
we better move on to talking about who should hold
private equity in the style that you're talking about. And
I know that one of the things you want to
talk about today was the extent to which private equity,
(35:22):
again of the type that you're talking about, should be
held inside a high networth portfolio, a medium networth portfolio,
and ordinary retail investor portfolio. So from what you've said,
someone who only participates in the listed markets is missing
out on the majority of the growth companies across economies
(35:42):
at the moment. So you might say, well, if you're
any in the listed markets, you're really missing out on
the exciting innovative growth stuff.
Speaker 2 (35:50):
There is that element. Yes, there's also a significant trade
off which it's important that we highlight, which is that
the liquidity the public markets. Of course, you know, sometimes
you're selling into very strong markets, other times you sell
into weak markets, and it's unpredictable, but at least in
most plays of the year, you can sell if you
(36:10):
suddenly need the liquidity in private equity or alternity is
more broadly, the whole point is that these companies are
not liquid and we as an industry end up selling
them when we are towards the maturing end of our
value creation plan. We created the company that we wanted
to set up, if you will, for an exit, and
(36:32):
the exit timing is right. And that means that when
you commit to private equity through a regular fund, you
should absolutely expect a premium performance to what you would
get in the public markets, because that's the trade off.
But at the same time, you don't have control of
when that liquidity comes in. So therefore, the industry as
(36:52):
you know it sort of grew up from institutionally investing
pension schemes, sovereign well funds, insurance companies with long capital duration.
So the vast majority of our investors are these types
of entities that have capital duration. The liability duration if
(37:13):
you will can be a decade or two or three,
or maybe even perpetual. When you look at some of
the sovereign wealth funds, and consequently they are very happy
to make the trade off. This okay, So if you
deliver for US five or ten percent or whatever it is,
returns above the public markets benchmarks, we will happily accept
(37:34):
that our capital is locked up for a number of
years with less productability of when it comes out. And
this is the key with then private individuals coming in.
So for ultra high network individuals, I know that that's
a pretty fluid definition. But people that can think of
capital in a sort of really long term way and
(37:56):
perhaps even in a generational way, I think it's a
really good because it's typically diversifying, and it accesses companies
that you otherwise couldn't access, and you can keep the
GPS foot to the fire, and you can back these
sort of strategies that you want to back. But then
for the retail investor who has high need full liquidity
(38:20):
and perhaps an unpredictable high need full liquidity, it may
be harder. And then people create these and I think
this is really important. Then people create these rappers to
make liquid products be a bit more liquid semi liquid products,
but we just need to be realistic. There are limitations,
So that's not an asset class. A semi liquid wrapper
(38:43):
around a non liquid or lower liquidity private equity set
of assets. It's a rapper, but the underlying assets are
still low liquidity. So those can help somewhat, but they
always come with a trade off on the returns because
those semi liquid products they need to carry more cash
(39:04):
and they call in the capital earlier than when it's invested.
They might need to invest in some credit products that
are higher liquidity, lower return, So you almost always end
up with a trade off where you get a bit
more liquidity until you don't and we've seen that in
the market, and you get lower returns. So if we
draw it as a continuum, I think there's the retail
(39:27):
investor who probably shouldn't invest in in liquid products because
they have a high need for liquidity and it's unpredictable.
Then there's in between. There's a set of investors who
can start making some of that trade off, but they
need to tread with caution and think deeply about what
level of exposure.
Speaker 1 (39:46):
And also understand as understand as you say that they're
buying a rapper.
Speaker 2 (39:50):
And understand crucially that they're buying a rapper where the
underlying product is not that liquid, and understand the constraints
that comes with that. And then at the other end
of the bookshelf, you have investors that can afford to
think about capital in kind of five even ten years,
perhaps longer increments. And therefore I'm very happy to make
(40:14):
those trade offs and in fact have a competitive advantage
in being able to make those those trade offs. So
that's kind of the way I would think about it.
What I don't think is right. And again we've seen
this through the previous cycles in the industry where where
some retail focused alternative products have gone wrong when people
(40:38):
really did need liquidity rapidly. And that's that's something that
I mean, time tends to clear this out out, but
it's just important to be aware of that.
Speaker 1 (40:48):
Okay, So this will make sense again that the highest returns
over the long term will go to the already very rich.
Speaker 2 (40:56):
That's a very provocative way of saying it. But if
you look at if you if you look at most
ninety plus plus percent of our investors, they are actually
pension funds where pension funds and insurance companies where the
beneficiars are really not already very rich. There are people
for whom private equity has created longer term patients accrual
(41:19):
in a way the otherwise went never had four for
their pension savings.
Speaker 1 (41:23):
That's again a very good comeback. Perfect. So our high
networth investor here he is. He's not a mansion fund,
he's not an American university endowment in, not any of
those things. He's a rich guy. He'd like to invest
in private equity. He loves what he's hearing from you.
He's like, our marriage should shut up with the challenges.
Because Kurt knows exactly what he's doing. How does this
(41:45):
high networth investor get access to what you do?
Speaker 2 (41:49):
So this is where I cannot and do not want
to talk directly about what we do because that'll be promotion.
Speaker 1 (41:58):
Canny go to his wealth manager and say, can you
buy me a stake and one of Kurt's funds.
Speaker 2 (42:03):
So the way it works is is the best wealth
managers will have the best GPS on their if you
will shelf. And if this investor goes to their wealth
manager and says, hey, I'd like to build a portfolio
of you know, two or three great GPS that achieved
the following thing for my portfolio. Let's talk about how
(42:25):
much the exposure should be and how I should think
about timing it and so forth. Then that wealth manager
will also have the best GPS on there in their offering,
and that they will be able to commit into these products. Again,
let's put the sort of some a liquid stuff aside,
because we talked about that, but they will absolutely be
able to commit into the best GPS probably that those
(42:48):
are fundraising at that point in time, and create a
portfolio that luks and feels very similar to what the
sovereign wealth fund might be to day.
Speaker 1 (42:56):
Okay, brilliant. Can I go back briefly? We are nearly
done for far too long, and I apologize, but just
fun can I go back? Can I go back briefly
to the decline of public markets and to the extent
that is a long term problem for not just non
very rich investors, but also for society and for economies.
I mean, as you will probably know, we're all terribly
(43:18):
upset about the endless decline of the UK market, the
lack of listed companies, lack of IPOs. The company is
disappearing abroad, etc. It's a problem and we worry that
it destroys our networking effects. It did bad for our
professional services. It's bad for our economy as a whole.
So even though there's a very active private equity business
(43:40):
based in London, of course there is the loss of
the listed market. It does seem to be a problem.
Speaker 2 (43:48):
Yeah, so I think it is, and of course it's
for us. It's good for our business. It's good because
it allows us to increase our share of ownership in
the types of companies that we want tourn. I think
that it's bad because then for those perhaps retail investors
who cannot or choose not to invest in private equity,
they find it harder than to own the kinds of
(44:10):
companies that would be good diversifications, and then and then
they get sort of stuck in a much error and
actually by number shrinking basket of investment opportunities. The reason
for this is you go back to the financial crisis
and some of the regulation that emerged in the United
States and across European I include, by the way, having
(44:31):
lived in London for a quarter of a century give
or take, I include the use But.
Speaker 1 (44:35):
Are you the last private equity guy living in London.
Speaker 2 (44:39):
I'm actually in Abouda at the moment where I'm meeting
our investors, So so no, there's plenty of private equity
people living in London. I think London is a great
talent magnet for people and it will remain so going
forward for the forever future. But let's not go into
that topic.
Speaker 1 (44:55):
And was he going to enjoy that one second? I
was looking forward to that topic. But way, you're right,
let's get that one.
Speaker 3 (45:01):
Yes, carry on, yes, yes, yes, Another very big question,
which is which is the equitization of the public equitization
of the markets, And and what's happening there is that
after the financial crisis, regulation came in and and clipped
the ability for equity analysts to get paid in a
(45:21):
way which actually paid for the sort of brain power
that went in there.
Speaker 2 (45:26):
And this coincided with this with this massive growth of
ETFs and automatic trading and index trading and so forth,
and and and the fees have shrunk more and more
and more and more. And that means that today and
I'm sort of carricaturing this a bit, but unless a
public market investor can write a three hundred or five
(45:49):
hundred million euro dollar commitment. They can't really maintain the
team that gives them the brain power, the analytical depths
and power to form a highly qualified, highly informed view
of that investment opportunity. So if the check size needs
to be you know, two hundred, three hundred, five hundred,
(46:10):
whatever it is, and they can't own more than a
couple maybe three percent of the company before things get
flagged and liquid, then by definition you back solve when
the company enterprise value sorry equity value needs to be
ten billion, twenty billion. So this is kind of what's happening,
and there's no there's very limited analytical depths and high
(46:34):
quality institution appetite for the smaller mid sized companies. There
are exceptions from this, as you know. For example, Sweden
is the most active IPO market in Europe over the
last over the last year or so, and it's a
sort of retail equity market. There's a culture of retail
investors wanting to earn equity and this has This is
(46:55):
not really the case in the UK anymore. All of
these factors coinciding, so kind of media that's been super
critical of public companies and incentive schemes and so forth
in the public in the UK, you take this drift
towards larger and larger stakes, therefore larger and larger enterprise values.
(47:21):
And then of course the growth of private equity as
an alternative ownership or governance model that has led to
a shrinking public market. Then we can debate whether it's
a big problem, a medium problem, or a small problem.
I think it's at least a medium problem. And we
would love to have thriving, well functioning public markets in
(47:42):
the UK and across the European continent, and for of
course the US public markets also to happily receive kind
of large meatcap companies and upwards, because you, as you
asked before, that is a contributing not an exclusive, but
it's a contributing way for us to exit companies in
our portfolio.
Speaker 1 (48:03):
Okay, brilliant, that was super helpful. Thank you very much.
Last question, literally I promised the last one, Kat. What
are you reading at the moment?
Speaker 2 (48:12):
I am reading at the moment the fantastic biography on
Masa Yosis's son by Leno Barber. I started that, Yes,
I started that probably six eight months ago, and then
for some reason I read some things in between and
then I came back to that and it's fun. I
(48:33):
tend to read stories about exceptional people. That's mostly what
captures my imagination. I tend to read stories about exceptional people,
and then sort of social psychology type books like books
about how we think.
Speaker 1 (48:49):
Help you understand those management.
Speaker 2 (48:51):
Well, help me understand myself and other people. I think
it's best to start with understanding ourselves as much as possiblesolutely.
Speaker 1 (49:00):
Well, that's a great pick. I love that book. Alonel's
a great writer.
Speaker 2 (49:03):
Is okay?
Speaker 1 (49:05):
Thank you so much, Kut, Thank you for joining us today.
Speaker 2 (49:07):
Thanks that was great fun.
Speaker 1 (49:13):
Thanks for listening to this week's Marin Talks Money. If
you like our show, rate review, and subscribe wherever you
listen to podcasts. Also keep sending questions or comments to
Marror Money at Bloomberg dot net. You can follow me
and John on Twitter or x. I'm at Marinus w
and John is John Underscore Stuppic. This episode was hosted
by Me Maren Sunset Web. It was produced by Zamasadi
and Moses and sound designed by Blake Maple's Special thanks
(49:36):
to Kurt
Bloomberg Audio Studios, podcasts, radio news. If you'd like to
hear more from us in our wonderful colleagues at Bloomberg
don't forget, You can sign up to subscribe to Bloomberg.
See the link in the show notes. Welcome to Meren
(00:27):
Talks Money, the podcast in which people who know the
markets explain the markets. I'm Maren zums Web. This week
I'm speaking with Kurt Bejuckland, executive chairman at Pamira, one
of the world's leading private capital firms. Premier managers over
eighty billion euros and led two of the largest tech
deals in twenty twenty four, taking both Squarespace and Adminter
private for seven point two billion and fourteen billion euros respectively.
(00:51):
Kurt became executive chairman in twenty twenty four. Haven't been
the managing partner since twenty twenty one and co managing
partner since two thousand and eight. Kurt is joining us
today to talk about exactly where we are in the
private equity cycle after a couple of fairly dismal years,
and also to discuss the themes over the next ten
years and exactly who private equity is suitable for. Kurt
(01:18):
thank you so much for joining us today. We really
appreciate it.
Speaker 2 (01:22):
Marian, thank you for having me. It's a great pleasure.
Speaker 1 (01:25):
We'll find out.
Speaker 2 (01:26):
I'm looking forward to this conversation right now.
Speaker 1 (01:30):
We've talked a lot about private equity on this podcast
over the last few years, and we've watched it go
from a sector that has regular reported outperformance to regular
report it under performance. And we've seen three years of
difficulties in this sector pretty much since interest rates started rising.
So why don't we start by talking about the sector
(01:51):
as a whole. Set the scene for us. Are we
near the end of this difficult period? What happens next?
Speaker 2 (01:56):
Yeah? So I think that's a profound question which which
needs to be looked at through a long period of time.
So I joined what became Premiere twenty nine years ago,
and this is the third megacycle. If I use that expression,
then I see now and they actually have turned out
to be relatively predictable in how they roll out. So
(02:18):
you have a period of performance, then some exuberants, you
have a lot of capital coming in, and then some
sort of art attach, typically in markets or macro And
in the end of the dot com period, it was
excessive capex investment into telecom stuff, and then in the
financial crisis it was excessive leverage in some corners of
(02:39):
the financial markets coupled with valuations driving too high in
some areas. And what we see now is this period
through COVID, then the great inflation bump leading to rates
resetting from kind of zero to kind of four percent,
and the industry having in some corners discipline in that
(03:01):
period of time, and then a very significant reset in evaluations,
and that has then led to an exit digestion problem,
which you've seen in the industry not driving enough exits
in twenty two, twenty three going to twenty four. And
then at the same time you've had this remarkable period
of public markets performance where over the last three years,
(03:25):
I don't know how many people would have guessed in
twenty twenty two that were set up for three years
or continued ball market, but that's what's happened in the
public markets. You know, whether that's we can talk about
what there's bubbles, whether there's not bubbles, but that's a fact.
So you look at the private equity industry, which over
the very long term, has done I would argue a
(03:46):
really good job for the right investors in that ASA class.
We'll talk about why. But over the last three years
or so has not looked good enough comparatively in terms
of ail equidity lock up that it does compared to
what the public markets have delivered.
Speaker 1 (04:02):
Yeah, I mean, I think it's worth saying that the
major underperformance has come in the last three years, and
in particularly with this extraordinary performance from the US equity markets.
But we now see there was lots of reporting earlier
in the year about the State Street Private Equity Index,
which now has been out performed by the S and
P over pretty much every time period out to ten years,
and so that was a bit of a shot for
(04:23):
the private equity industry those performance numbers. I know that's
listed private equity funds, but nonetheless.
Speaker 2 (04:29):
Well it's listed private equity funds. I think there's a
lot of stuff that masquerades as private equity in the
markets today, and we should talk about what private equity
actually means. Private equity is a governance model with a
very significant competitive advantage compared to In my opinion may
be biased, but I've seen that play through for a
(04:49):
long period of time over in many cases, the public
governance model and that advantage governance model leads, when apployed
properly in the right situations, to an alpha that is
really undeniable over time.
Speaker 1 (05:03):
Why don't we stop there then, just to tour bin
rather than let's lose the flow that we had of
talking about where we are in the cycle and stop
briefly to talk about what that governance model is in
your few Because, as you say, there's an awful lot
of stuff out there calling itself private equity. The spectrum
is huge. What does it mean to you?
Speaker 2 (05:21):
Yeah, what private equity means to me is controlled by
out governance. So private equity GP.
Speaker 1 (05:27):
So, just before we go any further, because not all
of our listeners a completely expert in this area, GP
sends for general Partner, which in the world of private
equity refers to the active manager of the private equity
investment fund.
Speaker 2 (05:40):
So private equity GP buys first of all, does great
assets selection, so picks out of one hundred companies that
you could buy, you pick the one or the five
that really fits your capabilities. The markets become super specialized
these days, so you know, some firms are phenomenal at
FARMA investing and other firms are phenomenal B to B
services invested thing and third ones that let's say real
(06:02):
estate development. But you pick the one, three or five
assets out of one hundred that you think are a
great fit with what you do, and then after that
you set out to transform the businesses strategically, tactically, operationally,
organizationally over the next five years. And the thing that
really matters is that you have enough time to drive
(06:24):
through long term evolutionary businesses. But it's not like an
it's not an open checkbook where you can own a
business for ten to fifteen years, so there's a sense
of urgency. By the time year, four year, five years,
six maybe takes by, you're starting to run out of time.
So it creates this sense of patients, but at the
same time urgency in all the stakeholders. And the third
(06:48):
element is very strong alignment. So you have a management
team that tends to have a significant ownership in the companies.
You have a private equity GP that is incentivized by
the outcomes through carried interest, and then you have the
investors that provided that this formula works well and the
right assets are selected and the patient capital does it
(07:09):
governor's job, you will get very strong outcomes. So that's
private equity now. The moment you then start blending into
that buying small stakes in companies in the same way
as the public markets can do. You know, you buy
a one percent stake, a five percent stake in a company.
The moment you start going into places in the capital
(07:29):
structure where you don't have the governance control, you might
get attractive returns, but you typically take risk that is
commensurate with that. You don't transform the companies and you're
not in charge. So that for me, start shifting away
from real private equity, if you will, towards the broader
alternatives basket. In all of these assets, I mean, the
(07:50):
real question is we ask our investors to forego their liquidity.
So instead of investing in Nvidia stock or you know
in a UK any publicly listed company, we ask investors
to lock up their capital in substance for a period
of years. And for us to make that ask, we
then need to deliver out performance in return for that.
(08:12):
For some investors they can take that trade, for other
investors they can't take that trade.
Speaker 1 (08:17):
Okay, so let's just pick up that. I think what
is your main point there, which is that for you.
Owning stakes in private companies is not the same as
being a private equity investor.
Speaker 2 (08:27):
No, you can be a private equity investor owning stakes
in private companies, but control private equity is an ESSETT
class which is designed to be accountable and in charge
for driving transformation in businesses in addition to picking great
companies to invest in, and that's where you then get
the out performance.
Speaker 1 (08:48):
Okay, and the role of debt in all this, because
when we talked about that the three things that are
important to you when it comes to finding private equity.
Financial engineering isn't mentioned, but it's usually a big part
of this, isn't it.
Speaker 2 (09:01):
I think that it's a part that can modestly amplify
the outcomes, but it should never be an existential reason
for making an investment. So that's really important. I think.
So on average when we buy companies, our LTV is
like forty percent forty fifty percent, and that helps, especially
with the current environment where the cost of debt might
(09:24):
be all in, you know, six eight percent. Even that
helps amplify your performance a bit. But fundamentally what matters
is that your EBITA or your operating hashflow in the
portfolio is growing. So we have around sixty companies in
our buyout portfolio. The EBITA is growing sixteen percent per
year organically, and it's that compounding of those profit poors
(09:48):
that is actually driving the performance. And then you put
a bit of debt financing on that and it amplifies
the sixteen percent somewhere into the twenties with other things
going on as well, and that's what the private ecutive
returns then than come from.
Speaker 1 (10:02):
So again, this is I'm actually going to saying old
fashioned method of private equity. And there's quite a few
academic studies knocking around at the moment suggesting that the
majority of the returns across private equity as a whole
over the last fifteen twenty years or so have come
from debt.
Speaker 2 (10:18):
I don't necessarily agree with their studies because I don't
know all the cooking that goes into them. But what
I do see and do know is that those private
equity firms that consistently deliver real ALFHA to their investors,
they are phenomenal at identifying great businesses and driving through
(10:38):
patient long term transformation of those businesses. I think the time,
you know, when I joined the industry in the mid
nineteen nineties. You're absolutely right that financial engineering at the
time would allow you to drive and create good returns,
and that was kind of the decade that led up
to the financial crisis. I think all of that has
been commoditized out of the industry practice twenty years ago.
(11:01):
So for the last fifteen twenty years in the industry,
what has driven differentiated returns is firms that have biged
great long term structurally growing themes to back and have
then either backed or created number one market leaders that
have benefited from this long term profit waar compounding. And
that's what, in my view, great control private equity is about.
Speaker 1 (11:25):
Okay, all right, we've got our definitions straight.
Speaker 2 (11:27):
Now, I think we're okay, So.
Speaker 1 (11:29):
Let's go back to Let's go back to where we were.
You were in wonderful flow about where the industry is
at the moment after a difficult period, and I interrupted you,
for which I apologize, But can I get that flow back?
Speaker 2 (11:41):
Yes, let's get the flow back, and you're welcome to
interrupted at any point in time. So these three megacycles
that I was talking about, basically the way it happens
is is, you know, the industry gets a little bit
over exuberant, there's a shock to the system that appears
from somewhere. Liquidity drives up because it's harder to it,
and you probably see backwards looking performance weaker because there's
(12:05):
been exuberants in the system at some point in time
with too much capital chasing chasing deals, and then there's
a shakeout in the industry. And that's what's happening at
the moment. We love shakeouts in the industry because what
that's proper shumpedy and destruction competition where those gps that
have not performed, they struggle in raising funds. The funds
(12:26):
might be smaller, they might not raise any funds, and
the teams therefore shrink or disappear from the market. Whereas
those firms that have had a good strategy and that
are backing the right types of companies with a great team,
a good strategy, they will they will raise funds a bigger, smaller,
same size, that doesn't matter, but they will raise funds
(12:46):
that will allow them to continue executing on their strategy
and continue thriving. So and this you see every time
when you get these megacycles where we are now, I
think the cycles tend to be like or to five
year cycles when they happen, and we're probably somewhere in
year three four. So what you're seeing now is a
(13:09):
rapid pickup, very bifurcated, but rapid pickup in the exit
velocity of those firms that have built the right portfolios
of the last let's call it a decade, last five
to ten years. They are now in a position where
they can sell those businesses, and firms like US are
having very significant liquidity performance of at last year or two,
(13:33):
and that will then feedback into the system. It'll start
creating more capital coming back, it'll demonstrate the performance of
the funds, and then who knows what happens with the
public markets. I mean, you and I have been around
for long enough to know that what today looks like
phenomenal public markets performance tomorrow might look more of the
same more it might look much weaker. So what you
(13:55):
get in private equity is that sort of decade long
perspectiveive on returns, which, by the way, then means that
as private investors will get back to that topic. As
private investors, you need to be very patient, that you
need to be prepared to invest into that dynamic.
Speaker 1 (14:14):
The excess that are coming through at the moment. And
one of the things that you wait for in a
cycle like this in the first few years of it
is an acceptance of a shift in valuations right, and
that has been quite a long wait in private equity
for possibly some investors to realize that the valuations they've
put on some of their holdings weren't quite right. We
get that immediately in the public markets, which is of
course the wonderful thing about the public markets, but the
(14:36):
private markets there's a lag in valuation acceptance, not on
the upside, but certainly on the downside.
Speaker 2 (14:42):
It's always very tempting to talk about averages on topics
like this, but of course we know that averages are
actually never what the experience we experience distributions and what
I see at our end of the industry is when
your profit walls are growing at fifteen to twenty percent
per year. Even if you get fifteen or twenty percent
(15:03):
correction in private market valuations, it's only a matter of
a year until the companies have grown back into the
same baseline that you might have held them at, or
papes of them, let's say a year ago. So the
problem really emerges if you are stuck in a portfolio
which is not growing, and especially if it's not growing
(15:25):
and you have a lot of leverage on the companies,
and if it's faintly cyclical. So that's when private equity
firms get into trouble. It's private equity firms that are
or portfolios that are too dependent on leverage, and then
leverage becomes more expensive and maybe less accessible if the
companies don't grow. That means that if your baseline shifts downwards,
(15:46):
you kind of can't grow out of it. Time is
not your friend. And then if a macro cycle hits,
you get an adverse current and you need to swim upriver.
So that's when I've seen private equity go really peer
shaped in this kind of environment. The opposite side of
that applies to most of a portfolio like ours, which
(16:10):
is we own these long term compounders where revenue is
growing somewhere in the teens, the profits are growing somewhere
in the mid teens to even twenty percent, and the
revenues are consisting mostly requiring revenue models where the macro
sensitivity is less and as I said earlier, forty fifty
(16:34):
percent learn to value only, so were less sensitive to
interest rate shifts, So that kind of portfolio, Yes, we
might lose in years. Sometimes with the market correct so
we might lose eighteen months, but it will come out
of it. And in this sort of environment, I know
that people are very focused on owning real assets. You
can look at what's happened with the price of gold,
(16:55):
for example. But for me, what you really want to
own is scarce things that everyone in the world wants
to own. In fact, an increasing share of the world
wants to own that are growing. And the most attractive
things of that definition are scarce companies that are market leaders,
that make product services that people really want to buy,
(17:21):
and that are growing, that are growing from year to year.
So if you own those, it's a fantastic protection against inflation,
it's a great protection against what interest rates might do.
And time is on your side, so over time you
will be fine. You'll be even better than fine.
Speaker 1 (17:40):
Is that also the case if you own a portfolio
of excellent listed companies over a ten year period, you'll
be fine.
Speaker 2 (17:45):
Yes, So if you were fifteen years ago or even
ten years ago, if you were smart enough, which I wasn't,
to pick the companies that became the Magnificent seven today,
you would have done phenomenally well. Now if you picked
the four hundred and ninety three companies in the SMP
(18:07):
five hundred that didn't become the Magnificent seven, then your
performance will be kind of pretty lackluster. And you know this,
we all know this. It's really the SMP five hundred
is really driven by these seven ish companies that have
performed fantastically well, and especially now over the last three years.
(18:27):
If you have owned anything that touches AI, you've seen
a great kick in your evaluations. But if you're outside,
that screwed. If you weren't good enough ten years ago
to pick pick that, you would actually have done better
in other places of the financial market. So I think
it's a there's a survivor bias, as psychologists would call it.
(18:49):
In looking at if you had earned the best SMP
five hundred companies, you'd be you'd be doing really well.
Speaker 1 (18:56):
But I mean the same problem exist in private equity.
You've got even more companies you from presumly then a
listed manager you have to make more decisions rather than fewer.
Speaker 2 (19:05):
I don't think so. If you look at the number
of real persistent performance in private equity. Persistent performance in
private equity is more, much more than it is in
public equities. The first point and the second point. If
you look at gps that have the scale and the
(19:27):
capabilities to really compete and become one of the best
investors in pharma platforms or B to B services or
enterprise software in the world, there's not that many of
them terms that can write large commitments to back phenomenal
market leading companies that become these long term compounders. I
(19:51):
mean you can in each of those themes, you can
pick I don't know amongst ten gps fifteen gps, and
out of those ten fifteen, maybe five or ten will
stand out. And then you pick your themes and you
build your portfolio. You pick amongst five ten firms that
you back the funds on, and you see the persistence
(20:12):
of the returns you will do and you will have
done really well with that strategy. And by the way,
it'll be more absolute return than relative return, and it'll
be a super nice diversified portfolio of the sort of
companies that you typically can't access in the public markets.
Speaker 1 (20:30):
It's just harder cut than it was at the beginning
of your career in that the sector has grown a lot.
The competition has grown enormously, paying higher evaluations for companies
when you find them. Is it harder than it was
twenty years ago?
Speaker 2 (20:44):
So I'll tell you a story thirty years ago. Yeah,
when I joined the firm in nineteen ninety six, I
got I was a kid from Finland and I got
a job offer to join this firm that I didn't
know much about. So I called a friend who worked
at Goldman in London and asked him, Hey, can you
find out about this firm and these people? So he
(21:06):
went around, called a few people and called me back
and said, hey, yeah, it's a really good firm, smart people.
But you need to know that it's too late to
join the private equity industry. The best times of private
equity are passed, and today there's too much competition and
too much capital chasing too few opportunities. This was in
nineteen ninety six. And then when myself, together with a
(21:30):
gentleman called Tom Lister, we then took on the co
managing partner role at Permira in two thousand and eight.
There was an article kind of announcing this, and the
journalist in an unnamed publication said so and so times
too have been appointed to this job. The golden age
of private equities, however, passed, and they will have a
(21:51):
tough time in driving the firm going forward. So I'm
telling you this because nothing has been more persistent in
my journey for three decades in private equity other than
our returns, has been people thinking that the golden years
are past. And the thing that that sort of misses
(22:11):
is that we're insanely entrepreneurial industry. So we attract great talent,
great young talent, and the incentive model, the governance model
is really strong. We have the whole time. So what
you think, well, what might appear like a relatively steady
state evolution is really this constant buzz under the water
(22:34):
of in our own firm trying and discarding themes and ideas,
and a constant evolution of the talent and this sort
of collaborative but the Vinian model of the best entrepreneurial
investors emerging inside our firm and inside out the gps
that come up with great ideas that combine capital and
(22:57):
decisive governance and patients to outcomes, and kind of that's
what investors are backing. They're not backing the static let
us look backwards five to ten years and assume that
you're going to do the same over the next five
to ten years. But they back our platforms that are
super nimble and able to adopt with great talent and
(23:19):
depth of capabilities into an ever changing environment. And yeah,
I mean, you're right that on average it's really hard,
but it's kind of never felt easy, Like it really
really has never felt easy. It's always felt tough on
the margin.
Speaker 1 (23:56):
Here we are in what year four or five of
the tricky bit? You think, so nearly at the end
from the open view, what.
Speaker 2 (24:03):
Do you think three before? I think I said, out
of kind of.
Speaker 1 (24:06):
Four three, four, sorry, out of four or five? Okay,
so kind of halfway there, nearly that When you look
out over the next decade, and you said that you're
constantly pivoting, constantly changing, what does the next decade look
for you? Where are you pivoting to? What is the
change and what are the themes that will come out?
Speaker 2 (24:24):
First of all, I think, what's going to happen over
the next two to three years, You'll live like this
creative destruction or pain that the industry will in some
corners suffer because fundraising is harder and performance comes to
the fourth. It will lead to a healthier competitive environment
I want, I don't say easy, but healthier competitive environment.
(24:44):
So you'll have a few firms, fewer firms with greater
clarity and more concentration of capital that that will continue
developing and executing on their strategy. And I of course
think that we will be in our chosen themes of
those firms that are strongly benefiting from this. So that's
that's the first thing. Then the second thing that we
(25:07):
must talk about is the impact of technology AI and
this rapid acceleration of the pace of change driven by technology.
So again you know, we are sort of tech first,
but not tech only. We've been invested in that space
for dotal firms and existence of over forty years and
(25:27):
have backed you know, we were early capital into many
of the great tech stories. So for the last last decades,
and you know, there was there was a dot com revolution,
and then there was a there was a mobile telephony revolution,
and there was a cloud compute and software transitioning into
the cloud revolution, and now we're seeing this ar revolution
(25:48):
and each of these create amazing opportunities for driving rapid
positive shift and growth, and they of course also create
amazing opportunities to get it very wrong if on the
wrong side of that transformative watershed. And what is so
exciting about this shift is that, in very much the
(26:09):
same way as let's say, in the dot com revolution
twenty five even thirty years ago, we're so complete transitioning
of many industries, whether it's consumer facing businesses or enterprise
facing businesses. Here we are seeing an even broader and
more rapid impact. So the farmer industry is going to
get completely transformed driven by AI over the next three
(26:33):
four or five years, three two ten years, I should say,
the B to B services space, you will be able
to drive better services, more growth, better customer outcomes and
better therefore customer loyalty, and do so with better productivity.
And of course the impact directly on the kind of
tech space and the consumer internet space and so forth
(26:55):
is very significant. Now there are aspects of this which
are clearly in bubble territory. So I mean, I'm sure
you will have discussed with many others.
Speaker 1 (27:07):
Much every week every week there we go.
Speaker 2 (27:10):
So so the sort of you know, just like adding
up the big numbers is very clearly hard in some
of these aspects. But what we see in our portfolio
in terms of what we can do in real life
in terms of driving additional revenues and better outcomes for
customers and so forth and so forth, is transformational. And
(27:31):
it actually helps that you have intense competition at the
foundation model end and at the data center en and
so forth, because that drives rapidly down the cost for
the users being us in the application end that can
then use that to drive change in our businesses and
offer that to the customers and in our portfolio companies.
(27:52):
So that's a really big deal. And getting that right
is existential. It's not only attractive, it's existential. And then
I think I think the third one that is gonna
I think the industry is going to do a little
bit full circle back to you know what we've started
our conversation with, back to kind of the boots. So
(28:14):
when you start calling everything that's not publicly listed alternatives
and equating that to private equity, I think we are
maybe in a in a sort of obfuscation zone. Sometimes
for fun with my hedge fund friends, I will call
hedge funds a fee model masquerading as an asset class.
Speaker 1 (28:37):
And what will they call you kat, They will.
Speaker 2 (28:40):
They will come up with lots of appropriate insults in return.
Speaker 1 (28:44):
I mean they can say the same about a lot
of private equity thumbs.
Speaker 2 (28:47):
Where I was going with this is, so know, when
you talk about what private equity really is in terms
of the governor's model and the patient capital and all that,
all of that stuff that we talked about, But then
when you when you start buying into the same companies
that you might have bought in with a public portfolio,
(29:08):
with small non governance stakes, in a very diversified portfolio,
then you can I think it's a very fair criticism
like what's the right way of buying this and how
much should investors pay for that? And how So that
that's where I was going with this, and so I
think you're going to see a bit of a circling
back to the roots and to the core essence of
(29:30):
what should private equity really be? Why has it over
the long long term delivered consistent both both absolute and
relative returns. With accepting the critique that at the moment,
with where public markets are and with like effects and
other things, the performance on sometime series doesn't look good enough.
(29:51):
I do think strongly that that will self correct, especially
when you look at private equity that's doing what kind
of private equity was created to do, which is the
asset sect and government great companies for long term better
outcomes and creating better businesses. By doing that, I think
you're going to see a circle back to this and
some fluffy is going to go out of the industry
(30:11):
and the true performers are going to attract the capital
and take more share.
Speaker 1 (30:17):
And in that model is the expectation that the improved
company is that the exitus onto a listed market, that
the exit is in IPO. Because that's what seems to
make sense. You get the company, improve it, you build it,
you set it on the correct path, and then you
effectively gift it to the retail a vesta viron ipo.
Speaker 2 (30:36):
But what says that the ultimate destiny of a company
must be in the public markets? Right? So I won't
get this number exactly right, but approximately right. So the
number of public companies in the United States has fallen
from let's call it eight and a half thousand and
nine thousand two, let's call it four and a half thousand,
four eight hundred or something like that. Last when I
(30:57):
saw the number. So you've had a very significant deep
public market deification. You know, that's not the word, but
let's use it as a word now.
Speaker 1 (31:05):
The agatization, Yes, but it's still not quite it's still
equity because it's still equity private equity, right, So it
just is not public anymore.
Speaker 2 (31:16):
And what's happened is that whereas the case used to
be that venture capital funds and private equity funds would
own the kind of really small and small medium sized
companies and maybe medium sized companies, and then the natural
home would become the public markets once they're medium sized
and larger, what's happening now in the markets is that
the public markets, in my opinion, are really only takers
(31:38):
of the really like fifteen twenty thirty billion dollar euro
Sterling companies and upwards, because that's when these public market
investment machines can really put the brain power into understanding
and analyzing and creating a liquid market and so forth.
So what's happening is that this space in company size
(32:02):
is being filled by different forms of private equity and alternatives. So,
you know, I would never have dreamed of when I
joined the industry in the in the nineteen nineties that
we would be owning companies that are worth ten or
fifteen or whatever billion dollars. But we do, and we
do so consistently, and we buy and we sell them.
And that's because our industry has become a longer term
(32:26):
holder and evolver of these companies. And what that means
is that for investors, be they institutional investors or are
trying networth individuals, they get to own companies through private
equity that the otherwise could not own because they're not accessed,
like you can't own that three one or three or
(32:48):
five billion dollar company through the public markets because the
public markets actually didn't want to earn them. So it's
created a space we as an industry are feeling and
have feel that, and I think that's just going to continue.
So therefore to your question, coming full loop to that,
I don't think the end game always is that this
(33:10):
must be a company that goes into being a public company,
because because okay, you know, do you make the four
and a half thousand companies in the US that are public.
Maybe you do, maybe you don't. But if you don't,
if you have a fantastic company that's market meeting and
it's growing and all of that stuff, and it's generating cashflow.
You can sell it to strategics. We if I look
at our exits up at last twelve eighteen months, it's
(33:32):
actually the largest category of selling has been to strategics.
We can sell it to all kinds of.
Speaker 1 (33:39):
Sorry, cat, go back. What do you mean by strategics.
Speaker 2 (33:42):
I mean a large company another enterprise buying a smaller
company because it feels maybe a gap in a product
portfolio or a geographic portfolio or otherwise is highly symingistic
to what they do. So that's one exit route, and
the other one is this So many variants today of
financial ownership that is not public markets. It's of course
(34:07):
everything that is private equity and broader alternative assets. It's
family offices, it's this semi liquid private ownership vehicles that
are emerging and so forth and so forth, and those
become exit roots for also great companies that sit in
private equity. But it's super bifurcated. So if you own
(34:28):
again a kind of small medium sized company that doesn't
grow and doesn't generate cash and is faintly cyclical, this
is like zero exit market for that rightly, so, so
you shouldn't earn those companies But if you own a
fantastic market leader that's worth one billion, and tomorrow it
might be worth two billion, and it's compounding in a
very predictable way and taking share of the world economy
(34:52):
if you will, then there's lots of ways of exiting that,
whether it's worth a billion or three or five.
Speaker 1 (35:00):
Okay, I would love to spend some time talking about
whether the decline of public markets is a good or
a bad thing, But times moving on, So I think
we better move on to talking about who should hold
private equity in the style that you're talking about. And
I know that one of the things you want to
talk about today was the extent to which private equity,
(35:22):
again of the type that you're talking about, should be
held inside a high networth portfolio, a medium networth portfolio,
and ordinary retail investor portfolio. So from what you've said,
someone who only participates in the listed markets is missing
out on the majority of the growth companies across economies
(35:42):
at the moment. So you might say, well, if you're
any in the listed markets, you're really missing out on
the exciting innovative growth stuff.
Speaker 2 (35:50):
There is that element. Yes, there's also a significant trade
off which it's important that we highlight, which is that
the liquidity the public markets. Of course, you know, sometimes
you're selling into very strong markets, other times you sell
into weak markets, and it's unpredictable, but at least in
most plays of the year, you can sell if you
(36:10):
suddenly need the liquidity in private equity or alternity is
more broadly, the whole point is that these companies are
not liquid and we as an industry end up selling
them when we are towards the maturing end of our
value creation plan. We created the company that we wanted
to set up, if you will, for an exit, and
(36:32):
the exit timing is right. And that means that when
you commit to private equity through a regular fund, you
should absolutely expect a premium performance to what you would
get in the public markets, because that's the trade off.
But at the same time, you don't have control of
when that liquidity comes in. So therefore, the industry as
(36:52):
you know it sort of grew up from institutionally investing
pension schemes, sovereign well funds, insurance companies with long capital duration.
So the vast majority of our investors are these types
of entities that have capital duration. The liability duration if
(37:13):
you will can be a decade or two or three,
or maybe even perpetual. When you look at some of
the sovereign wealth funds, and consequently they are very happy
to make the trade off. This okay, So if you
deliver for US five or ten percent or whatever it is,
returns above the public markets benchmarks, we will happily accept
(37:34):
that our capital is locked up for a number of
years with less productability of when it comes out. And
this is the key with then private individuals coming in.
So for ultra high network individuals, I know that that's
a pretty fluid definition. But people that can think of
capital in a sort of really long term way and
(37:56):
perhaps even in a generational way, I think it's a
really good because it's typically diversifying, and it accesses companies
that you otherwise couldn't access, and you can keep the
GPS foot to the fire, and you can back these
sort of strategies that you want to back. But then
for the retail investor who has high need full liquidity
(38:20):
and perhaps an unpredictable high need full liquidity, it may
be harder. And then people create these and I think
this is really important. Then people create these rappers to
make liquid products be a bit more liquid semi liquid products,
but we just need to be realistic. There are limitations,
So that's not an asset class. A semi liquid wrapper
(38:43):
around a non liquid or lower liquidity private equity set
of assets. It's a rapper, but the underlying assets are
still low liquidity. So those can help somewhat, but they
always come with a trade off on the returns because
those semi liquid products they need to carry more cash
(39:04):
and they call in the capital earlier than when it's invested.
They might need to invest in some credit products that
are higher liquidity, lower return, So you almost always end
up with a trade off where you get a bit
more liquidity until you don't and we've seen that in
the market, and you get lower returns. So if we
draw it as a continuum, I think there's the retail
(39:27):
investor who probably shouldn't invest in in liquid products because
they have a high need for liquidity and it's unpredictable.
Then there's in between. There's a set of investors who
can start making some of that trade off, but they
need to tread with caution and think deeply about what
level of exposure.
Speaker 1 (39:46):
And also understand as understand as you say that they're
buying a rapper.
Speaker 2 (39:50):
And understand crucially that they're buying a rapper where the
underlying product is not that liquid, and understand the constraints
that comes with that. And then at the other end
of the bookshelf, you have investors that can afford to
think about capital in kind of five even ten years,
perhaps longer increments. And therefore I'm very happy to make
(40:14):
those trade offs and in fact have a competitive advantage
in being able to make those those trade offs. So
that's kind of the way I would think about it.
What I don't think is right. And again we've seen
this through the previous cycles in the industry where where
some retail focused alternative products have gone wrong when people
(40:38):
really did need liquidity rapidly. And that's that's something that
I mean, time tends to clear this out out, but
it's just important to be aware of that.
Speaker 1 (40:48):
Okay, So this will make sense again that the highest returns
over the long term will go to the already very rich.
Speaker 2 (40:56):
That's a very provocative way of saying it. But if
you look at if you if you look at most
ninety plus plus percent of our investors, they are actually
pension funds where pension funds and insurance companies where the
beneficiars are really not already very rich. There are people
for whom private equity has created longer term patients accrual
(41:19):
in a way the otherwise went never had four for
their pension savings.
Speaker 1 (41:23):
That's again a very good comeback. Perfect. So our high
networth investor here he is. He's not a mansion fund,
he's not an American university endowment in, not any of
those things. He's a rich guy. He'd like to invest
in private equity. He loves what he's hearing from you.
He's like, our marriage should shut up with the challenges.
Because Kurt knows exactly what he's doing. How does this
(41:45):
high networth investor get access to what you do?
Speaker 2 (41:49):
So this is where I cannot and do not want
to talk directly about what we do because that'll be promotion.
Speaker 1 (41:58):
Canny go to his wealth manager and say, can you
buy me a stake and one of Kurt's funds.
Speaker 2 (42:03):
So the way it works is is the best wealth
managers will have the best GPS on their if you
will shelf. And if this investor goes to their wealth
manager and says, hey, I'd like to build a portfolio
of you know, two or three great GPS that achieved
the following thing for my portfolio. Let's talk about how
(42:25):
much the exposure should be and how I should think
about timing it and so forth. Then that wealth manager
will also have the best GPS on there in their offering,
and that they will be able to commit into these products. Again,
let's put the sort of some a liquid stuff aside,
because we talked about that, but they will absolutely be
able to commit into the best GPS probably that those
(42:48):
are fundraising at that point in time, and create a
portfolio that luks and feels very similar to what the
sovereign wealth fund might be to day.
Speaker 1 (42:56):
Okay, brilliant. Can I go back briefly? We are nearly
done for far too long, and I apologize, but just
fun can I go back? Can I go back briefly
to the decline of public markets and to the extent
that is a long term problem for not just non
very rich investors, but also for society and for economies.
I mean, as you will probably know, we're all terribly
(43:18):
upset about the endless decline of the UK market, the
lack of listed companies, lack of IPOs. The company is
disappearing abroad, etc. It's a problem and we worry that
it destroys our networking effects. It did bad for our
professional services. It's bad for our economy as a whole.
So even though there's a very active private equity business
(43:40):
based in London, of course there is the loss of
the listed market. It does seem to be a problem.
Speaker 2 (43:48):
Yeah, so I think it is, and of course it's
for us. It's good for our business. It's good because
it allows us to increase our share of ownership in
the types of companies that we want tourn. I think
that it's bad because then for those perhaps retail investors
who cannot or choose not to invest in private equity,
they find it harder than to own the kinds of
(44:10):
companies that would be good diversifications, and then and then
they get sort of stuck in a much error and
actually by number shrinking basket of investment opportunities. The reason
for this is you go back to the financial crisis
and some of the regulation that emerged in the United
States and across European I include, by the way, having
(44:31):
lived in London for a quarter of a century give
or take, I include the use But.
Speaker 1 (44:35):
Are you the last private equity guy living in London.
Speaker 2 (44:39):
I'm actually in Abouda at the moment where I'm meeting
our investors, So so no, there's plenty of private equity
people living in London. I think London is a great
talent magnet for people and it will remain so going
forward for the forever future. But let's not go into
that topic.
Speaker 1 (44:55):
And was he going to enjoy that one second? I
was looking forward to that topic. But way, you're right,
let's get that one.
Speaker 3 (45:01):
Yes, carry on, yes, yes, yes, Another very big question,
which is which is the equitization of the public equitization
of the markets, And and what's happening there is that
after the financial crisis, regulation came in and and clipped
the ability for equity analysts to get paid in a
(45:21):
way which actually paid for the sort of brain power
that went in there.
Speaker 2 (45:26):
And this coincided with this with this massive growth of
ETFs and automatic trading and index trading and so forth,
and and and the fees have shrunk more and more
and more and more. And that means that today and
I'm sort of carricaturing this a bit, but unless a
public market investor can write a three hundred or five
(45:49):
hundred million euro dollar commitment. They can't really maintain the
team that gives them the brain power, the analytical depths
and power to form a highly qualified, highly informed view
of that investment opportunity. So if the check size needs
to be you know, two hundred, three hundred, five hundred,
(46:10):
whatever it is, and they can't own more than a
couple maybe three percent of the company before things get
flagged and liquid, then by definition you back solve when
the company enterprise value sorry equity value needs to be
ten billion, twenty billion. So this is kind of what's happening,
and there's no there's very limited analytical depths and high
(46:34):
quality institution appetite for the smaller mid sized companies. There
are exceptions from this, as you know. For example, Sweden
is the most active IPO market in Europe over the
last over the last year or so, and it's a
sort of retail equity market. There's a culture of retail
investors wanting to earn equity and this has This is
(46:55):
not really the case in the UK anymore. All of
these factors coinciding, so kind of media that's been super
critical of public companies and incentive schemes and so forth
in the public in the UK, you take this drift
towards larger and larger stakes, therefore larger and larger enterprise values.
(47:21):
And then of course the growth of private equity as
an alternative ownership or governance model that has led to
a shrinking public market. Then we can debate whether it's
a big problem, a medium problem, or a small problem.
I think it's at least a medium problem. And we
would love to have thriving, well functioning public markets in
(47:42):
the UK and across the European continent, and for of
course the US public markets also to happily receive kind
of large meatcap companies and upwards, because you, as you
asked before, that is a contributing not an exclusive, but
it's a contributing way for us to exit companies in
our portfolio.
Speaker 1 (48:03):
Okay, brilliant, that was super helpful. Thank you very much.
Last question, literally I promised the last one, Kat. What
are you reading at the moment?
Speaker 2 (48:12):
I am reading at the moment the fantastic biography on
Masa Yosis's son by Leno Barber. I started that, Yes,
I started that probably six eight months ago, and then
for some reason I read some things in between and
then I came back to that and it's fun. I
(48:33):
tend to read stories about exceptional people. That's mostly what
captures my imagination. I tend to read stories about exceptional people,
and then sort of social psychology type books like books
about how we think.
Speaker 1 (48:49):
Help you understand those management.
Speaker 2 (48:51):
Well, help me understand myself and other people. I think
it's best to start with understanding ourselves as much as possiblesolutely.
Speaker 1 (49:00):
Well, that's a great pick. I love that book. Alonel's
a great writer.
Speaker 2 (49:03):
Is okay?
Speaker 1 (49:05):
Thank you so much, Kut, Thank you for joining us today.
Speaker 2 (49:07):
Thanks that was great fun.
Speaker 1 (49:13):
Thanks for listening to this week's Marin Talks Money. If
you like our show, rate review, and subscribe wherever you
listen to podcasts. Also keep sending questions or comments to
Marror Money at Bloomberg dot net. You can follow me
and John on Twitter or x. I'm at Marinus w
and John is John Underscore Stuppic. This episode was hosted
by Me Maren Sunset Web. It was produced by Zamasadi
and Moses and sound designed by Blake Maple's Special thanks
(49:36):
to Kurt
Host
Merryn Somerset Webb
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