Disclosure
Stone Point has launched over 50 de novo startup investments
“We've done over 50 startups, and people say, why did you do a startup there? And the answer is, that's where the twenty-foot pole falter was.”
Assertion Not checkable as stated
Following 2008, 29 of 31 evaluated independent Florida banks were technically insolvent
“There were 31 banks in Florida. Of any consequence that weren't owned by Citi, Bank of America, or someone from out of state. We called on 29 of those 31 banks. Every one of them was technically insolvent. Their liabilities were greater than the fair market va…”
Assertion Not checkable as stated
PE firms compete with strategics using higher leverage and creative EBITDA adjustments
“Right now, private equity firms are very competitive with strategics, so businesses that are leverageable, people will put a lot more leverage often on businesses than we will.
People often will adjust EBITDA in ways that are quite creative.”
Insight
Operator quality matters more than underlying business economics
“The people are even more important than the business. There were many people that he backed in tough businesses that did well, and there were many people that were in good businesses that were not capable, and they didn't do well.”
Insight
Conducting multi-year research enables investors to act instantly on target opportunities
“We wanted to have this elongated, bass-ackwards investing where you do your homework ahead of time and you really know what you want to do, and then when the opportunity comes, you can move instantly, but when you see an opportunity that you haven't done the m…”
Disclosure
Stone Point deployed $6 billion into pre-existing relationships during COVID-19
“During COVID, Where you couldn't meet management teams. We did 17 deals. We put six billion dollars to work in 17 companies, and we knew those management teams on average for over nine years, and we knew those sectors and studied them on average over 15 years.”
Assertion Supported
Private equity deal pricing is rising sharply from already high levels
“We're seeing pricing going up quite a bit from already high levels, and I think some of that is a function of Okay, here we go back to hopefully a normal environment. Some of that is interest rates and leverage capability, and some of that is just, okay, now I…”
Insight
Elite operators are domain specialists, not generalist corporate managers
“Many of these folks have lived in their world their whole life, and they just know it inside and out. If you ask them to run another business, they're not Six Sigma GE trained people who can go from light bulbs to jet engines. They don't want to. They're in th…”
Assertion Partly supported
Stone Point secured charters for the largest US bank startups in history
“We got de novo charters for the biggest bank startups in the history of the United States.”
Insight
Successful investments naturally create their own exits regardless of upfront plans
“This is not meant to be a glib comment, but if this business succeeds,
There'll be lots of exit alternatives.
If this business does not succeed, all the things we tell you today about how wonderful the exit options will be are not going to be there.”
Disclosure
Stone Point is selling preferred hold companies due to compelling market valuations
“We have a number of companies that we're selling right now that we would rather hold, but it's just the prices are so compelling.”
Insight
The days of solo fund managers raising multi-billion-dollar firms are numbered
“If you want to own your own business, it's very tough to hang a shingle now and say, hi, I'm Dineker saying I'm Eric Midnich, give me five billion dollars. Those days are pretty numbered. There's very few people that can do that.”
Disclosure
Stone Point typically avoids taking investment committee seats at backed asset managers
“We don't sit on those investment committees by and large. We do help them any way they want us to help them, and that's been a very successful strategy.”
Opinion
Progressive is likely the most sophisticated insurance underwriting company in the world
“Progressive is probably the most sophisticated insurance underwriting company in the world, so he was trained on insurance underwriting.”
Disclosure
Stone Point refuses to sell GP stakes to maintain internal partner control
“Having said that, the team here really is happy with Themselves and with each other, and we constantly discuss this type of thing, and we really want to control our own destiny, and we don't want other people at the table other than the people here that are ev…”
Disclosure
Stone Point builds sector relationships for years before investing
“At a stone point where we have a Strategy of a proactive multi-year outbound targeted search, and it's kind of slow twitch muscle investing because you spend years studying a sector, meeting people, interacting with them, learning, adding value, developing rel…”
Disclosure
Stone Point assigns a devil's advocate to evaluate every prospective deal
“Every deal we try to do has a devil's advocate. Everyone here feeds from the same trough.”
Disclosure
Stone Point provides target companies with warm customer introductions before investing
“And then you find out who they're looking to get as new customers, and we can help them with a warm introduction, and we often will do that before we even have a chance to invest. We try to help people before”
Assertion Not checkable as stated
Stone Point experiences almost zero employee turnover following its two-year associate program
“We tend to handpick people right out of the Wall Street training programs and really invest heavily in them, and they invest in us, and they end up staying and becoming permanent members of our team, and the turnover here has been almost zero after the two-yea…”
Disclosure
Stone Point rejects passive agreement and demands employees challenge senior leadership
“We're big at Stone Point on everyone speaking their mind, and we do not want people to be what I would call head bobbers. You look and see what the senior people want, where they're leaning, and you bob your head that way. We want people that make an independe…”
