Insight
Barber: Co-investments are not adversely selected but driven by check sizes
“Some people believe that co-investment in its own right is negatively selected. I don't, patently don't believe that because almost every single deal we do is because somebody needs more money. Never because like, oh, our normal equity check is a hundred, but …”
Opinion
Barber: Sub-$1B non-tech businesses cannot go public in modern markets
“Unless you are a super growth, super techie company, you can't get public these days. And that's part of the boom of the private equity industry. Like the companies I took public as a 28 year old could not go public today. They can only be owned by private equ…”
Opinion
Barber: Commodity-oriented cyclical businesses do not work well in private equity
“I think we've decided that very commodity oriented cyclical businesses don't work in a private equity setting very well. It doesn't help that everybody also just hates oil and gas and you're better off in more nimble vehicles where you can get in at the right …”
Insight
Barber: Requiring unanimous investment committee votes discourages honest dissent
“Well, if you have everybody unanimous, then no one wants to be negative during the process. And nobody wants to say, I don't like it, okay, I'm good. So let somebody say they don't like it and say no. And I really thought that was genius.”
Prediction Not checkable as stated
Barber: Venture bubble from 2019 to 2022 will produce real carnage
“I think there's going to be some real carnage that's come out of the most recent two, three years. In some of the, what I'll just call overall venture bubble, cause it's not just tech, et cetera.”
Assertion Contradicted
Barber: Every Drexel Burnham lender and equity holder recovered all their money
“And one of the things most people don't know is not only did every lender to Drexel Burnham get all their money back. We, as equity holders got all our money back at the end of the day, it was a short term downturn in the high yield market with too much concen…”
Insight
Barber: Quick rejections in co-investing are almost as valuable as commitments
“Quick no's I've learned are almost as good as yes's. And people often just say, wow, that's just so awesome. You're telling us no, like this quickly without, you know, drawing it out.”
Insight
Barber: When passing on deals, frame rejections around internal constraints
“We try when we say no more often than not to make it about us, not about them. We don't want to tell them their baby's ugly.”
Insight
Barber: Co-Investment Check Sizes Shouldn't Exceed Fund Look-Through Allocations
“You shouldn't have all your positions from your funds as two and a half million dollar positions and a bunch of your co-investment positions as five, seven halves and tens.”
Insight
Barber: Leverage limits impact LBO returns far more than interest rate hikes
“You run an LBO model. And you take rates from six percent to eight percent. It does not matter. If you all of a sudden can only borrow four times versus five times, that changes the math.”
Assertion Supported
Barber: Thoma Bravo's $11B Anaplan buyout was funded entirely by private debt
“There was an eleven billion dollar LBO done recently called Anaplan by, I think, Toma Bravo. Interesting, that deal was financed by, I think it was four or five private debt firms. No bank involved.”
Insight
Barber: Weaknesses are strengths boiled over, requiring careful modulation
“I have a saying that I talk to people about, which is that people's weaknesses are their strengths boiled over, and I think if you think about most people, you'll say, yeah, and some of the most successful people just know how to keep the heat exactly right, a…”
Disclosure
Barber: Cohesive Capital acquired airport snow melter Dijana doing $25M EBITDA
“We bought a company from a seventy-seven-year-old man in Port Washington, Long Island, called Dijana, now called Outworks. And his company plowed the snow and then melted that snow with proprietary melters at seven of the nine snowiest airports in America. And…”
Assertion Supported
Barber: Wall Street leaders in 1970s and 1980s rose through syndicate desks
“And if you go back in time, John Goodfriend, the legendary CEO of Solomon brothers had been the syndicate manager of Solomon brothers, Ralph D'Annunzio, the legendary CEO of Kidder Peabody had been the syndicate manager. Tommy Saunders, a very legendary Morgan…”
