Dan Rasmussen, founder of Verdad Advisers and former Bain Capital analyst, discusses whether private equity firms can operationalize revenue growth.
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“You can't predict revenue growth, and it's really hard to control it. Wish we could, and if it were possible, there'd be a class at Harvard Business School, how to drive revenue growth, okay? It's just impossible and unpredictable, and maybe you get things right, maybe you get things wrong, but it's really hard to predict revenue growth.”
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More from Dan Rasmussen
Opinion
Bridgewater is an elite academic department run by a cult leader
“Bridgewater is like, take MIT and Harvard's economics department and Stanford and Caltech's comp sci department and have them run by a cult leader and shift that all together, and you've got Bridgewater.”
Dan RasmussenFeb 17, 2020▶ 9:58Dan Rasmussen – Private Equity Risk and Public Equity Opportunity at Verdad Advisers (First Meeting, EP.15)
“And they basically start buying market share by offering the riskiest loans. So they're offering unit tranche, eight times debt to EBITDA loans with no covenants, and basically because they don't want to show their LPs that any of their loans have defaulted, T…”
Dan RasmussenFeb 17, 2020▶ 19:25Dan Rasmussen – Private Equity Risk and Public Equity Opportunity at Verdad Advisers (First Meeting, EP.15)
PredictionNot checkable as stated
25% to 30% of LBOs would go bankrupt in a normal recession
“And so much of private equity today of LBOs is single B or triple C type quality, that I would say 25 to 30% of LBOs would go bankrupt in a normal business cycle, normal recession with normal levels of delinquency.”
Dan RasmussenFeb 17, 2020▶ 21:58Dan Rasmussen – Private Equity Risk and Public Equity Opportunity at Verdad Advisers (First Meeting, EP.15)
PredictionNot checkable as stated
Private equity will likely enter an extend-and-pretend zombie state
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Dan RasmussenFeb 17, 2020▶ 22:56Dan Rasmussen – Private Equity Risk and Public Equity Opportunity at Verdad Advisers (First Meeting, EP.15)
Opinion
US private equity multiples are distorted and significantly overpriced
“Now I think private markets are much more expensive than public markets, and you can see this with the venture-backed stuff like WeWork. Private markets say it's worth seventy-five billion. Public markets say it's worthless. You can see it in the deal multiple…”
Dan RasmussenFeb 17, 2020▶ 24:09Dan Rasmussen – Private Equity Risk and Public Equity Opportunity at Verdad Advisers (First Meeting, EP.15)
AssertionSupported
CEO pedigree and elite education do not predict stock returns
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Dan RasmussenFeb 17, 2020▶ 35:03Dan Rasmussen – Private Equity Risk and Public Equity Opportunity at Verdad Advisers (First Meeting, EP.15)
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