Bruce Ou, Managing Partner at GroveStreet, discusses technological disruption and what distinguishes exceptional buyout managers.
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“So I'm not talking about just putting in a new CRM or a new accounting software system, new financial dashboards. I mean, that's table stake, right? These are very foundational level transformations.”
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“The medium return of funds, let's say it's sub one billion is quite similar to the medium returns of funds, five billion above observable from the industry data, but the top 10, 20% performers in the sub one billion category generates meaningfully higher retur…”
Bruce OuOct 30, 2023▶ 13:59Bruce Ou – Private Market Investing at GroveStreet (EP.347)
Opinion
Ou: China investment risks are priced in via depressed private market valuations
“So I would say today the risk associated with China investments in general are very reflected in the price premiums in terms of asset valuation or lack of bid for any assets in the private markets, for example.”
Bruce OuOct 30, 2023▶ 37:20Bruce Ou – Private Market Investing at GroveStreet (EP.347)
Insight
Ou: High idiosyncratic risk makes venture co-investing revert to average returns
“We have not really done much in the venture side at all. It requires a very deliberate different strategy to do venture co-invest in our opinion. Idiosyncratic risk is far greater than buyouts, and therefore you have to approach it with a diversified enough of…”
Bruce OuOct 30, 2023▶ 41:44Bruce Ou – Private Market Investing at GroveStreet (EP.347)
Opinion
Ou: Most investors fail to rethink portfolio construction for the next decade
“Rethinking how you deploy and what portfolio you built for the next decade is something I don't think a lot of investors are doing.”
Bruce OuOct 30, 2023▶ 45:13Bruce Ou – Private Market Investing at GroveStreet (EP.347)
AssertionNot checkable as stated
Ou: 2023 industry exit values are tracking 56% in buyouts and 17% in VC
“Private equity is tracking about 56% for buyouts compared to our 90% and ventures tracking, I think, 17 ish percent from memory to the 37% we have.”
Bruce OuOct 30, 2023▶ 47:53Bruce Ou – Private Market Investing at GroveStreet (EP.347)
Insight
Ou: Operationally intensive buyout teams use less initial leverage
“It is usually the case that an operational intensive team tends to use also less leverage at the beginning. So if we see a team that tends to use a higher leverage at the beginning, that is a bit of a warning signal to us, because if you are trying to really i…”
Bruce OuOct 30, 2023▶ 20:11Bruce Ou – Private Market Investing at GroveStreet (EP.347)
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