Sernovitz: Very few decisions separate success from failure in lower mid-market PE
Gary Sernovitz · Gary Sernovitz - Inside the CIO Seat (EP.357) · Dec 18, 2023 · at 32:04
Gary Sernovitz, Managing Director at Lime Rock Partners and author of The Counting House, explains how slim margins and survivorship bias shape lower middle-market private equity outcomes.
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“This was about how few decisions in a lower middle market private equity firm separate success and failure, genius and idiot and zombie, and I had a count. Six things we sold too early. Five deals that we decided not to do, but they were ours to do. We could have paid two percent more. We just decided not to do. Four things we did, and there were zeros. This game of inches for a firm that has Obviously, some success at the beginning to achieve some institutional success. Ecclesiastes time and chance happened to it all. Is this in that of a business that's so hard? And whether the firms we think of genius, there's a survivor bias to that based on if you just think about, yes, you can say, well, someone made the right decisions, but those very few decisions can really determine the life and the reputation and the success of these guys.”
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