The Ledger
Every statement that passed quotation and attribution checks. Mix any filter with any other: certainty 1/5, debate potential 5/5, or both at once.
why aren't all 27 resolved? a statement only gets an assessment when the public record can support or contradict it. opinions and what-ifs never can, and 1 checkable ones are still open, waiting for their date. predictions held up or didn't; assertions are supported or contradicted. on every card: ▮▮▮▮▮ certainty · ▮▮▮▮▮ debate potential. speakers are clickable
Sloane: PE DPI Slump Creates Succession Logjams and Withholds Carry
“One of the effects of the DPI problem in the broader industry is not just on LPs. It's also on investors, right? And you think about VP, principal, MD, even partner level investors who've been at firms for a while and haven't seen their carry paid out. There a…”
Perelman: GSP only rolls up sectors that were previously consolidated
“Alex touched on it earlier, we're only doing roll-ups in categories and asset classes and businesses that have been consolidated before. The benefit to that is there is off the shelf Tech solutions that have been created to manage these businesses in a multi-u…”
Perelman: GSP avoids roll-up categories with bolt-on multiples above 8x cash flow
“We are actively avoiding categories where the bolt-ons are trading outside of our price range. There are categories today that people are having success rolling up, whether they be Resi HVAC or pest control, or in a prior cycle, perhaps VET, where the platform…”
Perelman: Garnett Station has only lost money on a single deal
“So you don't run into the problem, which happened to us in our second deal, the only deal we've ever lost money on, where we had dis-synergies.”
Perelman: Youngest business GSP has backed was 17 years old
“The youngest business we've ever invested in at GSP is 17 years old. The oldest is 90 years old.”
Perelman: Garnett Station rarely uses upfront leverage in consolidations
“The way that we counteract the speed point with safety of principle and downside protection is we rarely use leverage up front in these consolidations.”
Perelman: Investment Discussions with Universal Consensus Are the Most Dangerous
“That's a huge part of our process is you can get into a room, everyone nods their heads and says, yes, this is a great idea. Are we going to make three times or five times? Who knows, but it's going to be great. Let's think again there because some of those so…”
Perelman: Super option dilution above 3x to 4x outcomes is worth the cost
“Our view is the incremental dilution above a three or four X is more than worth it for the incremental incentive for these people to be max be aligned with us”
Perelman: GSP grants 1:1 bonus options matching employee co-investment checks
“If they are willing to write a new check into our deal, side by side with our security, we will give them additional one-to-one options on that dollar.”
Perelman: Tech tools boost portfolio organic growth by 200-300 bps
“We have found that through partnerships with our operating partners and management teams and founders with tech implementation, whether it's estimating software or labor management tools or site selection, we're able to increase that organic growth rate typica…”
Sloane: GSP Scaled Burger King Franchise to 1,100 Units and $1B+ Exit
“We first invested in a 23 unit Burger King franchisee business that was based in the Garnett Street train station in Henderson, North Carolina. They gave us this shot. We were successful with that business that allowed us to grow. We ultimately got to 1100 fra…”
Sloane: Roll-Up Investors Easily Fool Themselves with Add-Backs and Run Rates
“You can really fool yourself with run rates and add back nonsense, particularly in a roll up where you're buying a lot of stuff. At some point you have to figure out what are the cash flows of that business.”
Sloane: Garnett Station Partners Has No AUM Target
“We certainly don't have an AUM goal. That's not the business. Our goal is on the incentive side.”
Sloane: GSP Treats Every Deal as the Enemy to Prevent Deal Inertia
“Every deal is the enemy is hung a sign in our office just to remind us on the one yard line, never get comfortable, never let inertia take you through a deal, never let Quote, unquote, pattern recognition allow you to invest money. Make sure you're thinking ag…”
Perelman: Debt markets are far friendlier to $15M-$20M EBITDA consolidations
“Size and scale, we have found that the credit markets are far deeper Cheaper, more flexible, less covenant-laden, and friendlier to consolidations that are, let's call it, 15 to twenty million of EBITDA in size and scope versus something that's five. What does…”
Perelman: Multi-unit investments must hit 20% store margins and 3-year payback
“If you take multi-unit businesses, of which restaurants would certainly be one of them, they qualify for investment from us. Business has to have at least 20% store level margins. Business has to have new units that pay back in three years or less and has to h…”
Perelman: Deborah Derby grew portfolio earnings from $60M to $150M before exit
“Fortunately, we were able to bring in a new CEO, Deborah Derby, who's now the CEO of one of our businesses. She took earnings in that business from a trough of sixty million a year at year-end, twenty-twenty-two, to when we sold the business a year and a half …”
Perelman: Authentic Restaurant Brands Grew From $20M Equity to Multi-Billion Valuation
“If you look at our largest investment to date, it's a consolidation called Authentic Restaurant Brands that we started four years ago with a twenty million dollar equity check. Today, it's a several billion dollar company across a number of different brands wi…”
Perelman: GSP Co-Founders Share Single Desk, Speakerphone, and All Meetings
“We share a desk. We have one big Polycom speakerphone between us. Take all of our meetings together, all of our calls together, and all of our travels together.”
Perelman: Garnett Station rolls equity into most business exits
“Most of the exits we've had, we've rolled equity into the deal.”
Perelman: Founders typically roll 20% to 50% equity in GSP deals
“Founders are typically rolling anywhere from 20 to 50% of a transaction with us.”
Sloane: Roughly $10T in Assets Will Change Hands Over Two Decades
“What we realized while building value in the Burger King business was that there was a massive opportunity to invest in fragmented markets, high quality businesses behind this baby boomer generational transition, 10 trillion of assets or so set to change hands…”
Sloane: GSP Lost Zero Portfolio Companies and Avoided Rescue Capital During COVID
“Surviving what was a very challenging period for our portfolio, getting through it, and not losing a company, not needing a dollar of rescue capital, growing equity value across the portfolio, and then Exiting those businesses proved to ourselves and proved to…”
Perelman: Garnett Station Partners manages $4 billion in AUM
“The examples today are similar to the examples back then, perhaps on a larger scale with four billion of AUM today versus 23 Burger Kings”
Sloane: GSP auto services platform grew from under $5M to $25M EBITDA
“We have a consolidation in tire and auto services. Business we invested in three years ago when it had less than five million of EBITDA. Today it's twenty-five million of EBITDA.”
Perelman: GSP's Burger King Reverse Merger Plunged to $0.98 During COVID
“When we took the business public, it was May of 19, and we reverse merged our 220 unit Burger King and Popeyes business into a larger Burger King business and became the largest shareholders of that company. The day we did the deal, we merged in at 8:35 a shar…”