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 10 resolved? a statement only gets an assessment when the public record can support or contradict it. opinions and what-ifs never can, and 0 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
Traditional PE fee structures incentivize managers to scale funds for themselves
“The management fee was there to cover the operating costs of the management company, and as the fund grew 10, 20, 40 times, the fees charged were not reduced by the same factor, and that structure is really conducive for the manager to increase the size of the…”
BlackRock LTPC uses an LP-approved fixed budget instead of percentage fees
“We went back to the roots of private equity where management fee was really designed to cover the operating costs, and now we have a fixed budget approach, and that has a significant impact because first, we ask our investor to approve the budget, but second, …”
Rotating PE owners and capital structures every few years disrupts companies
“It's a very disruptive activity for a company to change the partnership, the capital structure.”
BlackRock LTPC rotates internal deal teams to re-underwrite companies without selling
“What we're saying is that we can do the same thing either with a different deal team, with different operating partners, with different consultant on a regular basis. And achieve the same result without all the cost friction of selling the company three or fou…”
Deal teams are transaction experts; IC chairs provide pattern recognition
“When somebody has spent three, four, 500 hours on a transaction, they're the expert. You're not. But you hope that your training, that your experience, that the fact that you've seen so many transactions is really going to help you focus on the right question …”
Pension plans are long cash but short human capital for direct deals
“So I'd been trying to build more long-term strategy within our pension plan, but those plans are long cash and short human capital, so it was difficult to get the origination capabilities that we needed And probably more importantly, the value creation and ass…”
BlackRock Long-Term Private Capital avoids selling companies just to crystallize carry
“What we're trying to do here is really to Be more company focused and look at buying good companies and making them better and making them great. As my partner, Colm Lanigan says, cost reduction is not really a strategy, so we are extremely focused on growth, …”
BlackRock LTPC eschews dividend recaps and maximum leverage for moderate debt
“We're not going to use leverage to max it out and dividend recap, because that's really doesn't work in our model. We're going to use leverage in a moderate way, but we will be able to use it and increase the leverage on a timely basis, but really in an effort…”
Since 2000, 500 companies have been owned by three consecutive PE funds
“There's a statistic that says that since 2000, there's 500 companies that have been owned consecutively by three or more private equity fund, which means that those company would continue to do really well in the private domain, have been owned now for 1215, 1…”
BlackRock LTPC targets $500M to $1.5B equity checks in 10-15 companies
“So equity check of between 500 and a billion and a half. So let's call it 10 to 15 companies at the end. And again, the holy grail is really that once we have this portfolio of seven, eight, nine, 10 companies, that it generates enough cash flow to let us cont…”