Great lunchtime keynote by Madison Dearborn Partners’ Paul Finnegan, during last Friday’s Yale SOM Private Equity Conference. Informative, combative and interactive. Really far too few of these at industry conferences (hopefully Buyouts West will be an exception).
For example, he began by asking for a show of hands from those who believed PE pros pay too little in taxes. About four hands went up in a room of more than 200 (including yours truly), and he made two of them (not including yours truly) role-play various scenarios related to the credit crunch. A few notes from his talk:
- Finnegan believes that GPs could be in trouble if they were particularly inflexible with I-banks on debt terms following the credit crunch. As he said, not every firm gets to see every deal. I happen to think that bankers are more craven than vindictive, but we’ll see…
- Finnegan said that MDCP will soon send out PPMs for its sixth fund, with a $10 billion target. His attorney instinctively shouted out: “But we’re not soliciting.”
- An audience member asked if MDCP does hostile takeovers. Finnegan responded negatively, saying: “We are totally incapable of running a business.”
- He put odds of a recession at 50/50.
- Carry at MDCP is broadly distributed, with no one individual receiving double-digit points, out of 100.