Perhaps no private equity group was closer to the global financial crisis’ epicenter than was AIG Investments (now rebranded as PineBridge Investments). The past 18 months have been a roller coaster for the institution, culminating in its announced sale to Hong Kong-based investor Pacific Century Group. All the while, it continued to make investments and never missed a capital call.
Bob Thompson, head of alternatives for PineBridge Investments, comes to Buyouts West on April 15, to tell this story. In a pre-conference interview, he talks about buzz words he does and doesn’t like, the likelihood of PE shops merging with each other, and lessons learned as having been part of AIG over the last 18 months:
Give us a few thoughts on the PE marketplace generally. What kind of shakeout do you think there will be in the PE industry?
Bob Thompson: I have heard of conversations going on where small teams will be subsumed into larger private equity groups. I have no doubt the strong will get stronger. These groups with a real niche focus and an existing portfolio are making the judgment that they can get further faster and have better access to capital if part of a larger group.
Any buzz words you’re tired of hearing in GP pitches?
Here’s one: “value add.” I mean, have you ever met with a private equity firm that says it doesn’t add value? Here’s another, “Good company, broken capital structure.” You hear a lot of that. But these companies didn’t get their capital structures willy-nilly. Clearly, some very smart people made judgments about those companies, and the markets validated the capital structures as prudent at one point. The issues are more complicated; companies underperform for lots of reasons.
To read the full interview, continue to the Buyouts West wesite