Good riddance, 2009. Here are 17 funny, smart or just plain delusional statements LBO pros made this year:
I analogize it to sex. You realize there were certain things you shouldn’t do, but the urge is there and you can’t resist.
-David Rubenstein of Carlyle Group on leverage, February
There is no private equity from a traditional point of view and (there) hasn’t been for the past year.
-Leon Black, founder of Apollo Management, February
Buyouts moved from speculative finance to Ponzi finance.
-Howard Newman, president and CEO of Pine Brook Road Partners, March
Remember your eighth grade algebra? Figuring out the buyout game today is like trying to solve a three-variable equation. Assume ‘x’ is the target’s earnings, ‘y’ is the purchase price multiple, and ‘z’ is your cost of capital. With three unknowns, you can’t solve the equation.
-A senior GP on the difficulties of deal-doing, March
Their new label became “private equity,” a name that turns the facts upside-down: A purchase of a business by these firms almost invariably results in dramatic reductions in the equity portion of the acquiree’s capital structure compared to that previously existing.
-Warren Buffet on the evils of private equity, March
Things are often popular for the wrong reasons. Do I think we’re ahead of the curve? Yes. We’re now getting inbound calls of people saying, “Are you raising a fund?” People chase things for the wrong reasons.
– Jerry Newman of Willowridge Partners, on the newfound popularity of secondary funds, April
Some people are asking, ‘Why invest in private equity when its fundamental, inherent illiquidity has caused some institutions so many headaches?
-Chris Douvos, co-head of private equity group at The Investment Fund for Foundations, July
We also thank our sponsor Ripplewood Holdings, who has provided inspired vision and stewardship over the last two and a half years, including during this process.
-Mary Berner, CEO of The Reader’s Digest Association, the day the Ripplewood-backed company filed for Chapter 11, August
What’s happened in past cycles of LBOs is you overleveraged it or overpaid… you were stuck, locked in time. Now these big U.S. buyouts, because the debt trades… You can rewrite history in a sense.
-Tony James on putting the mega-LBOs behind him, August
I tell young professionals, “Don’t go into private equity. You’ve got to be mad to go into private equity.
-Guy Hands, Chairman and CIO of Terra Firma, September
The market, when it comes back, to the largest customer, there will be $5 billion purchases… They won’t be larger than that. Leverage will be, at most, one to one or one and a half to one, so the equity needed still will be larger than many firms want to do.
-Richard Friedman, Head of Merchant Banking at Goldman Sachs, September
Earlier (I heard) the Beatles song, “Yesterday,” which has the lyrics, “Yesterday, love was such an easy game to play.” It made me think about getting deals done today. Yesterday, private equity was such an easy game to play.
John D. Howard, CEO of Irving Place Capital, on the dealmaking environment, September
The idea that (taking portfolio companies) public is a panacea for private equity guys is not really true.
-Dan O’Donnell, private equity chair at Dechert LLP, September
We’re passing on junk – total junk. Bubble era flights of digital fancy now deflated and offered for scrap that they’re not worth.
-Media-focused buyout pro on middle market deal flow, October
The fundraising train crept to a halt in the second half of last year and has only continued its deceleration because of the very few, if any, transactions in the marketplace.
-Dan Vene, senior vice president, C.P. Eaton Partners, October
I don’t understand how a limited partner can make an investment in a fund that does PIPEs. If I want to, I can call my broker at JPMorgan and buy stock on the public market without paying someone 20% carried interest.
-Michael Psaros, co-founder and managing partner of KPS Capital Partners, November
Last year compensation was… still a forward-moving train despite the fact that funds were hitting the brakes. This year, the train has been thrown into reverse.
-Brian Korb, partner and head of the private equity practice at Glocap Search, on private equity compensation, December