Translating PE-Speak

The business world is full of silly sounding or near-meaningless corporatespeak clichés. Even worse, everyone repeats ‘em until they become official. Like most industries, private equity has its own ridiculous language.

In the spirit of holiday light-heartedness, my Buyouts colleagues and I compiled some layman’s explanations of our favorite PE clichés, with everything from “Proprietary deal flow” to “Value add.”

So remember, this is what journalists really think when we hear boiler plate clichés. Feel free to add your own. Feel very free. Happy New Year!

Top quartile: The most variable form of measurement on earth.
1 + 1 = 3: PE Math
1 + 1 = 11: Delusional PE Math
Partnering With Management: “We promise not to destroy and pillage the business your family has built for many generations.”
Stick to our knitting: “We are inflexible and fear change.”

Value add: (noun) What private equity firms think they do. Picture them injecting the value with a turkey baster.
Add value: The way they do it. “We add value with our value add.”
Value creation: Sometimes they whip it up from scratch.
Operating expertise: The source of value. Without it you’re just a financial engineer.
Financial engineering: The ghetto of private equity! Can not add value! Bad! Deny! Abort!

We Drink The Kool-Aid: “We turn a blind eye to impending disaster.”
Proprietary deal flow: Everyone has this. You must have this. It’s the loge box of deal flow. Auctions, those are the cheap seats
Flight to quality: Lenders today are very busy flying to the Land of Quality.
Thought leadership: Indicates there is such a thing as Thoughtless Leadership.
JAMBOG (just another mid-market buyout group): Just run from anyone who uses this term.
Blocking and tackling/Hitting singles and doubles not home runs/What inning are we in/What sports metaphor are we in: “We will do anything to make business sound more exciting than a bunch of dudes pouring over spreadsheets.”
Roll up our sleeves: difficult in a suit, please leave to consultants.
Dry powder: Backups. PE firms like to “sit on” their backups. See also: War Chest
Quality revenue: Some dollars are worth more than others.
Perfect Storm: Gawker said it best.