Private Equity Puns

I don't know if i have the right to post that...

U.S. SEC to ramp up hedge fund, private equity fund scrutiny | Reuters

But i think it's a good new for us...

Add this to the list of companies who will not go public via a SPAC (at least in the near future.) Those hoping for, or fearing a, DA with Watson Health can cross this one off their list.

Article From "Tech Crunch" https://techcrunch.com/2022/01/21/francisco-partners-scoops-up-remains-of-ibms-watson-health-unit/amp/

"In what has to be considered an anticlimactic ending, IBM sold off the data assets of its Watson Health unit to private equity firm Francisco Partners today. The two firms did not share the purchase price, but previous reports pegged the value at around $1 billion.

Under the terms of the deal Francisco is grabbing various pieces of the unit, including Health Insights, MarketScan, Clinical Development, Social Program Management, Micromedex and imaging software offerings. This gives Francisco Partners a broad range of health data under its umbrella.

When IBM put together Watson Health in 2015, it hoped to dominate the vertical by building the unit around a data-driven strategy. To that end, it began scooping up health data companies starting with Phytel and Explorys .

It went on to spend $1 billion on Merge Healthcare and wrapped up its spending, buying Truven Health Analytics the following year for $2.6 billion. Although the company had high hopes that Watson Health would help drive its artificial intelligence push, the unit failed to produce the results it was hoping for and when Arvind Krishna replaced Ginni Rometty as CEO in 2019, he had different priorities.

>[IBM reportedly shopping Watson Health just as healthcare gets hot](https://techcrunch.com/2022/01/07/ibm-reportedly-shopping

To be honest, I didn’t even consider this possibility until I started my dermatology residency. My program has had several sponsored dinners by these groups recruiting us for jobs. So far my research has come up with this list, but I am very curious to find out more (some of these may be limited to derm).

Pros:

• PP without worrying as much about the overhead

Cons:

• they lure you in by promising an outrageous, too-good-to-be-true salary, and then fire you after a year or so if you are unable to meet their predatory standards for # of patients seen/RVUs generated
• without saying as much, the groups that have recruited us have basically implied that anything more complex than your regular skin exam is referred out to the nearest academic center (which is how they expect their physicians to see 50+ patients a day). Some may consider this a pro.
• one of the groups advises their derms to only have one excision clinic a month. Somehow it’s more profitable for a physician to see 50 patients as opposed to doing 15 excisions in a day (everything I’ve been taught about billing so far in residency says the opposite)
• lack of interaction with residents and med students (again some may consider this a pro)
• little to no opportunity for partnership

Just wondering if anyone can shed some light about why these groups are a good idea for a new grad. I’m not seeing the benefits except for private practice pay without so much concern for overhead.

Short version - we just got bought out by a private equity firm, more or less completely out of the blue. Looks like they pushed everything through in the blink of an eye - the actual holding company is a numbered shell corp registered literally a week ago, and we have to sign a bunch of paperwork within a day.

Where it gets interesting - I had a great offer earlier in the year, but I really liked my team and one of the founders, so decided to stay after they threw a decent chunk of cash in the form of a retention bonus, and another decent chunk of equity at me.

I have to repay that chunk of cash if I leave earlier than mid-next year. Worse, I have another retention bonus for the year after that.

After the buy out, my equity is basically wiped out. Unvested options are accelerated, and are bought out from me... at 50 cents more than the strike price (comes out to about a weeks pay), which basically removes any upside I have in staying, and I have a day to make the decision.

This whole experience leaves a very bad taste in my mouth, and having already lived through the stages before a buy out, I don't want to repeat the process (fire a bunch of people, make everyone else work twice as hard, replace headcount with cheap Indian devs that are cheap for a reason.. you know the story).

Am I screwed in that I either have to pay back the retention bonus, or find a job that starts exactly when my retention bonus ends? Why the second retention is bad - the second I tell them I don't want it, they know I'm not planning on staying any more than I have to. Do I have some negotiating power being in a fairly critical role?

EDIT: Thanks for all the advice guys! Some really good ideas here. Will be exploring some of them as soon as I'm able to with all the stuff going on in my personal life.

Hallo liebe Affengemeinde, ich hab mir die Mühe gemacht, den kompletten Part 16 der BBC-Reihe gebündelt auf Deutsch zusammenzustellen - als PDF-Dokument zum runterladen.

Nehmt euch ein paar freie Minuten und lest euch das Meisterwerk des investigativen Journalismus einmal in Ruhe durch, es sind 33-Seiten, die wirklich tief gehen und die Finanzkriminialität von Unternehmensräubern genau aufdecken.

Den Text habe ich ein bisschen angepasst, leserlicher gestaltet und mit neuen Infos zu GameStop's ehemaligen CFO Jim Bell befüllt, da der original Part mit George Shermann, aufgrund von einer Namensverwechslung widerlegt worden ist, siehe Pfosten dazu vom OG Ersteller. (Dies ist übrigens, der einziger Fehler der gefunden worden ist)

Du findest den vollen Part aus der BBC-Reihe >>> hier auf OneDrive <<<

Das meiste vom Text ist mit Quellen belegt und kann einfach nachvollzogen werden, es werden an der ein oder anderen Stelle aber auch ein paar Spekulationen angestellt.

Untergliedert ist der Text in folgende 4-Teile:

• Teil 1 - Die dreckigen Geschäfte von Apollo Global Management und Adam Aron
• Teil 2 - Die Strategie der Unternehmensräuber Leon Black und Michael Milkens
• Teil 3 - Cellar Boxing, Zombie Aktien und die heutigen Memestonks
• Teil 4 - Fazit

TL;DR

Nach dem Beispiel von Milkens Unternehmensüberfällen durch die Verwendung von Junk Bonds, um Unternehmen unter finanziellen Druck zu setzen und sie für Übernahmen billig zu machen hat Apollo Global Management (größtenteils ein Spinoff von Drexel, Milkens Unternehmen) zusammen mit vielen anderen Private-Equity-Firmen die Corporate-Raiding-Strategie gemeistert und in die Neuzeit gebracht.

Dies beinhaltet die Einsetzung von Insidern in das Senior Management der Unternehmen, die reif für Übernahmen sind. Ihre Hedgefonds-und Market Maker Kollegen brachten sie dazu die Aktien bis zum "Gehtnichtmehr" zu shorten, die Unternehmen mit massiven Schulden zu belasten und dann die Kontrolle zu übernehmen und zu entscheiden, wie sie am besten aus dem Gemetzel Profit schlagen können.

Dies ist ein Prozess, bei dem Unternehmen wie Apollo, Blackstone, KKR und ihre Hedgefonds Freunde Millionen und Milliarden verdienen, dabei die Unternehmen und Jobs zerstören und nicht mal mit der Wimper zucken.

https://preview.r

Compiled some resources for IB/PE interviews in Google Drive: Interview Prep Material

Planning to update the drive with more financial modeling content, industry primers, etc.

Let me know if you have any suggestions on materials to add – hoping this shared folder will turn into a useful source for free material.

Disclaimer: All of the material in the drive were posted publicly online free of cost or outdated by more than a decade, but in case I made a mistake, please let me know as soon as possible.

https://www.businessinsider.com/alun-cairns-advised-elite-partners-later-took-job-2022-1?r=US&IR=T&s=09

Currently at a FANNG, but burned out. A previous contact from my past life in financial services reached out and I have an offer to lead a team (that I will build) for a data platform. This company has been acquired by a private equity firm and an exit is expected in 5-7 years. Offer is good base and bonus north of 300 and they took all my FANNG unvested shares and turned them into options at a strike price that is expected to double in 2 years. Anyone go this route before? What are things I should be worried about or dig deeper into? What is the worst case scenario? Is it true that in the PE world they would reach out to you for other investments once youve done a steller job? Any thoughts are appreciated.

EDIT: found out more answers wanted to point out here in case someone else is in the same shoes.

Many people asked the question about if the company is doing well why would the PE sell that positive cash flow? If it doesn't, it would mean your options would remain that, options, and you would never be able to cash out. The answer to that is, PE is managing funds, they raise money and for a fund (think govt, education, retirement etc) and they make investments based on their research/due diligence. These funds have a maturity date, by which, the cash needs to be redistributed to the the fund and the fund no longer exists. Which means all the assets have to be liquidated. So the goal of the PE is to take these investments and make them more profitable which means they would be more attractive to be sold or IPO(d).

I'm good to make that move, wish me luck. If I remember, I'll update this in a few years

https://nypost.com/2021/11/24/biden-spending-thanksgiving-at-private-equity-billionaires-home/

Thoughts?

Hey all,

I was just wondering how important you GPA is for private equity. I’ll be finishing my undergrad with a 3.4 which I know is low, but I also majored in engineering while playing D1 football. Please give all advice!

Edit: I will be within the MBB next fall if that helps.

How would you go deciding between the two? How does the day to day work, work-life balance, compensation, exit opps compare?

If you have any resources that elaborate on this that would be much appreciated

They are willing to pay absurd amount of money for a project manager role involving supply chain work. Offer is incredible but I’m getting bad vibes from it. Very charismatic ceo recruited me for it. Anyone with experience around these?

Have been contacted by a few recruiters for coffee chats regarding positions in Real Estate PE

Curious if anyone in this sub came from an institutional investing background and later left to do investing full time on their own dime

Any benefit to having that experience before taking the plunge yourself? Or would you reccommend taking the plunge immediately? Would another career path better prepare me (ie. RE lending etc.)?

For those that didn't come from an investing background, do you think this is something you would do if the opportunity presented itself? Or did the free / low cost online resources level the playing field?

My initial views on it:

Pros:

• Exercise investing mindset
• Build network
• Develop expertise in specific asset class / region
• Exposure to fund raising / investor decks

Cons:

• Likely minimum 2-year commitment to realize above pros
• Average 60-80 hour weeks. Alternative is to consume online resources at own pace
• Cog in the machine (no equity carry at junior level)
• Specialist vs generalist experience, which usually skew to commercial vs residential opportunities

Does anyone has guidelines or samples on how to record private equity journal entries for example: Capital calls Distributions calls For different situations like return on capital, money received or sent on a different day or not received yet, one fund is lending money to another fund to make investment?

That would be great. Thanks in advance for the help!

Like many here, my approach to equity investing is to approximate the whole market. So far, my method for approximating the whole market has been: 100% VT.

However, this excludes privately-held companies. Philosophically, I'd prefer to be exposed to those companies.

I'm not sure of the best way to estimate the size of that "missing allocation". Apples-to-apples comparisons are hard, since private company valuations are opaque. I did some back-of-the-envelope estimation based on comparing the revenues of the largest private companies vs. the largest public companies. (Note that the second link is *all* companies, so I excluded the private companies.)

https://preview.redd.it/x7vvoh8fop881.png?width=1200&format=png&auto=webp&s=7f41d63808ad3edbe1201f3417ddacbc577ed898

Based on this, about 25% of my equity investment should actually be invested in privately-held businesses.

To be clear, I have very low confidence in this estimate. The above approach assumes that revenue is correlated with market cap, but that's only barely true:

https://preview.redd.it/gmk2y27zqp881.png?width=1200&format=png&auto=webp&s=bb60cff0fee4bdc6460c9b418733ba5f55ac15d6

So, if anyone has a better estimate, I'm very interested.

Regardless, I think it's fair to say that a nontrivial percent of businesses (weighted by valuation) are privately-held. (And obviously, *not* weighted by valuation, the majority of businesses are privately-held.)

So, my question is:

Is there some way to get this exposure in a passive / principled / algorithmic way?

I was awarded significant amount of shares as part of my employment about 6 years ago. Two years ago, I was separated from the company, with a huge package, so no hard feelings on either side. At the time, I was told and given a letter verifying my ownership of the vested shares. The original terms of issuance said they will only be cashed out at the time of the company’s sale.

I’m not in a hurry to cash it out, but I’ve never heard anything about financial performance of the company, even when I was there, but during my tenure I was privy to at least some insights.

Has anyone been in this situation? As a shareholder, can I demand periodic financial statements (10k or balance sheet) from a private company? they are about $300-400 Million company in assets. Also, there’s been a few generation of guard changes that I’m getting out of touch with current corporate officers there.