Equity Private

I spent five years maneuvering to land, by hook or by crook, a coveted position in private equity. After all that, I may or may not live long enough to actually regret my decision.

After undergrad and then five sunless years inside one or another of several ivy encrusted red brick buildings (hereinafter "The University"), "Equity Private" holds BA, MA and MBA degrees from institutions of higher learning with endowments larger than the GDP of many countries. Somehow they still manage to annually pester our author for cash gifts of all sizes.

Though, in truth, the author showed little early promise in the world of high finance, though a strange and unlikely chain of nevertheless interconnected events, "Equity Private" was recently named "Vice President" of a middle market leveraged buyout firm in Manhattan. Somewhere, somehow, someone must have made a very serious, and potentially very costly, mistake. Let's just hope their error is not discovered too quickly.

If this is your first visit, a few points:

Motivation: I started this weblog because I couldn't really find any others like it. You can read my first post to get a sense for what I was thinking the day I started writing, that might lack the "after the fact" quality of this page, which I update quite a bit.

You can also start from the beginning, and read chronologically. That might be helpful.

Topics: I have expanded the original list of six categories into ten a bunch that now include:

"All My Darling Daughters" that focuses on one or another portfolio company of ours and its antics.
"Bono" that details the many pretenders to management who enjoy holding court in the throne room of public opinion and expressing unsolicited views on matters ranging from CEO pay to corporate governance and foreign policy in which they have no professional or related experience or knowledge whatsoever.
"Done Deals" that tracks the inner workings of deals my firm, or another firm, manages to close on.
"Getting In" that revolves around recruiting and the process of getting into the business.
"Noise in the Data" that will collect all the random writing that touches private equity or deal making only tangentially.
"Overheard" that will be populated with witty (or frightening) quotes I overhear from time to time.
"Patrick Bateman" that serves as a gentle reminder that some bankers think they are still in the 1980s, and there is a good chance they are violently psychotic.
"Project [fill in the blank]" gives you an easy way to chronologically track the trials and travails of a given portfolio company of ours.
"Social Equity" that concentrates more on the people inside private equity and their antics.
"The Business" that will be filled with my blithe commentary on the world of private equity.
"Trainwrecks" that will outline the flaming spirals of deals that go wrong.

This experience is practically a soap opera. It can be difficult to keep track of the guy who got fired before anyone found out he was sleeping with the girl in human resources who had to fire him before her boss got fired by Armin because of the letter sent by the former shareholder. No really. It is hard even for me. Remember, I have to make all these names up and remember who is which alias. I started the list to remind me who I had named what. I figured, why not just redact it and put it below?

Sub Rosa Capital, LLC: The pen name for the private equity firm silly enough to hire me.
Armin: My boss. The Senior Partner at Sub Rosa. European. Accented. Prone to confuse English idioms. Overly optimistic. Alarmingly charismatic. Source of the private equity "reality distortion field." (Distortions)
Sean: An "Industry Partner" at Sub Rosa.
Equity Private (a.k.a. The Empath): Me.
Ron: My introduction to Sub Rosa and Armin. A "friend of the firm." (Prologue VI - The Bounce)
Colin (Colen): Vice President at Sub Rosa. Former schoolmate of mine, though I didn't know it until after I started work. (The Bragging Wall)
Laura (a.k.a. Debt Girl/Debt Bitch): Sub Rosa's "Debt Associate." Flirts with all the debt boys in Manhattan. (Debt Bitch)

Morgan Stanley: Should need no introduction.
Nicholas: Leveraged Finance/Financial Sponsors guy with a thing for Laura the "Debt Bitch." (Debt Bitch)

School Days: A variety of characters related to recruiting, my MBA program, and Stanford (yuck).
Cindy: The obnoxious Stanford grad who slept her way to a job in M&A in the European offices of a bulge bracket. (Prologue - Disillusioned)
Pinstripes: The equally obnoxious Vice President of a bulge bracket who had her, and had her hired. (Prologue - Disillusioned)
Richard: The dupe who got dumped for Pinstripes. (Prologue - Disillusioned)
Allison: California blonde who failed to sleep her way to a job in investment banking (not for a lack of trying). (Prologue II - At What Price Honor?)
Colin: Exploiter of Allisons everywhere. (Prologue II - At What Price Honor?)
Kim: My friend from business school, found her way into investment banking at my second choice. (Prologue VI - The Bounce)

Sinister, LLC; Project Sinister: A portfolio company of ours focused on financial services. (Project Sinister)
Jeff: Sinister's CEO, friend of several Sub Rosa Partners and also Partner candidate for Sub Rosa.
Dave: Sinister employee and Ph.D. Maybe the only sales entity of note in the firm, at least if measured by his bulk, but a social washout. (Project Sinister)
Tom: Entirely useless Vice President of Sales for Sinister. Couldn't find his own shoes if you stapled them to his feet. (Haemoglobin)
Linda: Employee of Sinister, is most likely doing the horizontal bop with Tom, despite the fact that Tom is married. (Haemoglobin)

Project Spy: Our attempt to wrest a United Kingdom unit out of a Fortune 500 firm. (Project Spy)

Project Velocity: Our attempt to wrest a little group out of a fallen "bubble era" high tech firm that commoditized themselves right out of the market for their own product. (Project Velocity)

All actually asked in one form or another at one time or another:

Q. "Are these stories true?"
A. As true as I can keep them without giving myself away.

Q. "Hey, how come you get to be the hero?"
A. You haven't been reading carefully. I'm the villain.

Q. "Hey, how come you get to be the villain?"
A. It's my blog.

Q. "How long ago was the entry about [the goat in the associate's office]?"
A. I try to keep all the events pretty current. In the early parts of the weblog I obviously had to go way back to business school. Things are getting pretty caught up by now. By April I should be describing mostly "same week" stuff.

Q. "I can't find the entry about the goat in the associate's office."
A. That's not a question. You can't find it because I made it up to be funny.

Q. "How is it your boss hasn't caught you?"
A. He's too busy to read the internet? No one's told him yet? No one who knows him has seen the blog yet? No one who has seen the blog and knows him has put it together yet? I am so brilliant at obscuring the important details that though he reads it daily he hasn't put it all together yet? The rest of the non-blogging private equity world is even crazier and therefore my account seems too benign in comparison for anyone to bother even mentioning it to him? I really don't know. I am not about to ask him either. (Even if he found out, he'd probably scold me and then print a copy out and spend the night reading it and laughing, but I'm not taking any chances).

Q. "Are there 'Easter eggs' in the site?"
A. Well, yes, I guess. Sort of. The "mouseovers" for the pictures sometimes have funny snips. (I started putting them in after I got this question).

Q. "How do you have enough time to write all this?"
A. I used to spend evenings after work jotting down the day's events in a work diary. At first I did this because I read somewhere that you are supposed to so that if you get fired you can prove you actually did something valued, no matter what your employer says. Then I did it because it helped me to take a step back and review the day and absorb the lessons thereof. Eventually, I started typing it up, but it was cumbersome to constantly put a date on everything for each entry and try to sort things. Once I realized that blogs did this, and I realized how crazy this business is, well the rest is history. (Maybe). When I spend time thinking about various industry developments or economic news it helps me to write down my view first before trying to decide how it impacts us, our strategy or tactics and our portfolio firms. Might as well include those. (Some I don't post because they are a bit sensitive). Really I only spend two hours a night or so doing all this. You should try it. Sometimes after a weekend I have four or five days of writing "queued up" in the blog timed to post twice a day. I can ignore it mostly for the rest of the week that way or if I am traveling. (I generally try to put two a day up at least, something trite in the morning, something with substance in the afternoon, but no promises).

Q. "Yeah, but you posted six updates on Wednesday. What gives?"
A. Effectively a given day's posts are the sum of what I wrote the night before as a "diary" the weekend before, and what I pen during the day's research. Sometimes I will delay some posts to avoid sensitive stuff being published too fast. On a office bound day that's a lot. Otherwise you're stuck with the weekend or previous evening fare. Often something I am researching or looking into spurs an email to a partner or a note to myself. Interest rates are a hot thing for me right now because I need to know how hard to press for low LIBOR spreads. So I spend a lot of time cruising around looking for our wonderful Fed Chairman to say something dense that I can use or reference. Unsurprisingly, entries like "Certainly Certain" and "Paranoia" get posted and what was originally a 2-3 entry day ends up with 5-6 instead. Things like this start off first as comments in emails to one partner or another and get posted with minor modifications on the blog. Sometimes I am really, really tempted to just add an entry to the calendar two weeks ahead. I rarely give in to that urge. I'm an instant gratification sort. I want to see my entry NOW. In effect, you're getting near real time looks at my thought process, messy as it is. Sheesh. Stop complaining and enjoy already.

Q. "Why do you quote The Economist so often?"
A. Since you are asking this question it is clear you don't read the publication.

Q. "Here's my resume. Can I have a job?"
A. Nice resume, but probably not. Obviously, to get you in the interview process would mean you finding out who I am. What if we didn't hire you? You'd be on the Vault message boards with my name the next day, I wager.

Q. "Wait, you read the Vault message boards?"
A. Only if I need a chuckle.

Q. "I work for [a massive hedge fund/a ubercool private equity firm/an investment bank]. We are looking for new talent. Can I see your resume?"
A. Sure. Download it here. (32k .pdf)

Q. "Hey, are you interested in a company I know about that might be for sale that [makes widgets/latex gloves/bird flu/bird flu cures/cat flu/cat flu cures/cocktail straws]?"
A. You bet. Want to give me the book without me signing a CA? Cause I'm not putting my name on anything.

Q. "Are you a girl or a guy?"
A. Yes.

Q. "Are you married?"
A. Yes. To England the Firm.

Q. "Want to get a coffee?"
A. Sure. That's a great idea. I'll be back in 10.

Q. "No, I mean with me."
A. Oh! How very nice! No, thank you.

Q. "Is the Debt Bitch Single?"
A. What is this, eight grade again? Ask her yourself.

Q. "Can I have the Debt Bitch's [email address/phone number/description]?"
A. No.

Q. "Can you give me a hint where you and the Debt Bitch work?"
A. Well, it's a private equity firm.

Q. "Can't you give me a bigger hint than that?"
A. We do buyouts.

Q. "Maybe narrow it down a little more?"
A. In New York.

Q. "What about a hint about the name?"
A. It ends in LLC or LP.

Q. "I figured it out. You work for [Carlyle/Blackstone/KKR/DLJ/FirstEquity/One Equity Partners/JP Morgan Partners/Warburg Pincus/Goldman Capital Partners/Thomas H. Lee], am I right?"
A. Yes.

Q. "Do you have a picture of you I can see?"
A. Yep. It's on my firm's website.

Q. "Can you give me the address for the firm's website?"
A. Sure. Right here. Or here.

Q. "Ha ha. Very funny. Can you give me the address for your firm's website?"
A. No.

Q. "Where do the cool bankers go out in Manhattan?"
A. I don't know any cool bankers.

Q. "How much salary do you get?"
Six figures. Like about anyone in PE short of managing partners in the larger funds.

Q. "High six figures? Low six figures?
A. Yes, one of those.

Q. "Do you have equity/part of the carry?"
A. Yes.

Q. "How do I get a job in private equity?"
A. I don't know, actually. I've only managed to do it once and I'm still trying to figure that one out.

Q. "Awww, c'mon. You must know something? Is there a secret handshake? A codeword?"
A. Ok, ok. What you really need to do is work in Human Resources for a while. It is a field that gives you a lot of what you need to know to be successful, lets you work with the most talented people in corporate America and recruiters love it.

Q. "Really?"
A. No, but you will learn to work and deal with complete idiots or die trying. Reminds me of private equity. And that advice is about as good as any of the other recruiting advice out there. Cheaper too.

Q. "What a gyp."
A. Want your money back?

Q. "How much do you make from the blog?"
A. Do you see any ads here? It's a labor of love.

Q. "I am a literary agent for [Simon & Schuster/Harper Collins/Random House]. I love your blog and I would like to sign you up and work with you to get a book done."
A. Sounds like a lot of work and a low IRR to me.

Q. "You don't understand, I work directly for Jack Romanos, I really think this is interesting work."
A. Is it true that he has really bad hemorrhoids?

Q. "If I put a link to your blog on my blog will you put a link to my blog on your blog?"
A. I don't know. Is your blog a cool finance related thingy?

Q. "If I pay you will you give me career advice?"
A. Sure. Leave the cash in a laundry sack with the hobo who hangs out near the HSBC building on the Broadway side.

Q. "Oh, is that your agent?"
A. No, the hobos there just need a bit of a leg up. HSBC people are seriously cheap.

Q. "Wait, so you work in the HSBC building?"
A. No. I think I answered the "how cheap are you" questions on the leasing application wrong. I suppose I shouldn't have admitted to shopping at Saks.

Q. "If a plane leaves New York for London at 6pm local and travels at 400 knots and a similar plane leaves London for New York at 2am local time and travels at 350 knots where do the planes cross paths?"
A. Am I on the Gulfstream?