Sub Rosa, LLC generally dislikes co-investors. First, we prefer to be the lead. Second, there is always a lot of wrangling about the terms of management fee splits, who sits on the board, what sort of protections an equity co-investor will be entitled to if they are not the lead (and therefore have less say in the management of the company) and related nonsense that distracts from the key purpose in the first place: closing the deal and running the company. Third, if its that large, we probably shouldn't be investing. (We aren't doing $10 billion dollar acquisitions). Plus, you have to deal with people you don't have the ability to put many hooks in. (Ok, so that last one is more Laura the Debt Bitch's worry than mine- but it is also the key factor in today's reading).
Whatever Sub Rosa's particular attitude towards co-investors, I personally find them beyond endurance because of a single character. "Robert P. Darlington, III" I would say "I couldn't possibly invent a name so ridiculously obnoxious" but, in fact, I just did. Rest assured, and never fear, "Robert"'s actual name is just as obviously dripping with sickly sweet, white and fluffy, WASP-pomposity filled goodness. I suspect his shelf life is similar to a Twinkie, since he is the third in his line.
Robert is one of those younger finance professionals that has far too much attitude for his station. I realize how obnoxious that sounds, but I'm not sure how to put it any more pleasantly. He's an associate at CoInvestCo, LLC, his first private equity posting, where he has been for 6 months, and whom we were foolish enough to entertain as a partner on a buyout. His endless critiques and complaints delivered in the course of performing his duties as a grunt in document collection quickly began to alienate the seller, and everyone at Sub Rosa who had occasion to interact with him. This was a mere annoyance until Laura finally came to the point where she had enough.
Here is the thing, Robert has an undergraduate degree from Indiana University.
Now, that means nothing to me. I have met smarter people from John F. Smith community college than Harvard, but Robert apparently thinks that the humble parentage of his parchment is a big deal, and spends a lot of time over-compensating for it by proving to everyone what a "go getter," he is. Some idiot of a partner or MD at the not-quite-a-bulge he served as an analyst at must have told him that he needed to "work twice as hard for the same credit" or something equally daft. Perhaps it means something negative at CoInvestCo, LLC that his degree is from the midwest. Perhaps it meant something suspicious at the investment banking group of the not-quite-a-bulge Robert landed at after graduating. Perhaps he just has institutional envy. Whatever the cause, he is a serious pain in the ass to deal with. To wit:
11:15am:
From: Robert P. Darlington, III, Associate, CoInvestCo, LLC
To: Partner, Sub Rosa; Another Partner, Sub Rosa; SVP, Sub Rosa; Equity Private, Sub Rosa; The Debt Bitch, Sub Rosa; CFO, Seller; CEO, Seller
Subject: Timetables
It is quite sad that none of the document production requests we made this morning have been complied with in any way. Now we will have another day's delay as by afternoon it will be too late to ask for clarifications and amplifications.
Robert
No, I am not kidding.
This would be, perhaps, less offensive if the seller were not already a little skittish, if the seller were not actually trying to run a business, if Robert's requests were of critical financial documents rather than supporting, confirmatory and regulatory compliance issues.
Roll the cue roll forward about a week, wherein the Sub Rosa deal team are on a conference call with the CoInvestCo deal team. Robert elects to use this moment to wax poetic on his dissatisfaction with the working conditions.
I should point out that I still have not gotten the debt assumptions I requested earlier this week. I can't complete the model without them. Am I going to see those soon?
Armin clears his throat as if about to speak but Laura cuts him off without a flinch.
Hi Robert, it's Laura. You don't have the debt assumptions because I never sent them to you. I never sent them to you because after reviewing your model it is clear to us that it is inadequate to our needs and I don't think it accurately reflects the prospects for the target. In particular, you haven't made any provision for deductibility of quarterly payments on the debt. I know you aren't on the leverage team though so that's understandable.
Instead, we've developed our own internal model that Sub Rosa is going to use going forward, we probably should have done this in the first place but CoInvestCo seemed to be on top of things and taking the lead with the lenders last week. Regardless, you shouldn't really be relying on us to provide you with debt terms, instead you should probably be talking directly with the lenders. Certainly, Sub Rosa doesn't want to be responsible for any loss in translation that causes you to miscalculate your potential returns. Plus, just in terms of workload, it's probably easier for you to go direct to the lenders in any event, rather than have to chase us on a call where we are burning about $50 per minute.
So, did that answer your question?
Silence was her only reply.
