Tweet of the Week: TPG Loves What Apollo's Up To
Not going back in the bottle huh? They call them cycles for a reason.
Not going back in the bottle huh? They call them cycles for a reason.
There is so much to unpack in this stupid piece about the annual private equity recruiting frenzy. First, let's stop calling kids who are weeks out of college "talent" merely because they got a job in an investment bank trainee program. They haven't proven that they're talented at anything just yet. Going to an ivy league school, having a trust fund and being a douche isn't dispositive of anything. So, everyone chime the f*ck down please. Second, these folks get paid $200k? And people say there's no wage inflation? Third, the idea that an ibanker trainee is going to be appreciative for the two years of training a bank has given them and, in turn, give later private equity business to said bank is ludicrous. As a practical matter, his/her connection to that bank lasts a mere few weeks prior to them securing the next bigger, better and more Tinderable gig with which they prefer to identify. This seems like an outdated model with bad assumptions baked into it. The only sure thing seems to be that no matter which one of the PE firms these trainees land at, they'll be hiring Kirkland & Ellis LLP as bankruptcy counsel for one of their busted portfolio companies. Fourth, we love this bit about recruiting being earlier than ever "after an agreement to hold back fell apart." Hahahaha. So, private equity firms - KNOWN FOR DEAL-MAKING - couldn't even come to a deal amongst themselves?? This is like mutually assured destruction among KKR, Warburg Pincus, Carlyle Group LP, Apollo Global Management LLC, Bain Capital, Blackstone Group LP, TPG and Golden Gate Capital. Here's a great idea: lets trip over ourselves - and each other - to hire people with literally "no work experience." Those interviews must be PAINFUL AF. And, oh, hey you Managing Director. We love that you're "often forced to cancel business meetings last-minute to interview candidates." We're sure a multi-billion dollar transaction can wait for some piss-ant Harvard bro who inexplicably and unnecessarily writes equations on glass to regale everyone with his rad math skills. So lit. On what basis are these kids REALLY getting hired then? We think its probably pretty obvious. And its questionable how this BS still flies. What does any of this have to do with disruption? Well, when you're competing with venture capital and tech to acquire "talent," desperate times seemingly call for desperate measures. Logic has been disrupted. And it's absurd.
Apparently they've finally gotten the memo on retail (although, as we have well covered, the PE shops seem to be doing okay even while driving their portfolio companies into bankruptcy...but we digress): investments in retail companies are down markedly to 86 globally in 2017 as compared to 300 in each of '15 and '16. Speaking of private equity and retail, gotta love the timing behind the departure of TPG Capital's sole female partner given David Bonderman's ill-timed and inappropriate comments in the Uber boardroom. Notably, one noted potential cause for the separation is that heads needed to roll for the terrible J.Crew investment.
Goldman Sachs. Everyone loves to hate on them. Oh, and Venezuela ($GS). Pssst: there are several others in the trade too.
Intelsat ($I). There goes that Softbank thing. The merger didn't get enough creditor support.
Linn Energy. The recently restructured company offloaded its Jonah and Pinedale fields and surrounding area to Jonah Energy, a platform formed by TPG Capital. For $580mm.
Lunch. Short it. And the casual dining spots that serve it, e.g., Ruby Tuesday Inc. ($RT)
Ocwen Financial. Nothing like the "Strippers Defense" to ward off scrutiny ($OCN).
Retail. File this one under unintended consequences. It appears that Goodwill - yes, that Goodwill - is also falling victim to online shopping and is committed to downsizing its brick-and-mortar footprint and restructuring some operations. Someone on this newsletter should think about this as a potential pro bono project.