Friday Long Reads

Curl up with some PE reading

Perennial Favorites you may have already read:

  • Barbarians at the Gate - Burrough and Helyar (the story of a Big Deal)

  • Gods at War - Davidoff (modern day deal making)

  • Liars Poker - Michael Lewis (“everyone” in PE starts in Banking - get a sense of the people)

  • Den of Thieves - James B Stewart (the background to the PE explosion - get a sense of the Industry just prior to explosion)

Worth a Skim for Broader Perspective.

Debt's Dominion, Skeel

“Bankruptcy in America, in stark contrast to its status in most other countries, typically signifies not a debtor's last gasp but an opportunity to catch one's breath and recoup.” See the battle between lawyers, bankers/investors and the politics. PE uses a heavy debt load on the acquisition to recoup cash spent in acquisition. Bankruptcy law is fundamental to PE.

The Lord's of Strategy, Kiechel.

Kiechel, former editor of Harvard Business Review, traces history of Boston Consulting Group, McKinsey Associates, Bain Capital, and the work of Michael Porter. There’s a chapter on private equity as if the players were strategy consultants. A criticism of the chapter is that Keichel conflates LBO and PE firms as full synonyms.

The Ascent of Money: A Financial History of the World: 10th Anniversary Edition, Ferguson.

The first half of the book presents an interesting historical perspective on the development of money and capital markets, but the second half digresses into Freguson's personal views and opinions on banks, financial failures and other issues in financial markets.

Too Big to Fail, Sorkin.

A compelling tale of the unfolding of the financial crisis of 2009, worthwhile read from an economic history perspective.

Secrecy World: Inside the Panama Papers Investigation of Illicit Money Networks and the Global Elite, Bernstein.

This dissection of the Panama Papers makes for an easy read and while not directly relevant to mid-market and smaller PE, is helpful for getting your head around - at a cursory level - structures that PE deals drop into. This is more macro understanding for PE. Good for background.

I don’t personally have any great PE driven reads. PE is not just LBOs but - and I’m speculating here - maybe the writers interested are not as aware of that? I reached out the American Investment Council (PE Lobbying group) - MULTIPLE times by email and through LinkedIn - about suggestions they might have and not a single person got back to me. Based on their YouTube channel, they seem pretty out of touch. So I could either give you the piles of books on PE adjacent (consulting firms and banks that breed the PE analysts who end up at PE firms of all sizes) or mostly tedious/dry books on the Massive PE firms (KKR, Blackstone, Apollo) who selectively remember deals and details. I went for the flavor behind the industry. As always, feel free to share your opinion on that.