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Jun 2018
32m 6s

A Deeper Look at Private Equity - EP.09

BRAD JOHNSON
About this episode

Today, we take a deeper dive into looking at private equity. Private equity is Grayson’s world — so we switch the script and I ask him all of the questions I have about private equity.


We discuss how private equity can help grow businesses, get debt to help your returns, the high risk/high return nature of private equity, precise strategies, what to look for when you’re investing, how to know how much to invest, and more! 


Key Takeaways:

[:13] About today’s episode.

[:44] An overview about private equity, how Grayson defines it, and what sort of businesses he goes after.

[2:29] How do you grow the company with private equity?

[4:04] Are there any precise strategies that focus on particular markets in private equity firms?

[4:48] Who are the big private equity firms?

[5:30] Do smaller private equity firms do one-off deals in addition to funds (similarly to real estate)?

[6:28] Why does private equity have higher return (and in turn, a higher risk)?

[7:59] Can you get debt in private equity?

[9:12] High leverage, big buyout vs. the smaller deals.

[10:40] Multiple expansion and why it’s so great.

[12:41] What to look for when you’re investing in private equity.

[17:44] How do you know how much to invest?

[19:09] How do you pay a multiple on revenue?

[23:40] In an auction process on a deal, what would the variability between lowest bid and top bid be?

[24:50] A real world example of a private equity deal.

[29:06] What about exits? How do you make the most money in these deals?


Mentioned in this Episode:

KKR

Blackstone

Apollo

The Carlyle Group

Fortress

EBITDA 


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