PE4FAMs Blog

I am a constant and unapologetic advocate for the private equity asset class for many reasons: Alignment of manager and investor Prudent use of leverage Interest rate and tax environments have been supportive Own an asset that makes something or provides an essential service Businesses create and preserve jobs Investment returns over the last 25 […]

It is a rare treat to spend 4 hours in a car with an 85 year old electrical engineer. The CapitalWorks model of involving industry savvy limited partners in our portfolio governance gave me that chance. Aside from the frequent rest stops (me not him) on the way to Indiana for an advisory board meeting,

The Wall Street Journal reported on December 10, 2015 that the founder of Bitcoin may have been discovered in Australia. Satashi Nakamoto may actually be Craig Steven Wright. Mr. Wright’s home was raided on a tax matter relating to his business. Mr. Wright’s company, DeMorgan Ltd. describes itself as “focused on alternative currency, next generation

There is always an opportunity to read great business literature. Warren Buffet’s investment partner, Charlie Munger, is quoted as saying “In my whole life I have known no wise people (over a broad subject matter area) who didn’t read all the time—none, zero.” Foundational Reading Great business literature comes in many flavors. Some of it

Peggy Noonan has been my favorite journalist since 1999. In the centennial issue of Forbes, a group of thought leaders were asked to write about the forces that would shape the 21st Century. Their enthusiasm for technology, ecology, and emerging economies was everywhere. I was beaming with optimism when I got to Peggy Noonan’s prediction.

Two weeks ago we announced an acquisition of a family business that specializes in handling hazardous waste streams for industrial customers. This is a difficult technical business where there is absolute legal liability for improper disposal of a waste stream once you have accepted it.  In order to protect itself, the environmental services firm must

In Bonfire of the Vanities Thomas Wolfe’s main character is a bond trader named Sherman McCoy. When Sherman’s daughter, Campbell, asks her father what he did for work and Sherman fumbles the reply, his wife, Judy, delivers the now famous golden crumbs analogy: “Just imagine that a bond is a slice of cake, and you

Last week two debt rating agencies downgraded the creditworthiness of the State of Illinois. Moody’s downgraded the State from ‘A3’ to ‘Baa1’ while Fitch downgraded them from ‘A-‘ to ‘BBB+’. Illinois has yet to pass a budget. Fitch listed ongoing budget gaps, high unfunded pension liabilities and reduced financial flexibility as reasons for the downgrade. In

I often write about business models that I admire or ones that present unforeseen risks. You all know my opinion about the perfection of the Private Equity business model not only for its superior returns but also for its long term orientation and its alignment of manager and investor. I regret to inform all the

One of my college friends served as the general counsel of a major mutual fund company. When we talk about our respective businesses and business models he often comments on how lucky PE managers are because they do not promise daily “liquidity” to their LPs. By contrast, the biggest fear among mutual fund managers is