Reading for Mid Level PE Professionals
So much of what I've learned so far in my career has been monkey-see, monkey-do from watching my senior colleagues in IB and PE. Given the pace of the work, a lot of it is make it up as you go along and copy those who have done it before. While it has worked so far, I'm curious what best practices look like for certain aspects of the job such as project management, negotiating, managing/delegating etc.
Wondering if anyone had any book recommendations that has helped them develop / improve certain aspects of their skill set.
Hi Associate 3 in PE - LBOs, check out these resources:
More suggestions...
If those topics were completely useless, don't blame me, blame my programmers...
The standard books such as Mastering Private Equity can still have interesting bits (even after 5 years PE, 2.5 years consulting); and I quite enjoyed 2 and 20 (story from an ex-Apollo partner).
I've shifted more to expertise books (investigative accounting such as financial shenanigans; structuring oriented; legal oriented; etc) in order to deepen expertise. The biggest thing about the 'seniors' in our practice are that most people have completed 3-5 deals by the time they go into director/partner function and technicals are covered by advisors. This means even though you know when to nod, the deep expertise is often unfounded. Would suggest you pick one area at a time to build up your knowledge base, and focus on those areas valued in your firms DNA (e.g. if its financially oriented - go for investigative accounting - if it's more legal downside protection, find books on special sits, turnaround, creative structuring, etc).
Beyond that - which is rather desktop/self-learning oriented, would suggest two approaches:
(i) introspection (the question you posed is a good starting point...) and what profile you want to develop yourself into (what leader/senior will you be?)
(ii) discuss with advisors: you have access to any advisor - they get paid by you. Milk them dry for information, sit down for lunches, pick their brains. People love talking about themselves and their job so learn their trade, and get invited to their conferences as a guest etc.
Hope that's helpful - just my two cents on it I suppose.
As someone who's at a more junior level than OP, but has a similar question, your response is of great help. Thank you!
My pleasure!
This is very helpful, thank you!
happy to help, reach me out if there's anything else in that regard; know it can be tough and most PE organisations aren't really set-up to guide people well in this regard at all regardless the size.
Thanks for the great write-up - have some interviews / case studies coming in January so will definitely read the books!
Good post. Kudos. Are there any books you'd recommend on the legal / creative structuring side?
Pleasure. Without having considered a 100% comprehensive response, please see below. Regarding books: as I am working in/across Europe this is a rather localised topic given a lot of the structuring work is focused on two topics:
(i) tax optimisation (read avoidance, or shifting from dividend to capital gains, etc)
(ii) arms-length principles (risk mitigation through legal veils)
Beyond that from a transactional perspective you have two further points to consider:
(iii) financial certainty (risk mitigation through guaranteed returns, vendor loans, etc)
(iv) governance/control (ability to create governance/voter control despite minority economic interest, via share classes or rights structuring)
Nuances come in when we're considering OpCo/PropCo splits or sale & leaseback post-deal, SPVs, JV/minority considerations, etc.
(i) and (ii) of these aforementioned factors depend on a country-by-country basis in Europe where there's vastly different options depending on if the funds are Lux, UK/Jersey, Swiss, etc. and the basis of your LP (and carried interest holders). Simple example: Germany requires a dual GP approach to reclassify dividend to capital gains and save a couple % on tax leakage when upstreaming capital. I am sure in the US there are similar considerations.
Finally, structuring is a rapidly changing topic given tax considerations, ATAD3 (European anti tax/anti shell directive), carried interest taxation, etc.
In terms of books, you could consider (have not personally read):
- The Mechanics of Securitization: A Practical Guide to Structuring and Closing Asset-Backed Security Transactions (Moorad Choudhry - outdated)
- “Structuring M&A Transactions: Leading Lawyers on Negotiations, Due Diligence, and Deal Strategies for Mergers & Acquisitions” (Gus Dixon - outdated)
- The Art of M&A Structuring: Techniques for Mitigating Financial, Tax, and Legal Risk (Lajoux, Nesvold - outdated)
For me the most interesting structures (especially (iii) and (iv) which is more deal-centric) come from places such as Apollo hybrid value, Blackstone tac opps, or the odd deals such as the acquisition of Asda by the Issa brothers for GBP6.8bn whilst only putting in GBP780m in equity. These are examples of where you can structure either via pref equity/share classes, legal shenanigans, or multi-layered debt either (i) a near-guaranteed homerun (e.g. distressed, or ultra-levered) or (ii) a near-guaranteed return.
Final point: best place once again is to have 'intellectual' chats with PE colleagues, tax and/or (fund) structuring lawyers who are generally in love with this topic and gladly spill their 'expert' beans. Legal/tax topic papers and current white papers are also a good place to keep at pace with developments - good way to find them is knocking on those lawyer doors as a conversation starter. For discussion with peers/competitors this is typically something where you can discuss the structure without going into the company (i.e. can keep confidentiality relatively protected whilst still discussing our jobs/techniques).
Following
The Very Hungry Caterpillar
Quisquam dolorem atque sint aut. Quasi quia deleniti rem minima fugiat recusandae autem. Debitis quibusdam et rem doloribus. Aut repellendus facilis non et velit.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...