Koch Industries - Equity Investment Group
I was wondering if anyone has interviewed with them. They have an equity development group which invests in new platform companies and for their current companies that they own. What do you think of this group? Since its not traditional private equity position since you're not putting on any debt like in a traditional private equity. There's also this thing of moving to Kansas ;(.
Have a good knowledge of this group, which is called Koch Equity Development, KED (don't work there). I believe all positions are based in Wichita. Is this for SA or FT? If SA, they already have one intern, but will re-evaluate in the coming weeks (usually look for MBA students). The Koch investment philosophy is largely a synergy, value-adding focused; they only do a few acquisitions a year, but they tend to be big (Molex, INVISTA, Georgia-Pacific). It's pretty different than PE; the intended holding period is forever. Good amount of the guys have an MBA/prior IB exp, but industry is fairly common. A few have CFA's as well.
As for Wichita, it's actually not as bad as you think. Since Wichita's demographics are very evenly spread, many restaurants/fast-food chains have trial runs (so there are many food/comfort choices). Koch has a huge stronghold on the place, as the YMCA, WSU basketball stadium, etc are named after Mr. Koch. The nightlife is boring though. Not a lot of clubs/bars, and there's not much around to do for fun/nearby cities. Koch usually looks for people from a Midwestern background just for this reason. Beautiful city though, apart from the tornadoes.
If you are interviewing, make sure to read up on Koch's MBM-philosophy (decision rights especially). Very differentiating culture. Make SURE to be familiar with it.
No knowledge, but are you sure they don't use any leverage? If it is similar to other private investment cos or family offices, they will at least use some senior. May not use Mezz.
I'm not normally one to make these comments, but you might want to factor the ethical implications of working for Koch Industries into your decision. It is a private company owned by the Koch brothers, who, through tremendous political donations and lobbying, are probably the two people most responsible for the rise of the far-right in American politics - including things like the Tea Party, climate change denial, the government shutdown and efforts to repeal the ACA, the Taxpayer Protection Pledge that essentially prevents every Republican from ever voting for a tax increase, union-busting, and frankly most other similar things that you might have read about.
The corporation also makes political donations along these lines itself, and Austrian-school libertarianism/far-rightism seems to be hardwired into the company's culture, as broadstbully alludes too. At the very least you should think about whether you agree with these political initiatives, because a) your coworkers are probably all pretty conservative, and b) the profit from all the synergies you'll be finding is going to be funneled into political activism.
On a more practical note, the company's overt politics could be bad branding-wise. The Kochs are a household name and are often compared to Lex Luthor (as they themselves admit) in the mass media, so politically-aware Democrats or left-leaners in finance might judge you negatively for it.
Don't want this to descend into a political discussion, but it's important to put facts (and perceptions of facts) on the table. Hope this helps.
who?
Do you stand by this still? I mean they are just guys that want freedom from government
Guys - I appreciate all your comments @broadstbully - some great comments. Its for a full-time position. I don't have any major issues to move to Wichita, I've lived throughout the US so that doesn't bother me. Regarding the differentiation point from PE, my view is that position will still require PE type job function (defending your ideas, building models, and the regular admin bs). I guess my concern is that can this experience be leveraged into a PE role down the line 2, 3, or 4 years in the future?
@peinvestor2012 - I actually don't know if they use any debt or no debt. That was my assumption and could be wrong. It does make sense to lever up a bit just to get that return but remember these guys aren't every selling out unless the purchase was a total bust.
@moosen - You make some good points. I would fall in the middle of the political spectrum, sometimes on issues on the left and sometimes on right. I don't usually talk politics in the office and may need to keep my head down for a few years. Interesting point about branding though - didn't think about that. I can see how that would put off some guys, but it could also work in reverse!
Right, but I'm sure they employ senior to some degree. If not, perhaps leverage from a holding co. on the portfolio co. Should have an infinite hold period and low hurdle rate for returns.
Very good points made by moosen. Koch gets a lot of shit in the media, but they actually do a lot of good for the economy. Their goal isn't to "make money" or "control the world", but to "add value". That is the cornerstone of everything that they do. If they see an attractive investment, but it doesn't produce a good/service (especially one that isn't synergetic to their existing businesses), then they won't purchase it. A huge differentiating factor.
You will be doing a good bit of defending your ideas and building models. From what I have gathered, the culture is similar to Ray Dalio's of Bridgewater; in that you better believe in your idea and support it, or else you will won't like the result. If you have time, you should read the Science of Success by Charles Koch; interesting read and will be helpful to reference in your interview.
As for exit opportunities, you should be in good shape. KED works very similarly to an in-house M&A/PE team, so you'll definitely have some options. I don't know where past people have gone though. KED works across all of Koch's businesses (except Georgia-Pacific, I believe) so you'll have the opportunity to gain exposure across a wide range of industries (specifically Consumer Products, O&G).
PM me w/ any questions
would you still recommend working there?
broadstbully is correct in regards to GA Pacific.
Also, very good commentary on the philosophy of Koch. The subsidiaries preach the same philosophy as well.
Interviewed with them as an undergraduate. KED is an amazing group that will give you the opportunity to think as an entrepreneur and spend significant amounts of time trying to add value for the company. I ultimately took a job in MM IB, but I would have been willing to live in Wichita for the experience. Many KED professionals have the ability to transition into other equity development groups in other Koch company's and they do extremely well. Lots of talented people and definitely an authentic midwest feel in the office. The culture can seem a bit extreme, but thats the cost of working with such a conservative company. Additionally, everyone in KED has a whiteboard in their office encouraging them to draw out the value chain of businesses and seek ways to draw return from operations that most people overlook. I found this an important aspect of the group to think about as I went through the interview process as it gave a lot of insight as to what they are looking for.
Bump
I want to touch base on the political commentary above. I think it is being really exacerbated. Koch is by far one of the most active and experienced corporations + M&A shops in america. Additionally, it touches nearly every industry of the economy. Yes - the Koch's are political and conservative. However, this is a massive, multi-generation private conglomerate that has continued to remained successful. There are very few organizations able to do this over time.
As a personal data point, Koch took an LP stake in a private equity fund I worked at and I looked at co-investing in numerous companies with their investment group. I also met in person with them every 6 weeks. This was all while the head of my firm did not need their money, is a pretty high profile democrat, has a family member that works in the white house and raises $5M+ for democrat campaigns annually. The politics did not get into the business and investing we did at all.
The guys there were sharp. They also told me that the company, which, at the time, had ~$100 Billion in revenue, wants to acquire $50B in revenue by 2020. I don't know another corporate M&A role that could provide equal experience.
The biggest draw back I would have is the fact you have to move to Wichita.
bump.
would you hire someone from Koch if their resume came across your desk? What is the stigma about them?
.
Please don’t let the democratic communist party and it’s controlled media pollute your mind.
Working at KED is close to working at Berkshire Hathaway.
Would anyone know what their comp range is please? Also, how close are they to the top? (Would it be high likelihood for this group to just no longer exist one day because "someone at the top decided so"?)
Thank you!
What would everyone label this role - family office PE or corporate development/internal M&A?
If its anything like other highly acquisitive private conglomerates then I would not be surprised if it were highly leveraged (even more so than traditional PE, especially Asian conglomerates which expand very rapidly at little to no equity), so i doubt there will be no debt involved
Otherwise, as you, I am also curious if this role and other family office/private conglomerate M&A roles could be leveraged to more traditional PE roles. My guess is there is a large overlap in experience acquired with traditional PE roles - however it will be tough given the competition from tried and tested path of IB hires. Would be good to hear thoughts of the advantages of this role over IB for PE
Totam modi quasi dolore rem et. Id quibusdam est nemo ad accusantium facere qui sunt. Quo ut optio inventore quia et laborum. Aliquam voluptatibus molestiae porro est vel explicabo ab. Odio quos laborum et. Numquam voluptatibus unde ad est. Sed et nulla qui consequatur.
Facere quam quae mollitia quaerat nam rerum. Qui aut aperiam at. Ipsa velit neque est iste et dolorem.
Saepe rerum et at voluptas blanditiis corrupti iste. Sunt velit sit eaque est. Eos vel ratione tempora quae quasi deleniti quidem.
Eaque nostrum accusantium at ducimus commodi. Sint sapiente et magni enim. Blanditiis aut repellendus id ipsa accusantium temporibus facere.
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...
Modi qui amet exercitationem velit qui aut fugit reprehenderit. Blanditiis eum doloremque est qui perspiciatis animi dolores maiores. Quia ut numquam autem. Veniam deserunt autem in aspernatur est. Quo amet similique dignissimos occaecati nisi molestias explicabo.
Cupiditate ut sit molestiae sint voluptates suscipit. Repellat impedit fugit asperiores omnis voluptas non. Quia qui officiis quibusdam qui. Nulla iusto vel dolor vel consequatur. Qui itaque blanditiis atque laboriosam qui ut.