Synopses & Reviews
Private Equity firms, once tight-knit partnerships, have broadened their reach substantially, building or acquiring other businesses, from giving mergers advice to managing hedge funds, to underwriting stock and bond offerings. The majority have gone public, offering stock to retail investors, ensuring steady access to more money, and providing a means for which the billionaire founders (most of whom are already in their 60s) to cash out their holdings. This book will take the reader behind the scenes of these firms, understanding their origins and synthesizing the overlapping stories of their creations, evolutions and ambitions into a narrative as they prepare for significant public scrutiny as public companies.
The Cast of Characters:
Blackstone -- Stephen Scharzman, Tony James: A laid-off Lehman Brothers investment banker teams with his Lehman mentor to create a small advisory boutique. A decade later, he taps a savvy fellow banker who oversees an expansion and public offering, quadrupling its assets under management in a decade and leading the charge to the public markets.
Carlyle -- William Conway, Daniel D'Aniello, David Rubenstein: Two young Washington area CEOs team with a lawyer and former Carter administration official to leverage their Washington connections into the first truly global private equity firm, tapping heretofore unknown, but massive, pockets of wealth in the Middle East.
KKR -- Henry Kravis, George Roberts: A pair of Midwestern cousins who want to work for themselves join their Bear Stearns boss (who eventually leaves them for being too aggressive). They establish themselves definitively with the then record-setting RJR Nabisco deal, where they're dubbed Barbarians at the Gate. Almost two decades later, they'll top themselves twice to set new records.
TPG -- David Bonderman, James Coulter: A wealthy Texan hires an historical trust lawyer from Washington to fight a freeway scheduled to run through Fort Worth. The lawyer ends up staying on as his top adviser and meets a brash young former consultant. The unlikely pair breaks off from the billionaire to buy Continental Airlines for $80 million, selling it a handful of years later for 20 times their money. They go on to buy the likes of Burger King and J. Crew.
Subtitled Inside the Trillion Dollar Private Equity Industry that owns Everything
, Kelly tries to demystify the complex world of private equity through telling the stories of the leading characters and key firms in the industry.
A Bloomberg news reporter, Kelly is familiar with his subject and he traces the mushrooming of this industry from a relatively small niche area of financial service into a globally powerful phenomenon.
The book has a timely edge given the presidential candidacy of Mitt Romney, a former chief executive of Bain Capital, and is certainly well researched.
Kelly notes that he is trained to look for surprise and that as he researched the book, the omnipresence of the industry surprised even him. So much is owned by the industry, and the appetite to run the numbers on businesses that are not, appears to be relentless.
Kelly does his best to make the complex simple with glossaries and charts; it is a challenging read nonetheless.
Although interesting for the general reader, the book will be of most interest to those who work in the global financial services industry and who can relate readily to the firms under consideration here. (Irishtimes.com, November 2012)
An inside look at world of private equity tycoons as their firms go public
What do Dunkin' Donuts, J. Crew, Toys "R" Us, and Burger King have in common? They are all owned and controlled by private equity firms. The New Tycoons: Inside the Trillion Dollar Private Equity Industry That Owns Everything takes the reader behind the scenes of these firms, explaining their origins and synthesizing the overlapping stories of their creation, evolution, and ambitions into a narrative invaluable to anyone interested in understanding what they are and how they work as they prepare to go public for the first time.
Once tight-knit partnerships, private equity firms have broadened their reach substantially, building or acquiring other businesses, from giving mergers advice to managing hedge funds, to underwriting stock and bond offerings. Blackstone, Carlyle, KKR, TPG, Bain, Apollo, and a handful of others are going public or already are and regulators and policymakers are now bearing down heavily on this once ignored sector of finance.
- Goes inside the private worlds of private equity founders Henry Kravis, Steve Schwarzman, David Bonderman, and more
- With numerous private equity firms going public for the first time, informed readers need to know about how these firms operate, and this book is here to help
- Author Jason Kelly has been covering private equity for years and has forged unique relationships with firms that give him unparalleled insights
- Presents a never-before-seen look inside a secretive and powerful world on the verge of complete transformation
Analyzing the founders and the firms at a crucial moment, when they've elevated themselves beyond their already lofty ambitions, New Tycoons looks at one of the most important, yet least examined, trillion-dollar corners of the global economy.
Inside the Trillion Dollar Industry That Owns Everything
What do Dunkin' Donuts, J. Crew, Toys "R" Us, and Burger King have in common? They are all currently or just recently were owned, operated, and controlled by private equity firms. The New Tycoons: Inside the Trillion Dollar Private Equity Industry That Owns Everything takes the reader behind the scenes of these firms: their famous billionaire founders, the overlapping stories of their creation and evolution, and the outsized ambitions that led a group of clever bankers from small shops operating in a corner of Wall Street into powerhouse titans of capital. This is the story of the money and the men who handle it.
Go inside the private worlds of founders Henry Kravis, Steve Schwarzman, David Bonderman, and more in The New Tycoons, and discover how these men have transformed the industry and built the some of the most powerful and most secretive houses of money in the world.
- With numerous private equity firms going public for the first time, learn how these firms operate, where their money comes from and where it goes, and how every day millions of customers, employees, and retirees play a role in that complex tangle of money
- Author Jason Kelly tells the story of how thirty some years ago a group of colleagues with $120,000 of their own savings founded what would become one of the largest private equity shops in the world, completing the biggest buyout the world has ever seen, and making them all billionaires in the process
- Presents a never-before-seen look inside a secretive and powerful world on the verge of complete transformation as the industry and its leaders gain public profiles, scrutiny, and political positions
Analyzing the founders and the firms at a crucial moment, when they've elevated themselves beyond their already lofty ambitions into the world of public opinion and valuation, New Tycoons looks at one of the most important, yet least examined, trillion-dollar corners of the global economy and what it portends for these new tycoons.
Private equity is everywhere.
Firms like KKR, Blackstone, TPG, and Carlyle have a hand in what we wear and what we eat, by owning some of the world's biggest brandsfrom Hilton to Dunkin' Donuts and Toys"R"Us to J. Crew. Their influence doesn't stop there. They're investing on behalf of governments, university endowments, and pensions, giving them responsibility for billions in retirement savings. The companies they own employ millions of workers.
In The New Tycoons, Bloomberg News reporter Jason Kelly demystifies the complex world of private equity by telling the stories of the top firms and their leaders. The book details how their role as investors, owners, and employers has put them at the center of our lives.
Through in-depth, exclusive interviews with private equity chieftains including Stephen Schwarzman, David Rubenstein, David Bonderman, Henry Kravis, and others, The New Tycoons explores a cottage investing industry that's blossomed into a global financial force. With on-the-ground reporting, personal observations and richly drawn anecdotes, Kelly takes the story far from Wall Street and into companies controlled by private equity, examining how the business affects us as workers and taxpayers. With the presidential candidacy of former Bain Capital CEO Mitt Romney, and the industry's deepening influence on Main Street, understanding private equity and where it's headed is more important than ever. The New Tycoons offers a compelling examination of a massive, often overlooked, economic engine. You'll discover the untold stories of the most important firms and game-changing individuals that own everything.
Praise for The New Tycoons
"Jason Kelly has tenaciously reported on the private equity industry during its boom and bust. This lively book gives the reader a highly readable and enjoyable 'bird's-eye view' of some of the most interesting and traumatic years in the industry's history."
—JOSH LERNER, Jacob H. Schiff Professor of Investment Banking, Harvard Business School, and Director, Private Capital Research Institute
"Jason Kelly provides a fascinating account of the transformation of the private equity industry from relative obscurity a few decades ago to a major player in corporate America today. His book is a must-read for anybody who wants to know the individuals and the decisions they made that created this trillion dollar industry. The New Tycoons is well written as well as informative from the first to the last page."
—JAMES R. BARTH, Lowder Eminent Scholar in Finance, Auburn University, and Senior Finance Fellow, Milken Institute
"In The New Tycoons, Jason Kelly provides an inside look at the private equity industry today. He does a terrific job of describing the fascinating histories and current strategies of many of the major private equity players."
—STEVEN N. KAPLAN, Neubauer Family Distinguished Service Professor of Entrepreneurship and Finance, University of Chicago Booth School of Business
"Jason's book delves into what's behind the private equity curtain, describing both the business and its impact. As he was granted unparalleled access to the chieftains of private equity, the book has insights??that both the private equity professional and casual reader can appreciate. At a time when people are wondering what this industry is all about, this is an easy read and a thorough explanation of an important industry and its global presence in our lives."
—PAUL SCHAYE, Managing Director, Chestnut Hill Partners, LLC
About the Author
JASON KELLY is a reporter with Bloomberg News based in New York. He covers the global private equity industry and is a frequent contributor to Bloomberg Television and Bloomberg Businessweek. During his ten years with Bloomberg, Kelly has also followed the technology industry and written about issues ranging from the aftermath of Hurricane Katrina to economic development during the war in Afghanistan. Prior to joining Bloomberg, he was the editor in chief of digitalsouth magazine, a publication focused on technology and finance in the Southeast and Texas.
Table of Contents
A Visual Tour of Private Equity xi
Deciphering Private Equity xv
Chapter 1 Find the Money 1
Chapter 2 All the Money in the World 19
Chapter 3 The L Word 43
Chapter 4 You Bought a Toilet Seat? “When Was the Last Time” 55
Chapter 5 Modern Art 73
Chapter 6 Put on Your Boots 95
Chapter 7 Aura of Cool 111
Chapter 8 Hundreds and Billions 123
Chapter 9 Take This Exit 141
Chapter 10 The Taxman Cometh 155
Chapter 11 It’s a Steve, Steve, Steve World 165
Chapter 12 Not-So-Private Equity 187
About the Author 215