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Jon Winkelried

lines on the record: 56
first: 2024-08-02
most recent: 2024-08-02
sittings or episodes: 1
sources: podcast

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“Well, thank you, Alison. And it's always again, it's a thrill for me to be able to come back and talk to you about stuff like this. I mean, my relationship with you has been a very long relationship, which I value and I've enjoyed and my relationship with the firm has been a big part of my life. So thank you.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“With people they respect. And also, again, back to the richness of your experience. I mean, think about the clients that you're close to and what you've experienced as a result of that. I mean, your career would be totally different if you didn't have those relationships. So I think that that is something that I undervalued in the early parts of my career. I had a reputation for being pretty laser focused and even in my early times my career, I had a little bit of a reputation of sort of like it was like my way or the highway in terms of like making decisions. And eventually you realize that other people matter.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“Well, you touch on it before, which is the importance of developing relationships. I think when you're young and you get into the business, you're so laser focused, right, on doing the model, doing a good job, creating the output that you need to create, that you do, I think, underestimate the value of creating relationships. And that can be with people in the firm, people who are older than you or more experienced than you. people at other places like clients or things like that. The value of creating relationships, I think, is a very undervalued thing. It's also an undervalued skill. I mean, you created relationships for a living for a lot of your career. And I think you do it at a very unusually high level. But I think that the value of that, just in terms of your own learnings, your own development, the impact on business that it has, because people fundamentally want to do things.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I did. Right. And for me, I like being outside and I like being in sort of like big places. So that has always been a big release for me and a stress reduce. All come from something that cowboys actually really do. So if you raise cattle, as an example, very often you have to separate a cow out from the herd because you either have to doctor it or you're separating out cows and calves, but it's all turned into sports. It's all turned into different competitive events. So cutting basically is you separate a cow out from the herd in two and a half minutes, you have to cut at least two cows out of the herd and do it. And there's rules on how you quit that cow and go in and get another one. Anyway, so I saw this guy do it. And he said, hey, do you want to try it? So I got on this guy's horse and I did it and I was like, wow, this is really interesting because when you're on the horse, what you find out is how athletic they are and how powerful they are. And also, if you have a good one, how smart they are. And so anyway, I got interested in it from that. And I said, you know, I'm going to try to do this competitively. So one thing led to another and I got into it and I did it. My wife did it.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“First of all, it relates to the fact that when my wife and I were trying to figure out where we wanted to be, when we weren't at work or we weren't here. And so we decided that we would buy a ranch. And so we went out west. We'd like the Rocky Mountains. We liked the things we do out there. So we bought a ranch.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“You just know it. And I think that that's like a very rock solid thing when you inevitably have to kind of live through some storms and some difficult things. And so I'm very lucky in that respect. And my kids also, I've learned a lot from my kids. I have three kids, Jen, Matt, and Jay. And I've learned a lot from them. And my youngest child, Jay, started life as Jane and is now Jay and is non-binary and goes by they, them. And I learned a lot watching Jay's journey as well in terms of the understanding of the importance of people being who they really are and how that the ability to be who you are, your true self unleashes really your best self. You can be your best self when you're also able to be who you really are. And that has been a real life lesson for me as well. I've learned a lot from my family.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“I think it serves you really well because people really understand who you are as a person. And I try my best to be authentic and not have two different personalities in terms of in the office or at home. But when you're at home, though, you are who you are and you're grounded by that. My wife Abby has been an incredible partner to me my whole life. And we've had a very unusual relationship in that we're still best friends after, you know, we've actually known one another for almost 50 years. And so we're still best friends. We're still in love and we just have a great relationship. And she is always there for me, but sometimes it doesn't have to be verbal. It's just, it's, you know.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“Yes, a lot. First of all, the importance of balance. And I think it's often about making sure that people understand that that balance is important to you and insisting that you're going to go and do that with your family or you're going to show up at something that you think is really important from your family's perspective and striking that balance, I think, is actually very healthy. And I also think it extends your career and your longevity. And you start to bring it into different things that you do. It starts to affect sort of your persona and it starts to therefore affect the culture, particularly if you're the leader of the organization. So I would say that dynamic in terms of the balance that I always felt from my family. I think the other thing is that your family is very grounding. I mean, when you're with your family, you're never anything other than who you really are. And so that authenticity is really important. And if you bring that authenticity to your career as well,”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“Try to do what I think is right as it relates to TPG along with my partners to make that organization distinctive. But there are big concepts, though, that follow along, like the importance of culture and investing in culture and things like creating an inclusive environment and a diverse environment and how we source talent, where we source it from, the commercialization of our businesses, what makes sense, what doesn't make sense. many, many lessons”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“Right, but there's no doubt when I think about my training and my ability to actually be an effective CEO of a firm like TPG, this is my only job, basically. So there were so many things that I took from this firm in terms of how to build a business and how to think about risk management and how to think about equality standard and how we engage with clients and the culture around our client orientation and commercialization of things. the importance of the balance between doing things that can also add value and enterprise value to our organization. I mean, there's so many things. And I call on them every single day, every single day. Because TPG is not Goldman Sachs. And that's an important thing, which is like a use the skills that I learned and the network that I created and the things that I was able to experience and absorb, but I use that to then.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“There's probably only a few organizations like Goldman Sachs on the planet where there has been this orientation around and prioritization on the quality of the people. And that just built on itself over time in terms of who we hired, how we developed our talent. And obviously as we got larger, it got more institutionalized as well in terms of training people and talent development and exposing people to senior people and things that the firm obviously does a lot now and even when I was here the firm was doing. And so I'm not surprised at all in terms of what's happened as people have moved on. And I also think that the firm's orientation around trying to maintain touch with its alumni, think about how powerful that is. 220 people in positions of influence in companies around the world and the connection that they have back to Goldman Sachs, their feelings for the firm. I'm just in terms of like an embedded franchise value of that. It's huge.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“Building relationships broadly is important. I have to talk about the firm's network because in my night job now, I lead the office of alumni engagement and we recently did an analysis and found out that we have more than 220 Goldman Sachs alum who are CEOs, managing partners or CFOs of organizations that are a billion dollars of market cap plus or with assets under management of over $5 billion. As someone who grew up here and has been managing talent for a long time, can you share your perspective on the firm's talent and the impact of the network now that you're out?”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“Like Bob Hurst John Thornton literally was just because people like you said we got your back you're going to be okay because literally if I had tied my star to like one person or two people You know, and they leave. I mean, people are gonna. I always give people that saying advice.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“You post them. Go up there, stick your head in the office, and tell them who you are. And I've never forgotten that. And I tell you, it's very good advice for people generally because if you sort of rely on being represented by the person who your boss is, or you're always just deferential to your boss in that respect, and you don't develop your own direct relationships, I think that you miss a lot in terms of being connected into the organization.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“Probably my dad was an important mentor to me. He taught me a lot about just values and hard work, how you treat people. One of the things that my dad always used to tell me was that the dynamic of treating people the same, no matter whether or not it's somebody who's the CEO of a company or the person that's delivering something to your house. And that has always helped me because I've never forgotten that. So I try to treat people with respect, no matter who they are. And also, I feel partly as a result of that it's important for me to be available. So if somebody wants to see me, it could be an executive assistant. It could be an associate. It could be one of our most senior partners or a client. I make myself available. It drives some people nuts, by the way, but I do it. So he was an important mentor to me in giving me that baseline. Other mentors that were important to me here at Goldman, there were a few people that were influential, and Steve Friedman was one of them. He was a mentor of mine here.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“COVID. And so, what I did is I basically had a series of meetings with the management committee, TPG, and then with all the partnership. And I literally called people by name one by one to comment when we had these meetings on are you comfortable? What are you worried about? Would you do anything different? If I had said any questions.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“Yeah. First of all, it's very helpful for me to have gone through that. And then it helped me a lot think about the TPG IPO at TPG when we're thinking about going public. One of the things that I found, and this might surprise you, but many people in the organization really didn't understand what that meant or whether or not we could do it successfully. And so first of all, giving people the confidence that we can do this and we can do it very successfully, you can't underestimate that when you take a company public because just the internal sort of enthusiasm and backing and support for the process of doing it has to include that we can become a very successful public company. So you've got to give people the vision that we can do that's one important part of it. And we had to actually go through that process here. The second thing was communication. When we went through it at Goldman, we spent a lot of time talking to our partnership. So when we did it at TPG, we did it directly.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“Morgan Stanley, Bob Scully, and Ruth Perrott were sitting next to Geithner, and Jimmy Lee and I were on the other side of the table, and he said, well, what have you guys figured out? He said, well, there's no private market solution because there's an $85 billion hole. And they said, okay, thank you. They dismissed us. And that night, the government announced a credit line, basically. For $85 billion, which ended up being, I think, at the end like $115 or $120 billion. Anyway, so those were some memories.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“Grandkids to Derrick Queen. And so he hung up and I turned around, went back to the office. You know, David had it all basically, you know, revved up by the time I got back. And we had our equity guys on the phone preparing for the common deal. Anyway, so that was pretty memorable. And then after the Lehman weekend, two days after that, I was asked to be on a call with Lloyd. And on the other side of the phone was Jamie Diamond and Jimmy Lee and Geithner. And he said, listen, there's some really difficult things happening obviously at AIG. So Jimmy and I went to AIG and we spent 24 hours straight at AIG with a team from Goldman and a team from JP Morgan. And we did all the analysis in terms of the liquidity hole. This is a long story. But anyway, we ended up figuring out that they had about an 85 billion dollar shortfall. And so we had a meeting that night with Geithner, who was represented at the time by”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“And the IMF meeting, the annual IMF meeting was going on at the UN. I had to go up to see a couple of clients. I took the subway up. I got out of the subway and my phone rang and it was Byron. And he said, listen, I've got Warren on the other side of this phone. Are we doing this or not? And so, yeah, so I'm standing on the extraordinary. Who's standing on the street with Byron on the phone, Warren on hold, and I got Vinier on the phone with me? And basically Warren clicks in and says, okay, like I'm comfortable doing this if you guys want to do it. And we said, we do. And he goes, okay, I'm good. I'm done. Just call me back with all the terms. I'm taking my grandkids to Dairy Queen.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“That Mr. Buffett was happy with getting to those terms was what we were doing. And it was more sort of us adjusting to that than him adjusting to anything. But the fact that basically we were able to raise a large amount of capital directly from Berkshire Hathaway and then leverage that to doing a common stock deal on the back of that that we then increased in size. And the confidence that that gave not only the market, but the confidence that that gave people internally and the lift that that gave people. Now that wasn't the end of it because obviously the markets continued to be under pressure and it wasn't really until Hank and Bernacki and Washington decided that they were going to infuse capital in the banks and stand behind the banks. That was really the critical moment. But for us, the other critical moment was raising that capital and being in the middle of that, and I remember standing, if you remember, that was at the time, it was in September.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“You learn a lot about having to think about preparing to a better extent for sort of these tail events because they can happen. I mean, sitting there thinking that Goldman Sachs, there was the possibility that 100 and at the time, but 30-year-old firm could disappear was pretty remarkable. I think one of the things that stood out for me during that period of time was when we were thinking about trying to raise capital and we went through the sort of the experience of getting Warren Buffett to invest in our company and just the dynamics of being part of it and how that evolved with obviously one of our partners. I'm a longtime friend of mine because he was a college classmate of mine, Byron Trot, was close to Buffett and Byron called me and basically said, hey, are we thinking about doing anything in terms of financing? And I said, well, we're thinking about it. And he said, well, Buffett would be interested if we were. And over a period of about five days, getting to turn.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“A merger of equals, things like that, it kind of revolutionized it. So that's another huge change that happened over time. And then the other big change for Goldman Sachs that I lived through here was basically a transition from a kind of advisory agency orientation to a risk culture. That was one of the biggest changes in the history of Goldman Sachs. And it really happened in the mid-90s from sort of 93, 94, 95 to the late 90s. You'll probably remember this as well, but in 1994, this firm had its first really, really difficult year. And if you also remember, in 1994, Steve Friedman, who was the senior partner of the firm, retired that year, and John Korzine became a senior partner of the firm. And John was a trader. And John had a very different risk orientation. And that was the beginning of the transition of the firm basically going from a very risk-averse agency.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“There wasn't a dial up then, but in the building, it was wired in, but doing things like a LBO model, you had to get time to go on that computer. You had to then input all of the data by hand and then run the models. And so the other thing that I always reflect on is that I remember I think the first PCs that Goldman Sachs had was like an Apple IIE. And they had one in the computer room on the floor. And so when you think about how quickly that changed with basically people having access to on-desk type stuff and being able to use things like essentially use spreadsheet products, the first spreadsheet. Lotus 1, 2, 3. Yeah, the first spreadsheet product that this company, Goldman Sachs, used was ViziCalc. Then it was Lotus 123, et cetera, et cetera. The revolution that that created also to the extent in the merger market because you could do so much more so quickly in terms of evaluating LBO models or”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“Markets and it changed the way we behaved with our clients. It changed the volumes of activity. It changed the whole secondary market exploded as a result of that. So everything kind of lockstepped and changed. The other thing that was really interesting that I sometimes reflect back on is when I got here in 1982, there was not a single PC in the building. There was not a single PC. We had these digital equipment deck basically like mainframe type things, right? With the paper in them. And so things like...”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“And that changed Wall Street permanently. So what it meant is basically a company essentially file a registration statement that accounted for X billion dollars of securities. And it was like an omnibus filing. And essentially they could then just piece off different financings off of that omnibus by only filing a supplement. And that, by the way, continued to change over the course of the next probably five, six, seven years. When that happened, companies essentially went from being very irregular financers to accessing the capital markets all the time. Think about companies like banks that were looking to term debt markets for financing. Think about companies like Ford Motor, Ford Motor Credit, GMAC. I mean, this is taking us back, right? GE Capital. The level of financing just hockey stick in the market in terms of the use of public financing.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“Period of time. Yeah, that's a good question. First of all, how did the markets change? I think just size and scale, that's the first thing that comes to my mind. I mean, when you think about sort of just number of companies, size of companies, volumes of transactional activity, financing activity, it changed wildly over that period of time. Like I remember when I first came to the firm in 1982, companies had to file an S1 for every financing that they did, including a bond deal. a full S1. So it was a major event for a company to go through the process of doing that. And then in 1982, the SEC introduced and a trial period, Rule 415, which was the shelf registration rule.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“They were invited for the second round, too, right? And so they had a round robin where we all went from office to office to office. So they had us all in the conference room at the end. They said, we're going to invite to New York to interview either zero or one or maybe two of you. So we'll come back and let you know. So anyway, two days later, my phone rings. We want to send you back to New York. And so I was the only”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“I'm dead. Okay, that was bad, right? So, anyway, two days later, I get a call and they said we want you to come back to the Chicago office for the next round. I was like, wow. So I go down to Chicago office the next week, and I get there and I walk into the lobby of Goldman Sachs, which at the time was in the Sears Tower. And there were like six of my classmates in there.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“And so the interview went on, and he said, Look, you'll be contacted or whatever. And it was great to meet you, et cetera. So I leave the building and I'm like, I'm dead. I'm dead.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“Right schedule, right? Who has absolutely no chance. So I walk into this interview and this guy's sitting in front of me and he's starting to talk to me and whatever. And I'm thinking, okay, Goldman Sachs is an investment bank. And I'm talking about investment banking and stuff like that. And he stops me about 10 minutes into the interview. And he goes, John. He goes, do you know what job you're interviewing for? And I said, well, yeah, I mentioned bank. So I'm interviewing for an investment banking job. And he goes, no. He goes, this is for sales and trading. There's a difference between sales and trading and investment banking at Goldman Sachs. And I said, oh. I said, well, look, okay, all I can tell you is that I work my ass off. I'm a motivated person. I know I can be successful. And you just have to take a chance on me.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“And when I showed up for the interview, I walked into the interview center and there was literally eight rooms and there was eight schedules that Goldman Sachs had. And seven of them, this is God's honest truth, seven of them were by invitation. And the eighth was the bidding list. So in other words, there were seven rooms where Goldman had proactively invited people to come in.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“So, I'm in the library that night, and I'm thinking to myself, I heard about Goldman Sachs, I heard about it from a bunch of people I knew, and I was like, oh boy, 11 o'clock that night, I pick up my stuff from the library, walk to Stuart Hall, went to the basement, which is where the computer center was. And I changed my bid. And I bid all my points on the Goldman interview.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“But anyway, so I was like, oh my God, it's like encouraging and they're sort of inviting me to kind of like set up an interview. And so I went to the library that night. I remember I was studying in the library. And the bidding closed at midnight on Thursday night for that two weeks later interview. And I had already bid and I bid all my points”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“Right, exactly. I wish I did. Little did I know it was basically the letter they sent. Form the letter. The letter you now send to like, you know, 50,000 kids.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“Exactly. It's like a self selection process, right? And so I bid on the Lehman Brothers interview. And Lehman Brothers was coming to interview on campus the same week as Goldman was, but I had this interaction and I was like, that's the only thing I know. Anyway, so I had written letters to all these other firms. And so the bidding was open, I bid, and the interviews were two weeks later. So I remember I went back to where I was living. I was actually living in my fraternity house, and I went back for lunch one day. And I got a letter in the mail from Goldman Sachs. And it was from a guy named Bill Eisenstadt who was an investment banker.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“Hire you this year, but if you're interested next year after your first year in business school, come back. So at Chicago, they had this thing where basically you would bid, it was a point system and you bid on interviews.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“My summer in 1981 coming here was an amazing experience. First of all, I knew almost nothing about Wall Street. I kind of got here by accident. If I told you about the interview that I had for this summer job, well, the first interview I ever had was on campus at the University of Chicago with a guy named David Lambert, who was at the time that he was basically a research salesperson in equities in Chicago. The prior summer when I was still in college, I had come to New York and I was basically stomping around Wall Street trying to find a job and I could not find a job that summer. Before my first year in business school, I met someone from Lehman Brothers and it was actually a woman who was an investment banker, Patricia Kavanaugh. She would never remember me, but I remember the name because this was imprinted on me. And she was the only person who actually gave me the time of day and said, hey, listen, we're not going to hire.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“Some kind of a pick preferred or something in the middle of the capital structure, how do you feel about doing something like that? It gives us some capital, basically. We can return some capital that way. And when you look at that opportunity and you look at where you can price that, you can probably price something like that today in sort of mid to high teens. Now, if you think about where private equity sponsors are typically trying to underwrite private equity deals to, they're underwriting sort of 20% plus returns, but in today's environment, we're given the multiples and what people are paying unclear whether or not those really pencil out to 20% plus returns. So we like the risk reward of that coming into the middle of the capital structure with a strong sponsor underneath you, right?”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“A significant buildup of levered companies that are controlled mostly by private equity, coverage levels that have come way down, a maturity wall that's developing in front of us over the course of the next three, four years where many of these companies will have to refinance. Not all of them are going to be sold, right? And there's just too much of it. So it's going to take a while for companies to be sold, particularly at valuations that private equity firms want them to be sold. So one of the things that we're finding is opportunities in the middle of the capital structure. We think it's pretty compelling. So for instance, take a sponsor that owns a company where they've got a lot of equity in it. They want to return some capital to their LPs, which they're under pressure to do. One of the things that we're finding is we're seeing opportunities where sponsors, other sponsors are calling us saying, hey, you know this industry, you know this sector, you may even know this company because we may have seen it as a potential equity investor at some point. How do you feel about maybe putting”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“We're in an environment now that many people have not experienced or seen for a very long time, right? We were in a very low near zero interest rate environment for a very long time. We're not in that environment anymore. So one of the things that is interesting about the markets is that for the first time in quite a long time, you have what I would describe as a compression in terms of returns between different asset classes, meaning that equity returns, fixed income returns, and credit as an example are more compressed today and closer than they've been. a leveraged loan or a high yield bond might be returning today somewhere in the high single digits and maybe even above that into 10 or 11 percent and equity returns today are probably compressed from where they were as a result of things like particularly in private equity as a result of things like just what it cost service debt and level of leverage so one of the things that we're finding is pretty interesting these days is what's happening as a result of”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“Okay, so let's talk macro for a bit. We're at an interesting moment for markets and for the economy with a number of different dynamics at play globally. So where do you see interesting investment opportunities today given that macro backdrop?”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“I think that's a fascinating aspect, right? Of the business. I mean, particularly for you because you have covered these firms for a long time and you've seen these founders from like right in the solid kind of meat of their careers to now sort of passing the baton, as you say. I mean, this industry now has become so important to the movement of capital. And so it's fascinating that we're at the really first kind of turnover in the industry, right? Like 30 to 35 years in. And now the first turnover of the industry to the next set of leaders and also the institutionalization or permanentization, if you will, of these franchises. And some firms have made the switch and some firms have not. And I think that that is going to prove to all that's affecting consolidation. And some firms will survive the transition and some firms will not.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“Well, I wish you a long and happy marriage. Maybe as long as your marriage, which we'll come back to. The last thing on the industry before I talk about your career and leadership, which is to talk about the private equity industry in general, it's still relatively young industry. You and I have basically been aligned with it for the entire life of the private equity industry. But the period of transition that we're in now is a transition that we're seeing the next generation of leaders and a lot of the founders of these businesses pass the baton to next gen. So I'd love to hear your thoughts about where we are in that evolution.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“So it was also clear that over time we could leverage our relationships and our partnerships and bring these credit strategies into those relationships. So that's what we saw in the business, high quality business, undercapitalized, a lot of obvious revenue synergy for us, and finally a culture that we felt worked in the context of our culture. Human capital deals are tough, but I think they can be done.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“Had had a good brand. It had a good track record of investing. Angelo Gordon had gone through a transition already from the founders to the next generation. So everybody there that were in what I think of as the critical seats, in particular the portfolio managers, were mid-career people that have a lot of runway in front of them and had a lot of experience already. And they had a number of people that had come from other areas where they clearly were operating at a very high level. They had a diversified business, which was important. And we felt those businesses were in the sweet spot of where the growth was going to come from in the market. And what was also very interesting was every one of those businesses were undercapitalized, meaning they were out originating their capital base.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“Well, at a certain point, it was clear that Sixth Street wanted to be their own firm and run their own firm. So we went through a disaffiliation process. And when that happened, we knew from day one that we wanted to be back in the credit business. We knew it was an important asset class in the market. Our clients wanted it from us. We had experience in it. And from my background here, I knew something about it. And so we started actually looking. And as we were doing that, not surprisingly, the pace of growth in private credit was accelerating. And so when we went public, we realized at that point that we were going to talk about it publicly, that we were going to ultimately be back in that business. We did, and we now had a currency after we went public, which would make it easier for us to do something inorganic. And immediately after we went public, because of this dynamic that you and I were talking about in terms of consolidation, we probably got incoming calls from 25 different credit managers.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“You have expanded the firm's businesses beyond its buyout routes, especially with a big push into private credit with your recent acquisition of Angelo Gordon. So tell us about what got you excited about that opportunity.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“So everyone is focused on this question of lengthening duration or permanent capital. And there are others. There's dynamics with respect to how many firms will end up being public. There's the whole private wealth phenomena that we're talking about in terms of the democratization of alts and how is that playing out? And that's shifting quite dramatically. It's shifting from not only access to those pools of capital, but it's also shifting in terms of product structure.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT
“All these firms that you and I both know, and you look at the pie chart of where they get their capital from. One of the dynamics of our industry historically was that the pattern of raising capital was we raise a fund, we invest it, we go out and raise another fund, we invest it, and so essentially the capital base has to be renewed every essentially three to five years. But what's happened is that these firms have also now realized if we can lengthen the duration of our capital base or in some cases permanent, right? That changes the equation with respect to capital that we have versus capital that we have to go out and raise. And that's very valuable.”
2024-08-02 · Goldman Sachs Exchanges · TPG CEO Jon Winkelried on the evolution of private equity and alternative markets · IDENTIFIED FROM THE TRANSCRIPT