YouSaid · the spoken record

Paul Salem

lines on the record: 82
first: 2021-02-01
most recent: 2021-02-01
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Looking at it right now. It's Chantara. I don't know if you ever read Chantaram, but it is an amazing book about this. And I happen to be reading this book while I was traveling in India with the family during our sabbatical around the world. And just read the book. It's a book about perseverance. It's a book about a guy that lied that he was a doctor. He was an ex-con, but he helped all these people. And it's just an amazing book.”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's groupthink that kills you. And when you're sitting at Harvard Business School and you got your 90 best buddies telling you how to do something and there's that one person who's off in the corner saying, well, did you think about this? That's the person to listen to. Groupthink kills investment committees. That's how people get sucked into bad deals.”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“What's your gut? My gut was saying, don't do it, but the deal momentum had already happened. There was a couple people pushing to get the deal done. And my gut was saying you shouldn't do it, you shouldn't do it. But yet we did it. And good private equity investors, they remember their bad deals more than their good deals. I just hate losing money. And some of the bad deals we've done, they still stick with me. And I'm like, how stupid could we have done?”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“We invested in a company. This was kind of early in the internet cycle, and it was a comparison shopping company. And one of my partners was excited about the deal. And right before it was closed, the company kind of got shut down by Google. And there's always Google risk. And we thought, boy, this is weird. And so we went and talked to our connections at Google and for whatever reason they had shut it down, but they said, oh, no, no, we'll start it up again and everything's fine. And I thought, I have one sleepless night saying, well, if they could get shut down overnight by one person, why are we investing in this company? We invested and we lost all our money.”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“Momentum investing. It's a good deal because the last one was a good deal and the next one's going up, and it keeps on going up. And somehow when the music stops, there's no such thing as momentum. And I've made that mistake. I've invested in industries that Knew it was kind of at the end of a run, but you took another shot and we blew it.”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“I learned it pretty early, but I don't think you could ever learn it early enough is be confident. You don't believe in yourself, why would anyone else believe in you? And don't worry what other people think. Believe in yourself, be a good person, and believe in yourself, and it's amazing what will happen.”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“I did a TED talk on being lucky. And my dad was the most positive individual ever met in my life. And if you ever want to listen to my TED talk, go to Paul Salem, TED Talk, and you're going to hear me talk about luck because I truly believe I'm the luckiest guy in the world. And I've had this amazing run. And my dad told me I was lucky since I was born and he brainwashed me. So I literally believe I'm the luckiest person in the world. And who's to argue? It's worked out.”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“I hate people who complain. We live in America, the greatest country in the world. We're lucky people. And this is a country where if you work hard, it will pay off. And there's organizations like Year Up that some of the less fortunate that don't have a chance. You hook up with the right organization, you will do well. And I just, I don't have a lot of patience for people who complain.”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's a good one. Sounds weird, but I take long hot showers every morning and I think. It's the most quiet time. And you wouldn't believe how many great ideas I've come up with. In a shower. The water's pounding down on you, and I'm telling you, it's just that quiet time, and you let your mind just go. It's almost like meditating, but you're doing it in a nice hut out.”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“If I could do a sport every day, and I don't care what kind of sport, tennis, squash, biking, golf, I still play ice hockey. Anytime I can play a sport and be competitive, it's a better day.”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“Think I mentioned it before the unique ability to partner with great CEOs. We were in the right industries. And if you partner with the right CEO in the right industry, you're going to do great. And I'm really happy that we found some amazing CEOs. I'm like a coach, right? You're as good as your players. Bill Belichick's a great coach, but we still wish Tom Brady was around and having great CEOs makes your coach look better.”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“In COVID. It's sad. It's no different than seeing the streets of New York empty. And we're a destination resort. So until people feel comfortable traveling, Vegas doesn't work without conventions too. When are people going to do a convention? So our stock's done quite well recently because vaccines are proving to be very effective. And then Vegas will always come back. And it's fun. I really enjoy being intellectually stimulated. We had an activist investor join the board and that's kind of interesting to see how that whole thing plays out. We had Barry Diller buy a billion dollars worth of stock in the open market and now he's on the board. So I've actually been fortunate to be around some really smart people. And it'll be interesting to see, as I say, for all your listeners out there, COVID will end. Don't ask me”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so I became chairman of the board of MGM Resorts International and the chairman of the board of the MGM Growth Properties REACH. We were doing great until COVID came along, and we had a furlough 63,000 employees, which we have great leadership at MGM, but that's just an empty feeling. It's really sad because some people like Vegas, some people hate Vegas, but 43 million people a year go there and to actually see the streets empty.”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“Bakeries in Rhode Island. They were doing great until COVID, and because, thankfully, we have deep pockets, we kept them alive, and they'll do great again. But they certainly haven't done great in the last six months. But if you ever come to Providence, you go to Seven Stars Bakery. I guarantee you have the best coffee and the best pastry you'll ever have in your life. We do food really well in Rhode Island.”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“All different stages. I guess I've been in the business long enough. Deals just fine me. One company, the guy makes signs and he sought me out because he wanted me as a partner to help him give him business advice. I put in a million and a half bucks and I bought a small percentage of his business and his business is more than tripled. And to see his life change is just awesome. And you know what? I'm going to make three or four times my money because we're in the process of selling the company. And I'm like, wow, this is great. But just see him literally become very wealthy. And he's going to put a bunch of money. He has a kid that's autistic and he's going to start doing research on autism. I mean, you can see just the great things that happen when there's a good exit like that. So I just love doing stuff like that. I own a bakery where we have a high-end”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“And it doesn't matter to me how well these companies do, but it matters to the entrepreneurs, and I love it. I just absolutely love this. What I miss most is watching these entrepreneurs' lives change because of the capital that we put behind them.”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“And so we were proving that it wasn't only good for these young adults, but it's actually good for the companies because we could prove to them they were losing money by hiring the hut shop from Harvard. And so it was like getting these hungrier young folks that really just wanted to be there. 90% of the year-up students are students of color. And so it took us 20 years, but now we have every major corporation calling us saying, we need help. We need to employ these urban young adults. I started focusing on philanthropy. I became chairman of the board a year up, really got excited about that, did a couple other nonprofit things. And then I realized, boy, I still miss the deal business. I lasted all of a year of not doing deals, and I set up my family office, hired a couple folks to help me. And we bought seven companies in the last six months.”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“Office in Providence, and now we're in 20 plus cities around the country serving over 5,000 young adults a year, not giving them a handout, giving them a hand up. And that's what year up's all about, just giving people a chance. And what we found is we had over 200 interns at State Street. And what we found is State Street would bring in these young year up kids and they would work their butts off and then end up staying for four or five six years versus hiring the Boston College grad who would get trained, last for seven months and leave.”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“Just turned 57. I took a year to just think. And I'm chairman of the board of an amazing nonprofit called Europe. And Europe takes innercity kids, urban young adults, and we get them jobs in places like Facebook, Google, Goldman Sachs, Bank of America. These are young adults that have never put on a suit before. Maybe have a high school degree. They're just in dead end jobs or they're going nowhere. And we get these hungry kids. We train them for six months and get an internship for six months. And we get them a job at JP Morgan. And they're walking to work with a suit on. And we change these young men and women's lives. And 60 minutes did a great piece on year up three or four years ago. I've been involved for 20 years. We've grown it from one office in Boston. I set up the”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“Scratch my head when it comes to valuation. I actually own two Teslas. It's a great car. It's an awesome car. Can it be worth 500 and something billion dollars? But it doesn't matter. I'm not a public market investor. You've seen the same thing in private equity. Everything used to be a valuation based on EBITDA. Slowly getting to valuations based on revenue. And the only reason why you do it based on revenue is because you can't do it based on EBITDA because there is no EBITDA. So valuations are just creeping up. And I think that's just a function of the market that we're in today.”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“We were classic middle market until we weren't. And now there's firms that are lower middle market or if you look at a group of companies in an industry and you see enough opportunities, I don't care if it's middle market venture, but you're in the right cycle in the right industry. You can invest right along that early stage middle market stage, late stage. You're going to make money the whole way. You just are. You have to be in the right industries. It's no different than the companies that crushed it during COVID. If you bought Zoom stock in March, you're really happy right now. I'm a terrible public market investor, so I didn't buy Zoom, but boy, I also didn't buy Peloton, and I love my Peloton. But you're in the right space at the right time. You're making outsized returns, whether it's private or public markets.”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“A lot of people are happy to invest in what I would call the private equity index fund. They're doing just fine. But I do think specialization in the right industry at the right time in the right industry will get you absolutely outsized returns”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“So the Tomabrava, the reincarnated providence equity, we start off as specialists. They took it to a whole new level, Vista, a whole new level. And so you're getting more and more specialized. And I think two things. You have to pick the right industries. Now, province equity picks some great industries. Wireless communication, cable TV, starting in the early 90s? Come on, we had to make money. We should have made money. People who got into software as a service early, just the right time, right industry. So you have to have the right firm, right specialization at the right cycle. And then you can make outside returns. And then you have guys like Blackstone who just can raise money like no one else. And then they have some really smart people and they still have, you know, not the best returns, but they have good returns. And that...”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“That either fits your personality or doesn't fit your personality. And I think the same way with LPs. Every firm has a personality and every firm has a drive and a hunger. And you can feel that. And I know that Apollo's personality is different than Providence Equity's personality. And by the way, Apollo's fabulous investors. Amazing, but a different personality. And our firm is different than other firms. And so I think you really have to match the people with what the LP is looking to get. A lot of LPs want co-invest. Smart way for an LP to invest. Invest in the fund and get co-invest, no fee co-invest. You're just managing down your fees, right? That's a great way to invest. And so some LPs will congregate to people who know that they're not too big that they'll offer co-invest. I think you're going to see a lot of that stuff.”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“Every private equity fund is top quartile. Every single one of them. Amazing how you can have every fun be top quartile. It's a people business. And every firm has a culture. And when I was interviewing prospective employees, And then go spend a day with other firms. Of the time you will get a sense of the culture of that firm. 100%.”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I don't have an answer, and the good news is it's not my firm anymore. We have these really terrific next generation team running it. And I think it's tough. I think what's going to happen is you're going to align yourself with certain LPs that have just massive amounts of capital. Ontario teachers pension plan was one of our first investors and they were with us for just massive amounts of capital for five or six funds and they were just a great investor in the LP to have. And you're going to see, I think, people partnering with these big sources of capital and almost become in-house private equity teams for them because every big asset allocator now wants to have their own private equity team. And so if they structure it the right way, maybe that's how you can get real long-term capital and still pay the team the right amount of money.”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“And with every great idea in America or around the world, capital flows to great ideas and the private equity business is a great business. And now you're starting to see the public guys saying, wait, why can't we be in the private equity business? And so they come up with a better form of SPACs now that is a little bit better alignment with the public investors. And that's just pushing prices up. I do think private equity will have a dampening of returns meaningfully dampening. But when the 10 years trading at 0.8%, maybe if returns are only single digit for private equity, that's still good enough. I just think returns have to come down.”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“Crystal ball is a little cloudy on this one because that's an amazing asset class. It produces good returns. The advent of specs. Is going to cloud that crystal ball a little bit because that could become real competitive capital. And that will just make returns go down.”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“That change in private equity, where you're going to own your winners longer and you're going to find ways to pay out, in essence, carry halfway through the point because people still want to get paid. And I think LPs realize that the friction cost of flipping companies from one private equity fund to another makes no sense. So I think you're going to start seeing these longer dated funds. And I think that's good for the business. And everyone If we were really all smart, we would have just been more in buffet, right? And just done it through a public vehicle and never pay taxes. But we weren't that smart. He was a lot smarter than us.”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it makes no sense and why we all did it this way for years is you have a fund with a five or six year investment period, five-year liquidation period. And you're starting to see these long dated private equity funds now. It makes no sense to own a great company and sell it to Carlisle. And then we buy a company from them. Why not just own it yourself? And I think over the next 20 years, you're going to see”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“Could sell the company but roll it into the next fund without paying capital gains tax, that 20 million would have grown to 2 billion. And it's very inefficient to invest in a deal, you own it for five years, sell it, pay taxes, and redo it again. So what we did is we just want to put more money in our deals and hold on to our best companies longer. And that was kind of like our retirement package. You just had more money invested and I have more money invested in some great companies. And that's kind of like our payout. So for the next 10 years, I'll be getting paid out on our own personal investments in these companies, which is great.”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“Your allocation of that money you got from the LPs. What we did is we just invested it in our own deals. So we ended up investing more money in every deal, which really is the secret to private equity, is to be able to invest as much money as you can in your own deals. And I wish we had done that when we had 171 million dollar fund. If you put $20 million into Providence Equity and then never sold those companies, or you just could roll them into the next fund,”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“The younger generation. And that's just the way it always was. And then Blackstone decided to go public. And you realize that it doesn't have to be that way. And Providence Equity was never one to, we weren't big enough to go public. We probably could have, but we liked our private lifestyle. And so we were the first firm to ever do a deal with dial capital as a private equity fund. And we did a deal where we sold a percentage of the general partner to a few LPs into dial capital. And we didn't take the money out of the business. What we did is we left it in the business and we allocated that capital to the really the three main partners plus all the other partners. And we said, listen, we're not taking the money out. We're keeping it in the firm and everyone has their own now little bank account that says this is.”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“And I realized after I came back that in seven months our firm hadn't done a deal, had nothing to do with me. We had plenty of great deal doers. I'm thinking, I would have worked so hard during those seven months and what would I have shown for? And that's when I knew it was probably time to retire and give the young team an opportunity. And plus, as you get older, and I always say I get fat and lazy, there is a time when you have to push out the senior partners. And so I was one that they were like happy to see me free up some of my economics. What other business in the world do you work your heart out, right? And then you just give away the equity.”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I did it for 28 years, and we had a run like it was just an amazing run. It was awesome. And the last five to ten years was just raising money mostly, right? And you're getting away from what you'd love the most, which is just being with entrepreneurs. About five years ago, I took my family on a sabbatical. We went around the world for seven months”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“Goes, I know what real leadership is. You private equity guys, you know finance. And I would go rely on a guy like Barry Allen to make sure we, if I had a question about a CEO, I'd say Barry, you got to go help me here. And if Barry thought the guy was a good CEO or the woman was a good CEO, I slept that night. When he didn't think it was, then I knew I had a problem. And Barry, you're just a tremendous guy. And of the 10 operating partners, three were good, three were mediocre. Four were not so good. Not because they were bad people. They just didn't want to work. Barry wanted to work. So there's a little luck involved in that too.”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“Was the type of guy that just always asked people who was their favorite boss? The best operating partner we ever had at Province Equity was a guy named Barry Allen. He ran Ameritech, the phone company, and then he went to run Quest Communications when it was going belly up and he was called in to rescue it. And it's a Midwest guy who grew up in Milwaukee, and I've never seen him have such a way with people. He was just a true leader. We bought the Iron Man group, the World Triathlon Corp. And we put Barry in there to go work with the CEO. He doesn't know anything about triathlons, but he knew about leadership. And any company that guy touched, I think he worked for seven of our companies, he was seven for seven. Every one of them was a good deal. He always said, I'm a translator between the CEO and the private equity guy.”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“Because I used to go to board meetings, and when we have great CEOs, you would learn a lot. And when I get the good fortune of talking to whether it's the students at school or business school or Stanford, and I always say, I think my best talent was like a headhunter. I found the right CEOs. A great CEO can turn an okay business into a good business. Bad CEOs can take a great business and ruin it. And I always thought if there was one lesson I've learned in private equity is making sure you have back the right CEO. And by the way, We've probably done over 100 and something deals. You had a list of the Hall of Fame CEOs, it's not that big a list. And so finding those men and women is really the key. And some of it's luck. Some of it is just innate ability to find good people.”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I think the best thing we as a firm ever did was bring on either what we call operating partners or the true experts. And the example of AirCom, I brought an American guy over to be CEO. He was really COO because we wanted an Irish CEO. But we had worked with the United States. We brought him over to Ireland. And he knew how to run a phone company. We were able to attract some really great operating talent for me or Providence Equity. I always say if you go into a board meeting and you know more than the CEO or you think you know more than the CEO, you got the wrong CEO.”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“In all the levers that you can pull as a private equity investor, where did you see your particular area of expertise? You mentioned the financing. Obviously, that's an easy lever today. How about on the operational side?”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“And I am a complete lightweight. So after two guinesses, he's like, okay, now we can start negotiating. So I always thought the union got the best of me. But we made money. We made 2.3 times our money. And turns out it was coincidental when we took it public again in 2.3 years and company, we invested a ton of capital. We brought in new management. And it worked out well. And it worked out well for the Irish phone customers and it worked out well for us and the union made some money as well. But that was a good old Donningbrook.”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“Go talk to another newspaper, and it was the first time I'd ever heard our deal was on the radio and people like screaming at each other. And he goes, Ireland's such a small company. This was such an important company. And we worked so hard to win that deal and was publicly traded. So the highest bid won, and we went out by a few pence. And it turned out to be a great deal for us, but it was a Donnie Brook. And we would check into our hotel. One of my partners had his briefcase stolen because someone was trying to get information on what we were going to bid and it was really something. And so I would go to Ireland once a month. And one of my favorite stories was the head of the union. It was a unionized workforce. And so we had to get rid of thousands of workers who literally just weren't doing anything. And so I had to negotiate with the head of the union. And he would only negotiate with me after he invited me to his pub, and I would have to drink a couple guinas.”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think my favorite deal we were buying the phone company of Ireland called Aircom and it was a state run telephone company so it was poorly run and it had gone public they'd sold off their wireless business so they're left with this landline business and we were trying to buy it for four to five times EBITDA and so we partnered up with Sir Anthony O'Reilly who was Mr. Ireland and we were the telephone experts and it was Providence Equity and George Soros and Sir Anthony O'Reilly and we were the biggest check and another Irish entrepreneur named Dennis O'Brien partnered with another private equity firm and it was an Irish brawl Tony O'Reilly owned the newspaper so he would write about what a bad guy Dennis O'Brien was Dennis O'Brien was”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“And so it's an asset class that is not only here to stay, but will just keep on getting stronger and stronger and stronger. And the returns, you can argue about the returns, but at the end of the day, they're still pretty good.”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“Actually, attracts pension money, it will always attract pension money because they're sitting there going, hey, our hurdle rate, 7-8%. If I can get the preferred return out of a private equity guy before fees. That's not such a bad deal. And why the 20% carried interest hasn't ever changed as far as We're not complaining. We used to have a 25% carrot interest, but you would think it's so competitive that you could. And so the fee structure has really held strong. And I think when the black rocks are saying, oh man, I got to get into private equity and they're building up their private equity, you'll see some of the big firms. Know there's Blackstone and BlackRock ever reunite someday. Talk about a killer combination. You're going to see all that stuff happen. And I didn't think I'd ever see private equity firms go public.”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“There's been a lot of flipping of private equity companies to private equity companies. We're all guilty of that. We set up a group called Providence Strategic Growth. They have 30 young kids co-calling companies. And Summit Partners have been doing that for years and other firms have been doing it for years. I don't think there's a company in America that hasn't been called by a private equity firm. Capital allocator is going to be getting pitched by private equity firms that don't even know what you do. They're just trying to return a phone call. What used to be a nice niche is now an asset class that is not only here to stay, it's a fabulous asset class. And anytime you can get a preferred return of six to eight percent before you start sharing fees,”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“30,000 DAO, and even the Airbnbs are going public and the DoorDashes, and those are all funded with private equity for a long time. And so when you think about the amount of money that was in private equity was really displacing some public equity. So there was plenty of deals to go around. Now you have the advent of the SPACs. And I always think of the public equity of competing with private equity. And SPACs used to be, well, if you couldn't actually get an real investor, you just go to a SPAC. Now it's a competitive source of capital. And I think SPACs aren't going away. And so I think there's even more competition. So I just think there's just one overarching fact here is returns have to go down. They just have to. Now, with cheap leverage, we've been able to pump returns up. And leverages about as cheap as I've ever seen it.”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's interesting. There's been a huge up until just recently. It was always better to just raise money through private equity than go public. The last five years valuation has been higher privately than they were publicly. And so if you're a CEO, why do you want the brain damage of being a publicly traded company? So you saw the Airbnbs and all these companies just stay private for a long time. Now the market's obviously going crazy and”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“So we've been able to grow the firm through different types of strategies. Again, more specialization. And that was always our thing, is get more and more specialized. Right before I retired, I started a Providence public hedge fund. Because I thought we had all this knowledge sitting amongst the professionals. We'll look at a thousand deals a year where you four. And so without getting inside information, but getting industry information, we set up a hedge fund with our own internal capital, and the guys done fabulously well. His returns have been off the charts. And so just another way of using knowledge. And it's worked out for us.”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source
“Tommy created with us our credit platform, which became Benefit Street Partners. That was the name of it, Benefit Street. Benefit Street is the nicest street up at Brown University. And my partner, Jonathan, Glenn, myself, and Tom again all went to Brown. So we named it Benefit Street Partners. And we grew that into about a $25 billion business, and we sold it to Franklin Templeton. And it was a great trade for us and for Tommy and his team. And what started with just a way to buy cheap debt grew into a massive credit business. And that's how problems became kind of a multi-asset manager. We also set up a little smaller boutique province strategic growth. We started them off with 300 million. My partner, Peter Wilde, and his college roommate, Benny Mark Hastings, and they started buying software SaaS companies, software as a service companies. And they're already on their fourth fund couple billion dollar fund, and they've just grown massive.”
2021-02-01 · Capital Allocators · Private Equity Masters: Paul Salem – Providence Equity Partners (Capital Allocators, EP.175) · IDENTIFIED FROM THE TRANSCRIPT · source