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Scott Sperling

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58
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2021-05-21
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2021-05-21
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podcast

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  1. “No, I think it was a really big moment. You know, I joined in 94. The SNAPL investment was made in 1992 and monetized in 95. And the ability to buy a company and make your money on the growth of that enterprise as opposed to the traditional buyout up to that period of time, which was to buy large enterprises that might not be as efficient as they should be often had a aggregation of dissimilar businesses where there was value to disaggregating those businesses, you know, a model that applied to the great majority of buyouts that were done up through that period was something very different than the ability to identify a company that had the”

    2021-05-21 · Masters in Business · Scott Sperling on Innovative Investment Strategies (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “So it's still a really good business to be in, something that I think brings together both investment skills and the ability to participate in growing really important enterprises. So as an individual, it's continues to be a fun and exciting place to be but the nature of and intensity of the work that we have to do to, as I mentioned, sustain these high returns has certainly increased dramatically.”

    2021-05-21 · Masters in Business · Scott Sperling on Innovative Investment Strategies (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “the use of leverage was not all that well known, particularly in the early part of the eighties, the mid eighties. And so in the buy outside of private equity, there was an opportunity that really doesn't exist today to buy things very cheaply relative to their intrinsic value. And then you were able to ride that to relatively strong returns. I think today, and really for the last decade, pricing has been anywhere from fair to frothy. And in order to generate the kinds of returns that we expect and that our investors expect, our organizations are dramatically larger, have much higher levels of expertise and much higher levels of specialization.”

    2021-05-21 · Masters in Business · Scott Sperling on Innovative Investment Strategies (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “Well, I think the nature of what we have to do to drive superior returns continues to get more labor intensive, requiring higher levels of value add early on. I think there were lots of opportunities that did not require the level of intensity of either operational value add or necessarily the ability to use acquisitions as platforms for consolidating industries. The returns were often driven by the ability to enter at multiples that are significantly lower than what we typically see today.”

    2021-05-21 · Masters in Business · Scott Sperling on Innovative Investment Strategies (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “Say it was more collegial. In those days, as we pushed into some new areas, we would often not only cooperate, but there was some level of collaboration. So we had pushed into, again, venture capital and early buyouts in that 84, 85 period. David was starting at Yale, and he was similarly doing some of the same things. We worked together on a number of oil and gas opportunities. So there was a level of cooperation that underlined a lot of what we did. Now, I think Harvard accelerated a little more quickly than some of the other IVs did into these areas. We had the strong support of Harvard Corporation to”

    2021-05-21 · Masters in Business · Scott Sperling on Innovative Investment Strategies (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “And how he was looking for ways to really give the endowment an ability to participate in areas that he felt had higher risk adjusted returns go forward basis. And he convinced me that this would be a great thing for me to do. And I started there and we opened up activities in those days we thought of private equity mostly as venture capital, but then moved into the buyout space, investing largely in funds and then doing some co-investing. There was some real estate holdings that Harvard already had, but that was an area that I was given. And then what we ended up calling commodities, which was largely oil and gas and timber in those days. And so it started with almost nothing and grew to a little over 20% of the endowment by the time I left 11 years later.”

    2021-05-21 · Masters in Business · Scott Sperling on Innovative Investment Strategies (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “So it was one of those moments in life where you get a call out of the blue and you're asked to consider something that you'd never considered before or even truly understood. And Walter Cabot, who had started the Harvard Management Company, is one of the first third party managers of a major endowment. It was wholly owned by Harvard, but run completely separately under Walter's leadership, had decided that rather than sticking with a typical 65-35 split of U.S. domestic equities and bonds, he wanted to expand into some new areas. And he made the decision that rather than bringing somebody in with a typical investment management background, they want somebody with more of a business analytics background. And I went in, was incredibly impressed with Walter and his vision for where he wanted to take the management company.”

    2021-05-21 · Masters in Business · Scott Sperling on Innovative Investment Strategies (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “Well, I joined BCG out of business school, and there was no great intent on my part. I was 23 years old and had lots of loans, and consulting was one of the higher paying jobs you can get in those days. But it was a great experience because it really put somebody who was young and reasonably inexperienced in a place where you could apply the kind of analytics that you'd get used to in business school to the real world, working with C-suite executives at very large companies around the world. So the experience there was really quite intensive. And for me, it was about three and a half years of just being fed with fire hose of exposure to senior managers who were running some of the most interesting companies globally.”

    2021-05-21 · Masters in Business · Scott Sperling on Innovative Investment Strategies (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source