A Deeper Look at Private Equity - EP.09

Today, we take a deeper dive into looking at private equity. Private equity is Grayson’s world — so we switch the script and I ask him all of the questions I have about private equity.

We discuss how private equity can help grow businesses, get debt to help your returns, the high risk/high return nature of private equity, precise strategies, what to look for when you’re investing, how to know how much to invest, and more! 

Key Takeaways: [:13] About today’s episode. [:44] An overview about private equity, how Grayson defines it, and what sort of businesses he goes after. [2:29] How do you grow the company with private equity? [4:04] Are there any precise strategies that focus on particular markets in private equity firms? [4:48] Who are the big private equity firms? [5:30] Do smaller private equity firms do one-off deals in addition to funds (similarly to real estate)? [6:28] Why does private equity have higher return (and in turn, a higher risk)? [7:59] Can you get debt in private equity? [9:12] High leverage, big buyout vs. the smaller deals. [10:40] Multiple expansion and why it’s so great. [12:41] What to look for when you’re investing in private equity. [17:44] How do you know how much to invest? [19:09] How do you pay a multiple on revenue? [23:40] In an auction process on a deal, what would the variability between lowest bid and top bid be? [24:50] A real world example of a private equity deal. [29:06] What about exits? How do you make the most money in these deals?

Mentioned in this Episode: KKR Blackstone Apollo The Carlyle Group Fortress EBITDA 

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