What do you think?
Rate this book
The New Tycoons: Inside the Trillion Dollar Private Equity Industry That Owns Everything
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 moneyAuthor 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 processPresents 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.
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 moneyAuthor 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 processPresents 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.
256 pages, Hardcover
First published August 2, 2012
176 people are currently reading
1584 people want to read
About the author
Jason Kelly
2 books7 followersThere is more than one author with this name
Jason Kelly is a writer covering the global private equity industry for
Bloomberg News in New York and the author of "The New Tycoons: Inside the
Trillion Dollar Private Equity Industry That Owns Everything." He's a frequent
contributor to Bloomberg Television and Bloomberg Businessweek. During his
tenure at Bloomberg, he's written about issues ranging from the aftermath of
Hurricane Katrina to economic development during the war in Afghanistan. Prior
to joining Bloomberg in 2002, he was the editor in chief of digitalsouth
magazine, a publication focused on technology and finance in the Southeast and
Texas. He earned a bachelor's degree from Georgetown University.
Jason Kelly is a writer covering the global private equity industry for
Bloomberg News in New York and the author of "The New Tycoons: Inside the
Trillion Dollar Private Equity Industry That Owns Everything." He's a frequent
contributor to Bloomberg Television and Bloomberg Businessweek. During his
tenure at Bloomberg, he's written about issues ranging from the aftermath of
Hurricane Katrina to economic development during the war in Afghanistan. Prior
to joining Bloomberg in 2002, he was the editor in chief of digitalsouth
magazine, a publication focused on technology and finance in the Southeast and
Texas. He earned a bachelor's degree from Georgetown University.
Ratings & Reviews
Friends & Following
Create a free account to discover what your friends think of this book!
Community Reviews
Displaying 1 - 30 of 75 reviews
May 15, 2015
The biggest drawback about this book is in the editing. Key concepts about private equity aren't sufficiently covered until near the end of the book. In its place there is a lot of personal profiles and company profiles of the major players in private equity. There is a good story here--the decision to invest billions in an undervalued company, the political ramifications of taxing a major portion of private equity's profits at 15% and the ubiquity of private equity in consumers' everyday lives-- but the author only glosses over these issues and instead seems to give a superficial portrait of these issues. He is more content with reporting than analysis, and even this has some jarring contrasts between various companies and personnel that stunts the cohesiveness of the narrative. Business writing can be highly entertaining and informative as books by Michael Lewis and Bryan Burroughs demonstrate. Alas, Mr. Kelly takes an interesting topic and makes it quite pedestrian without the benefit of leading the reader to a greater understanding of the economics behind the industry.
September 7, 2016
Like its title, this book has a plethora of money stats and name drops that are hardly relatable
The book shows the origins and evolution of the biggest private equity firms. Although the author clearly did his research on the matter, the format is stiff, almost factual, embellished with tiny little details that are circumstantial. I tried several times to finish this book, but left the last one third undone.
The book shows the origins and evolution of the biggest private equity firms. Although the author clearly did his research on the matter, the format is stiff, almost factual, embellished with tiny little details that are circumstantial. I tried several times to finish this book, but left the last one third undone.
December 30, 2015
The first time I paid much attention to the term “private equity companies” was when Mitt Romney was running for President. They reported he made a fortune while working at Bain Capital a private equity firm. I saw the title of this book and grabbed it hoping I could learn more about this confusing topic.
Jason Kelly provides the history of private equity (PE) firms but more importantly he has gone behind the scenes to explain what makes the industry tick. He states the industry goes after unattractive, poorly run companies with potential, turns the companies around and then sells them for more than they purchased them. Of course, he points out that sometimes they make some big mistakes. Kelly states the United States private equity firms employs one out of twenty workers, their companies account for 8% of GDP, and they have over $3 trillion under management globally. Kelly not only writes about the companies but also the people who own them or run them. I was very interested in what Kelly reported about the big pension funds and their interactions with the PE firms.
The book is well written, well researched and appears to me to be neutral on the subject and unbiased. I learned from this book but feel I have just scratched the surface of the topic. I read this as an audiobook downloaded from Audible. Brett Barry did a good job narrating the book.
Jason Kelly provides the history of private equity (PE) firms but more importantly he has gone behind the scenes to explain what makes the industry tick. He states the industry goes after unattractive, poorly run companies with potential, turns the companies around and then sells them for more than they purchased them. Of course, he points out that sometimes they make some big mistakes. Kelly states the United States private equity firms employs one out of twenty workers, their companies account for 8% of GDP, and they have over $3 trillion under management globally. Kelly not only writes about the companies but also the people who own them or run them. I was very interested in what Kelly reported about the big pension funds and their interactions with the PE firms.
The book is well written, well researched and appears to me to be neutral on the subject and unbiased. I learned from this book but feel I have just scratched the surface of the topic. I read this as an audiobook downloaded from Audible. Brett Barry did a good job narrating the book.
June 12, 2019
If you want to understand private equity better this is a good place to start. The book covers the history of the industry and it's key players, compensation structure and explains where do LPs come from. It's really US centric and focuses on the biggest firms.
I liked it a lot and was able to listien to the Audible audiobook in 2 days
I liked it a lot and was able to listien to the Audible audiobook in 2 days
June 13, 2018
When Jason Kelly's primer on the private equity industry was published in 2012, Americans had a serious incentive to learn at least the basics of this complex, somewhat secretive industry. Mitt Romney, the GOP presidential nominee, had made his fortune as the CEO of Bain Capital -- one of the more notable and successful private equity companies in U.S. history.
Historically, American voters haven't voted against wealth -- or, at least what they perceive to be honest wealth, and particularly self-made wealth. This is in spite of the familiar "s/he is out of touch with the average American" line-of-attack that many a wealthy candidate has been whacked with on the campaign trail. After all, look at the net worth of our members of Congress and our past presidents and you'll see those who aren't millionaires are in the minority. (The most current average net worth of Congresspersons is north of $511,000.)
But Americans were wary of Mitt Romney's private equity-fueled fortune -- in part because it was hard to understand what private equity was all about. The opposition narrative was that Mitt made his money by buying companies cheap, firing a bunch of employees to cut costs, and then selling the gutted company for profit. Who's to say how much that narrative played into the final results of the election -- but the narrative was not an asset to Mr. Romney.
In "The New Tycoons: Inside the Trillion Dollar Private Equity Industry That Owns Everything" Kelly (using Romney as a bit of a springboard) dives into the basics of what PE is, how it works and who the major players are (at least, as of 2012). It's not a particularly thrilling read, no -- but if you are looking for a 101-102 level primer on this industry (which directly or indirectly employs millions of American workers and operates countless businesses along a broad continuum), then you couldn't find a better resource.
I won't bore you with too many details -- except to say that the concept of private equity isn't as complicated as you might think. An entity -- let's say for example, a state employee pension plan -- is looking to diversify its investments beyond mutual funds and stocks and what not. They decide to include private equity as an additional investment vehicle.
That pension fund carves out a chunk of cash for investment and hooks up with a private equity company (let's say, Blackstone). In this arrangement, the pension fund assumes the role of "limited partner" (even though they put up the bulk of the investment cash), and the PE company assumes the role of general partner (since they will be more directly involved in management of the investment). The investment portion of the process comes into play when the general partner makes a move (let's say, buys a vulnerable company using the cash set aside for investing). Then, it's up to the general partner to identify what's behind the company's vulnerability and fix it.
Once it's fixed (and hopefully, it's fixed without layoffs and such) the general partner will seek to turn a profit on their investment by taking the newly-fixed company public, or sell it altogether to another entity. The profits (hopefully, there are profits), are split 80/20, with the limited partner (the pension fund), getting the lion's share.
That's, more or less, how private equity works.
Interested in learning more? Pick up Kelly's well-written, well-edited book. Bored to tears? Then this is not the book for you. Either way, we can all benefit from additional perspective on an industry that occasionally does make the news for negative reasons.
Historically, American voters haven't voted against wealth -- or, at least what they perceive to be honest wealth, and particularly self-made wealth. This is in spite of the familiar "s/he is out of touch with the average American" line-of-attack that many a wealthy candidate has been whacked with on the campaign trail. After all, look at the net worth of our members of Congress and our past presidents and you'll see those who aren't millionaires are in the minority. (The most current average net worth of Congresspersons is north of $511,000.)
But Americans were wary of Mitt Romney's private equity-fueled fortune -- in part because it was hard to understand what private equity was all about. The opposition narrative was that Mitt made his money by buying companies cheap, firing a bunch of employees to cut costs, and then selling the gutted company for profit. Who's to say how much that narrative played into the final results of the election -- but the narrative was not an asset to Mr. Romney.
In "The New Tycoons: Inside the Trillion Dollar Private Equity Industry That Owns Everything" Kelly (using Romney as a bit of a springboard) dives into the basics of what PE is, how it works and who the major players are (at least, as of 2012). It's not a particularly thrilling read, no -- but if you are looking for a 101-102 level primer on this industry (which directly or indirectly employs millions of American workers and operates countless businesses along a broad continuum), then you couldn't find a better resource.
I won't bore you with too many details -- except to say that the concept of private equity isn't as complicated as you might think. An entity -- let's say for example, a state employee pension plan -- is looking to diversify its investments beyond mutual funds and stocks and what not. They decide to include private equity as an additional investment vehicle.
That pension fund carves out a chunk of cash for investment and hooks up with a private equity company (let's say, Blackstone). In this arrangement, the pension fund assumes the role of "limited partner" (even though they put up the bulk of the investment cash), and the PE company assumes the role of general partner (since they will be more directly involved in management of the investment). The investment portion of the process comes into play when the general partner makes a move (let's say, buys a vulnerable company using the cash set aside for investing). Then, it's up to the general partner to identify what's behind the company's vulnerability and fix it.
Once it's fixed (and hopefully, it's fixed without layoffs and such) the general partner will seek to turn a profit on their investment by taking the newly-fixed company public, or sell it altogether to another entity. The profits (hopefully, there are profits), are split 80/20, with the limited partner (the pension fund), getting the lion's share.
That's, more or less, how private equity works.
Interested in learning more? Pick up Kelly's well-written, well-edited book. Bored to tears? Then this is not the book for you. Either way, we can all benefit from additional perspective on an industry that occasionally does make the news for negative reasons.
December 23, 2025
I thought it was a very well researched book but didn’t go in depth into many topics and lacked story telling.
Overall, I loved the detailed analysis, the biographical insight into Schwartzmen, Rubenstein, Couler and Bonderman was very interesting and how their leadership styles differed. The analysis on specific deals like KKR’s dollar general and BX’s Hilton were also great case studies. Finally the growth drivers for each firm (KKR, BX, Carlyle) were interesting esp as I look at them through a public markets lense.
The main issue with the book was the lack of detail. Certain parts like how the founders communicate to investors took 10s of pages that could be spent on other topics. There was also a huge use of page space on tax implications and other concepts that weren’t directly relevant. I wished the exit section and case studies were more fleshed out too.
Some of the story telling also wasn’t great. The story ends off with the author taking his kids to Dunkin’s, which is great but doesn’t tie into the other parts of the story. Some of the coolest parts (like how 10 Wall Street firms started from BX) and how other firms (Bain, Warburg) operate was also gone through too fast.
Overall I liked the research and the concept but story telling and flow was lacking.
—
Notes below…
Top Level
- Oregon teachers and Washington state were the first PE pension LPs (BX and KKR)
- Canada model works because they have state support + more comp
- ILPA - PE LP board that set guidelines for GPs
- 9 West - historic PE building
Carlyle
- Carlyle is like a franchise model - David Rubenstein raises a lot and they hire local teams to run companies VERY fast
- “One Carlyle” - effort under D’Amelio to bring the 33 offices together
- Carlyle has roots in defense buyouts - bought out sub “BD” in conglomerate post Berlin Wall falling -> 14x’d their money —> “if KKR are the barbarians, Carlyle is the spooky, government connected group in the public imagination”
- Carlyle’s huge edge was getting capital from Middle Eastern SWFs ex ADIAz
- Ex. Mubdala (semi Dubai SWF) took a stake in Carlyle and loaned them $500m along w proving LP capital
- AlpInvest acquired for Euro PE FoF strategy (vs BX’s HF FoF strat)
- failed strats - Carlyle Capital (MBS financing) and Blue Wave (HF strat)
BX
- Leon Black, Marc Rowan, Josh Harris went from Drexel -> Apollo
- Jimmy Lee - head of Lev Fin @ JPM and creator of syndicated loans that jump started BX PE - known to bee deeper in the cap stack 2L+
- ^^ ex cov-lite debt or equity bridges
- Freescale - Motorola spin co that mfg’d semis and levered up - then crashed and IPO’d for 50% discount to LBO price
- Largest deals: Safeway -> RJR -> HCA -> TXU -> Heinz
- PE lower default rate: 1.2% vs 1.6% for US corp bond issuers
DG/KKR
- KKR retail deals: Safeway (56x), Stop & Shop (10x), Randall’s (3x)
- DG: was growing but as macro strengthened their sales flattened + poor practices w/ inventory and other unnecessary costs
- Dreiling: DG CEO appointed by KKR that killed it at Safeway
- KKR special ops: Capstone (internal consulting), KCM (IPO team), KFN (Credit/MBS financing)
- Organic growth in DG: cut down SKUs, prop up private label, focus on brand
KKR
- Scott Nuttal: head of global capital and asset mgmt
- KKR started from Bear Sterns’ LBO division
- KPE (Euro) first fund to go public but traded down due to lots of carry-led earnings -> then merged w/ KKR for NYSE IPO that was more fee based
- TXU failed as nat gas prices climbed and margins shrank - return was positive post-RX as the shale boom proceeded
Ops
- TPG/J Crew, fired CEO, expanded in China
- Bain/Dominos: tech focus, leaner team + more expansion
- Supplier Negotiations: KKR’s CoreTrust and BX’s Equity Healthcare leverage their portcos’ breadth to negotiate lower contracts
TPG
- Stock used for acquisitions: BX/GSO, Carlyle/AlpInvesf, Apollo/Athene
- Continental Airlines: 10x investment by improving product (flight meals)
- Expanded into HFs (TPG-Axon) and RE but slower than KKR/BX
Workers
- 8mm+ people employed by PE
- Key differentiator of PE vs strategic is… SPEED and ferocity of deal making
- Employment outcomes: mfg (wash), Service (growth then pause), retail (decline)
- Take privates have 10%+ FTE cuts
- PE to PE: 10%+ FTE gain
- Romney took PE to national spotlight and took criticism for bad deals like Toys R Us
- KKR & CD&R faced the Teamsters post buying out US Foods after an Illinois plant was shut down -> strike
Exits
- Div Recaps: pro is investor return + creditor needs to have confidence, cons are more higher BK risk
- Dade Intl.: Bain saved the co and then div recapped $242mm sending the co. To BK
- PE to PE: more onus on buyer to transform the company and transaction fees are 2-5% of the deal
- IPO: same fees but chance to take part in upside
- 80s-2000s $1 in PE returned 1.2x the SPX
- Future: LPs will go to smaller specialized funds for alpha
Taxes
- Carried interest tax concept rose to prominence with 1) BX IPO 2) Romney politics
- Volcker rule: restricts banks from growing large buy side arms
BX
- Schwartzmen started at Lehman as a banker - he brokered the white knight acquisition of Lehman by Amex
- BX only does non hostile deals: 1) better for LPs 2) mgmt stays 3) BX might hold onto a sliver to field mgmt of embarrassment for selling too low
- Tony James: COO w good work ethic, convinced Schwartzmen to buy GSO and Hilton during the GFC
- Garret Moran: head of BX public mkts
- Jon Gray: head of RE, led Equity office properties and Hilton
- ^^he bought stakes in extended-stay hotels which rallied due to: 1) Cheap CMBS financing 2) 2nd realization and safety as tenants stay for longer
- Tom Hill / HFS group: management partner wealth, so big it seeds HFs now
- John Studzinki / advisory: ex AIG advice to dispose assets during GFC
- Timothy Coleman / RX: ex helped Magic Johnson buy Dodgers out of Distress
- Black rock: spun out after BX was in a JV Financial Mgmt Group after Schwartzmen disagreed with Fink on SBC for FTEs
- Roger Altman: worked as vice chair at BX, then left to head US treasury, then founded EVR
- Mark Gallogey: partner that made Centerbridge
- Riverside Co also from BX
Other PE
- Warburg: remained in tech PE
- Bain: Romney negotiated severance for stake, 9 member IC decides investments, also AUM grown organically vs fundraising
- Economic Net Income (ENI) used to judge earnings
- PBX/LP split - one wants and the other hates mgmt fees
Overall, I loved the detailed analysis, the biographical insight into Schwartzmen, Rubenstein, Couler and Bonderman was very interesting and how their leadership styles differed. The analysis on specific deals like KKR’s dollar general and BX’s Hilton were also great case studies. Finally the growth drivers for each firm (KKR, BX, Carlyle) were interesting esp as I look at them through a public markets lense.
The main issue with the book was the lack of detail. Certain parts like how the founders communicate to investors took 10s of pages that could be spent on other topics. There was also a huge use of page space on tax implications and other concepts that weren’t directly relevant. I wished the exit section and case studies were more fleshed out too.
Some of the story telling also wasn’t great. The story ends off with the author taking his kids to Dunkin’s, which is great but doesn’t tie into the other parts of the story. Some of the coolest parts (like how 10 Wall Street firms started from BX) and how other firms (Bain, Warburg) operate was also gone through too fast.
Overall I liked the research and the concept but story telling and flow was lacking.
—
Notes below…
Top Level
- Oregon teachers and Washington state were the first PE pension LPs (BX and KKR)
- Canada model works because they have state support + more comp
- ILPA - PE LP board that set guidelines for GPs
- 9 West - historic PE building
Carlyle
- Carlyle is like a franchise model - David Rubenstein raises a lot and they hire local teams to run companies VERY fast
- “One Carlyle” - effort under D’Amelio to bring the 33 offices together
- Carlyle has roots in defense buyouts - bought out sub “BD” in conglomerate post Berlin Wall falling -> 14x’d their money —> “if KKR are the barbarians, Carlyle is the spooky, government connected group in the public imagination”
- Carlyle’s huge edge was getting capital from Middle Eastern SWFs ex ADIAz
- Ex. Mubdala (semi Dubai SWF) took a stake in Carlyle and loaned them $500m along w proving LP capital
- AlpInvest acquired for Euro PE FoF strategy (vs BX’s HF FoF strat)
- failed strats - Carlyle Capital (MBS financing) and Blue Wave (HF strat)
BX
- Leon Black, Marc Rowan, Josh Harris went from Drexel -> Apollo
- Jimmy Lee - head of Lev Fin @ JPM and creator of syndicated loans that jump started BX PE - known to bee deeper in the cap stack 2L+
- ^^ ex cov-lite debt or equity bridges
- Freescale - Motorola spin co that mfg’d semis and levered up - then crashed and IPO’d for 50% discount to LBO price
- Largest deals: Safeway -> RJR -> HCA -> TXU -> Heinz
- PE lower default rate: 1.2% vs 1.6% for US corp bond issuers
DG/KKR
- KKR retail deals: Safeway (56x), Stop & Shop (10x), Randall’s (3x)
- DG: was growing but as macro strengthened their sales flattened + poor practices w/ inventory and other unnecessary costs
- Dreiling: DG CEO appointed by KKR that killed it at Safeway
- KKR special ops: Capstone (internal consulting), KCM (IPO team), KFN (Credit/MBS financing)
- Organic growth in DG: cut down SKUs, prop up private label, focus on brand
KKR
- Scott Nuttal: head of global capital and asset mgmt
- KKR started from Bear Sterns’ LBO division
- KPE (Euro) first fund to go public but traded down due to lots of carry-led earnings -> then merged w/ KKR for NYSE IPO that was more fee based
- TXU failed as nat gas prices climbed and margins shrank - return was positive post-RX as the shale boom proceeded
Ops
- TPG/J Crew, fired CEO, expanded in China
- Bain/Dominos: tech focus, leaner team + more expansion
- Supplier Negotiations: KKR’s CoreTrust and BX’s Equity Healthcare leverage their portcos’ breadth to negotiate lower contracts
TPG
- Stock used for acquisitions: BX/GSO, Carlyle/AlpInvesf, Apollo/Athene
- Continental Airlines: 10x investment by improving product (flight meals)
- Expanded into HFs (TPG-Axon) and RE but slower than KKR/BX
Workers
- 8mm+ people employed by PE
- Key differentiator of PE vs strategic is… SPEED and ferocity of deal making
- Employment outcomes: mfg (wash), Service (growth then pause), retail (decline)
- Take privates have 10%+ FTE cuts
- PE to PE: 10%+ FTE gain
- Romney took PE to national spotlight and took criticism for bad deals like Toys R Us
- KKR & CD&R faced the Teamsters post buying out US Foods after an Illinois plant was shut down -> strike
Exits
- Div Recaps: pro is investor return + creditor needs to have confidence, cons are more higher BK risk
- Dade Intl.: Bain saved the co and then div recapped $242mm sending the co. To BK
- PE to PE: more onus on buyer to transform the company and transaction fees are 2-5% of the deal
- IPO: same fees but chance to take part in upside
- 80s-2000s $1 in PE returned 1.2x the SPX
- Future: LPs will go to smaller specialized funds for alpha
Taxes
- Carried interest tax concept rose to prominence with 1) BX IPO 2) Romney politics
- Volcker rule: restricts banks from growing large buy side arms
BX
- Schwartzmen started at Lehman as a banker - he brokered the white knight acquisition of Lehman by Amex
- BX only does non hostile deals: 1) better for LPs 2) mgmt stays 3) BX might hold onto a sliver to field mgmt of embarrassment for selling too low
- Tony James: COO w good work ethic, convinced Schwartzmen to buy GSO and Hilton during the GFC
- Garret Moran: head of BX public mkts
- Jon Gray: head of RE, led Equity office properties and Hilton
- ^^he bought stakes in extended-stay hotels which rallied due to: 1) Cheap CMBS financing 2) 2nd realization and safety as tenants stay for longer
- Tom Hill / HFS group: management partner wealth, so big it seeds HFs now
- John Studzinki / advisory: ex AIG advice to dispose assets during GFC
- Timothy Coleman / RX: ex helped Magic Johnson buy Dodgers out of Distress
- Black rock: spun out after BX was in a JV Financial Mgmt Group after Schwartzmen disagreed with Fink on SBC for FTEs
- Roger Altman: worked as vice chair at BX, then left to head US treasury, then founded EVR
- Mark Gallogey: partner that made Centerbridge
- Riverside Co also from BX
Other PE
- Warburg: remained in tech PE
- Bain: Romney negotiated severance for stake, 9 member IC decides investments, also AUM grown organically vs fundraising
- Economic Net Income (ENI) used to judge earnings
- PBX/LP split - one wants and the other hates mgmt fees
March 28, 2018
I had heard of “Private-Equity”. My son works for private-equity. During his summer internship he had worked with Bank of America Merrill Lynch, and on completing his MBA, he joined the private-equity industry.
But what exactly do private-equity firms do – that was the million dollar question. Jason Kelly’s “New Tycoons” takes us on a journey through the business cycle of the industry.
Extremely well researched and written highlighting the growth of the titans Blackstone, Carlyle, KKR and TPG, which started off as private-equity but are now financial conglomerates and many other medium sized and smaller firms which move a trillion dollar industry, that employs many MBAs, CFAs and others.
I know for sure that in India, there are private-equity firms which are associated with Blackstone, Carlyle, Bain and Clayton, Dubilier & Rice. There may be other players associated with KKR and TPG. All these firms India headquarters is the country’s commercial capital Bombay (now known as Mumbai) and they have massive investments in this country.
A perusal of the book takes one into the workings of institutions that control huge amounts of money and deeply impact millions of lives. They have a big responsibility to be model corporate citizens and not raiders, which was their original role, profits, more profits and still more profits for the general partners and a share to the limited partners.
That most of the leading firms have made contributions to the society and institutions is also made amply clear in the book, but still the earnings of the managers (general partners) is mind boggling.
The book presents a never-before-seen look inside a secretive and powerful world that owns everything – no industry or product is free from the scrutiny of these firms and any company can be a good prospect for take-over. Turning around loss making and tottering companies – Continental Airlines, Hilton Hotels, RJR Nabisco, etc. is one side of the picture. On the other hand these firms have also killed many a firms they took over, while the managers and investors (limited partners) raked in millions if not billions of dollars in the bargain. This is the dark underbelly of the private equity industry.
With numerous private equity firms going public for the first time, Jason Kelly takes us on a journey through how these firms that own everything 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. And as public firms their quarterly disclosures would, hopefully, lead to demystifying the trillion dollar industry.
But what exactly do private-equity firms do – that was the million dollar question. Jason Kelly’s “New Tycoons” takes us on a journey through the business cycle of the industry.
Extremely well researched and written highlighting the growth of the titans Blackstone, Carlyle, KKR and TPG, which started off as private-equity but are now financial conglomerates and many other medium sized and smaller firms which move a trillion dollar industry, that employs many MBAs, CFAs and others.
I know for sure that in India, there are private-equity firms which are associated with Blackstone, Carlyle, Bain and Clayton, Dubilier & Rice. There may be other players associated with KKR and TPG. All these firms India headquarters is the country’s commercial capital Bombay (now known as Mumbai) and they have massive investments in this country.
A perusal of the book takes one into the workings of institutions that control huge amounts of money and deeply impact millions of lives. They have a big responsibility to be model corporate citizens and not raiders, which was their original role, profits, more profits and still more profits for the general partners and a share to the limited partners.
That most of the leading firms have made contributions to the society and institutions is also made amply clear in the book, but still the earnings of the managers (general partners) is mind boggling.
The book presents a never-before-seen look inside a secretive and powerful world that owns everything – no industry or product is free from the scrutiny of these firms and any company can be a good prospect for take-over. Turning around loss making and tottering companies – Continental Airlines, Hilton Hotels, RJR Nabisco, etc. is one side of the picture. On the other hand these firms have also killed many a firms they took over, while the managers and investors (limited partners) raked in millions if not billions of dollars in the bargain. This is the dark underbelly of the private equity industry.
With numerous private equity firms going public for the first time, Jason Kelly takes us on a journey through how these firms that own everything 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. And as public firms their quarterly disclosures would, hopefully, lead to demystifying the trillion dollar industry.
February 17, 2019
The book does a good job narrating the history of some of the most prominent PE firms in the world and offering a glimpse into the infrastructure, practices, and recent trends of the PE industry. It also provides perspectives of the core practitioners and other parties intricately involved such as institutional investors and managers of portfolio companies.
A few takeaways:
1. The institutional limited partner association and its efforts and success at norm-making that seem to have a profound impact on the practices of PE managers.
2. The shift in the success strategy of PE firms from financial engineering on the balance sheet - which utilizes the informational asymmetry that largely doesn’t exist anymore according to the author - to more efforts in improving the “ops” of each portfolio and reliance on industry expertise.
3. The diversification of the big PEs to include hedge fund, credit, real estate and other areas of investment in their business.
4. The going public of the Blackstones and Carlyles of the world and the decisions to remain private of the likes of Bain and TPG. PE becoming public necessarily involves complex issues of valuation and potential conflicts of interest in serving limited partners by exiting at the optimal time and answering to the public market (and the financial motivations of the inside shareholders like the founders).
The author does a decent job getting into the psychology of key persons like Rubenstein and Schwarzman to show how people succeeded in this industry and how they plan to continue that success. But perhaps because this is fundamentally a book about the industry, not about the people in it, and because of the inherent limitations of financial reporting based on mostly publicly available information and a few interviews (this book feels more like a lengthy WSJ or Bloomberg report than an in-depth analysis and commentary), the book doesn’t really give you a clear sense of how life is like as a PE practitioner on a personal level and sometimes feels a bit dry to read.
A few takeaways:
1. The institutional limited partner association and its efforts and success at norm-making that seem to have a profound impact on the practices of PE managers.
2. The shift in the success strategy of PE firms from financial engineering on the balance sheet - which utilizes the informational asymmetry that largely doesn’t exist anymore according to the author - to more efforts in improving the “ops” of each portfolio and reliance on industry expertise.
3. The diversification of the big PEs to include hedge fund, credit, real estate and other areas of investment in their business.
4. The going public of the Blackstones and Carlyles of the world and the decisions to remain private of the likes of Bain and TPG. PE becoming public necessarily involves complex issues of valuation and potential conflicts of interest in serving limited partners by exiting at the optimal time and answering to the public market (and the financial motivations of the inside shareholders like the founders).
The author does a decent job getting into the psychology of key persons like Rubenstein and Schwarzman to show how people succeeded in this industry and how they plan to continue that success. But perhaps because this is fundamentally a book about the industry, not about the people in it, and because of the inherent limitations of financial reporting based on mostly publicly available information and a few interviews (this book feels more like a lengthy WSJ or Bloomberg report than an in-depth analysis and commentary), the book doesn’t really give you a clear sense of how life is like as a PE practitioner on a personal level and sometimes feels a bit dry to read.
January 5, 2025
This book I nearly gave up on,since it is packed full of investment acronyms to denote the various private equity firms,which are often the names of the fat cat creators,but some of them are also the names of pension funds.The California Public Employees Retirement System is instead called CALPERS. TXU is Texas Utilities. I stopped to look everyone of them up and as I read the book I consulted the looping chart at the front of the book to understand how the limited partners such as utilities,schools and pension funds make up 80% of a fund's worth and this is counterbalanced by 20% general partners, who are the private equity firms,of which there are only a few with enormous amounts of money. These private firms make leveraged buy outs, LBOs of distressed companies,like Dollar General, and over the course of 5-10 years they fix their bad metrics and sell such companies for profit. A transition phase follows with jobs lost or gained as this process unfurls. The private equity firm gets it's money back from Initial Public Offerings,IPOs,dividends and mostly from selling such companies at the end of the long cycle. The founders of these firms own such places as The Hilton and Waldorf/Astoria and they throw lavish 60th. birthday parties for the founders to further nuture their assets under management, AUMs. They dont always succeed,but most of the time they do and poorly managed companies with upside potential are their dry powder. As a layman I couldnt understand it fully,but then again, I'm just a worker and not a tycoon. Find the chart and study it for a very vague understanding of the architecture of how the American pension system may one day collapse as public funds mix with private capital to benefit mostly private capital and perpetuate the winner take all,casino-like business these companies engage in.
February 28, 2019
Shed light into every deal shop around the globe aiming for big deals. A true fly on the walls view minus the geek speak buzzing in your ear.
Pearls of wisdom
AUM = Assests under management
MOIC = Multiple of invested capital
The stock market is more of a war then a sport
The company will build whatever the CEO decides to measure
We are two people with one voice
Analyzing the merits of value
My time horizon is a little different
I have a no assholes rule
Strip and flip
Dividend recap the worst of private equity way they take money off the table
The best returns come from information advantages
I'm not a believer in just making 5% above the s & p I believe 2.5 times your money and 25% returns
Alpha is proxy for manager skill
No bears no bulls just pigs
I want the kind of coin to get my name on a building
Self congratulating jerks in the entire world
Basking in the after glow
We are all well wishers
Dealshop
I bought a basket of fruit and sold pears to guys who really wanted pears
Timing and luck played a role
Elevated language
My focus on growing assets is undeniable
Evergrowing
You take what you earn with the sweat of your brow, then you take a percentage of that and you invest it in other peoples labor
Long term set term investment
What I'm really after is durable cash flow
You can't save your way to prosperity
Pearls of wisdom
AUM = Assests under management
MOIC = Multiple of invested capital
The stock market is more of a war then a sport
The company will build whatever the CEO decides to measure
We are two people with one voice
Analyzing the merits of value
My time horizon is a little different
I have a no assholes rule
Strip and flip
Dividend recap the worst of private equity way they take money off the table
The best returns come from information advantages
I'm not a believer in just making 5% above the s & p I believe 2.5 times your money and 25% returns
Alpha is proxy for manager skill
No bears no bulls just pigs
I want the kind of coin to get my name on a building
Self congratulating jerks in the entire world
Basking in the after glow
We are all well wishers
Dealshop
I bought a basket of fruit and sold pears to guys who really wanted pears
Timing and luck played a role
Elevated language
My focus on growing assets is undeniable
Evergrowing
You take what you earn with the sweat of your brow, then you take a percentage of that and you invest it in other peoples labor
Long term set term investment
What I'm really after is durable cash flow
You can't save your way to prosperity
May 3, 2020
2.5 / 5 - While interesting the book lacked focus and seemed to meander through the PE industry, glossing over some of the more interesting information and technical details. I would have enjoyed a more technical analysis of some of the deals discussed throughout, as well as more information on the makeup of the companies profiled. It was hard to understand the landscape as the author made contradictory statements throughout. Rubenstein is the face of the PE industry - no Schwarzman is the face of the industry. Conway is the smartest investor in the industry. Nevermind, Bonderman is the smartest guy in PE. There is Blackstone and then there is everyone else. Or is it Blackstone and Carlyle are locked in an arms race? Despite those critiques, I enjoyed the read and found myself engaged, albeit longing for a bit more detail.
June 7, 2020
As always when someone has access to rich, powerful, interesting and reclusive people , the write-up of the interviews and conversation is fascinating.
However I would have liked to read more about the mechanics of the industry and of actual deals - as well as some stats. It is in the book somewhere, but only between quite a lof of fawning of the new tyconns.
Some questions are left unanswered - where would these equity funds be without pension funds? how much us really financial engineering rather than proper restructure?
But overall an entertaining read and intro into an otherwise rather murky world.
However I would have liked to read more about the mechanics of the industry and of actual deals - as well as some stats. It is in the book somewhere, but only between quite a lof of fawning of the new tyconns.
Some questions are left unanswered - where would these equity funds be without pension funds? how much us really financial engineering rather than proper restructure?
But overall an entertaining read and intro into an otherwise rather murky world.
December 7, 2021
I know a couple who I can describe as this:
He talks about stuff that he know 80% of like he only knows 20%
She talks about stuff she knows 20% of like she know 80%
This book is like the writer tries to describe something that he knows little about like he is an expert, and the narrator of the audiobook had no idea what he was reading!
It's like writing a book about successful football clubs, describing their shirt color in detail, who they hired to decorate the stadium, morning routines of the kitchen staff and what did the director do before joining the club, without giving a single clue why these clubs are successful compared to thousand of lesser clubs!
He talks about stuff that he know 80% of like he only knows 20%
She talks about stuff she knows 20% of like she know 80%
This book is like the writer tries to describe something that he knows little about like he is an expert, and the narrator of the audiobook had no idea what he was reading!
It's like writing a book about successful football clubs, describing their shirt color in detail, who they hired to decorate the stadium, morning routines of the kitchen staff and what did the director do before joining the club, without giving a single clue why these clubs are successful compared to thousand of lesser clubs!
August 14, 2017
While there were definitely some interesting tidbits in this book, I found the book to be one of those good for background. My mind would often wonder to other issues I was currently dealing with.
Private Equity is a fascinating subject to me, but this didn't give the insight that I had hoped. There were definite flashes of it - but then the author would run off to another corner of description and leave out the details of the deals.
I'm glad I read it, but it's not one I would read again.
Private Equity is a fascinating subject to me, but this didn't give the insight that I had hoped. There were definite flashes of it - but then the author would run off to another corner of description and leave out the details of the deals.
I'm glad I read it, but it's not one I would read again.
January 29, 2020
The book did its job on summarizing info about the PE industry, the prominent firms, and the key persons involved in it. One key take-away is the idea whether PE firms create or destroy jobs. It highlighted the fact that PE's end goal is to grow companies, which eventually would create jobs. However, some PE-owned firms may be pressured to cut jobs to meet margin targets or debt obligations.
Although it took me a while to finish, it is still a good book to read if one wants to learn about this space.
Although it took me a while to finish, it is still a good book to read if one wants to learn about this space.
August 20, 2017
A good review of making of the pervasive modern private equity industry from Carlyle to KKR and Blackstone. Leveraging his journalistic style, Kelly touches on a wide range of issues related to the PE industry: the politics of carried interest taxes, labor relations, transition to public private equity, etc. Kelly's access to the leaders at these firms and his first hand account of some of the recent defining moments of this industry, makes the book particularly engaging.
September 11, 2018
There are several times toward the end of the book, I found myself questioning if the author was compensated by Blackstone execs to promote its brand placement in private equity. There are times where the author writes a critical perspective of every player except for Blackstone and Mitt Romney. I was expecting a book more focused on the mechanics of how private equity created jobs and long term wealth, but the book is mostly about the political and tax details of PE unique positions.
December 10, 2019
Another English major that has discovered the Reptilian conspiracy. And it's easy to believe that, after all Kelly does not understand economics beyond buying a bagel at Walmart.
And, of course, one can argue that Kelly, in his ignorance, is an agent for another conspiracy. While asking for the blood of the investors, Kelly conveniently ignores that the US Social Security spends the one trillion *every year*.
And, of course, one can argue that Kelly, in his ignorance, is an agent for another conspiracy. While asking for the blood of the investors, Kelly conveniently ignores that the US Social Security spends the one trillion *every year*.
August 18, 2020
Learned a lot about private equity and its history. The author’s focus on the individual private equity companies and their leadership was scattered, too granular, and inconsistent.
Enjoyed the sections focusing on the ways that private equity companies bring in teams to turn around unfamiliar businesses.
Enjoyed the sections focusing on the ways that private equity companies bring in teams to turn around unfamiliar businesses.
March 12, 2022
If you like reading about the history of finance, this one on the origin of index funds is a good one. It dives deep into Vanguard, State Street and Blackrock histories, following ideation from Fama, Sharpe, French and others. Take a ride from the Netherlands to Boston to Chicago and out to San Francisco.
March 18, 2023
The book only begins reaching a point towards the very end. It's a long-winded read for a somewhat anticlimatic payoff. While there is some merit in the points raised, teh anecdotal approach to covering this subject leaves the reader a little disappointed. A very american style of writing which procrastinates through the pages and which lacks substance.
March 25, 2025
Jason Kelly writes the anthology of the mega PE funds in the US - explaining who is who and how they expanded into the influential entities they are today. It's helpful context on private equity and understanding how they operate, but generally falls flat on giving you a sharp opinion or tactical takeaway other than "wow that's interesting, they're quite big now".
January 7, 2019
I thought this was going to be more...I don't know. It seemed like a lot of name dropping with a few tidbits on the industry itself. If you're going to drop so many name, how about dropping some net worths and assets to go along with it. At least make it more interesting.
May 4, 2019
Journalistic style written for general audience. Yet not sure how much general audience is interested in PE. Tells stories, some in my opinion totally irrelevant. Again this is journalistic style but little use if you’d like to learn about the industry more professionally
January 13, 2020
A great background on the private equity industry and key transaction, firms and individuals involved. Many of the details and interviews are surprisingly revealing for a very - well, private- industry.
September 3, 2022
This sells itself as a history of or guide to the private equity industry, but it's more like a collection of magazine articles on the state of the industry in 2012. I thought it would be like "More Money Than God" for private equity but it was definitely not.
May 28, 2023
While the story wandered a bit and there were a few typos, I found the insight into private equity revealing and fascinating. It really piqued my curiosity and the author seemed to do a good job capturing the essence of the business. Private equity was a black box to me, and now it no longer is.
January 6, 2024
If you know less about PE, the book is worthless to read. If you know a little bit of PE, don't read it. If you know much more about PE, read it quickly. It's a general introduction to PEs. Useless for me.
March 5, 2018
Ok but mostly about the story of the biggest firms. Not much about the remaining of the industry
August 26, 2018
Easy to understand the complex world of finance, PE, VC, etc
Displaying 1 - 30 of 75 reviews