The best ideas from 30+ top podcasts, every week.
10 quotes from 1 episode on How I Invest, each with a timestamped link to the source.
Michael Fisch states that private equity is a human business constrained by operational capacity. Because capital is widely available, investment success depends entirely on retaining incumbent executives and supplying them with full-time functional specialists.
Capital is widely available, making private equity a direct competition for human talent.
“Money is the ultimate commodity. So all private equity firms in a sense are in a commodity business, but we're really in the people business.”
Over 80% of portfolio chief executives remain in place from the initial investment through the final exit.
“…more than 80% of the CEOs who were there when we invested in the company were there when we exited or are there with us today…”
Individual investors represent an untapped capital pool larger than the entire institutional market.
“This whole new set which is at zero and it's bigger than the entire institutional market, the individual investor market. So yes, it's a tsunami.”
Private credit funds can deploy larger capital pools using existing staff by purchasing larger debt tranches. Buyout firms face strict capacity limits because every transaction requires dedicated operational oversight.
“Whereas in private credit or debt, there's infinite amounts of debt out there in the world. There's companies that are issuing tons of debt and instead of being 1%, you can be two or five or 10% if you have more money. It's still 1% of your funds, but there's it's easy. The same people can invest a lot more money. Private equity is harder that way.”
“As a general rule, private equity really different than private credit and some other things…”
Dedicated functional specialists take on heavy internal projects so portfolio executives can focus on daily business operations. This specialized resource group outnumbers the core investment team.
“Because as I tell prospective CEOs, it's not that our any of our people are necessarily better than your people. It's that your people have a day job. And our resource group day job is to help your people win.”
“…the largest sector of our firm for years now, bigger than our investment team.”
Early buyout pioneers priced deals strictly on raw cash generation. These investors underwrote corporate balance sheets using the exact same logic as residential mortgages.
“And the depreciation isn't cash. And I don't care about EPS, earnings per share, net income. I care about cash flow. And this, you call it a religious war if you want, just looking at it from a different perspective was interesting to me.”
“The metaphor to mortgage is a very easy way to understand private equity leverage buyouts…”
“…you could name on less than two hands the number of players.”
How we attribute quotes. Every quote was matched against the episode transcript, so the words and the timestamp are real (we trim filler words like "um", nothing else). The name comes from our written summary of the episode, and we use it only when a separate check of the captions finds that person on the episode. YouTube gives us no voice-by-voice transcript, so open the timestamp to hear who is talking. See a wrong name? Tell us and we fix or remove it.
The week's private equity podcasts, boiled down to one short Sunday read, for deal professionals, operating partners, and LPs.
You get both newsletters, The Throughline and The Carry. No spam. Unsubscribe with one click.