Welcome back to The Private Equity Podcast by Raw Selection! Alex is joined by Drew Schardt, Vice Chairman and Global Head of Investment Strategy at Hamilton Lane. Drew brings over 17 years of experience at the firm, sharing valuable insights into the current state of private equity, how the market is evolving, and what’s in store for the rest of 2024. He dives into the importance of using data and technology to make informed investment decisions, and how Hamilton Lane is preparing for upcoming opportunities in sectors like healthcare, industrials, and private credit.

Breakdown:

[00:00] Introduction to Drew Schardt, Vice Chairman and Global Head of Investment Strategy at Hamilton Lane.

[00:45] Overview of Drew’s role at Hamilton Lane and his background in private equity.

[02:09] Key mistake private equity firms make: not acting quickly enough on management changes.

[03:06] Importance of transparency and using real-time data for better investment decisions.

[04:32] Role of technology and data platforms in improving decision-making in private equity.

[05:59] Private equity's recovery after global downturns.

[06:42] Lower leverage levels compared to the global financial crisis.

[07:37] How private equity evolved with stronger financial resilience and broader acceptance.

[09:00] Soft landing vs. recession risks in the economic outlook.

[09:58] Emerging deal flow and closing the buyer-seller price gap.

[10:56] Impact of global monetary policy on deal-making.

[12:09] Stabilized purchase price multiples aiding deal flow.

[12:53] Increased exit activity and liquidity in private equity markets.

[13:51] Robust deal flow and exits expected in the second half of 2024.

[15:50] How interest rate policies influence pricing and deal-making.

[16:17] Stabilized purchase price multiples across industries.

[17:11] Historical trends showing Q4 as the busiest for deal activity.

[17:40] Managing investment risk through asset selection.

[18:39] Drew’s approach to portfolio diversification and risk management.

[19:43] Key sectors of interest for Hamilton Lane, including healthcare and industrials.

[20:39] Importance of having multiple levers in value creation strategies.

[21:50] Emerging opportunities in private credit, infrastructure, and secondaries.

[24:33] Focus on defensive sectors like healthcare and industrials.

[26:10] How Hamilton Lane is preparing to capitalize on market opportunities.

[31:27] Focus sectors for Hamilton Lane: clinical research, supply chains, and logistics.

[33:05] Supply chain automation as an investment area.

[34:17] Sector-specific investment strategies for Hamilton Lane.

[35:40] How technology is increasing transparency and attracting new investors.

[37:09] Drew’s reading recommendations: "Radical Candor" by Kim Scott and works by Malcolm Gladwell.

[40:00] Closing remarks from Alex.

You can connect with Drew Schardt on LinkedIn by visiting his profile here.

To be added to the book waitlist, you can email alex.offer@raw-selection.com

Thank you for tuning in!

To get the newest Private Equity episodes, you can subscribe on iTunes or Spotify here.

Lastly, if you have any feedback on the podcast or want to reach out to Alex with any questions, send an email to alex.rawlings@raw-selection.com

Welcome to The Private Equity Podcast, by Raw Selection! Today, we're joined by Kevin McShane, a seasoned Chief Revenue Officer turned Operating Partner, with a wealth of experience from multiple private equity-backed exits. In this episode, Kevin shares insights on his journey, the impact of AI on driving revenue and EBITDA, and his key learnings from successful exits in the technology sector. We'll also dive into the role of AI in private equity and discuss Kevin's transition from CRO to Operating Partner.

Breakdown:

[00:00] Kevin McShane's Introduction – Overview of Kevin’s career in tech, private equity, and his role as an operating partner.

[00:10] Kevin discusses how AI can drive revenue and EBITDA growth.

[00:39] How portfolio companies are using AI for decision-making and growth.

[01:08] 25 years in tech, CRO roles, and his transition to an operating partner.

[03:05] Kevin highlights missed opportunities in private equity due to slow AI adoption.

[04:00] Examples of AI in sales, demand generation, and customer success.

[05:26] How AI implementation led to cost savings and pipeline growth.

[06:24] How AI can be cost-effectively integrated into existing CRM and marketing tools.

[09:42] Insights on recent stock price dips and tech sector trends.

[12:44] Kevin emphasizes the role of strong CFO and leadership relationships in successful exits.

[16:52] The importance of relationships and keeping ego in check for team success.

[19:44] Kevin’s advice on moving from CRO to an operating partner role.

[24:00] How Kevin builds trust and guides teams without direct authority as an operating partner.

[30:41] Collaboration with leadership to develop and own strategic initiatives.

You can connect with Kevin McShane on LinkedIn by visiting his profile here.

To be added to the book waitlist, you can email alex.offer@raw-selection.com

Thank you for tuning in!

To get the newest Private Equity episodes, you can subscribe on iTunes or Spotify here.

Lastly, if you have any feedback on the podcast or want to reach out to Alex with any questions, send an email to alex.rawlings@raw-selection.com.

Welcome back to The Private Equity Podcast, by Raw Selection! In this episode, Alex Rawlings, speaks with Geoff Lurie, Managing Partner at Traub Capital Partners. Geoff brings decades of experience as an operator-turned-private equity investor. He shares his invaluable insights on how private equity firms and portfolio companies can collaborate more effectively for superior results.

Breakdown:

[00:00] Geoff Lurie, Managing Partner at Traub Capital Partners, is introduced as an operator-turned-PE investor.

[00:25] Geoff emphasizes the need to focus on how price increases are perceived on the other side.

[00:55] Alex discusses the tough market conditions for private equity and hints at potential positive changes with increasing hiring and deal flow.

[02:18] Geoff explains the issue with PE firms assuming that entrepreneurs must suddenly change how they operate post-acquisition.

[02:47] Managing expectations and helping entrepreneurs report to the PE firm without losing their edge.

[03:42] Entrepreneurs struggle to adjust to reporting to external investors after being self-reliant.

[05:07] The importance of the first 100 days after an acquisition, setting up reporting structures and management.

[06:26] The crucial role of the CFO in portfolio companies, and why PE firms often replace them after acquisition.

[08:19] Geoff discusses how changing consumer sentiment impacts the success of private equity-backed companies.

[11:01] Differences between financial modeling and the practical steps needed to increase margins in portfolio companies.

[13:17] The importance of understanding real-world difficulties in implementing changes in portfolio companies.

[14:28] Alex asks how young private equity professionals can gain operational understanding without becoming CEOs.

[16:26] Alex plugs Raw Selection’s services, explaining the firm’s focus on executive searches for private equity-backed businesses.

[17:24] Geoff discusses the importance of managing debt properly and avoiding over-leverage in portfolio companies.

[18:23] Avoiding the mistake of using short-term working capital loans for long-term growth.

[19:42] Geoff explains how private equity firms motivate middle management by offering equity incentives.

[21:04] The importance of instilling an “enterprise, team, individual” mindset in portfolio companies.

[24:20] Geoff shares a personal anecdote about overhearing a young woman discussing her desire for a high-paying job without office work.

[26:20] Geoff talks about his transition from operator to private equity investor and why he made the switch.

[29:43] The best time to sell a portfolio company is on the way up, not at the top.

[31:10] Geoff explains the importance of setting up the right structure to allow CEOs to focus on future growth, not just day-to-day operations.

[32:34] Geoff shares that his passion stems from mentoring young professionals and imparting knowledge.

You can connect with Geoff Lurie on LinkedIn by visiting his profile here.

To be added to the book waitlist, you can email alex.offer@raw-selection.com

Thank you for tuning in!

To get the newest Private Equity episodes, you can subscribe on iTunes or Spotify here.

Lastly, if you have any feedback on the podcast or want to reach out to Alex with any questions, send an email to alex.rawlings@raw-selection.com.