Kelly - The new tycoons inside the trillion dollar private equity industry that owns everything

Contents

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Copyright 2012 by Jason Kelly. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

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Library of Congress Cataloging-in-Publication Data :

Kelly, Jason, 1973

The new tycoons : inside the trillion dollar private equity industry that owns everything/Jason Kelly.

p. cm. (Bloomberg Press series)

Includes bibliographical references and index.

ISBN 978-1-118-20546-4 (cloth); ISBN 978-1-118-22851-7(ebk); ISBN 978-1-118-24081-6 (ebk); ISBN 978-1-118-26567-3 (ebk)

1. Private equity. I. Title.

HG4751.K45 2012

332.6dc23

2012017193

For Jen, Owen, William, and Henry

We accept and welcome... as conditions to which we must accommodate ourselves, great inequality of environment; the concentration of business, industrial and commercial, in the hands of a few; and the law of competition between these, as being not only beneficial, but essential for the future progress of the race.

Andrew Carnegie

Theres a certain part of the contented majority who love anybody who is worth a billion dollars.

John Kenneth Galbraith

A Visual Tour of Private Equity

Deciphering Private Equity

You or someone you know almost certainly works for a company connected to private equity or is invested in a buyout fund through a pension or retirement account. Getting smart about the way these things work means getting comfortable with the alphabet soup of acronyms and abbreviations they use. Some are meant for pure shorthand, but others feel like theyre meant to give it a sheen of importance and others to obfuscate whats actually going on. For example: TPG and KKR arent likely to exit the TXU LBO through an IPO. There was no way they could do a recap, and the LPs will be lucky to get their money back. The GPs can probably forget about carry and its going to make a huge dent in the funds IRRs.

If youre in the business, feel free to skip ahead, but for anyone whos curious about the lingo, heres what you need to sound conversant, with explanations in plain English.