Rich Caputo: Private Equity Today | SALT Talks 284

TL;DR

Private equity firm The Jordan Company discusses the evolution of the private equity industry, their investment thesis, and the impact of macroeconomic factors like rising interest rates on deal flow.

Transcript

hello everyone and welcome back to salt talks my name is john darcy i'm a partner at sky bridge capital and the managing director at salt which is a global thought leadership forum and networking platform at the intersection of finance technology and public policy salt talks are a digital interview series with leading investors creators and thinker... Read More

Key Insights

• 💳 The private equity industry has experienced significant growth and institutionalization since the credit crisis.
• 👨‍💼 The "amazonification" of the global economy has driven investment opportunities in logistics, supply chain, and infrastructure businesses.
• 🇯🇴 The Jordan Company emphasizes a conservative approach to leverage and focuses on value creation through operational improvements.
• 😮 Rising interest rates may impact deal flow, but opportunities may still exist if favorable debt terms can be secured.
• 🇨🇫 The valuation of venture capital-backed companies will be an interesting area to watch as price discovery may lag behind public markets.
• ⛓️ The Jordan Company's expertise in supply chain and logistics has provided valuable insights and opportunities for their portfolio companies.
• ❣️ The firm remains cautious of heavy cyclicals and commodities as investment sectors.

Questions & Answers

Q: How has the private equity industry evolved over the last 30 years?

The industry has shifted from funding leveraged buyouts to more institutionalized, diverse investments due to changes in liquidity, regulations, and market conditions.

Q: What is The Jordan Company's investment philosophy?

The firm focuses on buying and improving good companies, avoiding trophy assets, and adding value through operational improvements, acquisitions, and synergies.

Q: How has the recent rise in interest rates affected deal flow and leverage?

The firm maintains a conservative approach to leverage and assumes rates will continue to rise. They prioritize finding debt providers who can offer attractive terms, which may impact deal flow.

Q: Are there any sectors that The Jordan Company is particularly excited about in the current market?

The firm sees opportunities in the tech, telecom, and diversified industrial sectors, which align with their investment thesis of benefiting from the "amazonification" of the global economy.

Summary & Key Takeaways

• Rich Caputo, CEO of The Jordan Company, discusses his background and the firm's investment philosophy.

• The private equity industry has evolved over the last 30 years due to changes in liquidity, regulations, and market dynamics.

• The Jordan Company focuses on investing in companies that benefit from the "amazonification" of the global economy, such as logistics, supply chain, and infrastructure businesses.