Tom Metcalf and Gillian Tan of Bloomberg News report that private equity titans have quietly discovered how to get even richer:
Robert Smith built Vista Equity Partners into a money machine.
The private equity firm has racked up more than $120 billion of deals
since its 2000 inception, mostly in technology companies, and produced
some of the highest returns in the industry.
That has made Smith one of the world’s richest people with a $6
billion fortune. But like many private equity tycoons his wealth is
largely illiquid, with the bulk of it locked up in Vista’s investment
funds.
Smith, 56, pioneered an increasingly popular way to free up some of
that treasure. He sold about 30% of the company he co-founded, helping
him to become one of the most prominent philanthropists in the U.S. and
buy at least $100 million of real estate, while also adding $500 million
to the firm’s balance sheet.
Since cutting his first deal with Dyal Capital Partners in 2015, Smith
has stepped up his philanthropy, signing Warren Buffett’s Giving Pledge
in 2017. In May, he went viral with a promise to wipe out the student
debt of an entire college class. He also reportedly bought two homes in
Malibu, California, for about $40 million and plunked down almost $60
million on a three-story Manhattan penthouse.
Vista’s 2015 deal helped popularize sales of minority stakes,
upending the conventional wisdom that only weaker businesses would sell a
piece of themselves and at a time when more money than ever was pouring
into private equity....
...MUCH MORE, Pension Pulse has some interesting thoughts on what's up.
