Partner and Head of Leveraged Buyouts Practice
1 Your firm has been expanding its LBO team. What is it exactly that attorneys needs to do to be good at servicing LBO firms?
What I look for are deal teams that are really [committed to] their clients. I like being a part of my clients’ deals. I once received a call on my cell phone at a Super Bowl party and my client needed to get an LOI [letter of intent] out the next day. I went home and worked on it till it was done. There is always immense time pressure—you know, time kills deals. LBO firms live and breathe it and we feel the same way. And in private equity, it’s different than big public company M&A, where a lot of the time people don’t have the same investment in the success of the transaction.
2 What is the most interesting trend in the LBO world today?
I’d say the continuing increase in auctions. Very rarely do you see companies being sold other than via an auction. Sellers have gotten smarter and investment banks have been more aggressive in pursuing middle-market companies. Almost every private equity firm will say they have proprietary deal flow—some have it and some don’t.
3 What do you think the best dealmakers in this business have in common?
I think the number one thing is the ability to solve problems. In the course of a transaction any number of issue can arise that may not have a readily apparent solution. So you have to bridge the gap. You have to be able to stand back and see the shades of grey. You know you’ve had a good negotiation when both sides walk away a little bit upset—that’s the sign that neither side really won. You try to set it up in a way that everyone thinks they are getting something.
4 Who’s going to win the World Series?
Of course I’m a Yankees fan, so if you’d asked me at the beginning of the playoffs I would’ve picked the Yankees. But seeing things as they stand I’d probably pick the Tigers, as they have the best pitching left.
5 Private equity guys love talking about turnarounds. How do you explain the Tigers turnaround from losing 119 games in 2003?
I think it was probably the young arms having learned how to pitch. And you can’t underestimate the influence of a guy named Jim Leyland. He’s like a Joe Torre: he understands how to handle players, he’s good with the young guys and the old guys and he knows how to push people’s buttons.