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Which is a better book about Private Equity, The King of Capital or The New Tycoons? Watch

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    Which is a better book on private equity The King of Capital by Carey and Morris or The New Tycoons by Jason Kelly?
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    read King of Capital and it's entertaining and a good very basic primer on private equity but definitely not a substitute for a textbook (or a more focused "story", cant think of one of the top of my head but they do exist) as it (and most other books like this) seem to focus on the big busts and big successes as opposed to sort of the more mundane successes had by private equity firms. I guess it's true that the big successes make up a large portion of returns but the problem with trying to tell a story about them is that there's a lot of attribution of luck as a skill...
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    (Original post by Teenage Pirate)
    read King of Capital and it's entertaining and a good very basic primer on private equity but definitely not a substitute for a textbook (or a more focused "story", cant think of one of the top of my head but they do exist) as it (and most other books like this) seem to focus on the big busts and big successes as opposed to sort of the more mundane successes had by private equity firms. I guess it's true that the big successes make up a large portion of returns but the problem with trying to tell a story about them is that there's a lot of attribution of luck as a skill...
    Thanks for that I can think of one text book the venture and private equity a casebook text book Josh Lerner of Harvard sometimes authors (depending on edition) apparently it runs to 800 pages + and goes into how deals are structured etc. Guy Fraser Simpson has a book as well think might be more technical as well, I have heard.

    By the way do general partners/fund managers at top tier Venture Capital firms get paid as much as at Private Equity firms (May start a new thread on this) as I have heard John Doerr of Kleiner Perkins Caufield Buyers is technically a billionaire but I don't know if he has earned 100's of millions of dollars (say during the tech bubble of the late 90's) in carried interest and profits from company trade sales and IPOs like the like of Schwarzman, Kravis and Rubenstein have in their careers from backing early stage companies.

    Also if the common theory is the top quartile of private equity firms make the most money compared to the rest of the private equity firms and only the top decile of venture capital firms make the most money compared to the other 90 percent of Venture Capital firms would you say it is pretty hard to make a lot if money in both industries unless your at the top, an average firms won't be raking money in? Plus that it is easier to make a lot if money or money at all in Private Equity compared to Venture Capital?
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    You should maybe check out Deals from Hell. I have read King of Capital, couldn't really be bothered with the New Tycoons tbh...unsuprisingly, what you get is a list of events without any real or interesting analysis. Generally, if a book has been written by a journalist, with some exceptions like Alpha Masters (the only reason this wasn't terrible is because she had access, much of the writing is awful), it is going to be bad. Also The Big Deal by Wasserstein is fairly awful but maybe interesting if you into IB as it has some detail on specific deals. Josh Lener, as you mention, is pretty ok too.

    It should be fairly obvious too that, on average, there probably isn't going to be any difference between Private Equity or Venture Capital.
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    (Original post by hsv)
    By the way do general partners/fund managers at top tier Venture Capital firms get paid as much as at Private Equity firms (May start a new thread on this) as I have heard John Doerr of Kleiner Perkins Caufield Buyers is technically a billionaire but I don't know if he has earned 100's of millions of dollars (say during the tech bubble of the late 90's) in carried interest and profits from company trade sales and IPOs like the like of Schwarzman, Kravis and Rubenstein have in their careers from backing early stage companies.

    Also if the common theory is the top quartile of private equity firms make the most money compared to the rest of the private equity firms and only the top decile of venture capital firms make the most money compared to the other 90 percent of Venture Capital firms would you say it is pretty hard to make a lot if money in both industries unless your at the top, an average firms won't be raking money in? Plus that it is easier to make a lot if money or money at all in Private Equity compared to Venture Capital?
    Don't try an play VC/PE off by comparing salaries. Within any fund, your pay is going to be linked to your performance and not necessarily your sector. The people that become intensely wealthy either do so because they were lucky, because they performed sustainably, because they became famous for some trade/deal or because they had a large equity share in a company that went public. It is not because they were in PE or VC.

    Furthermore, if you rank PE/VC houses by revenue/profit, then it's not a theory that the top decile make the most money compared to the other 90%, it's true by definition.

    Finally, It's not true that only top firms make people wealthy. Depending on what you mean by "wealthy" there are wealthy people working at firms you have never heard of/wouldn't consider.

    In short, quit trying to determine which sector is going to make you more money. Focus on getting a job which you'll do well at and which you'll enjoy the most. You can become wealthy doing almost anything if you're good enough. Have you even graduated yet?
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    (Original post by MinorityInterest)
    Don't try an play VC/PE off by comparing salaries. Within any fund, your pay is going to be linked to your performance and not necessarily your sector. The people that become intensely wealthy either do so because they were lucky, because they performed sustainably, because they became famous for some trade/deal or because they had a large equity share in a company that went public. It is not because they were in PE or VC.

    Furthermore, if you rank PE/VC houses by revenue/profit, then it's not a theory that the top decile make the most money compared to the other 90%, it's true by definition.

    Finally, It's not true that only top firms make people wealthy. Depending on what you mean by "wealthy" there are wealthy people working at firms you have never heard of/wouldn't consider.

    In short, quit trying to determine which sector is going to make you more money. Focus on getting a job which you'll do well at and which you'll enjoy the most. You can become wealthy doing almost anything if you're good enough. Have you even graduated yet?
    Thanks for your post
    Its a comparison that been made in academia, sorry I meant the top quartile of PE funds consistently make money compared to the rest some of whom don't make money at all. In VC it has been stated the top decile consistently make money, whereas the rest sometimes don't make any money as if there is a bias towards the tops firms for generating returns at all. Also academia also compare compensation in financial services, like this http://www.peri.umass.edu/fileadmin/...9_revised2.pdf its just an academic discussion really.
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    (Original post by hsv)
    Thanks for your post
    Its a comparison that been made in academia, sorry I meant the top quartile of PE funds consistently make money compared to the rest some of whom don't make money at all. In VC it has been stated the top decile consistently make money, whereas the rest sometimes don't make any money as if there is a bias towards the tops firms for generating returns at all. Also academia also compare compensation in financial services, like this http://www.peri.umass.edu/fileadmin/...9_revised2.pdf its just an academic discussion really.
    Apologies for being somewhat off-topic/critical. However, some points still stand. Top quartile of PE funds according to what? What do you mean by "make money"? Just "profitable"? Or something else? Or do you just mean, "a quarter of PE funds"?

    There are a lot of issues at play in your PE/VC comparison. There are obvious ways in which the fundamental aspects of these businesses differ and perhaps this does affect the proportion of those type of funds that are profitable, but I think that without any actual stats most of the discussion here is going to be meaningless (it's too abstract for the subject).

    Nonetheless, there are reasons why I think your statement might be true. For one, depending on how you categorise things, it takes less capital/resources to open a VC fund, you're taking a stake not buying the company. Second, VC is a "hot" area, people like to think they can have a go. Third, the industries which attract VC investments are more volatile/unpredictable than those which usually attract PE investments. Combine these three and it wouldn't surprise me if fewer VC funds are profitable as a proportion of the total number.

    But again, further clarification of terms and some stats are needed here.
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    (Original post by MinorityInterest)
    Apologies for being somewhat off-topic/critical. However, some points still stand. Top quartile of PE funds according to what? What do you mean by "make money"? Just "profitable"? Or something else? Or do you just mean, "a quarter of PE funds"?

    There are a lot of issues at play in your PE/VC comparison. There are obvious ways in which the fundamental aspects of these businesses differ and perhaps this does affect the proportion of those type of funds that are profitable, but I think that without any actual stats most of the discussion here is going to be meaningless (it's too abstract for the subject).

    Nonetheless, there are reasons why I think your statement might be true. For one, depending on how you categorise things, it takes less capital/resources to open a VC fund, you're taking a stake not buying the company. Second, VC is a "hot" area, people like to think they can have a go. Third, the industries which attract VC investments are more volatile/unpredictable than those which usually attract PE investments. Combine these three and it wouldn't surprise me if fewer VC funds are profitable as a proportion of the total number.

    But again, further clarification of terms and some stats are needed here.
    What I maybe can do is start a new thread in this and debate this there. It was kind of my fault this thread went off topic as I introduced this new dimension not related to a book comparison, which is what this thread was meant to be about. The original comment about this which soared my curiosity seems to have delt with the way entrepreneurs always want to be associated with top ten VC firms and returns are skewed towards the top firms, it came from Mergers and Inquisitions. "One difference is that in venture capital, returns are heavily skewed to the top firms: if you think about their business model, that makes a lot of sense – invest in the 1 big winner and you’re set.Plus, the best deals in VC almost always go to the top firms because the best deals have always gone to the top firms." which is aced up by a Union Square Ventures Article here about buying into the top ten firms:http://www.usv.com/2007/11/why-past-perfor.php I understand what you were saying the top ten VC firms are going to Make the best returns because they are the top ten. It's just this ten Decile ae money/threat don't in VC and in PE te too quartile make money/ the rest don't and top decile and top quartile make the best returns in VC and PE respectively, seem to be liked to be talked about in academia and on business magazine websites.

    See
    http://blogs.wsj.com/deals/2008/06/2...pe-performers/
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    (Original post by hsv)
    What I maybe can do is start a new thread in this and debate this there. It was kind of my fault this thread went off topic as I introduced this new dimension not related to a book comparison, which is what this thread was meant to be about. The original comment about this which soared my curiosity seems to have delt with the way entrepreneurs always want to be associated with top ten VC firms and returns are skewed towards the top firms, it came from Mergers and Inquisitions. "One difference is that in venture capital, returns are heavily skewed to the top firms: if you think about their business model, that makes a lot of sense – invest in the 1 big winner and you’re set.Plus, the best deals in VC almost always go to the top firms because the best deals have always gone to the top firms." which is aced up by a Union Square Ventures Article here about buying into the top ten firms:http://www.usv.com/2007/11/why-past-perfor.php I understand what you were saying the top ten VC firms are going to Make the best returns because they are the top ten. It's just this ten Decile ae money/threat don't in VC and in PE te too quartile make money/ the rest don't and top decile and top quartile make the best returns in VC and PE respectively, seem to be liked to be talked about in academia and on business magazine websites.

    See
    http://blogs.wsj.com/deals/2008/06/2...pe-performers/
    The reason it's talked about in academia is not because of career prospects but to sort of explain the returns from investing in PE. If you invest in "PE beta" (whatever that means), you're unlikely to do that well. If you have some alpha when it comes to manager selection, you're making out pretty well.

    The same thing applies for careers. Just ending up in PE by itself doesn't mean much.
 
 
 
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