Moulton: PE today 'not as fun as it was'

Better Capital's Jon Moulton used a speech at London's Cass Business School to lament the state of the private equity industry and offer his thoughts on why an executive's marriage record can be valuable information for GPs.

Working in the private equity sector is becoming increasingly “dull” and “not as fun as it was”.

That was the message private equity veteran Jon Moulton had for the student audience – most of which plan a career in the industry – at Cass Business School in London last week. 

Moulton said the life of a fund manager can still be exciting, but it’s duller than it once was. “If you [now] work in the London office of an international buyout firm there might be 20 to 25 people working in that office and in a typical year, there will be one deal done. But if you can get to the top, drive large deals, make a difference to companies, drive success, it is still enormous fun,” he said, before starting to talk passionately about turnaround investing. “The idiots you deal with make you feel good about yourself,” he said. 

One of the major challenges is having no access to proper information, he said. “We actually go into meetings with managers who can’t answer questions like, ‘how many employees do you have’? Seriously, this happens. They are amazingly bad managers, they don’t know the figures”. 

There also are some universal rules to work out a manager’s capabilities, according to Moulton. A manager’s track record of divorce can be a red flag, he said. “Statistically, it’s definitely better to back a manager that has been divorced once. [But] a manager that has been divorced twice is much worse. By the time you get to three or more divorces you can pretty well guarantee corporate failure,” he said.

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