Did they really say that?

“Next to the originator of a good sentence is the first quoter of it.”

Ralph Waldo Emerson certainly didn’t have private equity in mind when he wrote those words, but they are no less applicable to the asset class.

Affiliate title Private Equity International’s daily Side Letter spent last year bringing paying subscribers a mix of context and insight from PEI‘s own headlines, as well as the best of the rest. Each newsletter begins with a quip or observation from some of the industry’s most quotable denizens.

Here are some of the most memorable quotes – including from a few whose firms are involved in the secondaries market – from the year that was.

January

It paints a picture for the public and board that emerging managers are incontrovertibly risky. The board must end this deleterious characterisation of emerging and minority managers. Speculation, stereotyping, implicit and explicit bias cannot substitute for facts

Los Angeles County Employees’ Retirement Association board member Wayne Moore took exception to a line from a staff-prepared presentation on its emerging manager programme containing “inherently pejorative” language.

February

Let’s say everybody in your investment committee has the same background and are all best friends. To me, that would be a risk you would consider in your due diligence – that they have a huge blind spot, that they’re going to be unaware of something

Chris Ailman, chief investment officer of the California State Teachers’ Retirement System, told affiliate title Buyouts that promoting diversity can be considered part of a GP’s fiduciary duty.

March

Brexit is complicating our business – there’s a material increase in the regulatory burden. The reality is it took a lot longer than we expected. We’re glad we started early

Campbell Lutyens chief Andrew Sealey discussed the firm’s decision to open a European office in the wake of Brexit.

April

We won’t pay two and 20

Mark Fawcett, chief investment officer at UK pension and private equity newcomer Nest, told the Financial Times that the asset class is too expensive for his institution.

May

Every person – including potential asset managers – you meet, ask yourself if you would enjoy having two beers with this person, and if you would be willing to have them watch your puppy over a weekend

Christopher Schelling, long-time LP and director of alternative investments at Venturi Private Wealth, shared a novel approach to manager selection on LinkedIn.

June

Shareholder actions, along with the box-ticking on environmental, social and governance requirements that come with a public listing these days, can have the unintended side effect of diluting a board’s decision-making capabilities, thus stifling its entrepreneurial spirit

In a letter to the Financial Times, Steffen Meister, executive chairman of Partners Group, argued that PE is the “acme of entrepreneurialism”.

July

We decided some time ago that we wouldn’t make any new investments in oil and gas-focused private equity funds because their time horizons are generally too short to shepherd their businesses through decarbonisation

The Wellcome Trust will no longer invest in oil and gas PE funds, the foundation’s chief investment officer Nick Moakes told affiliate title New Private Markets (registration or subscription required).

August

UK for sale is very much an ongoing theme and it will remain so until the market becomes a lot better valued. If the market refuses to value a company appropriately, private equity will come and take it off your hands on the cheap

Tom O’Hara, portfolio manager at UK asset manager Janus Henderson, told Reuters that UK valuations are often unjustifiably cheap, even when companies are hugely cash-generative.

September

Think really carefully about every statement

Regulatory uncertainty surrounding ESG means GPs need to back every claim with facts, Christine Anderson, Blackstone’s global head of external relations, said on a panel at the PEI Media Investor Relations Forum (registration or subscription required).

October

Please don’t roll your eyes if I bust you. I’m taking this seriously

In an internal memo, Partners Group chief David Layton told staff to avoid using the term ‘deal’ when referring to their ownership of assets, or risk being fined, the Wall Street Journal reported (paywall).

November

We are all in a state of collective delusion here. We will look back in 20 years from now and say, ‘What were we all thinking? How is this really feasible that a buyout can happen at 25 times EBITDA?’

Apollo Global Management co-president Scott Kleinman said near-zero interest rates are causing valuation multiples to soar, Bloomberg reported.

December

Liquidity is overrated. If you have so much conviction in the manager you chose or in the companies that you own a piece of, why would you place so much value in the ability to get out at every instant?

Orlando Bravo, founder of tech investment giant Thoma Bravo, wrote in a tweet that the secondaries market – the fastest-growing sub-sector of private markets – is based on the premise that the ability to sell is always worth something.