The New Tycoons by Jason Kelly - Book review

The New Tycoons

Inside the Trillion Dollar Private Equity Industry That Owns Everything

By: Jason Kelly

Published: September 11, 2012
Format: Hardcover, 232 pages
ISBN-10: 1118205464
ISBN-13: 978-1118205464
Publisher: Bloomberg Press














"The numbers are staggering. Private-equity firms globally and collectively had almost $3 trillion in assets at the end of 2011. The companies they own account for about 8 percent of the U.S. gross domestic product by one estimate", writes Bloomberg reporter who covers the private equity industry, Jason Kelly, in his intriguing and eye opening book The New Tycoons: Inside the Trillion Dollar Private Equity Industry That Owns Everything. The author describes the people, strategies, and decision making that takes place inside the often mysterious world of private equity.

Jason Kelly recognizes that despite its surprisingly short history, the private equity industry has a powerful impact and influence on financial markets and the economy. The firms are not usually household names,and include KKR, Baiin Capital, Blackstone, Carlyle, and TPG. Their ownership of well established companies and brands is also not known by the general public. Despite this relative obscurity, the author provides an insightful reporting and interview based journey into the depths of this fascinating industry. The author provides illustrative stories of how these opaque, and relatively unknown companies control almost every area of people's lives. The story is one of huge egos, of successes and failures, and of their impact on the economy.

Jason Kelly (photo left) understands the importance of an industry that collectively employs 8.1 million Americans through a wide range of familiar companies and brands. The author presents details of how the firms behave as investors, company owners, and as employers. Jason Kelly presents the overall strategies employed by the firms, and how they execute their overall plans. The author also outlines the different formats and structures of the various leading firms, including their differing business models.

Jason Kelly describes the role of debt, as both a tool and a strategy, and its impact on both the firm and the acquired companies. The author also points out where the vast pools of acquisition cash have their origins. Ranging from retirement and pension funds, to governments seeking to diversify their sovereign funds, to wealthy individuals, the sources of capital are varied and seeking of high returns. These are who, writes the author, are referred to as limited partners. Combined with borrowed capital, the private equity firms wield enormous amounts of money.

For me, the power of the book is how Jason Kelly provides a comprehensive insider examination of the major players and firms in the global private equity industry. The author combines in depth interviews with the leading players in the private equity world, with anecdotes, and old fashioned reportage to delve into the heart of the personalities, strategies, and effects on the companies.

Jason Kelly presents both the successes and failures of the firms, in a balanced approach to their overall success. The author presents often complex information in an engaging and readily understood style, whether the reader is a private equity insider, investor, or an interested individual. Jason Kelly also provides a valuable glossary of terms used in the industry, as well as a handy list of the leading firms in this powerful and important industry.

I highly recommend the insightful and informative book The New Tycoons: Inside the Trillion Dollar Private Equity Industry That Owns Everything by Jason Kelly, to any private equity executives, leaders and employees of companies owned by private equity firms, potential investors, and anyone interested in this compelling and controversial industry. Since the author points out the impact of this industry that owns everything, it is important for everyone to understand how the firms operate from the inside.