poor, smart, and a deep desire to become rich

A quick note before we jump in…

A 1981 memo from Ace Greenberg on hiring MBA grads:

*PSD

*PSD

*PSD

*PSD

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Now, the true king of leveraged buyouts is…

Mr. Graeme Hart - the wealthiest man in New Zealand - worth $9.7B

He made his fortune in the ‘boring’ packaging industry.

An interesting fact about him was at a young age he would completely lock himself in a room to fully concentrate.

As a result, he wrote a research thesis for his MBA outlining his strategy for growing Rank Group Limited.

That being said, you won't find much about him, but I found one interview where you can really see how he thinks.

If you're still not sure if you should read what he has to say…

As social proof. It's his $265m yacht…

So yes, he's one of "those" guys.

Enjoy reading thoughts from a man who's mastered the art of business, and LBO :)

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Graeme Hart: “Your career is no more or less than a set of steps up a staircase.”

- But the cumulative output of those steps, the investment decisions you make each time you step up, the opportunity costs that you incur when you make a suboptimal decision — they all combine to give you an end result at the end of your 40 year career — so it’s about realized your full potential, no more or less than that.

Now if you’re young, it’s hard to reconcile, 40 or 50 years in front of you, that’s 2000 work weeks, 120,000 hours, that’s a long time - but I’m telling you, if you just spend some time thinking as you go forward, in 40 years, you will ensure that you realized your full potential.

Now here are some quick motherhoods, these are important because these hold regardless, if you are looking to reach pinnacles, that’s what life is about, I was burning with desire to reach pinnacles, it’s exactly the same whether you are businessman or a sportsman or an academic.

So for me, I think about these as my four legs, the four legs of my stool, it’s very simple.

- Leg 1: Passion - you have to get up every day and love what you are doing, and if you do not, make a change, because you will NEVER reach a pinnacle if you don’t have a burning passion.

- Leg 2: Focus - you must have goals, you must have timelines and the goals have to be quantified and you must hold yourself accountable.

- Leg 3: - you better have determination, and a lot of it. I’m a very determined individual, but what I’ve learned is that, “hey this is hard, this is really hard”, over 40 or 50 years you have some tough times, that’s when you need to dig deep, it’s easy when the wind is behind your back, it gets a whole lot harder when it’s in your face.

• Be intense

• Be obsessive

• Never waiver

- Leg 4: Self awareness - Critically important. Know yourself well. Understand your strengths and play to them. Understand your weaknesses, work with them, work around them, don’t obsess about them.

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The cool thing is that his father saw him becoming the man and business magnate he is today. I find it fascinating.

And that's probably my favorite part of his journey.

Anyway, back to Graeme's thoughts and advice.

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Other important elements:

1. Always be straight forward in your dealings - always do what you say you will do - guard your reputation. This is critically important as you go through your career. Years to gain, minutes to lose. This will help you gain deals in the future as your reputation goes before you.

2. Develop your interpersonal skills - you are going to spend your life seeking to persuade people to follow you - to buy from you, to work with you, to be alongside you as a colleague, I’ve never seen a rude success - put real effort into this.

3. Be bold - be thoughtful and take risks, be opportunistic and build great teams.

4. You in the future will amount to the people around you - you are the young leaders of the future - and it’s about your people and about how you lead your people.

5. Early lessons matter - remember the stair case, the early lessons you get at the beginning of your career, that is money in the bank for the next 40 years, your best lessons you get in year 1, not year 39.

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Now, it gets even better.

The business lessons:

- I quickly learned that buying my competitors and combining my competitors down the road was a very good idea - so what I learned was that when we combined them we took out some fixed costs. I didn’t know what they were till later I got my MBA and I learned that these were synergies. So I learned that I could charge more in my business because I didn’t have my competitors up the road anymore discounting and gained a thing called pricing power.

- The other thing I learned was that I had a team of people - and it’s a bell shaped curve, there’s good, there’s bad, there’s in the middle - I had to sort that out (cut the bad, keep the good, improve the middle) - Then I had lead them - and what made the difference for me was setting an example, so I wanted the trucks turned around quickly, get out on the loading dock and help them load - that’s what it’s all about, you’re going to know this for a very long period of time, it’s all about your leadership and your teams.

- Fit the picture they need - When you deal with people in your life, sometimes they have a profile of what they want you to look like - Work out what that is and fit in.

- Be bold - Buy as big as you can, borrow as much as you can, and then work the asset as hard as you can.

- Stay close to whatever it is you are responsible for - you cannot EVER take your eye off the ball.

- You’re going to get bruised - and you’re going to have your headwinds, and it’s not a bad thing, a little bruising teaches you how to fight.

- The best way to control your costs is to sign the checks, then you know where the money is going - this applies to anything you are responsible for - you need to keep a vigilant eye on your costs, or the equivalent of your costs, whatever it is you are responsible for, because there always giraffes lurking.

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The future

- What do we think about a lot in my office today? Disruption

- Disruption is coming on like a freight train - you’re either on the train or you’re on the tracks.

- So what does that mean for you? - When we look at our world, we’re looking at technology, artificial intelligence, quantum computing, sharing economy, Airbnb, Uber - it's seductive, exciting, but it’s opaque - and most importantly, disruptive.

- Across the period of your career, it is going to redefine the world as we know it - there is no business we have found that isn’t going to be subject to disruption to a greater or less degree - and along the same point, there is no career you will pursue that is not going to feel the disruptive forces of technology - so I urge you to focus on this, study it, research it in the most comprehensive way you can as you think about your 40 year investment decisions - I don’t want you to become a blind victim of disruption, rather a beneficiary - in my view you are standing in front of a frontier of opportunity - embrace it, be passionate, be focused and be determined.

I hope you found it valuable.

Take care,

Mikk aka PrivatEquityGuy

P.S. Great news: Serial Acquirer Networking Event in Stockholm, I will be there as well (more information here)

Lastly,

1. thanks a lot for reading;

2. and thanks a lot for being part of the journey.

Have a great day!