$3.1B AUM: all started deal-by-deal 20-something years ago

Dear Friend, Company Builder and Fellow Capital Allocator,

I’m writing a longer weekly newsletter, which I will share with you on Monday, but writing today got me thinking about this week’s podcast guest Ian, who started deal-by-deal but built a private equity firm which manages more than $3.1 BILLION today.

Many lessons for anyone wanting to invest in and acquire traditional businesses.

Links to episode: Apple podcasts, Spotify, and YouTube.

People seem to find it valuable as it has received more than 2,500 downloads in less than 24 hours.

That being said, on some level, every 3rd or 4th man in finance dreams of starting his own private equity fund.

Office on 57th Street, $275m in AUM while charging 2% management fee and generating 31%+ IRR…

If that's really the case...

Why do we have so few fund managers of the caliber of Steve Scharzmann, Henry Kravis, David Bonderman, Robert F. Smith, and Josh Harris?

The information on how to start a private equity firm, or how to use an LBO to acquire a $5.5m EBITDA company is available for almost for free...isn't it?

• Books...

• Interviews...

• Also seminars these days...

From the exact same gentlemen mentioned before.

Still, the vast majority of people who read, watch and consume all the information / knowledge / experience will not be able to implement it, simply because they don’t have the patience or ambition required to.

Hint:

Most of the strategies and methods shared by the industry legends are "doable". It is extremely hard, takes guts, long term planning, deep thinking, and a lot more work than one can ever imagine...

All of this separates the "I-want-to-run-my-own-fund" people from the folks who actually do.

As raising a first time fund is REALLY hard.

You need a deep track record at blue chip firms that investors might be willing to back a spinout from.  Even with that it is incredibly hard.

I know because I’ve talked to guys who’ve done it.

It takes a lot more than guts, deep thinking and long term planning.

That being said, one can ALWAYS start small… deal-by-deal, and go from there.

Ian Rickwood and his story are a great example of that. Ian and his wife started 20 years ago, and once they were 10+ years in, they successfully raised a fund.

Today, they manage more than $3.1 BILLION.

Here are the links for you: Spotify, Apple Podcasts and YouTube.

Before you go I want to mention the Sponsors of this newsletter:

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Brandon from Spacebar Studios messaged me their current offer: “We’re guaranteeing 10k subs in your first 90 days or you don’t pay.”

If your company or investment firm needs a weekly/monthly done-for-you newsletter (I would really consider this offer; at minimum, talk to their team), book a free call here:

SpacebarStudios.co/inquire

Take care and have a great weekend.

PrivateEquityGuy / Mikk Markus