Page 112 - Forbes - USA (November 2019)

NEW BILLIONAIRES:
A BAKER’S DOZEN

IT’S BOOM TIMES IN PRIVATE EQUITY, AND THANKS
TO A QUIET FLURRY OF GENERAL-PARTNERSHIP-STAKE STEVEN KLINSKY, 63
SALES, NEW BILLIONAIRES ARE IN BLOOM.
NEW MOUNTAIN CAPITAL, NEW YORK CITY
ASSETS: $20 BIL NET WORTH: $3 BIL
108 SAMI MNAYMNEH, 58 After earning a J.D./M.B.A. from Harvard, Klinsky

cofounded Goldman Sachs’ leveraged buyout
H.I.G. CAPITAL, MIAMI
business in 1981 and then spent years at white-shoe
ASSETS: $34 BIL NET WORTH: $4 BIL buyout firm Forstmann Little. In 1999, he founded

N A former managing director at Blackstone, Mnaymneh started the firm
O in 1993 with Tony Tamer, a former partner at Bain. Masters at buying New Mountain Capital, which specializes in mid-
I size companies. Its May IPO of biopharma services
A T medium-size businesses like Jenny Craig and Mississippi sausage company Avantor produced a multibillion-dollar
maker Southern Quality Meats, many of which produce huge returns.
G The duo also runs a large global credit business and publicly traded windfall.
I
T BDC, WhiteHorse Finance.
S
E
V JOSÉ E. FELICIANO, 46
N CLEARLAKE CAPITAL, SANTA MONICA, CA
I TONY TAMER, 62

E H.I.G. CAPITAL, MIAMI ASSETS: $10 BIL NET WORTH: $2.1 BIL
H A Puerto Rican who studied at Princeton on schol-

T ASSETS: $34 BIL NET WORTH: $4 BIL arship and worked for financial firms like Goldman

A graduate of Rutgers, with a master’s in electrical Sachs and Tennenbaum Capital. Started firm with

engineering and computer science from Stanford Behdad Eghbali in 2006. Clearlake focuses on
and an M.B.A. from Harvard. Lebanon-born Tamer three seemingly unrelated sectors—software, indus-

and his wife, an MIT graduate, are active philan- trials and consumer services. Prominent invest-
thropists. Endowed the Tamer Center for Social ments include Sage Automotive and Unifrax.
Enterprise at Columbia Business School in 2015.
BEHDAD EGHBALI, 43
BARRY STERNLICHT, 58 CLEARLAKE CAPITAL, SANTA MONICA, CA
STARWOOD CAPITAL, MIAMI ASSETS: $10 BIL NET WORTH: $2 BIL
ASSETS: $60 BIL NET WORTH: $3.1 BIL Iranian-born Eghbali may be the world’s youngest
Specializing in real estate investments, Stern- private equity billionaire. He started his invest-
licht founded Starwood in 1991 and later the ment career at TPG Capital, the Texas buyout
W hotel chain and Starwood Property Trust, firm founded by David Bonderman. He also spent

one of the biggest mortgage REITs. After many some time working in business development for
years in Connecticut, Sternlicht moved his firm Turbolinux, a software company focused on the

to Miami in 2018. Japanese market.

money on carried interest,” says Ludovic Phalippou, Oxford embodied the new era of private equity more than Smith.
professor and author of Private Equity Laid Bare. “What Vista invested exclusively in software deals, an industry

this says is: I don’t make money only with carried interest, once seen as off-limits to leveraged buyouts and ignored

I make tons of money with management fees.” by the biggest PE firms. Smith had proved that systemic
software LBOs were not only possible but exceptionally lu-
W uity firm, Blackstone Group, went returns.
crative, scoring some of the private equity industry’s best
hen the world’s biggest private eq-

public in 2007, cofounder Stephen
The leading private equity billionaires preceding Smith—
Schwarzman threw an infamous like Schwarzman, David Rubenstein and Henry Kravis—

star-studded 60th-birthday bash at had all gone public, listing their private equity firms on the
New York’s City’s Park Avenue Armory that many consider stock market in an attempt to cash out and bring in per-
to be the high-water mark of precrisis excess. That year, bil- manent capital. But they were also forced to contend with CHRISTOPHER GOODNEY/BLOOMBERG; FELICIANO AND EGHBALI: ROBERT GALLAGHER FOR FORBES
lionaire Schwarzman enjoyed a $684 million payout. public company challenges—from analyst calls to seeming- TAMER: AARON DAVIDSON/GETTY IMAGES; STERNLICHT: MICHAEL PRINCE; KLINSKY:
But then came the Great Recession, the massive govern- ly irrational market gyrations. Smith didn’t want the hassle
ment bailout of financial institutions and the Occupy Wall of dealing with stock market investors on a quarterly basis.

Street movement. Schwarzman and other Wall Street deni- So he tapped Goodman, who worked at Evercore, the
zens suddenly became villains. So it’s no surprise that the small investment bank founded by former deputy U.S. Trea-
current boom in buyout billionaires is happening out of the sury secretary Roger Altman. Together they met with Mi-
spotlight. chael Rees, who ran Neuberger Berman’s Dyal Capital unit,
By most accounts, the new wave of GP-stake deals start- which had been buying stakes in hedge funds. In July 2015,
ed in 2015 when Vista Equity Partners’ founder, Robert F. Dyal bought more than 10% of Smith’s Vista Equity at a
Smith, went to talk to investment banker Saul Goodman of valuation of nearly $4.3 billion. At the time, Vista had only

Evercore about finding capital in the private market. No one $14 billion under management; today it has $50 billion.

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