Page 62 - Forbes - Asia (March 2020)

NEW BILLIONAIRES:

A BAKER’S DOZEN

THANKS TO A QUIET FLURRY OF GENERAL-PARTNERSHIP-
STAKE SALES, NEW BILLIONAIRES ARE IN BLOOM. STEVEN KLINSKY, 63
NEW MOUNTAIN CAPITAL, NEW YORK CITY
60 ASSETS: $20 BIL NET WORTH: $3 BIL
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 buyout
ASSETS: $34 BIL NET WORTH: $4 BIL
FEA TURES A former managing director at Blackstone, Mnaymneh started the firm Mountain Capital, which specializes in midsized
firm Forstmann Little. In 1999, he founded New
in 1993 with Tony Tamer, a former partner at Bain. Masters at buying
companies. Its May IPO of biopharma services
midsized businesses like Jenny Craig and sausage maker Southern
company Avantor produced a multibillion windfall.
Quality Meats, many of which produce huge returns. The duo also runs
WhiteHorse Finance, a publicly traded business development corpora-
tion (BDC).
JOSÉ E. FELICIANO, 46
CLEARLAKE CAPITAL, SANTA MONICA, CA
TONY TAMER, 62 ASSETS: $10 BIL NET WORTH: $2.1 BIL
H.I.G. CAPITAL, MIAMI A Puerto Rican who studied at Princeton on
ASSETS: $34 BIL NET WORTH: $4 BIL scholarship and worked for Goldman Sachs and
A graduate of Rutgers, with a master’s in electrical Tennenbaum Capital. Started firm with Behdad
engineering and computer science from Stanford Eghbali in 2006. Clearlake focuses on three sec-
and an M.B.A. from Harvard. Lebanon-born Tamer tors—software, industrials and consumer services.
and his wife, an MIT graduate, are active philan- Prominent investments include Sage Automotive
thropists. Endowed the Tamer Center for Social and Unifrax.
Enterprise at Columbia Business School in 2015.

BEHDAD EGHBALI, 43
CLEARLAKE CAPITAL, SANTA MONICA, CA
BARRY STERNLICHT, 58
ASSETS: $10 BIL NET WORTH: $2 BIL
STARWOOD CAPITAL, MIAMI Iranian-born Eghbali may be the world’s young-
ASSETS: $60 BIL NET WORTH: $3.1 BIL est private equity billionaire. He started his
Specializing in real estate investments, Sternlicht investment career at TPG Capital. He also spent
founded Starwood in 1991 and later the W hotel some time working in business development for
chain and Starwood Property Trust, one of the Turbolinux, a software company focused on the
biggest mortgage REITs. Japanese market.

buyout managers gave up management fees in exchange for tech deals like Skype and Alibaba, tapped Dyal to raise $400
more carried interest—the “holy grail” because the waivers million. At the time, the Silicon Valley-based firm managed
converted top-bracket taxable income to capital-gains-rate $24 billion and the deal valued the operation at about $4
income and deferred taxation for years. billion. Silver Lake was founded in 1999 by tech investing
But in 2015 the Internal Revenue Service indicated that pioneers Jim Davidson, Glenn Hutchins, Dave Roux and
it would begin auditing these fee waivers. Thoma Bravo, the Roger McNamee. McNamee left early on in 2004, and by
private equity firm run by billionaire Orlando Bravo, for ex- 2013 Davidson, Hutchins and Roux had also moved on. The
ample, told its investors that the IRS was auditing its man- firm’s younger partners, led by Egon Durban, Kenneth Hao,
agement fee offsets in its 2012 fund. Mike Bingle and Greg Mondre, wanted more cash to con-
With fee waivers out, these stake deals allow Wall Street’s tinue investing in the firm’s enormous new funds. They were
billionaires club to continue to admit new members. Some asset-rich but in need of liquidity. CHRISTOPHER GOODNEY/BLOOMBERG; FELICIANO AND EGHBALI: ROBERT GALLAGHER FOR FORBES
have even coined a name for them: “Synthetic fee waivers.” The new managing partners used part of the $400 million
raised by Dyal to increase their own commitments in their TAMER: AARON DAVIDSON/GETTY IMAGES; STERNLICHT: MICHAEL PRINCE; KLINSKY:
T he current deal bonanza reflects another funds. Some of the proceeds went to the founders, part of an
agreed-on sum related to the transfer of the firm, by invest-
reality: Firms are selling off pieces of them-
selves to build staying power. What followed
ing on their behalf in Silver Lake’s funds. After the Dyal deal,
Blackstone’s initial public offering in 2007 Durban and the other remaining Silver Lake partners wound
was a sixfold increase in assets in the ensuing up with 90% of the firm’s future net free income. Davidson re-
decade, from $88 billion to $545 billion currently. Today’s tained a slice of future performance fees in Silver Lake Fund V.
private stake deals offer a glimpse into the up-and-coming Meanwhile, Durban, 46, masterminded an incredible deal
firms that will dominate tomorrow’s Wall Street. for Dell that has so far returned $4.4 billion in profit. Silver
In July 2016, Silver Lake, a private equity firm known for Lake now manages $43 billion, and Forbes estimates that Dur-

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