Yale School of Management

SOM Private Equity Conference Looks at The Road Ahead

The Yale SOM Private Equity Conference, titled "The Road Ahead," brought together some 200 private equity professionals in Greenwich, Connecticut. The 8th annual conference, hosted by the Yale SOM Private Equity Club on November 14, 2008, found its ongoing theme to be particularly appropriate this year, as the current economic turmoil has bred considerable uncertainty about the future.

Through the middle of 2007, private equity had been experiencing unprecedented growth which was pushing the industry to mature, institutionalize, and globalize. Deal flow has since dropped dramatically, and the industry must now figure out what is next. But, for a business built on understanding change, a time of upheaval can also represent extraordinary opportunity, speakers said.

Opening remarks by SOM professor Andrew Metrick YC '89, GRD '89 set the tone for the event. He said that while it isn’t the moment to say the fundamentals of the economy are sound it is fair to say the fundamentals of the private equity business are. (Read more about Metrick’s take on the recent history of private equity in his interview with Q4 magazine.) The sentiment was echoed by speakers and panelists who, while waiting for the dust to settle in the short term, expect opportunities to begin emerging particularly for those with available capital.

Keynotes were delivered by Philip Yea, CEO of 3i Group, and Scott Schoen, co-president of Thomas H. Lee Partners. Panels addressed a range of topics, including infrastructure investing, global sourcing of capital, and distressed investment opportunities.

There were calls to exercise discipline and patience in making deals. Some pointed to reduced use of debt to finance deals in the future, which will likely require an emphasis on returns coming from improving the metrics of the acquired company rather than through leverage or deal volume.

Rather than a closing keynote, Dick Cashin, founder and managing partner of One Equity Partners, engaged the audience on a range of topics prompted by questions from SOM faculty fellow Mark Manson.

The 25 SOM students in attendance had the opportunity to both learn more about the realities of the private equity industry and connect with top professionals in a setting that is more open for being closed to the media.

Second-year student Aaron Miller said the conference put the global economic challenges in perspective. He added, "While the road ahead is uncertain, it is clear that we can learn from our mistakes, overhaul and adjust the system and regain economic strength."

One of the biggest private equities conferences in the country, the event is entirely student run. The four second-year students who co-chaired the conference were Chris Cheever, Erik Hermann, Rakesh Shankar, and Chris Thomas. "We have all shouldered the load equally sharing the different responsibilities," Thomas said. "It has been a great experience."

Schoen YC ’80, who serves on the Yale SOM Board of Advisors, said, "As a Yale alum, it is exciting to do anything I can to make sure SOM gets the recognition it deserves as a world-class professional school."

The event’s primary sponsors were Ernst & Young and Kirkland & Ellis LLP. Additional support came for the New Haven-based Winchester Capital and DowJones.