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About Ludovic Phalippou
I ride road bikes, routinely taste great wines and work on anti-food-waste initiatives. In my spare time, I am a Faculty member of the Said Business School at the University of Oxford and a Fellow at The Queen’s College Oxford. I sit on the investment committee of my college endowment, and on the wine committee of the College, which is a more serious affair than you think.
I have been researching the private equity industry for the last fifteen years. It was a baby back then compared to today but people have always been intrigued by it. Data point after data point, article after article, I found that virtually everything that was sold as a fact was not quite so. I published about ten articles in leading academic journals on this topic and these articles are freely available on ssrn.com, have been downloaded some 50,000 times and cited about 2000 times (source: Google scholar). This research has been presented in about 100 universities throughout the world, at all major academic and practitioner conferences in this field, and featured in the media internationally (including The Economist, Financial Times, The New York Times). I worked with a number of large institutional investors on their private equity investment decisions and benchmarking systems and with government bodies on private equity matters (e.g. Dutch Ministry of Finance, Norway Ministry of Finance).
I have been teaching private equity for ten years to MBA/EMBA students, and developed a variety of executive education courses, including customized programs for leading consulting companies and asset managers. Representative student feedback talks about “great energy and ability to captivate class on a difficult topic”; “engaged professor who brings a lot of personality into the classroom”; “constantly pushing us to think critically”; and “has a knack for simplifying complex concepts.” Students also routinely complained that I should do something about my chaotic notes and board scribbles; here they are, at last!
I have also received some awards, none of which I deserve but these things go into biographies to show that the author is a serious dude. Besides some teaching awards at the University of Oxford and University of Amsterdam, I have been honored to be named as one of “The 40 Most Outstanding Business School Profs Under 40 In The World” by the business education website Poets & Quants in 2014. And in 2016, realdeals magazine listed me as one of the 20 most influential individuals in private equity in Europe – the only academic listed.
Finally, I stayed at school for a long time, ending up penniless but full of degrees (and of myself): Bachelor in Economic Engineering from Toulouse School of Economics; a Master in Economics and a Master in Mathematical Finance both from the University of Southern California; and a PhD in Finance from INSEAD.
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Yet, private equity is not rocket science. The reason why most people cannot follow a conversation about rocket science is that it is difficult to do so without having spent years going through the Math, redoing the many calculations the field is built upon. Plus, of course the jargon which is linked to all these math derivations. In private equity, there are no derivations to go through, you do not need to acquire tools and techniques in a specific order to acquire the full body of accumulated knowledge. It is all about the jargon!
There is nothing inherently complicated in private equity. I have observed that the mindset, which is very much a Finance and Homo Economicus mindset, is not intuitive to many people, or just not appealing. There is nothing intrinsically difficult.
The endless jargon, however, is a stunning and defining feature. And it matters.
I can guess very rapidly, and quite accurately, the degree of industry experience of anyone after just a few minutes. The choice of words, and the context in which they are used will give the answer. Flipping this observation around: If you want to work in this industry, be it directly or indirectly (e.g. as a service provider), you need to speak the language.
That’s all about fluency. Anyone who is pitching a deal or being interviewed for a job ought to be fluent in the language of private markets. If not, detection is immediate, and exclusion follows. And private equity is too cool to be kept out of it. So, here it is, a dictionary!
And of course, I tried to make it a bit funny, ‘cos who would read a dictionary? What could be more boring? Well, I tried to make it non boring.