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If that doesn’t sound very productive, bear in mind the person behind the quote is none other than Warren Buffett.
“I just sit in my office and read all day.”
The Sage of Omaha recommends that everybody should read around 500 pages a day - to learn, become a more rounded individual, and even to improve the ties in your social network.
With this in mind, we’ve put together 8 essential books that private equity professionals should be reading in 2024.
Author: Bent Flyvbjerg and Dan Gardner
Publish date: February 2023.
Amazon ratings: 4.5 (1,206 ratings)
Goodreads ratings: 4.3 (5,055 ratings)
Although not strictly a book on private equity, every private equity professional with big goals should put this book on their reading list. The book outlines, in highly readable detail, why large projects are so often delivered past their deadline and significantly over-budget.
The authors have meticulously studied over 15,000 megaprojects (projects with budgets over $1 billion) across the globe, to underpin their theories.
Review excerpt:
“Must-read for project delivery“
"The book is a must-read for those engaged in project delivery. The author addresses the gambit of planning and production issues that may affect cost exposure for any project. Chapter 7 includes an interesting defense of the author’s thesis against critics, while chapter 6 alone is a must read for those considering a home renovation. While the author’s views are based on his data, the genesis of his data is not included, leaving some question as to how his data summaries may relate to any given project. Chief among the open questions is how his position on planning for risk-based (fat-tailed) budgeting should relate to tax-funded public works, where the agent has a fiduciary duty for the public purse. Comparing a situation where costs were based on a competitive bid with risk of 25% over-run to costs based on a negotiated contract at 150% of the bid price (savings accrue to the contractor’s profit), the author’s argument would favor the latter, while the taxpayer would benefit from the former. Nevertheless, the book exposes the factors that can affect one’s view on this question unlike any other reference I have read.”
Author: David M. Rubenstein
Publish date: September 2022.
Amazon ratings: 4.4 (595 ratings)
Goodreads ratings: 3.9 (795 ratings)
For thost that aren’t familiar with the name, David M. Rubentein, he was one of the co-founders of the Carlyle Group, one of the world’s five largest private equity firms. In this book, he conducts a series of interviews with usually low-key investors who have all have one thing in common:
Their investments have yielded tens of billions of dollars. The insights are sometimes generic, but the story behind each investor and what attracted them to certain investment strategies makes this a compelling read.
Review excerpt: “Exceptional and Accessible Review of the Investment World“
Highly recommended for students considering an investment career. You get to hear the "origin stories" of world famous investors - what they studied, how they got into their specific areas and mistakes they made.The key thing that comes through is finding the area of the investing world that suits your personal disposition. This book can help you do this.”
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Author: Safi Bahcall
Publish date: March 2019
Amazon ratings: 4.5 (2,056 ratings)
Goodreads ratings: 4.0 (8,535 ratings)
This book has won a host of awards which speak to its quality. These include the Washington Post's "10 Leadership Books to Watch for in 2019", Adam Grant's "19 New Leadership Books to Read in 2019", Inc.com's "10 Business Books You Need to Read in 2019", Business Insider's "14 Books Everyone Will Be Reading in 2019".
If you’re wondering where investment is headed next, this book is not a bad place to let some ideas germinate.
Review excerpt: “Very interesting."
"I found this book and the ideas and explanations very interesting. I am retired so I didn’t read it as an aid in my career or anything like that. A friend recommended it to me. I retired from Bell Labs and found references to it interesting and from perspectives I had never heard during my career there. I also found all the real life references about other companies and countries interesting as well. Very well done.”
Check also: Private Equity Deal Sourcing Guide
Private Equity Podcasts: Top Picks for 2024
Author: Adam Coffey
Publish date: February 2019
Amazon ratings: 4.6 (1,022 ratings)
Goodreads ratings: 4.1 (58 ratings)
As the name suggests, this book sets out to be a ‘how to’ guide to private equity from the perspective of the portfolio company.
Nevertheless, both sides of the investment equation can learn a lot from the insights that author Adam Coffey provides here, drawing on his extensive experience to look at everything from finding the right firm to partner with, ensuring long-term growth, and valuing companies well (see next book for more on this same theme).
Review excerpt: “Buckle Up for PE Boot Camp: Adam Coffey's Private Equity Trilogy“
“Forget dry textbooks, these are the battle manuals for building an empire. Adam Coffey's private” equity trilogy throws open the vault on the world of M&A, exit strategies, and scaling your business from zero to a billion-dollar behemoth.
The Private Equity Playbook is your PE bible. It's like having a seasoned investor whispering secrets in your ear. Coffey peels back the layers of private equity, showing you how to navigate the game, land that sweet PE deal, and work with these guys for maximum benefit. This one's a must-buy, trust me, you'll be dog-earing pages left and right. Even if you don't care to reach $1B, the frameworks in all 3 books will be useful for scaling your business.”
Related
Author: Tim Koller and Marc Goedhart (McKinsey and Company)
Publish date: 1990
Amazon ratings: 4.6 (133 ratings)
Goodreads ratings: 4.2 (1,528 ratings)
Fast approaching its 40th year in publication, any private equity professional that hasn’t yet read this book should make doing so a priority. Few books have been as numeric and accessible all at once. You’ll come away from this book feeling like you could value anything, and it never becomes as taxing as some of the more technical books in this field. Almost all of the examples provided are publicly traded companies, but the principles still apply to privately traded firms.
Review excerpt: “A valuation classic."
”When it comes to learning valuation, McKinsey's Valuation is an absolute classic. Begins by giving you the paradigm of managing valuation and then continues with valuation methodologies. A must read and learn for anyone serious about high finance.”
Author: Ray Dalio
Publish date: September, 2017
Amazon ratings: 4.6 (18.130 ratings).
Goodreads ratings: 4.1 (59,776 ratings).
Rarely do titans of finance like Ray Dalio (and he can justifiably claim to be a titan) write such intimate personal histories of their personal and professional lives. Dalio does enjoy some of the praise that comes his way but he’s also not shy about being self critical, as this book shows.
An excellent delve into the strategy and techniques that made Bridgewater Associates what it is today.
Review excerpt: “An enlightening journey of principles: life and work."
I recently delved into the thought-provoking pages of "Principles: Life and Work" by Ray Dalio, and I must say it was an extraordinary reading experience. This book is a captivating guide that not only provides invaluable insights into the world of business and life but also inspires personal growth and introspection.
From the moment I opened this book, I was instantly captivated by Dalio's unique storytelling style. He effortlessly combines personal anecdotes, practical examples, and profound wisdom to paint a comprehensive picture of how principles can shape our lives and impact our decision-making processes. His writing is clear, concise, and relatable, making complex concepts accessible to readers of all backgrounds.
One aspect that truly stood out to me was Dalio's transparency and authenticity. He openly shares his successes, failures, and the lessons he learned along the way. This level of vulnerability creates a genuine connection with the reader and instills a sense of trust, making the book all the more impactful.
What sets "Principles: Life and Work" apart is its practicality. Dalio doesn't simply present theories and ideas; he provides actionable steps to help readers apply these principles in their own lives. The exercises and reflection questions scattered throughout the book encourage self-reflection, promoting personal growth and the development of a principled mindset.”
Author: Aswath Damodaran
Publish date: June 2022
Amazon ratings: (ie. 4.5 stars after 16,333 ratings)
Goodreads ratings: (ditto)
Aswath Damodaran, often referred to as the "Dean of Valuation," delivers another insightful and comprehensive resource with the third edition of The Dark Side of Valuation. This book is particularly valuable for those dealing with the challenges of valuing young, distressed, and complex businesses—areas where traditional valuation methods often fall short.
Review excerpt: “A great valuation book."
"Damodaran provides so many insights in this book. The fact that he addresses what not to do ("the Dark Side") is very informative--especially when you are looking for references to prove why an analyst should not be using a certain technique.”
Author: William Quinn
Publish date: September 2021
Amazon ratings: 4.5 (505 ratings)
Goodreads ratings: 4.0 (53 ratings)
Although investors don’t always like to hear it, this time isn’t different. We should learn from history. This book could have been academic, but economic historian William Quinn instead keeps it moving along breezily, providing plenty of interesting anecdotes along the way. Every economic and financial bubble you can think of off the top of your head is covered from tulips to technology. It does beg the question: Are we living through one right now?
Review excerpt: “When will we ever learn?"
"This is an academic work that is both readable and enjoyable and therefore, exceptional. The authors present ten different boom/bust scenarios that have occurred in a variety of time periods and geographic regions. They describe each situation in a way that allows the reader to be able to get a grasp on what happened without getting lost in minutiae. They go on to analyze the causes and the consequences of each situation. They introduce a simple, effective way to understand if a boom is occurring through the metaphor of the bubble triangle, akin to a fire triangle (fuel, air, heat). If 'speculation' is present along with enough excess 'money/credit', all that is needed is the promotional boost of what they term 'marketability' to begin the cycle that always seems to be new all over again. The authors state facts that reveal a deeper truth about human nature. When will we learn from our mistakes?”
Warren Buffett’s idea that all serious investors should be reading 500 pages a day is less ambitious when you’re reading veritable page turners.
We believe that all of these books can make a valuable contribution to the bookshelves of private equity investors everywhere.
SourceCo is software-enabled buy-side deal sourcing firm that helps Private Equity investors find off-market acquisition targets that align with their firm's criteria. Schedule a free intro call to learn how we can help you identify the best possible targets you won't find in online M&A databases.
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