WEBVTT - TPG's Jim Coulter Talks the Life and Legacy of David Bonderman 0:00:00.240 --> 0:00:07.440 Bloomberg Audio Studios, podcasts, radio news. 0:00:08.240 --> 0:00:11.000 Hi, it's Jason Kelly. I'm the chief correspondent for Bloomberg 0:00:11.000 --> 0:00:13.800 Originals and co host of The Deal with my partner 0:00:13.840 --> 0:00:16.520 Alex Rodriguez. I also wrote a book about the private 0:00:16.520 --> 0:00:19.400 equity industry called The New Tycoons. It's all about the 0:00:19.400 --> 0:00:21.800 firms and the people at the center of this massive industry, 0:00:22.320 --> 0:00:25.040 and no one was bigger than David Bonderman, who died 0:00:25.040 --> 0:00:27.600 on December eleventh at the age of eighty two. He 0:00:27.640 --> 0:00:30.520 co founded TPG back in the early nineteen nineties and 0:00:30.600 --> 0:00:33.480 along the way became a face for the booming deal world, 0:00:33.600 --> 0:00:37.479 engineering takeovers of everything from Continental Airlines to Burger King 0:00:37.600 --> 0:00:41.240 to j crwe specializing in deals few others would go near. 0:00:41.800 --> 0:00:45.080 He was also an iconoclast, building his firm far from 0:00:45.080 --> 0:00:48.200 Wall Street, basing TPG in San Francisco and Fort Worth, 0:00:48.600 --> 0:00:51.720 and choosing khakis over suits, and inviting rock stars to 0:00:51.760 --> 0:00:53.000 his annual investor meetings. 0:00:53.240 --> 0:00:53.920 Few knew him. 0:00:53.840 --> 0:00:57.040 Better than Jim Colter, his TPG co founder, who met 0:00:57.080 --> 0:00:59.400 Bonderman when the two men started working for the Bass 0:00:59.480 --> 0:01:03.320 Family in were Worth almost forty years ago. They created 0:01:03.320 --> 0:01:06.840 TPG together in nineteen ninety three, Jim joined me in 0:01:06.880 --> 0:01:09.680 New York to talk about Bonderman and his profound influence 0:01:09.760 --> 0:01:14.920 on the investing world and beyond. Obviously a very sad day, Jim, 0:01:15.040 --> 0:01:19.000 for the team at TPG, for really the entire investing world. So, 0:01:19.120 --> 0:01:21.360 first of all, condolence is of the loss of your 0:01:21.560 --> 0:01:24.679 longtime partner, and thank you for spending some time with 0:01:24.760 --> 0:01:25.080 us here. 0:01:25.240 --> 0:01:25.959 Thank you, Jason. 0:01:27.000 --> 0:01:30.800 So David Bondman, it's amazing to read about his impact 0:01:30.800 --> 0:01:33.760 on the broader investment world. He is a one of 0:01:33.800 --> 0:01:36.679 the best known names, one of the icons. You knew 0:01:36.720 --> 0:01:40.200 him better than anybody in this business. What specifically did 0:01:40.240 --> 0:01:43.360 he bring to this business that was unique to him? 0:01:44.080 --> 0:01:46.160 David really is a legend in the industry. 0:01:46.319 --> 0:01:48.400 But he's a legend for several reasons, and I think 0:01:48.440 --> 0:01:52.280 there's three particular things. First of all, he pioneered a 0:01:52.400 --> 0:01:56.280 type of investing. Secondly, he built a firm that had 0:01:56.320 --> 0:01:59.160 a distinctive place in the industry. And thirty had a 0:01:59.600 --> 0:02:04.080 really trusting personal style that I think helped evolve the style. 0:02:03.760 --> 0:02:04.520 Of this industry. 0:02:05.000 --> 0:02:07.280 And so what did he do, how did that work 0:02:07.320 --> 0:02:08.040 in practice? 0:02:08.400 --> 0:02:11.960 What was he doing as a deal maker that really 0:02:12.520 --> 0:02:13.160 set him apart. 0:02:13.919 --> 0:02:16.440 David did deal making as problem solving. 0:02:16.919 --> 0:02:19.160 So if you think about some of his signature deals, 0:02:19.200 --> 0:02:21.880 they were deals that everyone saw. 0:02:21.760 --> 0:02:23.600 But no one else was willing to take on. 0:02:23.960 --> 0:02:25.760 And it wasn't that he was taking on more risk, 0:02:25.840 --> 0:02:28.720 it was that he saw something different. Take the Continental 0:02:28.760 --> 0:02:32.160 Airlines deal, legendary deal in the industry, the most hated 0:02:32.240 --> 0:02:35.600 company in America, the biggest bankruptcy in US history. 0:02:35.600 --> 0:02:37.080 It sat there for two years. 0:02:37.720 --> 0:02:40.120 Dave and I put together a deal that carved out 0:02:40.160 --> 0:02:43.560 a new Continental and took it from worse to first 0:02:43.760 --> 0:02:50.000 in seven years. Warren Buffett said that airlines were financial sinkholes. 0:02:50.880 --> 0:02:56.320 David over and over made successful investments in airlines. When 0:02:56.360 --> 0:03:00.359 others saw the SNL crisis, David saw the SNL opportunity unity. 0:03:00.840 --> 0:03:03.400 We created the good bank bad bank structure for American 0:03:03.440 --> 0:03:06.240 savings when working with Bess, and then we exported that 0:03:06.320 --> 0:03:10.840 structure around the world to do bank rescues in China, 0:03:11.080 --> 0:03:14.720 in Korea. Again, deals that no one else did, and 0:03:14.760 --> 0:03:20.040 that a problem solving approach really was appeared at a 0:03:20.080 --> 0:03:23.560 moment that the industry was mostly about changing capital structures, 0:03:23.600 --> 0:03:24.280 not companies. 0:03:24.560 --> 0:03:26.200 All right, So you said something to me before we 0:03:26.240 --> 0:03:28.280 came on air, which I found fascinating, which is that 0:03:28.680 --> 0:03:32.959 David was a polymath investor. The Blueberg audience is pretty smart, 0:03:33.000 --> 0:03:35.520 but you need to break this down what that actually 0:03:35.560 --> 0:03:36.320 means in practice. 0:03:36.360 --> 0:03:38.520 Poly Math is from the Greek and it's basically a 0:03:38.560 --> 0:03:42.400 person who has broad and diverse interests but uses that 0:03:42.520 --> 0:03:47.120 knowledge and interest to solve problems. And so David really 0:03:47.160 --> 0:03:49.200 didn't come to investing until his forties. 0:03:49.520 --> 0:03:51.560 Think about that. He had several careers before. 0:03:51.600 --> 0:03:53.680 He was a litigator, He was argued in front of 0:03:53.720 --> 0:03:57.320 the Supreme Court. He taught law Tulane, he studied Islamic 0:03:57.400 --> 0:04:00.400 law on Tunis. This was a person that ever took 0:04:00.440 --> 0:04:04.400 a finance class, didn't know accounting, and yet was he 0:04:04.480 --> 0:04:08.520 brought that broad experience and problem solving expertise to the 0:04:08.640 --> 0:04:14.240 problems of investing. And his ability to use different experiences 0:04:14.280 --> 0:04:18.560 he had to solve problems I think really created his style, 0:04:18.680 --> 0:04:20.239 and it's a polymast style. 0:04:20.279 --> 0:04:21.479 It was not one thing. 0:04:21.880 --> 0:04:24.960 It was a unique ability to see opportunity and frankly 0:04:25.040 --> 0:04:26.320 solve problems well. 0:04:26.360 --> 0:04:29.760 And it translated into him being I have to say, 0:04:29.760 --> 0:04:33.480 one of those eclectic, maybe eccentric sort of figures in 0:04:34.000 --> 0:04:38.200 an industry that didn't always Certainly the broader Wall Street doesn't. 0:04:37.960 --> 0:04:39.920 Always sort of embrace change. 0:04:39.920 --> 0:04:43.000 So how was he received in this broader Wall Street world? 0:04:43.040 --> 0:04:45.479 In your estimation, David was many things, but he was 0:04:45.560 --> 0:04:46.200 never boring. 0:04:47.240 --> 0:04:50.159 We used to laugh that David often brought like a 0:04:50.360 --> 0:04:52.920 rock and roll backbeat into rooms that were used to 0:04:52.960 --> 0:04:56.039 classical music. It was a very different style. He was 0:04:56.160 --> 0:04:59.920 known for his ridiculous socks. I mean, there were just ridiculous. 0:05:00.480 --> 0:05:03.359 When others were drinking fine wine, he was drinking diet coke. 0:05:03.440 --> 0:05:07.000 He's flew one thousand hours a year to meetings anywhere. 0:05:07.000 --> 0:05:09.479 It's a very personal thing for him. And his style 0:05:09.600 --> 0:05:14.000 was informal, it was direct. He couldn't stand obfuscation. And 0:05:14.200 --> 0:05:17.599 that style was sort of a different, a different wind 0:05:17.640 --> 0:05:20.120 in the industry at the time, and it opened up 0:05:20.120 --> 0:05:24.120 the opportunity for different types of styles to really flourish. 0:05:24.279 --> 0:05:29.520 It's an industry that had incredible talent among its founding brethren, 0:05:29.640 --> 0:05:32.440 but David brought I think a little bit of a 0:05:32.440 --> 0:05:36.680 different attitude and frankly, you know, a lot of fun. 0:05:36.839 --> 0:05:38.120 Into a very serious business. 0:05:38.440 --> 0:05:39.960 And so how do you build to firm around that? 0:05:40.000 --> 0:05:43.160 I mean that you can be sort of a you know, 0:05:43.880 --> 0:05:46.840 sort of an iconoclast as a single person. 0:05:47.000 --> 0:05:48.160 You know, maybe as a small firm. 0:05:48.200 --> 0:05:50.160 You guys started out as three people in ninety two, 0:05:50.240 --> 0:05:55.680 ninety three, but now thousands of employees, quarter trillion dollars 0:05:55.720 --> 0:05:59.120 in assets. How does that sort of grow into something 0:05:59.200 --> 0:05:59.719 this big. 0:06:00.800 --> 0:06:03.480 I've been doing this long time. Culture and curiosity. 0:06:03.960 --> 0:06:06.760 So in some ways what we described you and I 0:06:06.839 --> 0:06:10.679 about David became how you describe TPG in some ways. 0:06:11.279 --> 0:06:14.120 At a time that the industry was very much about finance, 0:06:14.440 --> 0:06:18.840 was very much focused in New York, we came out 0:06:18.839 --> 0:06:20.760 of a family office in Texas. 0:06:20.760 --> 0:06:22.120 We set up on the West Coast. 0:06:22.600 --> 0:06:25.080 I used to say that, and you do sports a lot, Jason, 0:06:25.120 --> 0:06:27.599 that we were playing the same game, but differently. We 0:06:27.600 --> 0:06:32.120 were the West Coast offense of private equity. And to 0:06:32.200 --> 0:06:34.960 do that you have to get a culture of curiosity 0:06:35.520 --> 0:06:39.359 and problem solving. And I think at the first fundraise 0:06:39.360 --> 0:06:44.839 we did for TPG, our tagline was contrarianism, complexity, and change. 0:06:45.120 --> 0:06:47.640 At a time the industry was more focused on franchise 0:06:47.680 --> 0:06:52.400 businesses in finance. Contrarianism, complexity, and change, and I think 0:06:52.480 --> 0:06:56.880 those lines of problem solving and a different approach Really 0:06:56.960 --> 0:07:00.000 were what David brought to the business in the early days. 0:07:00.200 --> 0:07:01.640 Not afraid to take big swings. 0:07:01.760 --> 0:07:03.640 I mean, was that but you know part of his 0:07:03.800 --> 0:07:06.800 ethos do you think, like being able to really go 0:07:06.880 --> 0:07:07.720 big on something. 0:07:07.839 --> 0:07:10.560 Yeah, it was never about ego or size. It was 0:07:10.560 --> 0:07:13.960 about really interesting problems and sometimes we got it wrong. Yeah, 0:07:14.000 --> 0:07:16.560 if you're doing this type of investing, you know five 0:07:16.600 --> 0:07:18.960 percent of the time you'll make mistakes, and probably you 0:07:19.000 --> 0:07:21.960 should be taking that sort of risk. But the key 0:07:22.040 --> 0:07:24.120 is never make the same mistakes if you can help it, 0:07:24.560 --> 0:07:26.880 and importantly learn from all of them. And David and 0:07:26.920 --> 0:07:29.400 I think our firm has been a lifelong learner on those. 0:07:29.880 --> 0:07:31.280 So I think somehow. 0:07:30.880 --> 0:07:33.920 We've been able to grow with the industry but still 0:07:34.000 --> 0:07:36.320 keep some of that essence of doing it a little 0:07:36.320 --> 0:07:40.280 differently and looking at new deals. I mean even today, 0:07:40.680 --> 0:07:44.120 as you know, Jason, we've taken on impact investing, climate investing. 0:07:44.200 --> 0:07:47.960 These are new things, new problems, done in a new way, 0:07:48.600 --> 0:07:51.920 and that ethos I think was what we started with 0:07:52.320 --> 0:07:56.320 almost forty years ago, and we've tried to very much 0:07:56.320 --> 0:07:57.080 guard today. 0:07:57.320 --> 0:07:59.320 How'd you build a partnership with him? 0:07:59.360 --> 0:08:02.240 You guys are not the same you showed up in Texas. 0:08:02.480 --> 0:08:06.000 You know, Dartmouth undergrad Stanford Business School. He was a 0:08:06.120 --> 0:08:11.800 University of Washington bankruptcy lawyer save Grand Central. How does 0:08:11.840 --> 0:08:13.640 that marriage of a sort happen? 0:08:13.760 --> 0:08:15.880 I think there's two types of partnerships. 0:08:16.280 --> 0:08:18.280 One are people who are very much the same, almost 0:08:18.320 --> 0:08:22.680 can complete each other's sentences. The other type of partnership 0:08:22.840 --> 0:08:25.600 are people who are very different but share the same values. 0:08:26.120 --> 0:08:28.720 And I think David and I brought different skill sets, 0:08:28.760 --> 0:08:32.800 different views of the world, but values on fairness, the 0:08:32.880 --> 0:08:35.760 idea of you can leave the last cent on the 0:08:35.800 --> 0:08:39.080 table to create a win win, and we agreed on 0:08:39.120 --> 0:08:41.400 the type of firm and culture we wanted to build. 0:08:41.480 --> 0:08:45.840 So complimented each other, respected each other, but also brought 0:08:46.280 --> 0:08:47.640 some balance to the equation. 0:08:48.080 --> 0:08:52.160 How do you think he changed you as an investor 0:08:52.200 --> 0:08:53.400 and as an executive? 0:08:54.160 --> 0:08:57.720 I think David was, as well as being a great investor, 0:08:57.760 --> 0:09:00.880 simply a great business person. 0:09:01.040 --> 0:09:03.880 You know, he's served on eighty different corporate boards. Who 0:09:03.920 --> 0:09:05.200 does that? You know? 0:09:05.280 --> 0:09:08.840 Eighty different corporate boards, from GM to Dakati, from Behringer 0:09:08.920 --> 0:09:13.320 to Burger King. Immensely diverse, and that viewpoint something was 0:09:13.360 --> 0:09:16.600 often underestimated with David really helped me be. 0:09:16.640 --> 0:09:17.880 A bit better businessman. 0:09:18.240 --> 0:09:21.360 It's about being straightforward, it's about seeing different things. It's 0:09:21.360 --> 0:09:24.440 about patients from time to time, and even when things 0:09:24.480 --> 0:09:27.720 go wrong, you don't step back, you step in. So 0:09:27.760 --> 0:09:32.240 I think his polymath skills really extended into the business world. 0:09:32.360 --> 0:09:32.640 All right. 0:09:32.679 --> 0:09:36.480 I mentioned earlier this is a massive, massive industry at 0:09:36.480 --> 0:09:38.559 this point that what we used to call private equity, 0:09:38.840 --> 0:09:42.840 it's now alternative investing these firms, including yours, or doing 0:09:42.880 --> 0:09:43.920 lots of different things. 0:09:44.520 --> 0:09:45.680 How do you take. 0:09:45.559 --> 0:09:49.520 That Bonderman ethos, you know, the sort of like you 0:09:49.520 --> 0:09:52.800 know he's calling in to an investment committee, meaning from 0:09:52.840 --> 0:09:56.160 Timbuck to to you know, now a publicly traded company. 0:09:57.240 --> 0:09:59.280 How do you maintain that essence? Because I know that 0:09:59.360 --> 0:10:01.920 culture is something it's important to you, you study it, 0:10:02.240 --> 0:10:06.199 how do you really institutionalize that culture. 0:10:06.240 --> 0:10:09.679 Fight conformity in all ways? I think if you were 0:10:09.720 --> 0:10:13.160 starting this business today, sometimes I think that people who 0:10:13.200 --> 0:10:15.280 are looking at it field they have to learn finance 0:10:15.320 --> 0:10:17.760 in their crib and have to go through internships. 0:10:17.880 --> 0:10:20.400 David came to this, as I said before, in his forties. 0:10:20.840 --> 0:10:24.360 He brought that wide set of experiences, and I think 0:10:24.400 --> 0:10:28.440 the understanding that you can ask different questions, approach problems 0:10:28.480 --> 0:10:30.920 in different ways is something the industry needs to. 0:10:30.880 --> 0:10:32.000 Say true to today. 0:10:32.360 --> 0:10:37.319 So that's spirit, the spirit of problem solving, curiosity, a 0:10:37.360 --> 0:10:38.560 little bit of courage. 0:10:39.720 --> 0:10:42.319 Put together with a broad view. 0:10:42.200 --> 0:10:44.080 Is something the industry still needs today. And I think 0:10:44.080 --> 0:10:46.880 the industry is delivering that men's talent in the industry. 0:10:47.040 --> 0:10:49.720 We have to just make sure that it's not delivered 0:10:49.760 --> 0:10:50.280 in one way. 0:10:50.640 --> 0:10:53.280 And so as he sort of kind of moved on 0:10:53.360 --> 0:10:54.880 from the firm, and we'll talk a little bit about 0:10:54.920 --> 0:10:58.880 what he was doing in the latter years of his life. 0:10:59.000 --> 0:11:02.400 You know, how did how how did you sort of 0:11:02.440 --> 0:11:03.319 honor his legacy? 0:11:03.320 --> 0:11:04.400 How did he stay involved? 0:11:04.480 --> 0:11:07.040 Well, David always had broad interests and one of the 0:11:07.040 --> 0:11:10.200 interesting things about his career is he's mentored and spawned 0:11:10.200 --> 0:11:13.680 many businesses and helped many businesses, from Mark Lazari to 0:11:13.679 --> 0:11:17.880 Tom Barrick to Mark's Stad to Wasijing Shan. There are 0:11:18.000 --> 0:11:20.800 disciples around the industry that have picked up some of 0:11:20.840 --> 0:11:24.280 his investing style in ethos and he continued to do 0:11:24.360 --> 0:11:27.720 that as he continued to have TPG as a cornerstone. 0:11:27.720 --> 0:11:29.880 But he went on, as you know, to be active 0:11:29.920 --> 0:11:33.600 in sports and yes, he had been an investor in 0:11:33.640 --> 0:11:37.160 the Celtics, but he did a typical Bondo thing. By 0:11:37.200 --> 0:11:39.679 the way, just the nickname Bondo was different in the industry. 0:11:39.679 --> 0:11:42.200 He did a typical Bondo. 0:11:41.960 --> 0:11:43.719 Thing, which is he took on a problem no one 0:11:43.720 --> 0:11:48.559 else would, bringing back a team indoors in Seattle, rebuilt 0:11:48.600 --> 0:11:52.520 an arena where he had worked as a security guard when. 0:11:52.320 --> 0:11:54.640 He was an undergrad at University of Washington. 0:11:55.160 --> 0:11:59.280 It was a worthy outcome the Kraken, yet it was 0:11:59.280 --> 0:12:01.880 done in a very Bondo polymath way. 0:12:02.360 --> 0:12:03.120 Yeah, it's interesting. 0:12:03.120 --> 0:12:05.080 So let's talk about that for a second, because I 0:12:05.160 --> 0:12:08.640 was listening to something in preparation for this from Toddler Wicki, 0:12:08.679 --> 0:12:12.480 who's the president of the Kraken, and he was talking 0:12:12.520 --> 0:12:18.040 about the fact that the complexity was a feature, not 0:12:18.120 --> 0:12:20.800 a bug, and that seemed to be sort of a 0:12:20.840 --> 0:12:23.920 reflection of the sort of bondermin ethos of deal making. 0:12:23.960 --> 0:12:25.720 Is that fair? That's a great way to put it. 0:12:25.960 --> 0:12:28.600 And I saw that for thirty eight years that we 0:12:28.679 --> 0:12:32.760 worked together. Is if something hadn't been done, you start 0:12:32.760 --> 0:12:35.520 with a question of why not and the curiosity of 0:12:35.520 --> 0:12:39.120 whether it might be done. So there had been much 0:12:39.160 --> 0:12:41.800 talk in Seattle about bringing back teams, but the ability 0:12:41.880 --> 0:12:44.680 to really take it on as a hard problem is 0:12:44.720 --> 0:12:46.559 something that I think is very. 0:12:46.440 --> 0:12:48.040 Much David's legacy. 0:12:48.320 --> 0:12:50.560 He did that in business, he did it for the industry, 0:12:50.880 --> 0:12:52.440 and he's done it in his life. 0:12:52.640 --> 0:12:54.720 And so take me all the way back. 0:12:54.760 --> 0:12:57.000 I mean, let's go all the way back to when 0:12:57.040 --> 0:12:58.600 you first meet this guy again. 0:12:58.640 --> 0:13:01.520 You show up in Texas, You're like, well, a tagated guy. 0:13:01.559 --> 0:13:03.280 You're going to make your way on, you know, for 0:13:03.320 --> 0:13:05.320 this this family that's doing some investing. 0:13:05.640 --> 0:13:08.400 And you run across this kind and you're like, I'm sorry, what, okay, 0:13:08.440 --> 0:13:08.840 that's cool. 0:13:08.880 --> 0:13:10.760 You argue in front of the Supreme Court, what are 0:13:10.760 --> 0:13:12.520 you going to tell me about in investing? 0:13:13.360 --> 0:13:15.400 And yet he did, Like I was. 0:13:15.840 --> 0:13:17.959 I was chatting with Tom Barrick earlier and he said, 0:13:18.320 --> 0:13:21.320 you know, we were the farm system for this, you know, 0:13:21.400 --> 0:13:22.240 great investor. 0:13:22.679 --> 0:13:23.480 What was that like? 0:13:23.920 --> 0:13:26.440 We were all fortunate to work with Bob Bess who 0:13:26.559 --> 0:13:30.000 kind of gave us the leeway to develop this type 0:13:30.000 --> 0:13:33.520 of style. But what was interesting is that David hadn't 0:13:33.520 --> 0:13:34.679 really done much investing. 0:13:35.360 --> 0:13:38.160 I was coming as a junior person. We had not 0:13:38.320 --> 0:13:39.000 much of a team. 0:13:39.120 --> 0:13:41.240 The first deal we did together was a cable TV 0:13:41.400 --> 0:13:44.080 roll up, and we went on with a small office 0:13:44.160 --> 0:13:47.520 to do the first reinsurance deal, something called National Reinsurance 0:13:47.559 --> 0:13:51.120 buy out of Bell and Howell, bought Weston out of 0:13:51.679 --> 0:13:54.880 un Airlines, sold the plosit to Donald Trump. A series 0:13:54.880 --> 0:13:58.080 of deal after deal, and I think it was we 0:13:58.080 --> 0:13:59.440 were kind of learning on the job. 0:14:00.040 --> 0:14:01.560 We were undaunted by that. 0:14:01.920 --> 0:14:05.079 And in some ways, not having the framework of how 0:14:05.120 --> 0:14:07.040 it was supposed to work, we could create a different 0:14:07.080 --> 0:14:07.960 framework of how. 0:14:07.800 --> 0:14:08.480 It would work. 0:14:09.040 --> 0:14:11.920 So tell me about the decision that you guys make 0:14:12.080 --> 0:14:14.560 in ninety two. You're going to go after Continental Bob 0:14:14.600 --> 0:14:17.000 Bess basically says, go with God, Like, I'm not going 0:14:17.080 --> 0:14:18.680 to do this, You guys can go do it on 0:14:18.720 --> 0:14:19.080 your own. 0:14:19.320 --> 0:14:21.960 What's that moment like? And do you know at that. 0:14:21.880 --> 0:14:24.120 Point that you're creating something new and different or is 0:14:24.160 --> 0:14:26.040 this just a deal that you're interested in doing? 0:14:26.560 --> 0:14:30.280 Somewhere between deeply interesting and absolutely terrifying. Again, this is 0:14:30.320 --> 0:14:33.760 the most hated company in the country, the biggest bankruptcy 0:14:33.760 --> 0:14:36.880 in US corporate history. No one else is showing up, 0:14:36.920 --> 0:14:38.920 We have no money, we have to put together the money, 0:14:38.920 --> 0:14:39.920 do the deal, etc. 0:14:41.400 --> 0:14:42.280 But it was a. 0:14:42.360 --> 0:14:45.600 Fascinating one of the most fascinating business problems I've ever seen, 0:14:46.040 --> 0:14:49.960 So in some ways what motivated us was the problem 0:14:50.200 --> 0:14:53.800 and the opportunity. It was like a hunk of marble 0:14:53.840 --> 0:14:56.400 and you had to see what was inside it. So 0:14:56.480 --> 0:15:00.480 I think for us we probably didn't know better. If 0:15:01.240 --> 0:15:04.680 someone was starting a business today, this particular deal would 0:15:04.720 --> 0:15:08.280 have in capitals at the bottom, don't try this at home. 0:15:08.880 --> 0:15:10.640 But we did try it at home, and that made 0:15:10.640 --> 0:15:11.280 all the difference. 0:15:11.320 --> 0:15:14.240 How did you know that it was going to then 0:15:14.360 --> 0:15:17.040 become that there was a business to be built out 0:15:17.080 --> 0:15:17.680 of doing this? 0:15:17.760 --> 0:15:19.160 How soon did you make the decision? 0:15:19.200 --> 0:15:23.119 What was that decision like to create an entirely new firm. 0:15:24.120 --> 0:15:26.440 After we did the Continental deal, we had a long 0:15:26.520 --> 0:15:29.920 discussion because at that time there were two ways we 0:15:29.960 --> 0:15:32.200 could have gone. We could have kept doing deal by deal, 0:15:34.200 --> 0:15:36.920 which was a Richard Rainwater model, or we could build 0:15:36.920 --> 0:15:37.320 a firm. 0:15:37.960 --> 0:15:38.720 We made the. 0:15:38.600 --> 0:15:41.440 Call then that the industry was going to develop in 0:15:41.480 --> 0:15:44.840 a way that you had to have broader resources in 0:15:44.960 --> 0:15:48.040 a more permanent structure really to be able to not 0:15:48.480 --> 0:15:51.400 serve us, but to serve the people that would join 0:15:51.440 --> 0:15:51.840 the firm. 0:15:52.280 --> 0:15:53.760 We needed to have a future for them. 0:15:54.400 --> 0:15:57.520 So we brought in a third partner, Bill Price, who 0:15:57.600 --> 0:16:00.240 was kind of our operating side of the business, And 0:16:00.440 --> 0:16:03.320 we decided to name it not after ourselves, but a 0:16:03.400 --> 0:16:06.960 name that was kind of low key and could be 0:16:07.520 --> 0:16:10.200 what it was going to be beyond us. And I 0:16:10.280 --> 0:16:14.760 think that decision to build a firm and the generosity 0:16:13.680 --> 0:16:17.080 that that implied really. 0:16:18.600 --> 0:16:20.080 Was part of David's legacy. 0:16:20.320 --> 0:16:21.480 Were you sure it was going to work? 0:16:22.320 --> 0:16:23.360 Never sure it was going to work? 0:16:23.880 --> 0:16:26.520 We live in a world we call constructive paranoia, which 0:16:26.560 --> 0:16:29.120 is you always have to be constructive, but at night 0:16:29.160 --> 0:16:30.880 you have to make sure you're not making mistakes. 0:16:31.160 --> 0:16:33.880 And did you think, like were there timing over those 0:16:33.880 --> 0:16:34.600 thirty eight years? 0:16:34.880 --> 0:16:36.280 I mean, you've done, you know. 0:16:36.400 --> 0:16:39.160 Tremendously successful deals, as you mentioned earlier, some deals that 0:16:39.200 --> 0:16:39.680 didn't work. 0:16:39.880 --> 0:16:40.960 Was there ever a moment you're like. 0:16:41.000 --> 0:16:43.640 Maybe this isn't maybe this isn't the right thing, Like 0:16:44.080 --> 0:16:46.240 how did how much doubt comes into it? And what's 0:16:46.280 --> 0:16:49.840 Bondo's sort of what's his frame of mind in those moments? 0:16:50.120 --> 0:16:54.680 You know, David, if things are going wrong, you want 0:16:54.720 --> 0:16:57.440 David with you in the foxhol So I've never seen 0:16:57.520 --> 0:16:59.920 him daunted or I never saw him daunted or down 0:17:00.080 --> 0:17:03.760 by problem and you also begin to get perspective. Jason, 0:17:03.760 --> 0:17:06.960 You've been around this industry for a while. We continuously 0:17:07.160 --> 0:17:10.800 declared private equity dead in nineteen eighty nine, in nineteen 0:17:10.840 --> 0:17:13.520 ninety seven, in two thousand and one, in two thousand 0:17:13.560 --> 0:17:16.239 and seven, in twenty fifteen, were declaring it, you know, 0:17:16.720 --> 0:17:20.639 dead today in some ways or diminished. But what you 0:17:20.760 --> 0:17:25.080 learn is it's a very powerful, very powerful economic engine. 0:17:25.960 --> 0:17:29.960 It's investing with a bigger toolbox, and so stay the course. 0:17:30.600 --> 0:17:33.199 And what I find interesting about that that stay the 0:17:33.200 --> 0:17:37.920 course idea is that as going back to this notion 0:17:38.000 --> 0:17:43.320 of the industry institutionalizing, it goes public, you guys are 0:17:43.320 --> 0:17:46.280 the last of the big firms to do that. Like 0:17:46.720 --> 0:17:52.280 this contrarianism, like not only you know is there it 0:17:52.560 --> 0:17:55.439 takes hold it as sort of a core principle. How 0:17:55.520 --> 0:17:58.639 much was was David sort of driving that, Like what 0:17:58.640 --> 0:18:01.160 would it bring him into that discussion? 0:18:01.280 --> 0:18:03.560 Yeah, Jason, you've written one of the best books on this, 0:18:03.880 --> 0:18:06.919 and I hope you will continue to work on this 0:18:07.040 --> 0:18:10.680 because the story of this industry and how it went 0:18:10.760 --> 0:18:13.879 from a few people doing deals to something that touches 0:18:14.240 --> 0:18:17.359 and probably employees ten percent of the economy today there's 0:18:17.400 --> 0:18:20.360 more than forty five hundred private equity firms. We used 0:18:20.400 --> 0:18:22.320 to all know each other in the industry. 0:18:22.800 --> 0:18:23.960 That evolution. 0:18:25.359 --> 0:18:28.280 Is one of the more interesting stories in business. I 0:18:28.320 --> 0:18:30.600 went back a few years ago far threieth anniversion and 0:18:30.720 --> 0:18:32.800 I looked at the growth of the industry over the 0:18:32.840 --> 0:18:36.320 period TPG has been there. It's grown fifteen percent a 0:18:36.400 --> 0:18:38.240 year compounded for thirty years. 0:18:38.920 --> 0:18:40.480 I couldn't find another business. 0:18:40.800 --> 0:18:43.960 Fourteen and a half percent was the growth of Chinese electronics, 0:18:44.240 --> 0:18:48.080 So that growth has been extraordinary. I think what David's 0:18:48.160 --> 0:18:52.240 role was was shaping the fact that it could be 0:18:52.440 --> 0:18:53.400 a different set. 0:18:53.240 --> 0:18:54.879 Of styles that it could grow. 0:18:55.400 --> 0:19:02.920 He was also personally extraordinarily important in opening Asian private equity. 0:19:03.960 --> 0:19:06.040 As you know, TPG was one of the first firms 0:19:06.119 --> 0:19:09.600 to go to Asia in nineteen ninety four, and David 0:19:10.040 --> 0:19:13.919 was instrumental in both driving that move and frankly building 0:19:13.920 --> 0:19:15.200 the business throughout the region. 0:19:15.760 --> 0:19:17.720 And so one of the things that I'm glad you 0:19:17.760 --> 0:19:19.680 brought up Asia, because you know one of the. 0:19:21.880 --> 0:19:22.399 I think it. 0:19:24.160 --> 0:19:27.240 Feels like it is something that couldn't be true, but 0:19:27.680 --> 0:19:29.399 I've heard enough people say that it must be that 0:19:29.440 --> 0:19:30.919 he would literally get on a plane to go have 0:19:31.000 --> 0:19:35.000 lunch in Shanghai, like, he was very much a practitioner 0:19:35.040 --> 0:19:35.600 of the art. 0:19:35.440 --> 0:19:36.200