What Returns Do Private Equity Firms Really Generate?

Guest Profile

Jeff Hooke is a senior finance lecturer at the Johns Hopkins Carey School of Business. Earlier, he was a managing director at Focus, LLC, an investment bank serving middle-market companies. Previously, he was a director of Emerging Markets Partnership (a $5 billion private equity fund), a principal investment officer of the World Bank Group, and an investment banker with Lehman Brothers.

Jeff has been quoted widely in the business media. He is the author of five books on the world of finance. He has co-authored several peer-reviewed academic papers on finance and has written many position papers for non-profit think tanks on a pro bono basis. He holds an MBA from the Wharton School and a BS from the University of Pennsylvania.

• Company: Johns Hopkins Carey School of Business (Senior Finance Lecturer)
• Location:  Washington, DC
• LinkedIn:  www.linkedin.com/in/jeffhooke
• Website:   www.carey.jhu.edu/faculty/faculty-directory/jeffrey-hooke-mba
• Phone:      (202) 663-5970
• Email:        jhooke1@jhu.edu

Topics Covered

• How has Jeff Hooke’s exposé book, The Myth of Private Equity, made any enemies for him? [1:04]
• Is there a big disconnect between the academic world and practitioners in the private equity world? [4:14]
• What are the three major parts of the private equity industry? [9:55]
• What influences the performance of private equity-held firms compared to public firms? [13:00]
• How long does it take to sell a private equity fund? [16:10]
• How is a typical pension fund structured? [20:20]
• How does bankruptcy work for a pension fund? [27:34]
• What are the implications of institutional investors controlling the public market? [32:04]
• Where do family offices tend to invest their funds? [38:28] 
• Does private equity add value to the business community? [41:25] 
• Do private equity firms provide significant value to smaller companies that have not instituted the private equity toolkit in the lower middle market? [43:33]
• What are your thoughts on angel capital? [45:34]
• Book recommendations – from Wall Street history to the Old West to the war in Iraq [46:15]
• What are the patterns of human behavior in the business world? [52:26]

Learn More

• The Myth of Private Equity, An Inside Look at Wall Street’s Transformative Investments (Columbia University Press, 2021)
• M&A, A Practical Guide to Doing the Deal (John Wiley & Sons, 2nd edition, 2015)
• Security Analysis and Business Valuation on Wall Street: A Comprehensive Guide to Today’s Valuation Methods (Wiley, 2nd edition, 2010)
• The Emerging Markets: A Practical Guide for Corporations, Lenders, and Investors (John Wiley & Sons, 2001)
• The Dinosaur Among Us: The World Bank and its Path to Extinction (BookSurge, 2007)

Resources Mentioned

• CFA Institute: Financial Analysts Journal 
• The Myth of Private Equity: An Inside Look at Wall Street’s Transformative Investments
• Angel Investing: The Gust Guide to Making Money and Having Fun Investing in Startups
• The Caesars Palace Coup: How a Billionaire Brawl Over the Famous Casino Exposed the Power and Greed of Wall Street
• The Cattle Kingdom: The Hidden History of the Cowboy West
• The Three Trillion Dollar War: The True Cost of the Iraq Conflict

Listen to Other Episodes

• A Broad Look at IPOs, Private Equity, and Preparing for a Sale
• The Private Equity Toolkit – How PE Firms Grow Businesses
• Understanding Private Equity – A Primer for Sellers