Institutional Money

Last week i attended to an institutional investor event in London, Here are my conclusions:

Macro views:

With a +15% Senior debt, PE activity is decreasing and trending to continue decreasing. My thesis is that, considering the dry powder accumulation period we are going through, we will see multiple increases in the mid-market and potentially more small PE firms acquiring small roll-ups. So, there is good news for those aiming to build a roll-up.

About the professionals in the industry:

This industry differs greatly from the entrepreneurial sector. It is primarily fueled by funds collected from taxpayers (Honestly, it is an industry mostly without skin in the game.). People within it are highly competent, surpassing those typically found at entrepreneurs' and small business owners' conferences.

Who are you competing with?

Don't venture into the PE space. You can't compete with institutional money. Period. The playbook is roll-up and a) exits -like @Bence Horvath did- or b) just own profitable businesses you enjoy running.

The Small Business Acquisition Space:

Most entrepreneurs are (crazy) hyperdopaminergic highly optimistic individuals, while most GPs are cold, hyper-rational, and cautious. The good news is that as a private investor, we are fortunate to benefit from the best of both worlds: you have the independence to pursue audacious goals and the skin in the game to be playing with your own money; the "bad news" is that you have to be exceptional and only take the calculated risks, never putting yourself in situations where you can´t afford to lose.

PS.-

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