Birthday Musings: Private Equity in 1978

So I’ve spent much of today trying to take my mind off of turning 30. I went sailing. I swam my usual laps in the pool that I always do while on holiday. I read a couple of chapters of the book I just bought. But nevertheless my mind kept wandering back to the inconvenient little fact that today I was in fact turning the big 3-0. Now typically I don’t think much of birthdays. “It’s just another day”, is my usual mantra. However, for the first time that I could recall the days and weeks leading up to my birthday were wrought by an uneasiness that I was saying adieu to my twenties and saying hello to some perceived increased sense of responsibility. 30 has a lot more weight behind it than 29. At 30 you’re fully entrenched in adulthood. When I was 15, 30 seemed like an eternity away. How quickly infinity passes!

Luckily I’ve been somewhat subdued by the reality that my thirties should be pretty damn good (it’s my birthday, I don’t have to be modest!). I’ve never wanted to live a small life and I have no plans to.

That being said, in honor of my first 30 years, here’s a little look-back at the world of private equity back in 1978:

The grand total of fund commitments for private equity totaled $570M (which was a substantial increase thanks partially to congress cutting the capital gains tax that year. I have no idea why anyone would ever want to raise it). 1978 was also the beginning of a venture capital boom (there’s a correlation between rising interest rates and VC booms and 1978 saw the U.S. interest rate go to 8.41%) which saw the beginning of a run of 30 straight years of venture-backed IPO’s in the U.S. Also, names that today are synonymous with PE/VC were either in their infancy of just getting started. Such venerable buyout firms such as Forstmann Little and Co. and Clayton, Dubilier, and Rice were formed, as was Oak Investment Partners on the VC side. The business has evolved tremendously from small “bootstrap” deals to the multi-billion dollar industry that it is today, and the next thirty years (which I plan to participate fully in) will see even greater growth and evolution to private equity and venture capital.


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