![]() ![]() Another risk: Backing rock-star managers means working with hyper-successful people who may have big egos and are used to having control, sources said. While an executive may have been the best at what he or she does for the past 20 years, there’s no guarantee of future success. The challenge with this type of investing is that it is based on people. It is perhaps more prevalent among newer shops, where GPs can tap into long-standing relationships with executives they have worked with before and have the ability to operate more nimbly than bigger, older outfits. This type of strategy is a way to return to the entreprenurial roots of private equity in merchant banking, when firms invested alongside founders and focused on growth, rather than leverage, to generate returns, sources said. Besides RedBird, GPs that seek to back big-name executives include GTCR, Riata Capital, Pine Brook and Warburg Pincus. Venture capitalists have been making big bets on rock-star managers for some time, but the phenomenon still isn’t as common in private equity. We have a passion for building companies, and we look to add value across a range of areas, which is easier said than done.” “It’s a hands-on approach to investing that creates an inherent alignment with best-in-class operators and entrepreneurs. “This is what we love to do,” said Gerry Cardinale, CEO of RedBird and a former Goldman Sachs partner. ![]() The firm also brought in John Collins, former chief operating officer of the National Hockey League, to be CEO of On Location, a platform spun out of the NFL. It then brought the “Livin’ on a Prayer” singer into the deal as both an investor and a manager.īon Jovi folded his own company, Runaway Tours, into On Location, building a music focus onto the sports-related company. RedBird last year teamed with Bruin Sports Capital and the National Football League to launch On Location Experiences, which sells VIP packages to the Super Bowl and other marquee events. RedBird Capital took it to the extreme with one recent deal, teaming with real-life rocker Jon Bon Jovi. Private equity investors are increasingly looking for seasoned, successful executives - so-called “rock stars” - to drive performance at their portfolio companies. Continued abuse of our services will cause your IP address to be blocked indefinitely.GPs Back ‘Rock Star’ Managers to Amp Returns Please fill out the CAPTCHA below and then click the button to indicate that you agree to these terms. If you wish to be unblocked, you must agree that you will take immediate steps to rectify this issue. If you do not understand what is causing this behavior, please contact us here. If you promise to stop (by clicking the Agree button below), we'll unblock your connection for now, but we will immediately re-block it if we detect additional bad behavior.
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