Warburg Pincus CEO Jeffrey Perlman on navigating a trickier private equity environment

Welcome to another episode of Goldman Sachs Exchange's Great Investors. I'm Alison Mas, chairman of investment banking in Goldman Sachs's global banking and markets, and your host for this episode. Today, I have the pleasure of sitting down with Jeffrey Perlman, the CEO of Warburg Pincus. Warburg Pincus is one of the pioneers of private equity investing, having raised its first fund in 1971. Today, it has about $90,000,000,000 in assets under management, offices around the world, and a relatively new CEO. I'm excited to hear how Jeff plans to build on his firm's legacy amid all of the opportun

for having me. Before

I get to your career, I wanna start with your firm. Take us back to 1971 when Warburg Pincus launched its first PE fund, and tell us a little bit about what the investing world looked like then. And what was the opportunity that your firm's leaders saw then?

Yeah. This may not surprise you, Allison, but that does predate me. But,

going

going back to that first fund, Lionel Pincus was really a visionary for the industry, really coined the term private equity. And when I look back in 1971, we raised at the time was a 41 and a half million dollar fund. I think the Wall Street Journal at the time said, wow, where is Warwick Pincus gonna be able to invest all of this capital? That

much money.

And if you went back also, what was unique was we called all the capital on day one. That makes sense. Today, we all are used to capital calls, the capital being invested over multiple years. But candidly, no one trusted their investors in those days. It was a new product in that regard, so we called all the capital on day one. Also, the limited partnership agreement, I think it was all of 10 pages, and it probably covers about 95% of what's in our documents today that now Wow. Consist of about a thousand pages. So the visionary elements that Lionel had when you think about the structure of th

Yeah. Nineteen seventy four was one of those years that I think when we were in business school, we studied what happened in the market. So you talk about the investment environment in 1971, but how does that compare with the current environment? There is a perception that higher rates and an uncertain geopolitical environment, and that's an understatement, not to mention a greater degree of competition, make this a really difficult environment for private equity investors. So what is your view of today's environment? Yeah.