Private Equity Experience

What Everyone's Asking About Private Equity Right Now

• Emily Sander • Season 1 • Episode 39

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In Episode 39 of the Private Equity Experience Podcast, the hosts answer listener questions and discuss the biggest topics shaping today's Private Equity landscape. From AI and recession concerns to valuation trends, venture capital changes, and investment strategies, they break down complex topics into practical insights anyone can understand. The conversation also reflects on what listeners have learned from the podcast, why Private Equity is becoming more relevant to business leaders, and where the show may go next. Whether you're a founder, executive, investor, or simply curious about PE, this episode offers valuable perspectives on today's market and the opportunities ahead.

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Who Are We?

Three insiders. One mic. All things private equity — explained. Hi 👋 We’re Ed, Rory, and Emily — a CEO, a CFO, and a Chief of Staff — here to demystify the world of private equity. Between us, we’ve sat in the founder’s chair, run PE‑backed companies, and worked on the deal side, so we know the wins, the pitfalls, and the jargon (and we’ll explain it).

Through the Private Equity Experience Podcast, our book On‑Ramp to Exit, and a library of free tools and templates, we share real‑world stories, practical strategies, and insider insights to help you navigate every stage of the PE journey — whether you’re leading a portfolio company, joining a deal team, considering PE, or just PE‑curious.

🔗Connect with Ed

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🔗Connect with Rory

Welcome to the Podcast

Welcome to the Private Equity Experience Podcast. Your backstage pass to the strategies, stories, and secrets that drive value in the PE universe. No filters, no fluff, just straight talk and expert insights to help you navigate the private equity world with confidence. And now your hosts, ed Barton, Rory Leaphart, and Emily Sander.

rory-liebhart_1_06-23-2026_140434

if we can surface some of those things, then it'll lead to jump-off conversations about, you know, either things we've seen and involved ourselves with or, you know, you know, things that, you know, people don't think about as much, that kind of thing.

emily-sander_1_06-23-2026_140434

Let's,

rory-liebhart_1_06-23-2026_140434

it goes. Yeah.

emily-sander_1_06-23-2026_140434

All right.

Grab Bag Episode Setup

emily-sander_1_06-23-2026_140434

Welcome back to the Private Equity Experience Podcast, and

rory-liebhart_1_06-23-2026_140434

We back.

emily-sander_1_06-23-2026_140434

we're gonna be doing, we're gonna be doing a grab bag. So we've actually been doing this podcast for a while now. Our book's been out as well,

rory-liebhart_1_06-23-2026_140434

Yeah. Almost two years. Yeah. Yeah.

emily-sander_1_06-23-2026_140434

gotten some

rory-liebhart_1_06-23-2026_140434

Crazy

emily-sander_1_06-23-2026_140434

and some thoughts and questions and comments, just all three of us, from different people and places. So we thought we'd do a little grab bag of reactions and responses and feedback we've gotten on the pod

rory-liebhart_1_06-23-2026_140434

Yeah. Yeah, it's been fun.

Why PE Feels Like a Black Box

rory-liebhart_1_06-23-2026_140434

I mean, I've run into people, mostly people I know, um, but others that, you know, um, I have just met and they wanna learn more, that kind of thing, and people are curious about it. And that's, that's generally what leads people is like, what I'm finding is people have a very decent understanding about drivers to the macroeconomic landscape because it's in the news all the time, right?

emily-sander_1_06-23-2026_140434

Yeah

rory-liebhart_1_06-23-2026_140434

but when people start-- They don't, they lose... It becomes a black box to them, so to speak, when people start talking about how does it all get funded? How, you know, what are the drivers to capital to drive the commerce and the, the economy? So that's where I think people are kinda diving into the kiddie pool here, um, is from that standpoint. It's like, "Boy, this is a place that I really don't understand that well, and I know you all, so... Or at least I know Rory, or I know Ed," or whatever. And they're just like, "Well, you know, they're doing it, so if they, if they have something to say about it, I'll listen." And it kinda just blossoms from there a little bit.

Real World Wins and War Stories

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

Yeah, I've actually had a couple clients, I've gotten a couple clients because of the

emily-sander_1_06-23-2026_140434

No

rory-liebhart_1_06-23-2026_140434

Yeah.

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

Yep. One, one of which, one of which was a former coworker of mine who went off and did his own thing and has got a company that's growing really rapidly and is looking at private equity as a potential exit, um, in the next couple years and said, "Hey, you know, I know you've got this. Our board has watched some of your episodes. They think they know... They think, they think you f- you might know what you're talking about." And so we picked up, essentially it's about $100,000 a year engagement, because of, because of the pod. And a lot of it, it's l- exactly what you said, Rory. There's, there's a... Where we're trying to make it very tactical, like this is, this is not, there's mystery around it, but the mystery is very very solvable

rory-liebhart_1_06-23-2026_140434

Yeah

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

if you kinda wanna dig in. There, there is a real desire out there, and this is somebody who's a very sophisticated business

rory-liebhart_1_06-23-2026_140434

Yes

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

where they're like, "I just almost need a Sherpa to guide me through

rory-liebhart_1_06-23-2026_140434

That's a great analogy.

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

a crevasse." And that's the... And I'm like, "Okay,

rory-liebhart_1_06-23-2026_140434

Yeah.

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

I can serve, I could serve that purpose." And then of course we've got other professionals here at the firm that handle some of the more tactical elements of, you know, the close and the, the reporting and KPIs and stuff like that. But it's been, uh, the, the other part that I think has been... So that's some tangible stuff that's come

rory-liebhart_1_06-23-2026_140434

Yeah

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

the other thing that I think has really been beneficial is being able to, and this is gonna sound sappy but that's fine, I'm in a sappy mood, is being able to like engage with you

rory-liebhart_1_06-23-2026_140434

Oh, yeah

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

time and get a lot of... Like there's a lot of the war stories we've been able

rory-liebhart_1_06-23-2026_140434

It is, is

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

And, and

rory-liebhart_1_06-23-2026_140434

so true

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

clients that are going through it like real time, and we've talked about that a little bit over the last, last year, year and a half, and I'm like, if they had just had this ahead of time they would've been in a much, much, much better spot. So

rory-liebhart_1_06-23-2026_140434

Totally

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

it's definitely been, you know, regardless of whether we had just the three of us listening to the podcast or whether you have, you know, several hundred people listening to each episode, it's, it's really been beneficial from that perspective

rory-liebhart_1_06-23-2026_140434

Yeah. It, it sound, it seems to me like, um, everybody's got some scenario when I talk to them. They've got some scenario that kind of involves private equity or seems to be on, as you said, like with your client, Ed, like on the horizon where that becomes a thing. So people are thinking, "Okay, I, I need to learn a little bit about this to either sound intelligent or for their own curiosity and, and situation." But it's, it's, it's definitely a matter of how, you know, how prominent private equity is in the, in the economic landscape that people, no matter what part of business they're in, whether they're in operations, finance, whether in marketing, sales, everyone's got some connection somehow, some way to private equity. You know, and so they're like, "Wow, I didn't really know where to start. This is a good place to start." And so I've had then follow-on conversations with people and, you know, kind of done some consulting around helping people with specific scenarios. But yeah, it's a great jump-off point. And I get the same comment about the book too, really. And I'm-- and again, it's, it's a matter of talking to very sophisticated, very intelligent people that just are not subject matter experts yet in this space. And, you know, they, they see it as a great entry point to that. And of course, with smart people, then they want to learn more and they want to dive deeper, but it is a good jump-off point no matter kind of, you know, what level somebody's at within the financial game, so to speak.

emily-sander_1_06-23-2026_140434

And I know someone who actually, uh, in their previous career had of assets under management they were in charge of, and listens to our pod because he's like, "I like how you guys talk about it 'cause it reminds me of the, some of the fundamentals or some of the things that people would have confusion around, and so it really helps me look at it in a, in a new way."

rory-liebhart_1_06-23-2026_140434

Yeah

emily-sander_1_06-23-2026_140434

like, he's well-versed in all of this, but he's just like, "I like how you guys break it down and how you guys talk about it."

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

Well, I, I'm sure he appreciates getting an update on the definition of risk premium

rory-liebhart_1_06-23-2026_140434

without a doubt. Yeah. I mean, it does have nuances that change with every context in, in the news. But that's the other thing too, is I find that, you know, the people tune in-- Some people tune in more when they see that it's a salient topic regarding whether what the political economy of the US and how that's affected economically in private equity. Or they see a, you know, situation they may have read about, but we're explaining it from a private equity angle. Then you have other people that are like, "Oh, and it's really kind of, um, you know, fundamentals or, you know, principles of private equity, that's when I'm hooked in." So it's-- If you, if you, if you got a news junkie that wants to learn more about finance, that's when they tend, tend to tune in. If you have somebody that's looking for fundamentals, then, you know, they might listen to it all, but they specifically tu- tune in to, you know, when we're explaining, as you say, like the definition of risk premium or, you know, what a, what a capital stack is or risk adjust- adjusted rate of return, whatever that may be people wanna, you know, add to their tool belt. It's cool. I enjoy it 'cause, you know, I didn't know that I liked talking about this stuff as much as I enjoy it. You know, I think part of it is our conversational element to it, 'cause we usually harken back to some, some war stories and get a chuckle out of those, 'cause really they are all pretty funny when you think about it. But, but yeah, it's,

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

They're, they're far funnier now

emily-sander_1_06-23-2026_140434

yeah.

rory-liebhart_1_06-23-2026_140434

uh... Oh my God.

emily-sander_1_06-23-2026_140434

not

rory-liebhart_1_06-23-2026_140434

Yeah. Yeah.

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

they were at,

rory-liebhart_1_06-23-2026_140434

Yeah.

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

in the

rory-liebhart_1_06-23-2026_140434

They were prematurely aging me while I was going through that. But, you know, with a few, you know, years, decades of remove, like maybe it's a little more, more funny to look back on. But yeah, it's, it's been good in that respect.

emily-sander_1_06-23-2026_140434

uh, we should, our next book should be like, um, the pros and cons or the dos and don'ts of husband and wife 'cause that's a whole,

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

Oh, God

rory-liebhart_1_06-23-2026_140434

We can create a series actually.

emily-sander_1_06-23-2026_140434

That's a whole

rory-liebhart_1_06-23-2026_140434

do's and don'ts about dragging a founder along into the next stage of a business. Who knows? You know, you could-- we could write, oh my gosh, yeah, so many articles, so many, so many situations, that sort of stuff. I mean, maybe the next frontier for us is a Substack or something like that, where it's actually like a newsletter of this sort of shit,

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

Yeah

rory-liebhart_1_06-23-2026_140434

know? Uh, but, uh, but you know, we all have the day jobs too, so

Different Angles and Audience Takeaways

rory-liebhart_1_06-23-2026_140434

yeah

emily-sander_1_06-23-2026_140434

I, I appreciate the fact that, um, given our backgrounds, we come at things from different angles. So obviously you guys are like the financial wonks and the quants and all these crazy acronyms, and I'm like, "Whoa, what's happening?" And so I proxy for the normal people listening to the show. But I've been part of PE-backed companies on the leadership team and from

rory-liebhart_1_06-23-2026_140434

Yeah

emily-sander_1_06-23-2026_140434

from a, uh, process and people perspective. So hey, we're running and due diligence and data rooms for prospective buyers, like running that process behind the scenes, but then also change management aspects for the people. Like we're talking about people and... who are getting throttled and

rory-liebhart_1_06-23-2026_140434

Yeah

emily-sander_1_06-23-2026_140434

are changing significantly, and so there's that whole layer of things to consider as well.

rory-liebhart_1_06-23-2026_140434

Absolutely. Yeah

emily-sander_1_06-23-2026_140434

where I usually come at things from. But just speaking with you guys in depth, I just learn so much. I mean, I learn so much from working with you, and I would kind of try to keep up and like pick up every 12th word you were saying and put it in context. But hearing these episodes, it's like, no, I can get it down, and I ask, you know, I ask repeatedly because it takes me that long to get it in my brain. But it's putting together this whole picture of the private equity landscape and the private equity

rory-liebhart_1_06-23-2026_140434

Yeah.

emily-sander_1_06-23-2026_140434

and I think

rory-liebhart_1_06-23-2026_140434

Yeah

emily-sander_1_06-23-2026_140434

lot of people can, like you were saying, Rory, pick up and like, "I like the news aspect," or, "I like this aspect," or, "I can relate to the people aspect because I just went through that myself", type of thing.

rory-liebhart_1_06-23-2026_140434

Yeah, no doubt. And I think that's-- I've, yeah, I definitely had folks say, you know, the three of you specifically have your own style and approach to the discussions, which is... Well, I guess that's, I mean, that's why we formed this particular group that we did. But, um, but you know, I think we've all been in it together. We've all been in it in our own right. But, you know, being able to... I don't think that the content would've been created if not for, um, this particular combination of people, you know? Uh, so, so I guess, uh, we found the formula, and I guess it's a question of just, you know, where we go next with it, I suppose.

What Listeners Ask About the Economy

emily-sander_1_06-23-2026_140434

What are you guys hearing, uh, that's top of mind for people? Is something- are things top of mind, fresh, news cycle, worrying, or what's the, what's the sense you get there?

rory-liebhart_1_06-23-2026_140434

I th-- well, what I hear, it's so funny. It, it's-- when people listen to what we have to say about private equity specifically, they naturally believe we have the answers to whether the economy is gonna go into a recession or, you know, what are, what are interest rates gonna do. Um, you know, my crystal ball is pretty foggy at times, so it is funny how people think that, you know, the, the information we have to share is something that we also have the ability to predict, which I think we have a somewhat informed view, but like everyone basically wants to know, is the economy gonna like sputter or is it just gonna somehow miraculously continue to, you know, um, stay on this trajectory or grow, you know? And so

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

It's

rory-liebhart_1_06-23-2026_140434

be more bearish,

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

'cause it al- 'cause it's a

rory-liebhart_1_06-23-2026_140434

but yeah.

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

so it always

rory-liebhart_1_06-23-2026_140434

Of course.

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

the when. S- so my, my ability to predict, I can predict with 100% certainty that it will

rory-liebhart_1_06-23-2026_140434

Yeah

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

What I can't predict is the when

rory-liebhart_1_06-23-2026_140434

Exactly. 'Cause we're pretty deep in this cycle, it feels like to me

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

Yeah, I've-- A-and I've predicted, like, six of the last three recessions, so, you know, I'm, I'm probably not the guy... I, I tend to, tend to be kind of a glass half empty, a little

rory-liebhart_1_06-23-2026_140434

Yeah.

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

on the

rory-liebhart_1_06-23-2026_140434

Yeah

Macro Risks and Consumer Resilience

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

and that's-- And I continue to look at things like, okay, we've got, you know, as, as we're recording this, we're kind of on-- We have a precarious on a ceasefire in the Middle East around,

rory-liebhart_1_06-23-2026_140434

Oh my gosh, yeah

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

which again, is, is when you have an energy shock, that tends to have impacts on a macroeconomy. you know, I'm, I'm looking at it going, "I don't know if that's gonna hold or not." And what's the opportunities or lack of opportunities being driven by the fact that the Middle East looks like it's about to be... You know, it-it's always been a little bit rocky, but I think it's gonna be rockier, um, over the next probably 24 to 36 months because the... I've also predicted nine of the last three wars, is the, Iranians are gonna not play, but they're gonna delay, it's gonna be a, "Okay, well, we're gonna have to go in and boots on the ground and do all that kind of stuff." And, you know, that ends up turning into a macroeconomic issue, a big one, and a dis--

rory-liebhart_1_06-23-2026_140434

Exactly.

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

destabilizing force, a big

rory-liebhart_1_06-23-2026_140434

Yeah. Yeah, it truly is. And, you know, that's the other area where people are curious about is like, how does, how does what's going on in the Middle East and that sort of thing predict or like impact private, private equity and, you know, just general investments and things like that. But I think the resiliency of the consumer is what really has me scratching my head all the freaking time. 'Cause I mean, I get so angry about the level of, you know, inflation that I'm realizing in my life and, you know, I, uh, you know, we all have different, uh different, uh, parameters for what, what, what, what it feels like to be squeezed, right? So, so I can only imagine in other areas where somebody's like, "Oh, my grocery bill's gone up by 50% the last year and a half." God, you know, whatever. It's just like, how, how far can this consumer go before the consumer breaks, you know? But we haven't seen things like bankruptcy filings rising. We haven't seen delinquencies spike on debts. We've seen certain sub-sectors of debt, um, underperform, subprime auto being one of them. But, you know, all that to say is, like, all of this stuff does eventually come to roost, but I'm just so surprised by how, how long it's taken because, you know, um, we are so deep in the cycle. And, you know, I think everybody predicted that COVID itself was going to be the, you know, the breaking point. But then, of course, you know, other stimulus and things like that, and then just jobs and other things have kinda cont- continued to re- remain resilient, that sort of stuff. So I don't know. It's shaken my confidence in my ability to predict the future, for sure.

AI Hype and Running a Good Business

emily-sander_1_06-23-2026_140434

Ed, it looked like you were gonna say something, but I've gotten the feedback that, uh, the, what's top of mind for the people I'm talking to is AI. It's like AI everything and blah, blah, blah. And, um, I think one of the pieces... touched on AI, but one of the pieces we talk about is the fundamentals of how to run a good business, which is the precursor and prerequisite to any PE transaction. 'Cause if you have a poorly run business or not a pro- uh, you know, something that's not profitable, doesn't really matter. You're never gonna have the discussion as such. So

rory-liebhart_1_06-23-2026_140434

Well, certainly not from like the growth equity groups, but more like the vulture capital you would be having on painful conversations with, but yes.

emily-sander_1_06-23-2026_140434

Yeah

rory-liebhart_1_06-23-2026_140434

taken, yes. You gotta-- how to run a good business and be cognizant of that is fundamental for sure.

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

Yeah, I was, I was actually gonna take the position you kinda touched on it, Rory, that almost no business of size that is off the radar for private equity. It's just which fund

rory-liebhart_1_06-23-2026_140434

And what price?

emily-sander_1_06-23-2026_140434

yeah

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

So, uh, so you've got ones that specialize in, and we've talked about this, they specialize in debt financing. Some specialize in turnaround or kind of the, the up the mess or dispose of the, the mess, you know, kinda troubled asset, uh, recovery. Some are, you know, growth equity. Some are really venture firms, but late stage venture firms that call themselves private equity, but they're really more of a, they have more of a venture profile.

rory-liebhart_1_06-23-2026_140434

really quickly, I gotta jump in on that one. My recent phenomenon that I've personally observed is that venture capital funds that call themselves that now much more resemble private equity funds out there. They're requiring businesses to have way more traction, you know, you know, obviously product market fit, but like actual ARR on their books to then invest, which is... Re- remember back in the day, like not too long ago, it was like, if I just had an idea, I'd have people at my door. But no, these days it seems like the run-of-the-mill VC is looking for more advancement, which don't mean to pull you off your, your thought process there, but that was one thing that stuck out to me over the last year is the changing dynamic of VCs looking more like private equity firms and how they interact and execute.

emily-sander_1_06-23-2026_140434

Does that change the whole, like, chain reaction? Like, so angel investor role changes, VC role changes, PE role

rory-liebhart_1_06-23-2026_140434

Kinda.

emily-sander_1_06-23-2026_140434

PE doesn't

rory-liebhart_1_06-23-2026_140434

Yeah.

emily-sander_1_06-23-2026_140434

competition or

rory-liebhart_1_06-23-2026_140434

Well, there's a few factors at play. I mean, as a founder, you have to continue to decide how long you can bootstrap a business before you bring in institutional money. Um, angel investors might also have to be in the same boat to say, you know, "You're gonna have to hang on longer, and by the way, still probably be diluted." Um, you know, are you willing to do that and continue to pour money into a business until, uh, the VCs come along? So it could be a longer tail for funding, either as a self, self-funding mechanism, bootstrapping, or with early-stage investors. So like seed rounds go on for a longer time, I guess, is the way to put it, so. So yeah, there's a little bit more of a chain reaction that way, I'd say. Yeah.

emily-sander_1_06-23-2026_140434

Which is like not necessarily a bad thing per se, it's just kind of a change. What would you attribute that change to?

rory-liebhart_1_06-23-2026_140434

Mm. I think w-in my-- what I've personally observed is just like there's, there's a lot of capital out there, but there's just general, uh, anxiety, maybe a too harsh a word, but nervousness about where the economy is gonna go, you know? Like f- especially for, you know, consumer-facing businesses or, or other certain types of B2B business models is like, you know, is the thesis of the founder and this business plan relevant six months from now, 12 months from now? So reticence to get in now because they don't feel like it's on the up and to the left type-- up and to the right trajectory. More-- might be like straight line or down and to the right. So, you know, who knows?

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

Well, no, the longer we continue to go into this cycle, the-- you know, historically, we are in a fairly long growth

rory-liebhart_1_06-23-2026_140434

Yeah,

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

where we've had,

rory-liebhart_1_06-23-2026_140434

definitely

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

really, I don't know if we've even had a technical recession really since

rory-liebhart_1_06-23-2026_140434

Mm-hmm.

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

COVID. Um,

rory-liebhart_1_06-23-2026_140434

I don't see we have not, correct?

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

Yeah, I, I was about to say, 'cause that's-- a technical recession is two quarters of negative

rory-liebhart_1_06-23-2026_140434

Yeah

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

Two consecutive quarters of negative growth. And so, you know, we're in an extraordinarily long I don't wanna say it's been a rapid growth environment really coming out of COVID was rapid, and then it's kinda steadily... It's the, the central bank and others have done their job. issue though is, I mentioned earlier, it's always a cycle and it will sputter. And I think the longer it goes, everybody goes, "Okay, it's gotta be closer to the sputter."

rory-liebhart_1_06-23-2026_140434

Mm-hmm.

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

And so they're, you know, as Rory noted, the up and to the right is not only when you're looking at the companies and kinda where they sit in the macroeconomy and, you know, but also I think there is a general con- uh, a general feeling there's gotta be a correction here somewhere, whether that's in the stock market, whether that's in the, the, the macroeconomy or both, will impact valuations. Valuations are at record highs from a, you know, kind of traditional metrics

rory-liebhart_1_06-23-2026_140434

Yeah. The traditional metrics, man

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

see a-- Yeah, or we're gonna see a macroeconomic decline, which is gonna impact, even if you stayed at the current metrics, is gonna impact, which are silly, but I've been saying that for 40 years too, and,

rory-liebhart_1_06-23-2026_140434

Totally

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

working. So the, the-- But I think that's gonna-- Folks are just getting nervous. I think there is a-- it's-- And the longer this goes, the more nervous folks are getting 'cause they're like, you know... Again, I'm one that goes, "Okay, what's the contrarian investment that you should be making today, assuming

rory-liebhart_1_06-23-2026_140434

Mm-hmm.

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

that the economy sputters or that there's a, you know, a, a pullback to more traditional metrics of valuation?" Um, which if you looked at my stock portfolio, I think we've talked about that on here, it's largely consists of utilities, energy, consumer, consumer

rory-liebhart_1_06-23-2026_140434

Yeah

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

know, it's, it's a classic like defensive posture, dividends, you know,

rory-liebhart_1_06-23-2026_140434

Mm-hmm.

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

whole nine yards and going, "Okay, well, what..." You know, 'cause if interest rates fall, dividend-paying stocks tend to go up in value. So I'm like, you know, I'm, I'm trying to play on all those

rory-liebhart_1_06-23-2026_140434

Definitely. Yeah

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

I'm still working, so I obviously have not found the secret formula

rory-liebhart_1_06-23-2026_140434

Yeah. Yeah. Yep. Amen. Amen. Exactly

emily-sander_1_06-23-2026_140434

As someone who barely passed their macroeconomics college course, um, I do learn a lot about how, oh, like events in the world actually do impact these, these things that I, that I know. Um, I, I h- I honestly think that I would get more out of that class now that I have life experience and business experience,

rory-liebhart_1_06-23-2026_140434

I say that a lot about a lot of things in life.

emily-sander_1_06-23-2026_140434

I don't understand.

Downturn Playbook and Distressed Deals

rory-liebhart_1_06-23-2026_140434

Yeah.

emily-sander_1_06-23-2026_140434

But if you were to take on what you just said, Ed, and we're like, okay, gonna sputter at some point. I think we're getting closer and closer and closer to that tipping point where that happens,

rory-liebhart_1_06-23-2026_140434

嗯。

emily-sander_1_06-23-2026_140434

and I'm somewhere in the PE ecosystem. I'm considering PE, I'm in a PE investment, I'm a PE managing director. What does that mean? Like, what do I plan for if I'm getting a little worried?

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

I mean, the biggest, the biggest thing

rory-liebhart_1_06-23-2026_140434

Good question. Really good question

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

to plan for the exit because the exit tends to be driven by, "I've got to get a multiple of X on my initial investment." And so, you know, as some of these things occur, the question's gonna be, "Okay, where do I buy for value? What do I look at for leverage?" Because you got a double-edged sword on leverage. You could actually, you know, if you've got a good cash flow and conservative business, you could throw a bunch of leverage on it to get to that return if it's... especially if it's a counter-cyclical or a, you know, kind of reasonably, reasonably resilient economic play,

rory-liebhart_1_06-23-2026_140434

Yeah

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

versus a, you know, company where you're going, "Well, I don't know, but I've got a bunch of capital and I'm a, you know, growth equity fund. I got to put it to work somewhere, otherwise I don't get paid." So you just go in, you start throwing leverage on it to try and get returns on top of a real high multiple environment and a challenging macroeconomic environment. If the winds blow against you, you're not gonna be able to tack out of the, out of the storm type of thing, and it's gonna be ugly.

rory-liebhart_1_06-23-2026_140434

Yeah

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

And, and... But some, some funds and some firms are so wedded to a particular style that, you know, that it's impossible and would be a disservice kind of to their LPs to-- The LPs should be diversified at the LP

rory-liebhart_1_06-23-2026_140434

Yeah

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

funds don't necessarily and should not arguably be diversified at the fund level,

rory-liebhart_1_06-23-2026_140434

Agreed

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

they should be able to say, "This is what we do," and take their lumps when the lumps show up

rory-liebhart_1_06-23-2026_140434

Yeah.

emily-sander_1_06-23-2026_140434

I'm assuming

rory-liebhart_1_06-23-2026_140434

the other answer to that question is, if you're a fund, you hope that you are, you know, fully subscribed in a recently closed fund, meaning you've raised, just raised the money, 'cause then you're on the hunt for great deals, right? A-as you said, in some, some areas where there's decimation, there's value in the rubble, right? So, you know, you can go buy, buy-- If you're, if you're in a new fund and you just raised a bunch of capital, you're out to deploy it, that's your job, and you have, let's call it five to seven years time horizon to realize the value of that, then maybe you're in good shape and you can go out and do things others that in that cohort can't do because they're, you know, in a different situation. Maybe they're fighting against liqui- you know, liquidity or redemption demands or whatever it may be. So yeah, having dry powder, fresh dry powder when stuff goes bad, um, could be a good place to be depending on your investment strategy.

emily-sander_1_06-23-2026_140434

Are there PE funds that go, "Okay, we're in a downturn.

rory-liebhart_1_06-23-2026_140434

Mm-hmm.

emily-sander_1_06-23-2026_140434

I'm gonna see which companies are resilient." Not that they're, like, making, you know, profit over profit, but they're doing less bad than everyone else, so they're most resilient, and then they're gonna use that as part of my process

rory-liebhart_1_06-23-2026_140434

Absolutely. Absolutely. I think that is one, one very tangible way in which you can prove out the durability of a business and, you know, how, how, how much the demand for what it does persists despite downturn. And yeah, if it means that you've got less competitors that are, you know, PE funds that have other, you know, liquidity issues or, you know, they're not-- they don't have fresh dry powder, then you might be in a position to buy a business for a great price where you don't have other competition or very little. Yeah, it's a good place to be, 100%. Like, but Ed and I, you know, the business that we worked in, while we were not buying businesses, we were effectively buying distressed portfolios. And so when we had capital, when stuff was bad, we had-- we made-- we had-- we got some of the best deals that that company ever saw

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

Oh, it was, yeah, it was

rory-liebhart_1_06-23-2026_140434

during that time. And of course then we wrote up the value and sold the company after that perfectly. It was, it was great. And

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

Yeah, we wanted, we wanted more capital. I remember

rory-liebhart_1_06-23-2026_140434

Yeah.

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

I'd be pounding on a table with Dallas going, you know, we could... they're off buying... No, they did fine on

rory-liebhart_1_06-23-2026_140434

Oh, yeah, absolutely.

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

banks and mortgages and all, and I mean, this was... But our biggest competitor went away,

rory-liebhart_1_06-23-2026_140434

Yeah

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

and all of a sudden everything was just sitting there, 'cause Bear Stearns was our biggest competitor. Everything was sitting there and, you know, it was like we could back up the truck

rory-liebhart_1_06-23-2026_140434

Yeah

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

banks are getting slaughtered

emily-sander_1_06-23-2026_140434

who just are listening at this episode, explain your business model.

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

So our business model was we-- Banks have a requirement to have certain capital levels, and what happens is, we'll, we'll use consumer bankruptcies because that was our

rory-liebhart_1_06-23-2026_140434

Yep

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

What happens is a, a consumer files for bankruptcy. So the economy goes bad, consumer files for bankruptcy. The Office of Comptroller of the Currency, who kind of looks at the banks, goes, "You have to make that credit card account," because we bought largely unsecured, although there was some other stuff in there.

rory-liebhart_1_06-23-2026_140434

Yeah

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

"You have to write that off to zero." So you have to write it off because, uh, your cr- your debtor went bankrupt. The issue is, like on a Chapter 13 bankruptcy, you're likely to get paid out 25, 30 cents on the dollar. In a Chapter 7, you're likely to get paid out a 1%.

rory-liebhart_1_06-23-2026_140434

Mm-hmm.

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

But the, the regulations say you have to-- the bank has to charge it to zero. Well, the bank, at the same time that folks are filing bankruptcy, is getting slaughtered with, you know, other bad loans and other things, and they're trying to hold their capital up. So

rory-liebhart_1_06-23-2026_140434

Yeah.

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

what do they do? They go,

rory-liebhart_1_06-23-2026_140434

Mm-hmm.

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

we'll give you 10 cents on the dollar, 12 cents on the dollar, and we'll wait the five to seven years to collect the, the remaining-- Well, to double our money,"

rory-liebhart_1_06-23-2026_140434

Mm-hmm.

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

which is a 15, 18% return before leverage. And the bank goes, "Okay, we got-- we're mitigating our losses. We had to take this $10,000 credit card charge it to zero. At least now I can now get 1,000 bucks, so my, I only have to write off $9,000. And then that $1,000 goes against my capital reserves, which are being evaluated by OCC." So, you know, it, it's a, it's really one where regulated in like a bank, and so you had the ability to go, "Yeah, we could wait for the money." You can't. We'll take the, we'll take the risk because in a large pool, any one given account is likely to

rory-liebhart_1_06-23-2026_140434

Yeah.

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

pay.

rory-liebhart_1_06-23-2026_140434

Yeah

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

a pool of these accounts is very predictable as to how they

rory-liebhart_1_06-23-2026_140434

Very

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

so that was our business. And, and we, we did that for... Well, Rory still

rory-liebhart_1_06-23-2026_140434

I still do it. Yeah.

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

Yeah yeah, it's 25 years of

rory-liebhart_1_06-23-2026_140434

Yeah. Wow. My goodness.

emily-sander_1_06-23-2026_140434

And so when you were saying we were asking for more capital, is that to buy more of the, the

rory-liebhart_1_06-23-2026_140434

Yeah

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

the banks, I mean, you

emily-sander_1_06-23-2026_140434

Yeah.

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

this, this is 20- 2008, 2009, 2010, so everything's gone to hell the banks are getting slaughtered. And our largest competitor in that space, we were, we were the, like the number two people in the space, or number three. Our largest competitor was Bear Stearns, and Bear Stearns went away. They, they got bought by Chase, and Chase is like, "Yeah, we're not gonna do this anymore."

rory-liebhart_1_06-23-2026_140434

Yeah

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

So what ended up happening was, you know, we're sitting there going, we got all these big banks need to get rid of their bad loans, and the biggest money that was in that market went away. So we were like the only big player left, and we're l- us and another company, Sherman Financial Group, and

rory-liebhart_1_06-23-2026_140434

Yeah

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

w- I was telling Dallas, we were owned by Lonestar Funds at the time, "Give us all the capital you can because I can deploy it profitably here and get us, you know, 18%, 20% returns before

rory-liebhart_1_06-23-2026_140434

because of the bad economy and

emily-sander_1_06-23-2026_140434

Did they

rory-liebhart_1_06-23-2026_140434

demand because of the capital crunch

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

Not

emily-sander_1_06-23-2026_140434

Not enough

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

They didn't give us enough. They, they-- But they, what they did do is they bought most of Merrill Lynch's bad assets,

emily-sander_1_06-23-2026_140434

Oh.

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

which turned into a home

rory-liebhart_1_06-23-2026_140434

Yeah

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

They bought, um, CIT, was a home lending business, CIT's home lending business, which was, uh, at least a triple.

rory-liebhart_1_06-23-2026_140434

Yeah

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

They, they had bought a couple other mortgage companies, the one of which that they had MIGO deal with,

rory-liebhart_1_06-23-2026_140434

Mm-hmm

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

not a good investment. They should have-- They poured more capital into that before they put it into Chapter 11. They should have sent that capital the bee

rory-liebhart_1_06-23-2026_140434

Truth

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

And there was a couple other investments that they made hoping that the turnaround would be quick, and it wasn't, that was part of the, part of the issue. And they, and they were heavy at the time in real estate.

rory-liebhart_1_06-23-2026_140434

Yeah. Resi.

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

we had,

rory-liebhart_1_06-23-2026_140434

Yeah

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

you know, restaurants and grocery stores and other things where they had bought it largely for the value of the underlying real estate, and that becomes a little bit of an albatross when everything's-- when capital markets are frozen up

rory-liebhart_1_06-23-2026_140434

Yeah. Yeah

What’s Next Live Events and Wrap

emily-sander_1_06-23-2026_140434

What else are you hearing from the listeners, from the viewers of the pod or readers of the book

rory-liebhart_1_06-23-2026_140434

I have-- I get a lot of questions I don't have a quick answer to, i.e., what are y'all gonna do next?

emily-sander_1_06-23-2026_140434

हा।

rory-liebhart_1_06-23-2026_140434

know, like, are you guys gonna write another follow-up book? Are you guys going to, you know, continue to do podcasts? Are you looking to do, you know, live events, whatever? Um, people, people ask these questions with, you know, general c- genuine curiosity, and I think, um, yeah, I don't think we've settled on that yet. So listeners, what do you wanna hear? What do you want more from us? 'Cause we are ourselves looking to determine how we take this forward

emily-sander_1_06-23-2026_140434

that's the first I've heard of a live event request. I've heard

rory-liebhart_1_06-23-2026_140434

Yeah

emily-sander_1_06-23-2026_140434

books or like m- different kind of podcast episodes or whatnot?" But that was the first I've heard of a...

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

I'll do, I'll do a

emily-sander_1_06-23-2026_140434

You'll be great at a live

rory-liebhart_1_06-23-2026_140434

give talks, you know, like,

emily-sander_1_06-23-2026_140434

Yeah,

rory-liebhart_1_06-23-2026_140434

town hall style, you know?

emily-sander_1_06-23-2026_140434

panel

rory-liebhart_1_06-23-2026_140434

Yeah. Yeah, we could do that. That'd be fun. I'd enjoy that.

emily-sander_1_06-23-2026_140434

You've done some of that, haven't you, Ed? And you've done some of that, haven't you, Rory? Or not so much?

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

I've done, I've

rory-liebhart_1_06-23-2026_140434

Yeah, for sure

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

I haven't done a lot of late.

emily-sander_1_06-23-2026_140434

Yeah

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

Um, most of my, most of that was done several years ago. Back when podcasts, I was like, "I don't know what these things are, but I'll go on them because it's

rory-liebhart_1_06-23-2026_140434

I, yeah

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

actually been too busy to do that stuff of late outside of this one

rory-liebhart_1_06-23-2026_140434

I've done that stuff representing, you know, companies I've worked for, but never have I done it for like my own thing or our own thing, you know? So this would be something very different. But, you know, getting in front of people and, you know, spreading the gospel, that's not new. But, you know, doing it on something we've created, that's, that would be both new and fulfilling, so

emily-sander_1_06-23-2026_140434

Yeah, I mean, I would like just to workshop that just hypothetically. I mean, one of the main goals of writing the book to educate people and just kind of pull the curtain back on this ominous kind of confusing black box of PE. And I think I said in an earlier podcast, the biggest reaction I get to the book and the pod, like, "Oh yeah, like, you know, with my former CEO and CFO doing a book on private equity," is this sound, private equity." Um, and like just dispelling that like, okay, it's not, uh, as scary as that, and like, "Ooh, but like those people in private equity." It's like some of them, yes, but it's also can be a win-win if you know what you're getting into. So I think if it's, uh, expanding that education, like, "Hey, like here's what it's used for, like here's what it's good for, and if you're in this camp, like, and if you're in this scenario, don't use it. Not,

rory-liebhart_1_06-23-2026_140434

Yeah

emily-sander_1_06-23-2026_140434

for you," type of thing. I think if it's anything to do with that, I would be, I would be game 'cause that was our original premise.

rory-liebhart_1_06-23-2026_140434

Yeah, it could be, it could go a lot of directions for sure on that front, you know. Like an event could be geared towards, you know, founders and entrepreneurs that like, you know, have something they're considering, but they're looking towards the long term and what that might mean for their business, you know, 10 years down the road. Who knows?

emily-sander_1_06-23-2026_140434

but this could go a whole bunch of different directions

rory-liebhart_1_06-23-2026_140434

it really could, yeah

emily-sander_1_06-23-2026_140434

we could speak to PE funds themselves, managing directors. We could speak to leadership teams and founders and executive teams. We could speak to, like, have a whole workshop on, like, if you are a husband and wife team, come to this talk because you need to hear

rory-liebhart_1_06-23-2026_140434

Exactly

emily-sander_1_06-23-2026_140434

do this well.

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

need to hear, you need to hear

emily-sander_1_06-23-2026_140434

You need to hear about this stuff and things.

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

private equity land

rory-liebhart_1_06-23-2026_140434

Yeah, yeah

emily-sander_1_06-23-2026_140434

um, yeah, there's, like, good parts of working together, but there's also, like, you need to, you need to know

rory-liebhart_1_06-23-2026_140434

Mm-hmm,

emily-sander_1_06-23-2026_140434

these things

rory-liebhart_1_06-23-2026_140434

Yeah

emily-sander_1_06-23-2026_140434

you get into bed with PE. So yeah, I feel like we

rory-liebhart_1_06-23-2026_140434

So many offshoots, right? You know, you, you can even make it topical, like a series that's topical to some of the fundamentals of the book, right? Like, so some people wanna know, how do I become an effective chairperson of a board, right?

emily-sander_1_06-23-2026_140434

Yeah.

rory-liebhart_1_06-23-2026_140434

as a CEO, founder person, you know, or how do I manage a board? I remember when we worked at a company, Ed handed out books. Ed was the CEO, handed out books to the executive team on basically working with the board, or maybe it was the other way around. You handed it-- a, a set of books out to each of the board members to basically be like, how you could be a good... Yeah, I know I got it, but I think you also gave it to the board members too, so like we all had it. And that was really pretty cool because it, it, you know, a lot of us, myself included, had never worked at that level before, and a lot of the board members had never been board members before, or real ones, you

emily-sander_1_06-23-2026_140434

Yeah.

rory-liebhart_1_06-23-2026_140434

So

emily-sander_1_06-23-2026_140434

a good future

rory-liebhart_1_06-23-2026_140434

let us know, listeners, what you want to see 'cause-- and hear, um, because we got you covered. We'll figure that out.

emily-sander_1_06-23-2026_140434

And with that, we'll call this one a wrap. Thanks, Ed. Thanks, Rory

rory-liebhart_1_06-23-2026_140434

Thanks, Anne

hrh-edward-i-of-uranus-s-rings_1_06-23-2026_140433

Thanks, Sam

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