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FEATURESFORBES ASIAFORBES ASIA MARCH 2020buyout managers gave up management fees in exchange for
more carried interest—the “holy grail” because the waivers
converted top-bracket taxable income to capital-gains-rate
income and deferred taxation for years.
But in 2015 the Internal Revenue Service indicated that
it would begin auditing these fee waivers. Thoma Bravo, the
private equity firm run by billionaire Orlando Bravo, for ex-
ample, told its investors that the IRS was auditing its man-
agement fee offsets in its 2012 fund.
With fee waivers out, these stake deals allow Wall Street’s
billionaires club to continue to admit new members. Some
have even coined a name for them: “Synthetic fee waivers.”he current deal bonanza reflects another
reality: Firms are selling off pieces of them-
selves to build staying power. What followed
Blackstone’s initial public offering in 2007
was a sixfold increase in assets in the ensuing
decade, from $88 billion to $545 billion currently. Today’s
private stake deals offer a glimpse into the up-and-coming
firms that will dominate tomorrow’s Wall Street.
In July 2016, Silver Lake, a private equity firm known fortech deals like Skype and Alibaba, tapped Dyal to raise $400
million. At the time, the Silicon Valley-based firm managed
$24 billion and the deal valued the operation at about $4
billion. Silver Lake was founded in 1999 by tech investing
pioneers Jim Davidson, Glenn Hutchins, Dave Roux and
Roger McNamee. McNamee left early on in 2004, and by
2013 Davidson, Hutchins and Roux had also moved on. The
firm’s younger partners, led by Egon Durban, Kenneth Hao,
Mike Bingle and Greg Mondre, wanted more cash to con-
tinue investing in the firm’s enormous new funds. They were
asset-rich but in need of liquidity.
The new managing partners used part of the $400 million
raised by Dyal to increase their own commitments in their
funds. Some of the proceeds went to the founders, part of an
agreed-on sum related to the transfer of the firm, by invest-
ing on their behalf in Silver Lake’s funds. After the Dyal deal,
Durban and the other remaining Silver Lake partners wound
up with 90% of the firm’s future net free income. Davidson re-
tained a slice of future performance fees in Silver Lake Fund V.
Meanwhile, Durban, 46, masterminded an incredible deal
for Dell that has so far returned $4.4 billion in profit. Silver
Lake now manages $43 billion, and Forbes estimates that Dur- TAMER: AARON DAVIDSON/GETTY IMAGES; STERNLICHT: MICHAEL PRINCE; KLINSKY: CHRISTOPHER GOODNEY/BLOOMBERG; FELICIANO AND EGHBALI: ROBERT GALLAGHER FOR FORBESNEW BILLIONAIRES:
A BAKER’S DOZEN
THANKS TO A QUIET FLURRY OF GENERAL-PARTNERSHIP-
STAKE SALES, NEW BILLIONAIRES ARE IN BLOOM.SAMI MNAYMNEH, 58
H.I.G. CAPITAL, MIAMI
ASSETS: $34 BIL NET WORTH: $4 BIL
A former managing director at Blackstone, Mnaymneh started the firm
in 1993 with Tony Tamer, a former partner at Bain. Masters at buying
midsized businesses like Jenny Craig and sausage maker Southern
Quality Meats, many of which produce huge returns. The duo also runs
WhiteHorse Finance, a publicly traded business development corpora-
tion (BDC).TONY TAMER, 62
H.I.G. CAPITAL, MIAMI
ASSETS: $34 BIL NET WORTH: $4 BIL
A graduate of Rutgers, with a master’s in electrical
engineering and computer science from Stanford
and an M.B.A. from Harvard. Lebanon-born Tamer
and his wife, an MIT graduate, are active philan-
thropists. Endowed the Tamer Center for Social
Enterprise at Columbia Business School in 2015.JOSÉ E. FELICIANO, 46
CLEARLAKE CAPITAL, SANTA MONICA, CA
ASSETS: $10 BIL NET WORTH: $2.1 BIL
A Puerto Rican who studied at Princeton on
scholarship and worked for Goldman Sachs and
Tennenbaum Capital. Started firm with Behdad
Eghbali in 2006. Clearlake focuses on three sec-
tors—software, industrials and consumer services.
Prominent investments include Sage Automotive
and Unifrax.BEHDAD EGHBALI, 43
CLEARLAKE CAPITAL, SANTA MONICA, CA
ASSETS: $10 BIL NET WORTH: $2 BIL
Iranian-born Eghbali may be the world’s young-
est private equity billionaire. He started his
investment career at TPG Capital. He also spent
some time working in business development for
Turbolinux, a software company focused on the
Japanese market.BARRY STERNLICHT, 58
STARWOOD CAPITAL, MIAMI
ASSETS: $60 BIL NET WORTH: $3.1 BIL
Specializing in real estate investments, Sternlicht
founded Starwood in 1991 and later the W hotel
chain and Starwood Property Trust, one of the
biggest mortgage REITs.STEVEN KLINSKY, 63
NEW MOUNTAIN CAPITAL, NEW YORK CITY
ASSET S : $20 BIL NET WORTH: $3 BIL
After earning a J.D./M.B.A. from Harvard, Klinsky
cofounded Goldman Sachs’ leveraged buyout
business in 1981 and then spent years at buyout
firm Forstmann Little. In 1999, he founded New
Mountain Capital, which specializes in midsized
companies. Its May IPO of biopharma services
company Avantor produced a multibillion windfall.T