The Hierarchy of Needs. The Private Equity Approach Explained. It is Almost November! Sadio Mane = Selfless. Bon Jovi & Richie Sambora.
- Quote of the Week: “I think a lot of self-importance is a product of fear. And fear, living in sort of an un-self-examined fear-based life, tends to lead to narcissism and self-importance.” – Moby
We have all run into or dealt with this type of person. Someone who cannot get out of their own way, protects their fragile being by being over-the-top, or always must have the last word. Narcissistic is one way to characterize this type of person, but their self-importance issues, in my opinion, directly correlate with their lack of respect and lack of self-esteem.
Better yet, to get a clear opinion of self-importance, refer to the video below. Cher’s answer to “Do you think men are important” is a classic.
For me to better understand self-importance and how someone morphs into a narcissist and megalomanic, I referenced Abraham Maslow’s “Hierarchy of Needs,” an idea in the realm of psychology proposed by psychologist Abraham Maslow. The basis for Maslow’s theory was that humans have basic needs that must be met before they can perform at the highest level and achieve their full potential.
I am certainly far removed with any skills relating to psychology, but I do believe in the hierarchy established by Maslow. Self-importance and narcissism are defined in varied way by psychologists, but it does seem that they stem from individuals with low self-esteem.
- My previous post detailed how private equity (PE) firms are strategically rolling up home services companies as one part of their overall strategy. Chris Antonello, an operating partner at Plexus Capital, provided the following details of the PE approach called ‘buy and build.’ Chris, many thanks for your input and explanation. Plexus Capital – Private Capital for the Lower Middle Market
Gary: The trend you describe of PE’s “rolling up” or acquiring companies within an industry and then consolidating and leveraging back-room efficiency is alive and well! This approach is commonly referred to by Private Equity (PE) as “buy & build” and is happening in more than just the HVAC and Plumbing industries … landscape maintenance, lawn care and pest control just to name a few others.
The below diagram shows how the PE market works. These entrepreneurial owners operate in the lower middle market where there are hundreds of thousands of existing small businesses and thousands growing into the category each year. About 10,000 of these small businesses are invested in by PE each year. So, to answer your question, there is plenty of “inventory” available for the trend to continue.
The PE’s focus on providing operational and strategic support to acquire and integrate the companies. The companies are acquired as a multiple of earnings. The combined, blended multiple of all the acquisition is less than the resulting multiple when the newly consolidated company is sold the “middle market” at a higher exit multiple. This is how the PE’s make money for their investors.
It is the Last Sunday of October…
- I am not picking on Boeing, but they did report a quarterly loss of $6 billion. Yes, $6B. Boeing is the single largest exporter in the U.S. by dollar value, generating close to $80B in revenue each year. Still, the company has failed to turn a profit since 2018. Their CEO called for a ‘culture change.’ Really?
- The Atlanta Journal-Constitution entertainment section included an article about Young Thug’s home being on the market. It is a beautiful home in the Buckhead area but that is not my point. I can just imagine my father’s reaction if I decided to go by the name of Young Thug. It would have been ugly.
- Buca di Beppo, Rubio’s, Graffiti Junktion, Red Lobster, Tijuana Flats, Burger Fi, World of Beer. These are just a few of the many restaurant chains who have filed for bankruptcy this year. Supply chain and labor shortages are wreaking havoc causing serious margin and cash flow issues. Kudos to restaurant owners and their businesses.
- Speaking of food, Chilean Sea Bass crackers are the new name for the Goldfish cracker. What?
- The World Series brings us the two massive markets of LA and NY. The Fox networks are smiling.
- The NBA and NHL seasons are in full swing.
- The NFL is already in week eight!
- The MLS playoffs are on Apple+.
- College hoops are getting ready for what I hope is a great season.
- The Champions League matches are now in the “league phase.” A very interesting format with each of the thirty-six teams handed eight games against eight different teams — four at home, four away.
- Thanksgiving is less than five weeks away!
- Leaves turning colors – the epitome of Fall.
- May 22, 2025. The Orlando area will be adding Epic Universe to their list of theme park attractions next May. This theme park will be made up of five worlds: Celestial Park, The Wizarding World of Harry Potter — Ministry of Magic, Dark Universe, Super Nintendo World, and How to Train Your Dragon — Isle of Berk. After five years of construction, this should be another fantastic attraction adding to Universal Studios’ portfolio of Orlando attractions. Epic Universe joins Universal Studios, Islands of Adventure, and Volcano Bay. Research firm MoffettNathanson projects that ten million visitors will visit the park in year one. A side note: Orlando and State of Florida transportation chiefs better fast track the changes at Orlando International Airport – and do it soon.
- I may have shed a negative light in last week’s post regarding the top ten earning soccer players earning a combined $983 million. My point, after reading the Forbes article, was to understand the vast amount of money garnered by worldwide clubs and their ability to pay massive wages. On a positive note, there are many athletes, while enjoying their vast amount of compensation earned on and off the field/court, who do give back in a big way.
Sadio Mané is a Senegalese professional soccer player who plays his club football in the Saudi Pro League, along with his duties with the Senegal national team. From humble beginnings to an international soccer star, Mané is one of many professional athletes on a mission to give back. Sadio Mane is amazing.
- Pure Talent. Do you remember the days when MTV actually played MUSIC videos? Do you remember when the MTV Music Awards show was must watch TV? There have been many great performances on various awards shows, but Jon Bon Jovi and Richie Sambora’s acoustic version of Wanted Dead or Alive is fantastic. Pure Talent at its best.