Michael Woolhouse

And to that end, I actually do think there are both hard and soft skills that are necessary to succeed in the secondaries market.

I could get into the details on the structures and how you align incentives and some of the technical parts of the business.

But I think this...

partnership orientation and the necessity for trust that they are going to appropriately manage the business are different and potentially conflict with the mindset and experience and skills of a private equity investor.

That's exactly right.

So the way that I think about most of the beginning and the end of the private equity sort of skill set is on the buy.

Which company and which sponsor do you want to invest behind?

How do you diligence, underwrite, value the business?

There's then a secondaries package, economic package, all the terms and conditions and the structures that are associated with the secondaries deal.

But once you've made your investment,

It's no longer a private equity investment.

It's a secondary investment.

We are usually a TPG, and this is true for any large lead investor into one of these deals.

You're the largest investor.

You sit on an advisory board.

They report to you, but you're not sitting on the board of the company.

You're not directing management.

You're not in control.

You're passive.

In these deals structurally, the general partner is a seller on one hand out of the older fund and a buyer or investor into the continuation vehicle on the other hand.