In this episode, Scott Becker breaks down five key business news stories stories,
Chapter 1: What are the top business news stories today?
This is Scott Becker with the Becker Private Equity and Business Podcast. These are five stories that we're following today. It's a day where the markets are closed, so enjoy the day, take it easy a little bit, and so forth. But here's five stories we're following today. First, the markets are closed today, probably a welcome day for neurotic investors and market watchers.
Chapter 2: Why is KKR focusing on long-term holdings?
Take a breath and enjoy yourself. KKR moves to long-term holdings in its strategic holdings group and doubles down by putting more money into a few of the companies it holds in its long-term portfolio. And this is interesting for a variety of different reasons.
First, something that companies are putting money into, they're putting more money into 1-800-CONTEXT, Heartland Dental, and USI Insurance Services. Now, that's in and of itself, not that interesting. What's more interesting is it, like some other PE funds, continues to double down on diversification from its traditional private equity business.
Chapter 3: What challenges are private equity firms facing?
This may be in part because the traditional buy, build, and sell, traditional model of PE is struggling right now. Longer and longer hold periods, harder and harder to exit and get profits and so forth. So what we're seeing with a lot of these companies is If you watch the financial reports recently of KKR and Carlyle Group, record fee income, but less exit profits.
Chapter 4: Who is Larry Fink and why is he significant?
The third story I'm following today, the journey of billionaire Larry Fink. And Larry Fink is fascinating. He's the CEO, long-term CEO of BlackRock, founded in 1988. It's the largest asset manager in the world with $10 trillion plus under management. Recently, the board awarded him carried interest on some of the firm's funds. Fourth, his net worth is right about $1.3 billion.
Chapter 5: What changes has Larry Fink made in his management approach?
Fifth, he was one of the biggest discussors of ESG and DEI for several years. They've now stepped back from that significantly and also withdrawn from the Climate Coalition. He, by background, is a UCLA grad and his dad owned a shoe store. Just a fascinating, rags-to-riches story. Fantastic, fantastic, fantastic. Amazing what he's accomplished.
I've often been negative on him because he was so out in front of playing social justice warrior. But at the end of the day, a really impressive business career and so forth. I love many of the thoughts from Bob Parsons' book, Fire in the Hole. Bob's the founder of GoDaddy and Parsons Extreme Golf, PXG. Here's one of his quotes. Quotes, here's what I know for sure.
The success or failure of any business revolves around the leader. To be successful, leaders need to do something they really like to do. I think he's right on in this and so many things that he says in his book, Fire in the Hole. Finally, Seth, three quick talking points from healthcare from a keynote talk we're giving soon. And I'll, again, do a separate podcast on this.
First, health care is a huge supply and demand problem. No matter how you slice it, we've got a growing population and not enough doctors, providers, nurses, just a serious, serious math problem. And I don't think that's getting any better. Three hundred forty million people and only a million sixty thousand physicians. Great shortages, primary care physicians and specialists.
Concierge growth is off the charts because people can't get a doctor. Just really in trouble here. And you'll hear longer and more points on it in our further discussion. The second point is access is everything. Politicians discuss coverage and managed care, but few focus on real problem solving. How do we address truly the supply-demand problem?
Politicians seem farsely immune from all this, but we all face access problems that are getting worse. When Doge talks about cutting $80 billion a year from healthcare, can they differentiate what's needed in administrative versus what's waived? How do we create more access? Currently, medical loss ratios are up at about 85%. That means 15% is going to administrative costs.
Isn't there a way to improve that? But then how do we invest in more doctors, nurses, and providers to go with everything else? The third point I'll say about healthcare is, It's tech plus solving the shortages to make this work. It's not just tech. Tech is often an incremental game changer, not a transformative game changer. Very, very important, but we still need more providers.
Tech is critical, but not fully in itself a panacea. Trust plus verify. Use tech, adopt tech, AI, everything else, but more doctors and nurses and providers too. That's the thoughts around tech and healthcare and providers. Thank you for listening to the Becker Private Equity Business Podcast. We'll be back with you with a couple other episodes today. Thank you for listening.
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