Conventional Wisdom: 90% Convention + 10% Wisdom

If there was one thing I learnt in all of my time in private equity that I think could help newcomers, it’s that conventional wisdom is about 90% convention and 10% wisdom. And that’s being especially generous.

In my first few months at my first PE firm, I heard all sorts of hyperbole, such as:

We only invest in the best managers
We never pay above X times earnings
Private equity creates more jobs than any other industry
and much more…

But you soon come to realise that this conventional wisdom isn’t wisdom at all; it’s all convention. If you stick to the fundamentals, stick to creating lasting value for great businesses, and stick to your personal ethics, you’ll go much much further.