On January 26, the Foster Finance Society welcomed distinguished University of Washington alumnus David Bonderman, Chairman and Founding Partner at TPG Capital, back to campus to share his thoughts on private equity, and the broader business climate as part of the Finance Society’s Boardroom Speaker Series. The event was joined by student members of the Foster Finance Society, Dean Jim Jiambalvo, and Foster faculty.
Mr. Bonderman began with a brief introduction of his background, including a discussion of his earlier career as a litigator in Washington, DC and an account of how he got started in investing as COO of the Robert M. Bass Group (RMBG). Afterward, he dedicated more than an hour to student questions about investing, his background, the economy, and his thoughts on future careers in finance.
On investing, Mr. Bonderman noted that generations of low interest rates have made it difficult for the public equity and bond markets to deliver satisfactory returns, while private equity has benefitted from these lower borrowing rates. Additionally, in his view, hedge funds have recently been uncovered as less uncorrelated on the downside than previously believed, but passive investing is no panacea either – its popularity will likely wane in a down market, whenever that day arrives.
When asked about his most memorable transaction, Mr. Bonderman talked about the post-bankruptcy acquisition of Continental Airlines in the 1990s. Not only did this deal, in his words, “put [TPG] on the map,” it taught him and his partners how to make money in an industry Warren Buffet once called “a death trap for investors.” Mr. Bonderman is now the Chairman of the Board at RyanAir, one of the most profitable airlines in the world, and happily noted that it looks like Mr. Buffett “is finally coming around to my side,” referencing Berkshire Hathaway’s recent large investment in the industry.
Mr. Bonderman also highlighted his continued bullish view on the healthcare and technology sectors. In particular, his position on the boards of Uber and AirBnb prompted him to highlight how well the two companies, and their peers, are run by corporate leadership not much older than the MBAs in the audience.
As the evening came to a close, Mr. Bonderman left the Finance Society with one last piece of advice: “Don’t focus on how to break into the private equity industry or anything others tell you to pursue. Pursue something that you are truly passionate about doing and are truly good at doing.” With many Foster MBAs heading into or out of interviews with top firms that very week, his advice was no doubt well timed.
David Bonderman is a University of Washington and Harvard Law graduate and is Chairman and founding partner of TPG Capital, one of the largest and most successful private equity firms in the world. In addition to his Chairmanship at TPG, Mr. Bonderman serves as Chairman of the Board at RyanAir and is on the board of directors at several other multi-billion dollar corporations, including AirBnb and Uber.
The Foster Finance Society is a student-run organization focused on developing the skillsets and networks of Foster students interested in finance through guest speakers, career preparation, and alumni events. The Society’s Boardroom Speaker Series hosts distinguished leaders from the Seattle and broader West Coast finance communities to share their insights on areas such as private equity, banking, asset management, and corporate finance, among others.