Dipan Patel on Permira’s ‘Artisanal’ Approach to Private Equity

**Dipan Patel** (0:05)
Good things happen to good companies, and bad things happen to bad companies. And I think what AI is doing is just accelerating those things.
So if you're a business that aggregates commodity data, sells it through a commodity channel with a commodity UX, you were probably already on a decline curve. And if you're a company with proprietary data and with network effects, an incredibly strong brand, and you built a user experience, which is built for the idiosyncrasies of a vertical, probably you're going to be on the right side of AI.

**Allison Nathan** (0:43)
Welcome to Goldman Sachs Exchanges Great Investors. I'm Alison Mass. I'm about to sit down with Dipan Patel, co-managing partner and co-CEO of Permira, a global investment firm spanning private equity and credit with approximately $100 billion in assets under management.
So welcome to Great Investors. So great to have you here.

**Dipan Patel** (1:07)
Thank you for having me.

**Allison Nathan** (1:08)
So everyone remembers their first job, but yours must have been especially memorable. You worked at Arthur Anderson in 2002, and then after university, you went to Lehman Brothers. Those must have been fascinating experiences. So tell us a little bit about them.

**Dipan Patel** (1:24)
Yeah, that's right. I worked at Arthur Anderson in 2002 during the Enron scandal, and then Lehman Brothers in OA, obviously during the global financial crisis. Formative to see two iconic companies struggle and then eventually fall before us, 30 was something that once you see it, it's hard to unsee it, and leaves lasting memories and a lot of learnings.

**Allison Nathan** (1:48)
Yeah. So tell us about Permira today. For those who aren't familiar, what makes Permira unique? And maybe tie in some of the lessons that you learned from earlier in your career that have helped you lead Permira today.

**Dipan Patel** (2:01)
So Permira started in 1985 as four people, $48 million from Schroeder's Bank. Over the last 41 years, if you wind the clock forward, the business has raised more than $100 billion of capital. We have about 500 people, 350 investors, 16 offices globally.
We invest in private equity and in credit. Our private equity business invests really across four sectors, consumer, healthcare, services, and technology. It does it primarily across the mid-market. So think businesses in the 200 million EV up to 2 billion EV range. And everything we do is really significant minorities, so governance with teeth, all the way through to full control, and to a very active owners. Then our credit business invests across private credit through to liquid credit and right through the risk return spectrum. You asked the question around what makes us unique and what was our edge. I'll say a few different things. The first thing is, Permira raised the first pan-European fund in the late 90s. And as a result, we built boots on the ground right across Europe and just dense networks, relationships, footprints.
And that served us really well. That's 50% of our investing today.
At the same time, we're probably one of the very few firms that have an equal weight of the US and European business. About 50% of our people sit in the US, 50% are in Europe, 50% of our capital deployed and capital returned have come from both regions. So that's one. We have what we call digital core multi-sector. So we're very deep in digital. But the most interesting aspect of our investing has always been at the intersection of digital and our real economy sectors, so consumer healthcare and services. And that's where we have a particular edge, like a real economy business, where there is a significant value creation underwrite in the realm of digital is Power Alley for Permira. We have a very strong growth DNA, so we've probably got one of the fastest growing portfolios in the larger cap end of PE.
Our portfolio consistently grows organically, low teens, top line, and significantly higher at the bottom line. That's by design. We overindex to growthier businesses.
The typical Permira business will be underlevered, undermargined, and overgrowthed, and we really like that formula. In the end, when you're selling businesses, particularly selling businesses to strategics, you are trying to convince someone that there is a long growth runway, and you don't get there by underinvesting in a business and milking a business over your investment period. So we tend to invest really deeply in new products, new channels, new geographies. We often do business model transitions, but growth underwrites are central to anything that comes through our investment committee.
And then the last thing is we are a private company. It's not unique. There are a bunch of scale private equity funds. It's increasingly becoming important, but over time, we're a private partnership. Since inception, that's not changed. We're owned by our partners, and that goes ultimately to outcomes and performance and incentives and alignment.