Learn more about private markets with this one neat trick (and three fun books)

Here at Prosek, alternative asset management, and especially private markets, are areas where we pride ourselves on being able to deliver the best results for clients, thanks, in part, to our in-depth industry knowledge and understanding of their business at a far more granular level than other communications practitioners or even the journalists that cover them. While everyone can always be learning more about this fast-evolving space, for entry level folks and new joiners, it really can be a lot to get your arms around.

There are myriad research reports, textbooks, podcasts, articles, investor calls and the like out there on these topics, but I have always found that one of the easiest ways to learn something new, is to read (or now that I’ve got a kid to chase around and an addiction to trail running..more often than not, listen to) a riveting work of narrative non-fiction or, occasionally, a very well informed piece of fiction, such as The Counting House, from my summer reading list. So, to help folks learn more about private markets in a way that’s hopefully relatively fun, here are the three books I would propose reading in this order:

• Barbarians at the Gate: A classic book about the pursuit and eventual KKR buyout of RJR Nabisco, the first PE mega deal. In addition to being an exciting read with lots of tension, drama and great characters involved in the deal, the authors do a good job of weaving in the history of the then fairly nascent PE industry, and touch on the pivotal role Michael Milken and the creation of the junk bond market played in making its growth possible.
• King of Capital: The Remarkable Rise, Fall, and Rise Again of Steve Schwarzman and Blackstone: This book is focused on Blackstone and Steve Schwarzman (not to be confused with the book he wrote himself, What It Takes: Lessons in the Pursuit of Excellence) but also gives a great overview of the further evolution of PE, through the lull in the 90s to the resurgent, pre-crisis markets of the early to mid-2000s and the early parts of the GFC. In addition to being a very well written history of a firm and the people who founded it, it also captures a lot of good detail on how PE evolved and grew during this time, with innovations such as syndicated loans (now the primary financing tool for large PE deals), club deals and the like. It was published in 2010, but you can tell the discussion of the crisis is kind of tacked on at the end, so I would really think of it as a great overview from the time Barbarians ends through the GFC.
• The Caesars Palace Coup: How a Billionaire Brawl Over the Famous Casino Exposed the Power and Greed of Wall Street: Written by two great journalists and friends to many Prosekians, Sujeet Indap and Max Frumes, this book tells the wild story of the LBO and bankruptcy of Caesar’s Palace, the well-known casino and entertainment business, a situation that many Prosek clients were involved in. The story is very valuable on its own, as a great discussion of how overexuberant forecasts and too much leverage can bring down a business, but it also provides a lot of technical detail in a very accessible way. This book is helpful for learning about both private equity and credit (not so much private credit as credit in general, with most lessons being applicable across both). It also does a nice job chronologically of picking up around where King of Capital ends, to tell the story of the crisis and its aftermath for PE and distressed debt investors.

Unfortunately, there has not yet been a really good work of narrative nonfiction about the late 2010s, COVID and post-Covid private markets world written, that I am aware of – although I will gladly take any recommendations. In the meantime, as always, I’d encourage anyone trying to stay up to speed on the space (in a way that actually explains the underlying concepts at work) to try to read Matt Levine’s Money Stuff newsletter every day.

All of the above books should be readily available in audio and text formats, free to borrow from most library apps (e.g., Libby, in a lot of places) or on Amazon. Theres’s also Merchants of Debt: KKR and the Mortgaging of American Business about KKR (written in 1992, so on the heels of when RJR Nabisco was going pear shaped). It’s not on the above for the simple reason that I haven’t gotten around to reading it yet. The last time before writing this post I had checked, you had to buy an out-of-print paperback for $50, but looks like it’s on Kindle now, so maybe I’ll give it a read.

Other honorable mentions include: Other People’s Money: Inside the Housing Crisis and the Demise of the Greatest Real Estate Deal Ever Made about Stuy Town, to see how a mega RE deal comes together and then implodes, Den of Theives and The Predators’ Ball – the Junk Bond Raisers and the Man Who staked Them about the rise and fall (before the rise again) of Mike Milken and the impact that had across finance (but as they are very focused on cataloging the crazy antics of the time, they don’t do as good of a job spelling out how it reshaped capital markets as later works do), and The New Tycoons: Inside the Trillion Dollar Private Equity Industry That Owns Everything by Jason Kelly, which is mostly just profiles of then senior PE firm leaders, while also giving helpful history on a range of large firms.