While the private equity industry is massive today, it is still a recent innovation. In fact, the industry got its start about 40 years ago.
And one of the pioneers is Lionel Pincus, who created Warburg Pincus. Unfortunately, he Pincus died over the weekend. He was 78.
With an MBA from Columbia, Pincus began his career on Wall Street as an investment banker (with Ladenburg, Thalman & Co.) No doubt, it was an extremely helpful experience, in terms of learning corporate finance and building a strong network of contacts.
From there, he started his own firm, Lionel I. Pincus & Co., which focused on venture investments. But to get more scale, he merged with E.M. Warburg & Co (an investment bank) to form Warburg Pincus. This was in the mid 1960s.
It was certainly perfect timing as the U.S. was in the midst of a bull market. As a result, a variety of tech companies needed financing.
However, in order to develop a sustainable private equity marketplace, Pincus realized there needed to be huge amounts of capital. To this end, he worked hard to change U.S. regulations, allowing pensions to invest in private equity and venture capital deals. It led to the explosion of activity during the 1980s. In fact, Warburg Pincus was the first firm to raise $100 million (back in 1980).
As of now, Warburg Pincus is a global powerhouse, with more than $29 billion in assets. Over its history, the firm has invested in 600 companies across 30 countries.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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