Success, it seems, is all in the eye of the beholder.
For most of us, Silver Lake Partners would fit the bill. Since being founded in 1999, the tech-focused private equity firm has amassed $14 billion in assets under management, opened offices around the globe, produced strong returns for investors and diversified its investment strategy. For Silver Lake co-founder Roger McNamee, however, Silver Lake is about opportunity lost.
McNamee was one of several contributors to something called “The Failure Chronicles,” a series of first-person articles included in next month’s issue of Harvard Business Review.
At first glance, I assumed that McNamee would be detailing the struggles of Elevation Partners, the firm he launched after breaking up with Silver Lake in 2003. Kind of a harsh analysis — Elevation actually may produce decent returns thanks to a well-timed Facebook investment — but clearly Elevation hasn’t lived up to its extraordinary hype (and the chances of it raising another fund are remote).
So imagine my surprise when I actually read the piece, and realized that McNamee was talking about Silver Lake. His lead:
To be sure, McNamee is sure to slip in that Silver Lake “is a very successful firm.” But his larger critique is that Silver Lake strayed from its founding principles, and became just another giant leveraged buyout firm. It’s an unforgivable sin to McNamee, and is reflective of the schism that caused his departure in the first place.
McNamee is basically a next-generation version of Ted Forstmann, in that he abhors financial engineering. Instead, McNamee wants his investments to succeed due to operational improvements, even if that means smaller funds, larger staffs and longer time horizons. He writes:
It certainly is possible that Silver Lake may have been something very different were it to have followed McNamee’s advice over that of its other partners. But there is no guarantee that the result would have been any more, or less, successful. In fact, it might have been more of a failure.