Jon Winkelried, the co-CEO of TPG, recently spoke with Jason Kelly at Bloomberg Invest New York about the evolving nature of the private equity business, how TPG is positioning itself and his outlook for the market. You can watch the 20 minute interview here.

Some notes / highlights below:

• On his decision to work at TPG: He had a long and interesting career at Goldman but at some point decided he wanted to move on and do other things. TPG wasn’t initially on his radar screen in terms of what he was going to next. As he learnt more about the firm, he felt their range of investing activities was interesting and differentiated. The opportunity to be in San Francisco was also appealing because he had spent almost his entire career in New York. SF is the capital of innovation right now and he felt being there would give him a different mindset and exposure.
• On his biggest surprise to date: It didn’t fully occur to him (from the outside looking in) how difficult it is to invest well. He knew TPG had a long history of success and he expected it to be institutionalised, but it’s not. The success of the business depends fundamentally on the quality of talent at the firm. Just like at Goldman, you need great people driving the process every day.
• On culture shock: Prior to TPG, he had spent his entire career at Goldman. He grew up at the firm and therefore knew all the people and parts of the business. Coming in as co-CEO to a new organisation is difficult. As an outsider, you need to be patient and let the organisation gel with you as you grow into it. Early on, certain people will be much more receptive to your presence, so go there first. Ultimately, however, you have to produce results.
• On the evolving PE business: There is something very robust about having strong multi-strategy capabilities. One of the dangers when you invest in a monoline way is that you can get very insular with your view. Investors who don’t have adequate peripheral vision and access to other inputs can miss things. For TPG, it helps that they have strong credit and growth capabilities. The key is trying to connect the synapses as you think about different investment opportunities.
• On TPG Growth: Developments in technology have created an embedded infrastructure on which various businesses can innovate and grow. As they look out across industries today, they see most of the innovation coming from smaller companies (either early stage venture or later stage growth). If you are not in touch with it, you can miss a lot of things. They are increasingly looking at investing in growth and innovation through their portfolio companies, especially in today’s environment where the deal landscape is very competitive and valuations are high.
• On current valuations: It worries him a lot. He said the level of complacency about where the markets are today is pretty scary. Parallels to 2007/8, with cheap debt and high valuations. He remembers people at the time were doing it but talking about it. Today, nobody is talking about it. Always amazes him how short the memory of the market is. Not sure what might trigger a correction, but feels there is significantly more geopolitical uncertainty today and that could be the main driver.