In their first-ever long-form interview, in this Australian Investors Podcast episode Owen Rask is joined by Dean Price, Managing Director of Credit and Emerging Companies, and David Scammell, Managing Director of Private Equity and Advisory; from Washington H. Soul Pattinson & Co. Ltd (ASX: SOL).
Both Dean Price and David Scammell are integral members in the Washington H. Soul Pattinson business, especially with regard to private equity, early stage investing and private credit.
In this podcast with Soul Patts’ Dean Price & David Scammell:
- What is private credit?
- Soul Pattinson’s private credit investing process
- Soul Pattinson’s criteria for private equity
- Examples of private investments going gangbusters for WHSP
- Soul Pattinson’s key thematics
- How Soul Pattinson tries to find emerging companies like TPG Telecom (ASX: TPG) or New Hope (ASX: NHC)
- Advice to their younger selves
Questions with Dean & David
Dean, let’s start with you. You straddle emerging companies and private credit. For listeners who are still wrapping their head around private credit, can you explain what a typical day as a private credit investor would like like? How deals come to you, what you actually get to see, types of businesses, etc.
David, how does what Dean looks at compare to what you and your team are looking at on the equity side?
To the average person on the street private equity might be a bit of a dirty term. People would think barbarians at the gate, leveraged buyouts and IPOs like the infamous Dick Smith IPO. But coming from the Sol Patts angle and heritage, what does private equity mean in the hands of Sol Patts? How does Soul Patts compare to a traditional fund?
I’d imagine an advantage is Sols isn’t seen as an investor looking for a five year turn around/exit? But saying that, do you or can you participate in these shorter term plays?
How about on credit. How are deals typically struck in terms of yield, duration, security, default rates, etc?
Can you each provide an example where you (or the Sols team) have worked with a management team, and been a positive proactive strategic partner for the long term? (if it’s a lesser known company, set the scene by explaining the business and its predicament)
TPG and New Hope have been wonderful investments for Sols. How do you go about finding companies that you can hold for decades, potentially take to IPO, or keep holding? Is that the mandate in the private equity and emerging companies side? (Guys, specifically, what I’m looking for is how you process for finding these businesses, with almost permanent equity, differs to traditional PE or managed funds – I’m trying to let listeners know that this is a huge competitive edge for Sols and it is enduring)
Dean, how many companies do you hold? Given Sols is such a diversified investment company does this give you the freedom to be more concentrated then say a standard small cap equity manager?
What is the role of emerging companies in the terms of Sol Patts overall performance? Do you only look for companies that can grow into the strategic positions Sols is known for?
Does the listed/public company investment approach differ in any meaningful way to your private company investment process?
Do you have any other examples of where Sols has played a role as both a credit and equity partner?
When I look at Sols, I see a huge opportunity for Sols to open its doors to outside capital or even play a bigger role in the private credit ecosystem here in Australia. What role does private credit play within the return profile of SOL parts?
If you could go back in time and tell your younger self something about business/investing/finance what would it be?
Previous Soul Patts podcasts on the Rask network
Washington H. Soul Pattinson’s (ASX:SOL) unshakable advantage, with CEO Todd Barlow
Rob Milner on The Australian Investors Podcast – Full Interview
Tom Millner on coal stocks, founder-led businesses & true long-term investing
