David Breach at Milken Conference
David Breach Attends Milken Institute’s 2022 Global Conference
Vista’s President and Chief Operating Officer, David Breach, was invited to Milken Institute’s 25th Global Conference as a panelist to discuss private markets in periods of uncertainty. Breach shared his thoughts on how Vista’s scale and focus position the firm and its companies for success while also addressing the broader dynamics at play in today’s markets. The responses below have been adapted from the full conversation, which can be viewed unabridged on Milken Institute’s website.
Increased Capital and Competition in the Market
Moderator: “How does the scale of capital in the market affect investments, exit opportunities and the industry as a whole?”
Breach: “I remember in my early days in private equity, doing a deal with a $100 million equity check was a big deal — and that was less than 20 years ago. The increase in capital has increased competition, so as you’re in the market, you’ve got to have a value proposition to differentiate yourself.
“As an industry, we’ve got amazing tailwinds, which creates more folks that can buy businesses from us and opens up the aperture of our exits — but it also creates competition on the front end. So you’ve got to be thoughtful and disciplined about how you’re deploying capital. You also have to think about the different processes you’re in and identify which ones make sense and which ones don’t, because there’s always going to be someone that’s willing to pay the price. And you’ve got to decide, do you have something differentiated to advantage yourself in a process?
“We’ve focused on how we make our scale a competitive advantage in our market. Because we’re concentrated on enterprise software, and we’ve built a portfolio of over 80 companies that are all fundamentally doing similar things, we’re keenly focused on how we leverage that platform to help our companies perform better and benefit from the ecosystem we’ve built.
“When we bring our CEOs together, and you sit in a room with 80 other CEOs running similar businesses, that’s very powerful. So, we’re trying to use our scale to accelerate our performance as opposed to it being something we have to overcome.”
The War for Talent
Moderator: “The competition for human capital is one of the greatest challenges facing companies today. How is Vista approaching training and hiring at the firm and across its portfolio?”
Breach: “Most companies hire someone and give them two weeks of training. And then they expect them to be in their job, whether it’s in software development, sales, etc. Our folks go through sometimes between nine months to a year of training before they’re given a full-time role at the company.
“One of our key areas of focus is around manufacturing talent because it’s impossible to compete with Google, Amazon and Facebook for software talent. The other thing we’re focused on, both at the firm level and across our portfolio, is diversity, equity and inclusion. Neither the asset management space nor the technology space have historically been the most stellar industries from a DE&I perspective. The war for talent allows you to rethink how you’re going to meet your talent needs in innovative ways that help you pursue your DE&I goals and move the needle.
“We host internship programs designed for students that have finished their freshman, sophomore or junior years. Our junior internship program is really trying to identify people we can hire as full-time analysts at the firm when they graduate. It’s been incredibly effective because we’re able to get people interested in the finance space that are often on an educational path where they haven’t previously been exposed to it. When you give someone an internship experience, it creates and stimulates their interest.”
Advantages of Private Equity Amid Market Fluctuations
Moderator: “With high volatility and uncertainty in the market, what can private equity offer that public markets can’t provide?”
Breach: “One of the benefits of being in private capital is you’re generally under no fundamental pressure to sell. Our investors look for us to be smart stewards of their capital, and they understand that sometimes you have to hold a business for another year because it’s just not the right time to sell. Sometimes a company may be performing well, but it’s not the right market to sell and get the returns that you want. In the private market space, we’re not under the pressure of the day-to-day stock ticker, so you can make those long-term decisions that are in the best interests of your investors.”