Hellman & Friedman

In 1984 Warren Hellman and Tully Friedman left their hedge fund to do something unusual for private equity. They bought profitable companies and left them alone. Most PE firms bought companies slashed costs and sold them in five years. Hellman and Friedman bought boring profitable businesses and held them for decades. They bought Dr Pepper. They bought the H&H Group, a luxury real estate marketplace. They bought restaurants and software companies. The pattern was consistent. The companies had strong cash flows and loyal customers but were not optimising for growth. Hellman and Friedman would invest, improve management and step back. They did not fire staff. They did not load debt.