IVCA Q&A Profile: Ellen A. Rudnick, Professor of Entrepreneurship, University of Chicago Booth School of Business, Regarding 10th Annual Beecken Petty O'Keefe & Company Private Equity Conference

IVCA Q&A Profile: Ellen A. Rudnick, Professor of Entrepreneurship, University of Chicago Booth School of Business, Regarding 10th Annual Beecken Petty O'Keefe & Company Private Equity Conference

January 19, 2011

CHICAGO - “ On February 25, 2011, the 10th Annual Beecken Petty O'Keefe & Company Private Equity Conference will take place at the Westin Chicago River North. The event has transitioned from a student focused event to one designed to provide information and networking opportunities for Private Equity practitioners. Programming includes notable speakers and a Masters Panel with expert participants from the private equity community in Chicago.

In anticipation of the the conference, the IVCA interviewed Ellen A. Rudnick, Clinical Professor of Entrepreneurship at the Chicago Booth School of Business, and the Executive Director of the Michael P. Polsky Center for Entrepreneurship there. Professor Rudnick has over 25 years experience in the health care and information services industry prior to joining the Chicago Booth faculty.

IVCA: This is the 10th Annual Private Equity Conference in Chicago and the focus this year has shifted towards PE practitioners. What was the decision behind this shift and which PE practitioner would get the most benefit from this event?

Ellen Rudnick: Yes, while the 10th Annual Conference continues to be a student driven and organized event, this shift towards practitioners has taken place over the last few years. Chicago Booth, the Polsky Center for Entrepreneurship and our long-standing partner, Beecken Petty O'Keefe & Company, have worked to make this an industry leading event and one that attracts the appropriate balance of students and practitioners. We have continued to attract some of the best names in the industry to speak and panels that tackle the current and future issues most relevant to the PE industry. In combining knowledge from both the industry and academia, we strive to provide value to PE practitioners that would be hard to find in any other setting. The speakers, panels, discussions and networking made available through this event will truly benefit PE practitioners and industry participants at all levels.

IVCA: What subjects will be covered by the speakers, and what specific issues will be the main takeaway?

Rudnick: The theme for the conference is - ˜A Fund Above the Rest,' meaning how to differentiate your fund and achieve industry leading performance in this new PE environment. One of our main objectives is to provide professional attendees with valuable takeaways to share at their next Monday morning meeting. As a result, our keynote speakers - “ including Phil Canfield of GTCR and Jay Jordan of The Jordan Company - “ will focus on how the industry is changing, current best practices and anecdotes from their careers that help inform practitioners. The panels will also include topics like fundraising tips from LPs, creative financing strategies and regulatory/tax issues that will impact the industry going forward.

IVCA: What networking benefits can be expected from this event? What are the advantages for alumni and professionals who attend?

Rudnick: We anticipate over 150 PE professionals in attendance. This includes Associates, VPs and Principals from PE firms in Chicago and throughout the country. Also in attendance will be representatives from several well known LPs, as well as many top consultants and lawyers that work in the industry. Lastly, the keynote speakers, panelists and professors that are participating in the conference provide access to a really unique group of industry thought leaders. For instance, the - ˜Masters Panel' will include discussion and debate between (IVCA members) Professor Steven Kaplan, Carl Thoma (Thoma Bravo) and Robert Finkel (Prism Capital). There will be ongoing networking with all attendees throughout the day, as well as a cocktail hour following the event. We feel this event provides great value for alumni and professionals alike.

IVCA: In what area of the ever-changing private equity atmosphere can academia make the best contribution?

Rudnick: Academia's role in the PE industry is to educate and prepare students to be future leaders in the industry and also to provide research and analytical tools that inform the industry about performance, operating trends and economic conditions that impact PE.

Preparing students goes well beyond teaching LBO models or looking at the current cycle; the first is largely commoditized and the second changes year-to-year. It's really about teaching decision making and problem solving techniques that are applicable to all parts of a career in PE. Yes, Chicago is a highly quantitative program, but teaching students to understand a model in the context of complex relationships, operational challenges and agency problems is key for educating leaders of tomorrow.

Research and analytical tools can include performance trends that impact fund formation and industry focus, as well as research on how entrepreneurial firms evolve or the characteristics of a successful CEO. Booth Professor Steven Kaplan has written on these topics in the last few years. Academia can also support or dispel myths about the industry such as the impact of PE on employment. Professor Steven Davis tackled this topic as well. Additionally, the faculty at Chicago continues to put out cutting edge research on the overall economic outlook that directly impacts the PE environment.

IVCA: What type of students and backgrounds consider careers in Private Equity, and when did you see this trend become more prevalent?

Rudnick: Traditionally, a career in PE was almost always preceded by years spent in the investment banking and/or consulting industries. While this is still largely true, we are seeing more and more students with deep domain expertise - “ in industries like healthcare, energy or technology - “ becoming attractive candidates to PE firms specializing in those areas. This follows my previous comments regarding the need to bring in operational expertise together with transactional and financial capabilities.

While the PE industry has been of interest to our students for several years, we have seen an increase in students with both prior PE experience and non-prior PE experiences pursuing a post-MBA role in PE. I believe this industry appeals to many of our students who are interested not only in - ˜doing the deal' but who desire to work over time with portfolio companies and be more tied to the performance of the company than traditional post MBA careers in consulting or investment banking allow.

IVCA: What has changed the most in the Booth PE curriculum in the last 10 years?

Rudnick: In addition to Booth's top notch entrepreneurship faculty and specialized classes including Entrepreneurial Finance and Private Equity, plus Commercializing Innovation and Building the New Venture, we have continued to increase the focus on experiential courses and labs. The Private Equity & Venture Capital Lab allows students to work in a PE or VC firm during the school year. This 10-week internship allows students to gain first-hand experience to complement their academics and prepare them for their future jobs. Further, the New Venture Lab and New Venture Challenge give students the opportunity to understand firsthand the challenges of a start-up company. We believe these complementary experiences build a depth of knowledge in this space that is hard to come by in a traditional classroom setting.

IVCA: Which ideas or industries are gaining the most traction in private equity?

Rudnick: While this is certainly ever-changing and different for all firms, we have seen an increased focus in certain areas. For example, healthcare reform has provided a completely new set of challenges as well as opportunities for those firms focused in the space. Emerging markets and distressed investing have also seen an increased emphasis, as firms look beyond traditional U.S. buyouts. In terms of ideas, we have seen a renewed focus on the role of the operating partner. In an increasingly efficient PE environment with intense competition for good deals, many firms have heightened their reliance on operating partners with deep domain expertise in terms of sourcing, diligence and operations. While this is not a new model it appears to be gaining more and more traction for both differentiation during fundraising and portfolio management.

IVCA: Does academia take a lead in advising private equity on investment trends, or does the opposite relationship take place?

Rudnick: This is a difficult question to answer. In some cases I believe academic research will validate trends or successful strategies that practitioners have long supported. In other cases, academic research might actually dispel myths or certain patterns of investment that have not proven successful despite popular opinion. It really depends on the specific issue at hand.

IVCA: Where can our IVCA members get more information or register for the event?

Rudnick: The conference website has all of the necessary details and the ability to register.

IVCA members will find a special discount on the registration site. We appreciate the support and partnership with the IVCA and look forward to seeing many of your members in attendance.