Corporate leaders talk tactics

Sitting around tables adorned with baskets full of rolls and plates dressed with fresh salads, MBA students, aspiring entrepreneurs, investment bankers, consultants and Wharton alumni gathered to discuss the importance of private equity in today's market. Friday, Wharton held its ninth annual Private Equity Conference at the Park Hyatt Philadelphia at the Bellevue. This year's theme was "Traversing the Private Equity Landscape onto the Road that Lies Ahead." Three keynote speakers highlighted the conference, including Leon Black, a founding partner of Apollo Management, Lawrence Schloss, the global head of the Private Equity Group Credit Suisse First Boston and Edward Mathias, the managing director of The Carlyle Group. Once a student graduates from Wharton, does he actually leave? The answer, according to Schloss, is quite simply no. Schloss, a 1978 Wharton graduate explained at the luncheon that everything he learned as a Wharton student he has been able to apply to his current position in the business world. As conference attendees ate their chocolate mousse cake, Schloss spoke about the current environment surrounding the financial market and how Sept. 11 and the uncertainty of the U.S. declaring war on Iraq has caused a lack of consumer confidence in the market. The war on terrorism has impacted everyone, and "the dollar is tanking," Schloss noted. Moreover, there was a $6 billion U.S. public equity loss as a result. "There is a bubble, it bursts, you lose a lot of money, and as an investor, you lose confidence," Schloss said. Thus, the market dropped -- existing portfolios were hurt, bankruptcy filings are on the rise and venture capitalists who extended themselves by investing in too many companies now must only save the best companies. And now, there are very little exit opportunities. "The economy is stuck until we figure out what to do with Iraq and terrorism," Schloss warned. Yet, the current situation is still good for the private equity market, Schloss said, and those with a long-term prospective realize that private equity should ultimately provide decent returns for venture capitalists. Jeffrey Kerwin To, a first-year Wharton MBA student and business consultant at IBM Global Services, said the private equity conference allows for Wharton students and aspiring businessmen to search for "sources of finance" within the private equity sphere, as well as learn to "focus on how to finance" in this unstable market. So while public equity has been challenged since Sept. 11, it still provides hope for investors. Schloss concluded his speech by noting that now is the time to invest. "People are going to make some great investments now and two to three years from now [and] make lots of money getting out" of these investments, he said. The conference had a three-fold mission: to strengthen the private equity network, continue education and attract more senior alumni into the Wharton sphere. Moreover, the conference also enabled a wide variety of businesspeople to expose themselves to the world of private equity and learn about the long-term effects of investing in today's economy. In addition to the speakers, there were also several panels held throughout the day ranging from topics on investing opportunities to possible career paths in the private equity market. The Wharton Private Equity Club was founded by Wharton alumni in order to increase people's awareness of the Wharton School and provide support for its students, especially those working toward their MBA. The conference was coordinated by Wharton MBA students Kyle Cruz and Jonathan Goodman in conjunction with the Wharton Private Equity Club. Key sponsors included Goodwin Procter, German accounting and consulting firm KPMG, Greater Philadelphia Venture Group, Mellon Ventures, Inc., Morgan Stanley and Wharton Private Equity Alumni Network.