Lee McCabe Calls for Sharper Questions in Private Equity Media

In a recent LinkedIn post, Lee McCabe highlights a perceived gap in traditional private equity media coverage, arguing for a more critical and independent approach to reporting on the industry. McCabe, founder of Not Very Private Equity (NVPE), contends that many existing media outlets face an inherent conflict of interest due to their reliance on access to private equity firms for data and sources.

McCabe articulates this challenge directly in his post:

“The industry it covers is also the industry it needs access to. PitchBook needs data. PE Hub needs sources. Buyouts needs relationships. Most of the ecosystem needs GPs to keep answering calls, confirming details, sponsoring events, sending deal notes, and pretending the press release language has not been boiled until all nutritional value has left the building.”

This dynamic, according to McCabe, often leads to a tone that is overly cautious and deferential.

The ‘Access-Friendly’ Trap in PE Journalism

Lee McCabe elaborates on how this need for access shapes the narrative within private equity media. He suggests that standard reporting often adheres to a polite and professional, albeit superficial, script provided by the firms themselves. This results in coverage that frequently lacks critical depth.

“A deal is announced. The quote says the sponsor is thrilled to partner with an exceptional management team. The management team is excited to accelerate the next phase of growth. The lender is pleased to support. The adviser is proud,” McCabe writes, illustrating the typical, often sanitized, announcement language.

He points out the discrepancy between this public narrative and the likely internal realities:

“Everyone is apparently delighted, which is remarkable given that someone almost certainly overpaid, someone else has a debt covenant sweating quietly in the corner, and three people are already wondering whether the integration plan is fantasy.”

McCabe emphasizes that this is not a criticism of individual journalists, who often must balance their reporting needs with maintaining professional relationships. However, he argues that the business model itself creates limitations.

NVPE’s Mission: Independence and Critical Analysis

McCabe founded Not Very Private Equity as a response to this perceived void. He explains that NVPE aims to provide news, views, and deal analysis without the constraints of needing ongoing access to the firms it covers.

“NVPE exists because private equity needs a voice with fewer hostages,” McCabe states. He further clarifies his independent stance:

“I do not need GP access to survive. The next conference invite is not keeping me up at night. I do not need to pretend every buy-and-build is differentiated because the press release found a synonym for fragmented.”

As Lee McCabe sees it, the core mission of NVPE is to ask more pointed questions about the substance of private equity deals. This includes scrutinizing the financial sense of transactions, the viability of the underlying business thesis, the practicality of operating models, and the assumptions behind valuation multiples.

Questioning the ‘AI-Enabled Platform’ Hype

McCabe specifically calls out the trend of overhyping technological capabilities, such as artificial intelligence, within investment theses.

“Whether the ‘AI-enabled platform’ is just a software company with better perfume,” he questions, highlighting the need to look beyond buzzwords to understand the true value and operational reality of a business.

In conclusion, Lee McCabe advocates for a more robust and critical form of journalism within the private equity space. He argues that the industry’s significant economic impact warrants coverage that goes beyond approved language and offers sharper, more probing questions, ideally before any financial write-downs occur.