Yes, private equity is still a people business

Before it was called private equity, the banks had a different name for it. "The banks used to call it financial entrepreneurship," recalls Brian Sheth, Chief Investment Officer and Founder of Haveli Investments. "The Financial Entrepreneurs Group." The people who built PE were entrepreneurs who happened to work in finance, drawn to the messy, human work of backing operators and building companies.

Somewhere along the way, as the industry grew many times over and hardened into a prestige career track, the selection filter shifted. And Sheth, after roughly 30 years of watching who gets hired and who succeeds, has noticed something he finds genuinely puzzling. "I'm surprised by how many people, especially young people, are attracted to private equity who don't seem to really like people, or aren't particularly excited to go out and meet entrepreneurs or go out of their way to spend time with folks, if there isn't like an immediate transaction." On a recent episode of Carried Interest, he framed it as puzzlement, an elder noticing a drift: a people business that has come to hire for pedigree and modeling skill, and away from the one trait that built it.

What actually separates the great ones: genuine interest

The easy misread here is that Sheth is describing charisma, and that private equity should hire for the biggest personality in the room. He isn't, and his own examples make that clear. Asked about the legends of the business, he names Henry Kravis and George Roberts, "two of the most fun, interesting people in the world to be around," and then makes this point: "both their personalities are very different, but in their own ways they're extraordinarily engaging."

Very different personalities, but both engaging. That combination rules out the extrovert theory. The trait Sheth is pointing at is genuine interest in other people, the kind that makes someone actually want to spend an afternoon with a founder when there's no deal on the table. An introvert can have it in abundance. A gregarious, back-slapping dealmaker can completely lack it. Are you actually curious about the person across the table when nothing is being transacted? That’s the question he’s getting at.

Where it honestly doesn't matter as much

Of course, liking people isn’t a universal requirement in every corner of investing. Sheth is careful about this: "Rarely does that work. I have seen it work with a couple folks. They tend to be more like distressed investors."

That exception makes sense. Distressed investing is a more analytical game, with fewer stakeholders to win over and more of the edge coming from rigorous, unsentimental analysis of a broken balance sheet. A brilliant distressed investor who would rather read an indenture than have lunch can do extraordinarily well. So the claim is probabilistic rather than absolute. In most of private equity, where the work is fundamentally about persuading operators to partner with you and staying close to them for years, the person who doesn't like people rarely thrives. In a specific, analytical niche, they sometimes do. Both things are true, and the honest version of the argument holds them together.

You can't fake it, so don't try

If genuine interest in people is the trait that matters, the obvious temptation is to manufacture it, to coach the reserved analyst into performing warmth. Sheth's advice runs directly against that, and it applies whether you're naturally outgoing or naturally quiet. "Try to be the best version of yourself that you are. Don't try to be anything you're not. Don't try to emulate those qualities because it's going to come off as artificial."

This is the opposite of a charm-school prescription. Sheth is telling everyone to stop performing a personality and start building a genuine habit. The reserved person who is sincerely curious about others doesn't need to fake gregariousness, and shouldn't. Instead, actually care about the people you work with, and to let that show up in your own register instead of a borrowed one. Founders and colleagues can tell the difference between real interest and a technique, and the technique always reads as exactly what it is.

What it means for who you hire

If you take Sheth's observation seriously, it changes what you screen for. Most private equity hiring optimizes for the things that are easy to test: the modeling exercise, the pedigree, the case study. None of those measure whether a candidate actually likes people, which is the trait most predictive of long-term success in a relationship business.

So look for evidence of it directly. Does the candidate maintain relationships that have no transaction attached to them, people they stay in touch with simply because they value them? Can they name someone they went out of their way to help with nothing to gain in return? Those questions are harder to game than a modeling test, and they get at something a spreadsheet never can. You're hiring for the underlying disposition that made this a people business in the first place, and that compounds across a career.

That, in the end, is the value Sheth says he came to prize most, and credits Frank Quattrone with teaching him: "How well you treat people is much more important than how smart you are." It's an unfashionable thing to say in an industry that recruits on raw intelligence and prices itself on being the smartest party at the table. But across 30 years, it's the lesson he keeps coming back to. The people who built private equity liked people. The ones who endure in it still do.