Divorce makes you a better investment, says Jon Moulton

by Stuart Rock - Wednesday, 14th May 2008 - (2) comments

Divorce rates are an effective indicator of managerial capability, says private equity guru Jon Moulton

Statistically, it is best to back a manager who has been divorced, says Jon Moulton of Alchemy Partners. Speaking at the Real Deals/Directorbank "Buying into buyouts" conference, he entertained an audience of buyout/buyin candidates with his frank assessment.

"A CEO with one divorce is a better manager than one who has not been divorced. It is a statistically significant difference," he said.

However, a CEO with two divorces under his or her belt is "dire." Moulton reported a "60 per cent loss rate" from this category.

And, as for those with three divorces, he had experienced a "100 per cent loss of capital."

As an investor, his top two questions for any prospective buyout leader ought to be: "how much money are you looking for?" and "how many divorces have you had?"

On a related note, Moulton also reckons that, on balance, it's better to back a manager who has had an office affair. (For male managers, the targets tend to be the HR director or the "girl in accounts payable.")

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2 Comments

May 23, 2008 7:49am
suzymiller Says:

I can certainly believe that men who have experienced one divorce may have discovered that fighting it out with lawyers cost them a bomb and destroyed relationships for good with ex wives and damaged their children, and that just maybe working collaboratively was a better way forward. A good manager is a natural collaborator and the British are only just starting to realise how much choice there is over HOW you get a divorce - why be left bitter and twisted when you could launch yourself forward and start your life over in a positive way? Matrimonial financial mediation, for example, can save thousands and even keep you out of court all together, and boy do the children benefit. For those interested in starting over in a positive way, there is the UK's first ever divorce fair happening in Brighton on 11 October 2008 at Brighton Racecourse. http://www.startingovershow.co.uk

May 22, 2008 10:38pm
Kirsten Gronning Says:

On the same theme - relationship splits may inspire women to start up in business. A study by The Enterprising Women project showed 18% of the women business owners studied between June 2006-June 2007 were single mothers. (see the Enterprising Women Community Statistics report, June 2007)