The Exchanges

Q Tell me, you can call yourself up the, the night before your wife has her first child and your first child. What do you advise yourself?

A I think, like, you've figured out. Like, it's, I, I, I don't have a good, good answer to that. Kids are the best. It's, I, what I would just say, my advice to you would be, like, definitely have kids. They make you, they bring, they're definitely the most important thing. And I like, I love, like, my managers are, like, my relationships are, like, my children too, but, like, it's all the cliches. But, um, but also, like, I don't, you just kind of, like, react and you kind of, You know, deal, deal with each situation as it, as it, as it, there's no big grand advice I would have. Like I have my, my wife was a lawyer and now she's a full-time mom. She's like the best mom. Like, so pick the right spouse. That, that, that would be, that would be, uh, obvious. I'm very lucky and we kind of, I try to be, I'm very involved on the weekends with my kids, but, like, it's definitely a divide and conquer, and, like, having, knowing that my wife is, like, on top of everything, so I can focus on Harry and work and all that is huge.

AI assessment note: “there's no big grand advice I would have... pick the right spouse.”

Q Dude, has your intuition ever been wrong on a person in terms of a manager that you've backed? And if so, what did that teach you?

A I don't think I, I mean, it's a boring answer, but I don't think I've had bad intuition. There was a situation where I, and this turns into a positive, but my colleagues knew a person going back, like, 10 years. This, when they were based in Boston. Then they moved to Silicon Valley. And this is the echo. This is the same example. I'm not going to name names, but my senior colleagues knew this person really well when he was like, 24, 25. Then he's like, now he's like 35, 36, right? Not the same person that he was. But I had that firsthand from my colleagues, like, yeah, like we know this. And then I did A bunch of references. I, I had out of the blue, the biggest, some of the biggest companies in the world, founders proactively calling me on references because they told me, you know, and I'm like, wow, oh my God, like this person wants to talk to me.

AI assessment note: “I don't think I, I mean, it's a boring answer, but I don't think I've had bad intuition.”

Q Would you do anything differently now, having had that experience?

A Yeah, yeah, yeah, no, I will, I will say, I will, and now to tack and maybe pat myself on the back a little bit. By the way, that deal hurts more than Some of the stupid deals I did on, like, frothy pricing, because, like, it wasn't like I, like, needed to seek out, like, a buyer. Like, they were coming to me. But the secondary thing is, it's obvious, like, when you want to be a seller and a buyer. Like, and so we sold, we were able to, um, execute a secondary sale of, like, a bunch of, like, tail end stuff with managers we weren't continuing to back at, like, 94 cents in the fall of 21. And it was bought by a another multifamily office who's trying to build a secondary, uh, portfolio. They're like trying to like build the product. I'm like, I am, I was very happy to be a seller of that. I also sold a manager that we got out of because of some ethical situation, um, at one Oh four. Yeah. I mean, so there was, there were, I did execute a number, a couple of, and I have relationship ever core as well as some boutiques and we are now getting every Three to six months kind of pricing because the bankers will work for free. They're pricing the portfolio. And right now I think if we wanted to sell some of our venture stuff, it'd be very unattractive. So it's, yeah, we'd be a buyer right now. I'm a buyer, not a seller, but I want to continually that we were doing it, but I want to lik…

AI assessment note: “we are now getting every Three to six months kind of pricing”

Q I think also the level of cynicism they bring towards things, right? I've spoken to someone like, we'll only engage at 80% discounts. And it's like, that's unreasonable for assets that are actually very premium assets.

A There are a lot of the players out there who will do venture, and there's only a few, I think Lexington will as well, but they, they will not do it at scale. So what Pine Grove is going to try to do is, you know, be a solution provider, At fifty million plus. And it's not to say there's not like other people that will do it, like I'm sure there's, but there's a, it, it, it, it is a great market opportunity. I'm really excited about that one. I, I think it's gonna take time to play out, but when things were going nuts in 20, 21, it was like, I would see pitch books, like I'm gonna go back to like buyouts a little bit, but Every mid market, it was just, like, levered beta, right? Every mid-market fund was putting up 50, 60, 40, 50% IRRs. You couldn't tell, like, people who had no skill, number, everything looked great. And, of course, in venture land, it was, like, just beyond silly. And I feel like we were doing very, like, nuanced, thoughtful work, but you couldn't tell the difference between that and not. And so, in this new environment, I think that, you know, The tide is going out. It's going to expose people, and, you know, I think our, our relative returns will be, even if the absolute returns are not quite as high, the relative returns will be better, and I feel like we've taken a lot of our lumps. Like, you talked about the venture marks earlier. Like, I feel like we've …

AI assessment note: “So what Pine Grove is going to try to do is, you know, be a solution provider”

Q Dude, has your intuition ever been wrong on a person in terms of a manager that you've backed? And if so, what did that teach you?

A I don't think I, I mean, it's a boring answer, but I don't think I've had bad intuition. There was a situation where I, and this turns into a positive, but my colleagues knew a person going back, like, 10 years. This, when they were based in Boston. Then they moved to Silicon Valley. And this is the echo. This is the same example. I'm not going to name names, but my senior colleagues knew this person really well when he was like, 24, 25. Then he's like, now he's like 35, 36, right? Not the same person that he was. But I had that firsthand from my colleagues, like, yeah, like we know this. And then I did A bunch of references. I, I had out of the blue, the biggest, some of the biggest companies in the world, founders proactively calling me on references because they told me, you know, and I'm like, wow, oh my God, like this person wants to talk to me.

AI assessment note: “I don't think I've had bad intuition.”

Q How do you manage them at scale, Peter? You are like, you're also a real partner and friend to us. How do you do that?

A I work hard. Yeah. I have good teammates. Um, I have a really, you know, Kyle, who you know, you got, but, uh, it's, it's a lot. There's a balance between, cause I've, you know, a couple of, I have an 11 year old daughter, six year old son, trying to balance family and work and all the travel. Um, but I don't go to that many, I don't go to every annual meeting. You know, it's like, you have to pick your spots and I wish I could do more than I do, but like I, you know, there's the balance between that and then Um, if you have too many cooks in the kitchen, you can't, you know, so I'm, I'm working on like the time piece is like the thing I'm constantly working on.

AI assessment note: “I don't go to every annual meeting. You know, it's like, you have to pick your spots”

Q Do you think people overemphasize how stable endowment fund money is?

A There is that herd mentality, right? And so, and there's currently, like, the seed manager, and I'm like, you kind of want the different food groups. Like, you know, you want to have your endowment, your single and multifamily office, which I'm biased, but I think is the best, um, maybe a fund of funds that can be, like, they're really good people and be thoughtful because, I mean, for example, like, I don't wake up every day thinking about, like, venture and stuff, and so if you, if you have a venture specialist fund of funds, like, they're gonna be, there's things they're gonna do that can be more thoughtful than, than, you know, more diversified pool. If you get money from endowment A, endowment B, endowment C, endowment D, that all, like, are very close to each other and talk to each other, and then one of them leaves, Then they might all leave. So having diversity of, like, mindset, and you could probably, I mean, there's a crew of LPs that I do stuff with, I mean, but I think we think generally independently, so maybe you need to be thoughtful and like, oh, they all do a lot of the same things together. Maybe, like, it would be a problem if

AI assessment note: “one of them leaves, Then they might all leave.”

Q Well, how do you feel about the compression and deployment timelines? You know, we saw people move from three years to 12.

A It's so obvious in retrospect. Right. I mean, but I, I just want to know. What does that mean? So Warren Zev, for example, we, we both know and love. He's just very transparent about what he's going to do. So I would size my commitments accordingly. So it's like, if you tell me you're going to put out your fund in six to 12 months, I'm just going to size you at a half bite. Understand expectations on what you're doing. Um, But a lot, I mean, the vast majority of my managers basically were putting out their, put out their funds in 20, 20, 21 in like a year. We now look back on that, and it's obvious. At the time, I said SPACs were gonna, I made the comment, like, I was like, 85, 90% of these SPACs are gonna be a disaster. And it turns out I was, I was wrong. I was too generous. So I'm not, but on the fun size, I mean, on the deployment piece, I think I was less, uh, perceptive of, you know, I mean, you kind of realize like, wow, this is crazy. It's not going to go on forever, but like.

AI assessment note: “on the deployment piece, I think I was less, uh, perceptive”

Q Would you do anything differently now, having had that experience?

A Yeah, yeah, yeah, no, I will, I will say, I will, and now to tack and maybe pat myself on the back a little bit. By the way, that deal hurts more than Some of the stupid deals I did on, like, frothy pricing, because, like, it wasn't like I, like, needed to seek out, like, a buyer. Like, they were coming to me. But the secondary thing is, it's obvious, like, when you want to be a seller and a buyer. Like, and so we sold, we were able to, um, execute a secondary sale of, like, a bunch of, like, tail end stuff with managers we weren't continuing to back at, like, 94 cents in the fall of 21. And it was bought by a another multifamily office who's trying to build a secondary, uh, portfolio. They're like trying to like build the product. I'm like, I am, I was very happy to be a seller of that. I also sold a manager that we got out of because of some ethical situation, um, at one Oh four. Yeah. I mean, so there was, there were, I did execute a number, a couple of, and I have relationship ever core as well as some boutiques and we are now getting every Three to six months kind of pricing because the bankers will work for free. They're pricing the portfolio. And right now I think if we wanted to sell some of our venture stuff, it'd be very unattractive. So it's, yeah, we'd be a buyer right now. I'm a buyer, not a seller, but I want to continually that we were doing it, but I want to lik…

AI assessment note: “now to tack and maybe pat myself on the back a little bit”