The Ledger
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Lacaillade: Single family offices require at least $5B net worth to justify
“Like, I mean, I think it's definitely not a billion dollars. Like, I think it's, you have to be maybe worth ten billion. At least five.”
Lacaillade: Optimal private equity portfolios require 60 to 70 active GP relationships
“I think it's the diversification piece in, in private equity, the way to build an optimal portfolio, which I think is, I have 60, 70 active relationships in private equity. I think there's a lot of people out there that say it should be like 20 to 30.”
Lacaillade: SCS halves commitment sizes for VC funds deploying within 6-12 months
“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.”
SCS Financial Took 25-30% Venture Write-Downs But Maintains 29% Net IRR
“I feel like we've written down our portfolio In the venture, when I say we, our managers, I don't know, it's like, 25%, 30%? After having years of hundred percent IRRs. So it's still good. It still looks good. I think it's a 29% Net IRR after all that, and the…”
Lacaillade: Track record ranks fourth or fifth when evaluating fund managers
“Track record is important. Like it tells you, do these people know how to invest? Like, are they smart? But for me, and I say this often, it's like, maybe it's number four or five on my list of things that are important, like the quality of the team. And we ca…”
Lacaillade: Lower middle market buyouts will generate venture-like returns
“I'm spending like, the vast majority of my time on lower middle market buyouts. And I'm so excited about like the opportunities that I'm seeing. And actually, I'm going to generate like venture-like returns. In small cap, EBITDA positive businesses, right?”
Lacaillade: Venture portfolios have absorbed 70-80% of valuation write-down pain
“And I don't think we've taken all our pain. I think there's more to come, but I think we've taken like 70, 80% of it.”
Lacaillade: SCS exited manager at 104 cents due to ethical issue
“I also sold a manager that we got out of because of some ethical situation at one Oh four.”
Lacaillade: SCS sold tail-end fund stakes at 94 cents in late 2021
“We sold, we were able to 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.”
Lacaillade: SCS's 2020-2021 co-investments will yield 2-3x instead of 4-6x
“If I look back and I did a bunch of co-investments, like in what I believe to be like great, in some cases, great companies. Right. But they're going to have to grow into their multiples. So rather than making four to six acts, we'll make two or three acts.”
Lacaillade: SCS Financial's IC rejected under 5 deals in 12 years
“The investment committee I mean, I can count on one hand the amount of funds or co-investments that have been declined in my 12 years, and I remember them well.”
Lacaillade: SCS Financial Is Not Invested in Benchmark but Wants to Be
“Yeah, it's a good question. Probably, probably benchmark.”
Lacaillade: Tenzing co-investment is on track for a 4x-plus return
“Mentioned a situation with a London manager, Tenzing, where there was a co-investment. I was on the LPAC and basically very track. It's going to work out. It's going to be like a Forex plus deal.”
Lacaillade: SCS Financial was one of few early institutional LPs in Founders Fund
“We were one of the only institutions in it. I mean, there were not that many institutions. Now everyone wants to get into it.”
SCS Financial tightens LP commitments, force-ranking venture managers
“We are very tight. But we make exceptions for exceptional managers, but it is causing a force ranking of things right now.”
Lacaillade: $100M family offices should use multifamily offices or fund-of-funds
“You should probably, in that scenario, you should either partner with a multifamily office like SES, or you should invest in a fund of funds.”
Lacaillade: SCS Financial accounts for 50% of capital in select funds
“I'm like half a couple of funds.”
Peter Lacaillade allocates about 70% of personal capital to private equity
“I'm probably like 70, but I eat my own cooking.”
Lacaillade: SCS is currently a buyer, not seller, of venture assets
“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”
SCS Financial uses 48-hour memo approvals to bypass formal IC meetings
“We do standing investment committee Every other Monday, right? But for co-investments, there's no, we don't need to convene investment committee. You send out a memo, and the investment committee has 48 hours to reply.”
SCS Financial Writes $20M-$100M Fund Checks and $5M-$15M Seed Checks
“My typical investment is somewhere between kind of 10 to 25. I'll go up to 50, I'll go down to five. Funds, I will write checks between 20 to like a hundred million. And actually in the seed venture, it's like kind of like five to 15.”
Lacaillade: SCS Financial holds ~130 co-investments at 10bps fee, 7-8% carry
“Well, first of all, like from a fee perspective, and we have like over a hundred, it's maybe a 130 or so direct investments. I think, I mean, essentially no management fee, like 10 basis points blended. And the carry is like seven or eight percent, which is th…”
Lacaillade: SCS does 5–15 references by calling fund-of-funds that did 60
“I will maybe do, Five, 10, 15 reference calls where these funded funds will be like 60. But one of my reference calls will be the funded funds that did 60 calls.”
SCS Financial manages money for partners of Accel and Greylock
“And we manage money for the partners of founding partner of Excel and Greylock. So I knew that it was tough to get into those funds because I had it in and it still wasn't like”
Lacaillade: SCS Financial manages $30 billion for 200 families
“We're a multi-family office, we manage thirty billion from 200 families”
Lacaillade: SCS Financial venture portfolio is 70% franchise, 30% emerging
“In venture, it's probably, it's like, 50, 50, like, franchise versus emerging. It might even be like, 70% franchise, 30% emerging. Actually, I think, yeah, those are the numbers, right?”
Lacaillade: SCS Financial Passed on Ribbit Capital Due to Capital Constraints
“Rivet's done a really nice job too. And I think if I hadn't been as capital constrained, I've, you know, met with Mickey many times over the years. That's another great one.”
Lacaillade: SCS Financial Is an Investor in Sequoia Capital Heritage Fund
“So we're kind of in Sequoia, but like, and I'm very, I mean, Kevin Kelly is like my, I love Sequoia heritage.”
Lacaillade: SCS Financial private deployment grew from $250M to $1.5B annually
“When I joined SCS, we had seven billion dollars under management. I was investing maybe two hundred and fifty million a year. Now it's like about a billion and a half.”
Lacaillade: SCS Financial provided the first check to Shore Capital
“Not to ramble, but on the buyout side, there's a group called Shore Capital, which Justin Ishbia at the time was 32 years old, and he had three partners that were 27, 28. And we were the first check there, and I like to say that I got more push, I got as much …”
SCS Financial allocates 20-25% to co-investments, capping positions at 2%
“If you think of, like, our vehicle, right, it's about 20, 25% co-investments. So at the full, and we've raised these vehicles every 18, 24 months, but at the high level, it's like a co-investment will be, it will max out around two percent exposure, but it's p…”