The Ledger
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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: 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: My past prediction that 85-90% of SPACs would fail was too generous
“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 wrong. I was too generous.”
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 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.”
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 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.”
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…”
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.”
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 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: 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”
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 Financial does not accept cold email outreach from managers
“I don't do cold emails”
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.”
Lacaillade: SCS Financial Is Not Invested in Benchmark but Wants to Be
“Yeah, it's a good question. Probably, probably benchmark.”
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 …”
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?”
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…”