Leverage

“Dude, a lot of these assets are like four to six X levered.”

“I don't think it's an optimal balance sheet if you have no debt. Because you can improve the returns by shrinking your share count, because you have fewer shares. So the same amount of returns is, is greater per share, because you have fewer returns. So I thin…”

“He's like the most leveraged person alive.”

“The way that we counteract the speed point with safety of principle and downside protection is we rarely use leverage up front in these consolidations.”

“Well, if you think about what blows up roll-ups over time, at least in our experience, it's two things. It's leverage and lack of integration.”

“I think that's harder to do today in part because individuals don't have that much leverage in the system. So I'd like to think not, and I also think we have this extraordinary playbook, which we now know works to some degree.”

“And I can tell you that if I did not use leverage, I really should do the math someday. If I didn't use leverage, I mean, I would have You know, 25% of the wealth that I currently have.”

“If long-term capital management hadn't been running a fifty-x leveraged strategy, They wouldn't have ended up in the trouble that they ended up with.”

“We are risk targeters, so we can't build a portfolio and then just lever it up to beat a benchmark. That comes down to really discipline, build the best portfolio we can, the most diversified portfolio we can, and then we do use some leverage to tailor the ris…”

“I mean, you get yourself to B level negotiator there. You'll never get yourself to A plus on leverage. Cause leverage is the ability to inflict harm. And if you're making deals based on the ability to inflict harm, these are not, those don't go for stable long…”

“Well, there's a lot of brand names we don't have, and it varies why, but one of the most significant reasons is because they just use leverage we found to juice up their returns, and we don't think that's attractive.”

“If you look at the spectrum of what's out there, we're probably going to be on the lower end of the amount of leverage we deploy. We want to be on the client friendly side across multiple dimensions, one of which is liquidity. And we want to be able to stay in…”

“When, once that comes in, it's going to be insane.”

“You create higher returns over time by using little to no debt as weird as that is in the finance world.”

“We're currently at about 12% leverage, so we have 112% invested for every dollar that we have in assets, and that used to be higher when the yield curve was not inverted. It makes much more sense to do this when the yield curve is more normal, so we used to ha…”

“One thing I want to point out is leverage is not good or bad. Everyone talks about it like it's good. It's not. It is a neutral force. It just magnifies whatever else is happening.”

“The capital structure dynamics is also, I would say, more consistent than different. They tend to be anywhere between three to four times in leverage and entry. So when we see a deal that's four and a half times or more, we tend to raise our eyebrows.”

“And the way they get their returns year after year is taking the leverage, the midday leverage up higher and higher and higher and higher. So they're making smaller and smaller profits on more and more volume, which gives them this big peak leverage risk, whic…”

“I honestly don't think you're ever comfortable with that. If you're comfortable with leverage, you are doing something wrong.”

“Jim Simons would make absolutely no money if it weren't for leverage. That's just how, how it works.”

“If you've got investors with leverage, they're focused on not losing money, number one. The leverage works both ways, and they're focused on really compounding wealth over the long term”

“And a lot of buyouts these days, as we found in the financial crisis, are being done with less leverage or in some cases no leverage.”

“You're not allowed to use leverage. You're not allowed to use the assets as collateral in a back levering package. You're not allowed to have formal governance control.”

“Well, the crisis got worse after we bought it, and some of these loans fell 20, 30 points. Well, if you take 20 points times four, you've lost 80%. You take it times five, your equity is negative. And that's what we went through in 2008. And so I've been reall…”

“Ironically, leverage plays the least role in venture capital. Most of them have relatively little leverage. It's equity money.”

“We never lever. We're a terrible prime brokerage client. We don't short, and we don't borrow money.”

“Everyone's over levered, and private equity guys, they're the worst in terms of this.”

“We're going to focus on the ones that are levered because when they get multiple expansion and they're levered, that's where you really make a ton of money.”

“The market neutral or very low beta strategies have always employed a fair amount of leverage to make small alpha streams look better.”

“We're not going to use leverage to max it out and dividend recap, because that's really doesn't work in our model. We're going to use leverage in a moderate way, but we will be able to use it and increase the leverage on a timely basis, but really in an effort…”

“Using leverage is its own skill. I mean, I don't want to act like that's easy. You just put five percent on and leave it. That's not my point at all. People would poo-poo hedge fund guys say, well, they're just long short with leverage. And I'm like, well, yea…”

“So essentially the CEOs that had higher levels of risk taking in their private lives, we saw the same attributes in the firm. So everything from higher leverage, Higher prevalence of M&A activity, higher equity return volatility. It was almost like everything …”

“Returns above an index have to, mathematically, they have, the possible sources are leverage, concentration, or turnover.”

“I don't suspect leverage is going to be the next big challenge, I do think liquidity might be the case.”

“I think there's more leverage in the market than people realize, and we just, no one has yet sort of cogently spoken about it, but there's, it's a lot of little things that actually together add up to a lot, and so, you know, like all this stuff with the, with…”

“And when you start combining highly leveraged strategies with strategies that are crowded, where people are looking at similar factors in a market that we still think is fairly illiquid, you know, in our view, those are risks that you're not particularly well,…”

“We've never really been a big user of leverage. So we definitely lived through periods of stress and pricing, but we've recognized that as long as you're not leveraged and forced out of the trade at an inopportune time, you can last a long time.”

“If you have that cash to put down, then you would be stifling your growth. Because you would be waiting to buy your first single property until you saved up every ounce of cash, and you would have no leverage on that deal. The reason income property is so, so …”

“And the fact of the matter is, deals, if we do one, they end up taking way longer than we expect. And we want that last month before the deal is signed to be One of the best months ever, because it gives us leverage.”