IRR

“Our first firm's over 40% IRR, you know, it's 50,”

“For relationships that can compound over a long time into something Really big, even if there's a lower nominal return to that, if you don't have that kind of reinvestment risk, you may want to choose that relationship over something that has more of a burst o…”

“The reason why you buy private equity isn't for the total return, in my view, it's the relative return to your PME, because a private equity portfolio or private equity management, let me just give you an example. Let's say they generate a 12% IR. Well, if you…”

“AngelList did a study of all of their different mini funds on AngelList to see which ones were the most successful. And their ultimate conclusion was The more qualified deals, and of course we need to define what qualified means, you invest in, the higher your…”

“We spent a lot of time looking at our IRR with hedge fund managers. We've been able to add a couple hundred basis points by taking money away when they're up and adding when they're down.”

“And what turned out to be the 2006 and 2007 CLOs, the vintage medians from those periods far outperformed the base case in the pitch books. Not because they had good loans. They probably had some bad loans, but they had the ability to keep reinvesting with loc…”

“In lots of parts of the market, the data is easy to manipulate. Depending on how liquid, even not just private equity, but how do you mark a credit book is very important. Some people market mid-market, some people mark bid and ask. I think it's useful to star…”

“I don't manage for IRR. I manage for multiples. So we don't run a line of credit, for instance. That would be a much better way to eke out another point of IRR, but that's not how I want to run the business.”

“There's no par payout at the end. A lot of times you're getting back 40 cents, 50 cents on the dollar. Now, over the eight-year life of the CLO, you've got these very large distributions along the way. Hopefully it nets to a nice return for you, but you don't …”

“A lot of LPs of longstanding relationships going 3040 years back to the firms that are still on the short list of what are the best BFC firms in the world have gotten returns that are quite a bit south of The IRRs that reported in those manager records.”

“If there's a world where firms are generating consistently 30, 40% IRRs, people are going to notice that, and some people are going to say, hey, I should do that too, and then the returns inevitably get bid down.”

“And the portfolio isn't sized based on the highest IRRs. A lot of times the highest IRRs have the fattest tails to them.”

“And then just people that are obsessed with IRR, because in these funds, there are ways to manipulate it. You have to look at multiple of capital and how many years you're stuck and the average amount of capital deployed, and then use that as a litmus test ver…”