Dec 22, 2025 · 46m · capital-allocators
Year in Review 2025 (EP.478)
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In this 2025 Year in Review episode of Capital Allocators, host Ted Seides and CEO Hank analyze institutional investing trends across private liquidity freezes, active public equities, and the Total Portfolio Approach while reviewing podcast milestones, curated playlists, and enterprise expansions.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Ted holds 86.3% of the talking time here. How this is scored →
Ted as informed peer 6.5 Guest teaching 0.0 Guest disagreement 0.1 Ted pushing back 0.1
speaking balance: gold is Ted, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 12:39 Probing middle-market PE sentiment against hedge fund cynicism
Hank gently probes whether middle market private equity is turning into the hedge fund paradox where allocators dislike the asset class base rate while claiming to like their specific managers.
Hardest push from Ted ▶ 23:33 Ted rejects simplistic press coverage of TPATed explicitly pushes back on media comparisons of whether TPA has 'done better than' traditional strategic asset allocation, calling such reporting ridiculous and misinformed.
Biggest teaching moment ▶ 10:38 Explaining the divergence between GP panic and LP stabilityTed educates listeners and Hank on why LPs are not actually distressed about delayed exits compared to GPs whose entire business models rely on raising successor funds.
Ted holds their own ▶ 7:30 The private equity pizza analogyTed demonstrates deep subject-matter expertise by synthesizing dry powder, private credit availability, and bid-ask spreads into an intuitive pizza-making metaphor.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Ted as informed peer | Guest teaching | Guest disagreement | Ted pushing back | Why |
|---|---|---|---|---|---|---|
| Holiday Gift Announcement: Curated Episode Playlists | 0 | 0 | 0 | 0 | Solo host monologue and sponsor reads announcing curated Spotify playlists and introducing AlphaSense and Intap DealCloud. | |
| Private Equity Liquidity Freeze and the Bid-Ask Impasse | 8 | 0 | 0 | 0 | Ted explains the private equity liquidity freeze using his pizza analogy, detailing dry powder, credit availability, and the bid-ask multiple gap. | |
| Private Market Restructuring and the Mega-Fund Advantage | 8 | 0 | 1 | 0 | Hank asks why PE market gridlock persists, and Ted details survey data, strategic buyer hesitance post-Liberation Day, and the structural shift toward mega-funds via sovereign wealth and private wealth channels. | |
| Middle Market Return Pressures and the Proposed PE Wager | 8 | 0 | 1 | 0 | Hank compares middle market PE to the hedge fund base-rate joke; Ted explains return distributions, the hurdle rate of 8% net, and recounts his attempt to launch a PE vs S&P 500 charity wager. | |
| Private Credit Inflows, Wealth Distribution, and Spread Compression | 8 | 0 | 0 | 0 | Ted details why private credit expanded in the wealth channel due to yield and coupons, contrasting it with institutional illiquidity budgets and warning about spread compression. | |
| The Private Forever Dilemma in Venture Capital | 8 | 0 | 0 | 0 | Ted analyzes venture capital shifting into permanent private growth equity and predicts unlocked private capital will flow first into public equities rather than recycling into privates. | |
| Where Allocators Deploy Capital: Geopolitics, Japan, and AI Tech | 7 | 0 | 0 | 0 | Ted outlines institutional interest in Japan, defense technology, and AI infrastructure, while noting institutional allocators act like tanker boats that mostly stay the course through geopolitical turbulence. | |
| Demystifying the Total Portfolio Approach (TPA) | 8 | 0 | 0 | 1 | Ted refutes press misunderstandings regarding Total Portfolio Approach (TPA) and outlines his forward view on AI valuation corrections and continued illiquidity. | |
| 2025 Podcast Reflections: Highlights and Memorable Guests | 5 | 0 | 0 | 0 | Ted and Hank review favorite podcast episodes of 2025, praising managers like WCM who openly shared perspectives on major drawdowns. | |
| Lessons from the Private Wealth Miniseries and Power of Storytelling | 7 | 0 | 0 | 0 | Ted summarizes insights from the private wealth miniseries, noting the resource intensity of mega-firms building distribution teams and the varied maturity between private banks and wirehouse teams. | |
| Solving Podcast Discoverability with Themed Playlists | 7 | 0 | 0 | 0 | Hank and Ted talk about resolving podcast back-catalog discoverability via themed Spotify playlists and discuss angel investments in fintech products like Owl Labs, Thema, and Ascension Software. | |
| Capital Allocators University Evolution and Team Expansion | 5 | 0 | 0 | 0 | Ted details the evolution of Capital Allocators University moving online into modular subscriptions and highlights key team hires Tamar Auerbach and Liz Smith. | |
| Long-Term Institutional Foundations and Future Momentum | 6 | 0 | 0 | 0 | Ted discusses institutional foundation-building and answers rapid-fire closing questions on true self evaluation, favorite books, and personal background. |
Statements from this episode (24)
Seides: Private Equity Has $1.2 Trillion in Dry Powder
“Well, there's tons of dry powder, trillion two of dry powder. You need debt capital, and there's almost an infinite amount of corporate private credit available. You need companies that are willing to transact, and there's tens of thousands of private companie…”
Seides: GPs Delay Exits and Extend Hold Times to Protect Future Fundraising
“You could say that private equity is frozen because of fear. It's fear on the GP side of, you If they sell, returns aren't what their LPs would have thought. They're afraid they're not going to be able to raise their next fund. So rather than say, we'll just t…”
Seides: Private Equity Transactions Remain Frozen by Multi-Turn Valuation Spread
“Private equity firms only want to buy if they get a great deal, and they only want to sell if they're getting full value. There's a few turns of multiples in the middle, and you haven't seen that thought quite yet.”
Seides: Private Equity Exit Recovery Is Two to Four Years Away
“I continue to think this takes several years. Maybe it's two, three, four years away. It's a question of how long does it take for that bid-ask spread to narrow?”
Seides: Sovereign and Private Wealth Capital Exclusively Benefits Mega-Funds
“The private wealth channel is a whole different distribution mechanism. What those two things have in common is they benefit the largest firms. They don't benefit the middle market player. So the middle market, you have contraction, and then you have expansion…”
Seides: Many Private Equity Firms Have Already Raised Their Last Fund
“There are a lot of private equity firms out there today who don't realize they've already raised their last fund.”
Seides: Median Private Equity Has Historically Outperformed the S&P 500
“Middle market's been better than large. Small has been better than middle market. Median has outperformed the S&P. Bottom quartile, definitely not. Top quartile by a lot.”
Seides: Zero Institutional LPs Admit Their PE Portfolios Are Below Median
“I've asked at every AGM I've spoken to this year, please raise your hand if you think your private equity portfolio is median or below. And there isn't a single hand that's ever gone up. Everyone playing is playing for the top quartile.”
Seides: Proposed PE vs. S&P 500 Wager Found No Public-Side Counterparty
“At the end of the day, there wasn't anyone to take the public equity side of the bet. I reached out to some friends at Vanguard, but Vanguard isn't just a public equity index fund manager.”
Seides: Most Wealth Channel Alternative Allocations Flow Into Private Credit
“Most of the move to alternatives in the wealth channel has been in private credit.”
Seides: Private Credit Structures Prevent a Bank-Like Systemic Calamity
“I do not think there's going to be some calamity. The structure that the asset managers are using is just much better than what the banks used to use. You know, borrow short, lend long. So these are very long dated structures, which is great. You can work thro…”
Seides: Massive Inflows Will Compress Private Credit Returns to Roughly 6%
“Where I think there is a challenge is when all this money comes in, the one thing it does for sure is compress spreads. I don't think the people buying in the wealth channel have the right understanding of what returns they should expect. There was a pocket of…”
Seides: Venture Capital Has Structurally Shifted Toward Remaining Private Forever
“The one interesting aspect of venture, structurally, is to the extent private equity is private for longer, venture feels like it's private forever.”
Seides: Successful Venture Bets Create Trapped, Unexited Growth Equity Allocations
“So what's happened is a lot of the institutional allocation portfolios who never used to invest in growth equity, their most successful venture investments have created a very meaningful bucket of growth equity that they can't exit.”
Seides: Trapped late-stage venture illiquidity reduces capital available for new fund commitments
“The first thing it's done is increase the illiquid allocation, which means that when it comes to how much are you going to put in of new funds on the other end, there's less to go around.”
Seides: Institutional demand and allocations for top early-stage VC managers have not changed
“In terms of allocation to great managers on the early stage side of venture, that is still highly sought after, and allocations haven't changed at all.”
Seides: Unlocked Private Market Capital Will Flow Back Into Public Equities
“The biggest impact of that over the next couple of years is that when private markets unlock for liquidity, the first wave of that money from the institutional market is going to go back to the public markets. It's not going to get recycled in the private mark…”
Seides: Magnificent Seven AI valuations are probably a price bubble
“Is that a bubble in price? Probably. It's probably not a bubble in the underlying economic activity of the businesses. But Mag seven went from these dominant cash flow machines to taking all the cash flow and spending it in something that has an unknown ROI.”
Seides: Geopolitical Uncertainty Rarely Alters Institutional Allocator Portfolios
“The interesting thing about that in this community is it doesn't affect much of anything that people do, and that's because these allocator pools are like tanker boats. They're not fleet boats. So unless it's an allocator who's outside the U.S., domiciled in a…”
Seides: Institutional allocator sentiment toward China is cycling back
“The only thing that's been interesting to watch has been China, because two, three years ago, China was going to be out of portfolios. Then you have a year where Chinese stocks perform really well, and now these things are cyclical. The U.S.-China relationship…”
Seides: AI Down Rounds Will Trigger Significant Private Market Valuation Compression
“So I will say whether it's next year or the year after the year after, I would be shocked if there isn't a significant compression. Maybe starts with the valuations of private AI companies and significant down rounds, and maybe that has downstream effects beca…”
Seides: Public Market Active Managers Poised for Outperformance
“I think people will be talking about public markets and the potential for outperformance from active managers because you're teed up pretty well to have a good period of time for active managers.”