Insight
Barth: Why BBR uses generalists instead of asset-class investment specialists
“First, from a structural perspective, all of the senior people are generalists, and so if you're a hammer, everything looks like a nail. If you're the private equity specialist, Every investment problem has a solution that looks like a private equity fund.”
Disclosure
Barth: BBR avoids asset-gathering managers focused on fee retention
“At the end of the day, managers who are focused on earning a management fee and keeping assets and just not underperforming, you know, your average mutual fund whose job it is, is to never be below three or four Morningstar stars so that the four one K consult…”
Insight
Barth: BBR adds capital to underperforming managers while other investors redeem
“All the things you loved about a manager and the strategy and the people and the approach aren't changing and they're underperforming. Most folks pull money. We write checks.”
Opinion
Barth: Investors are taking crazy risks to generate 6% in high yield
“Today people are willing to take some, I would argue, crazy risks to generate a six percent return in high yield and other places.”
Disclosure
Barth: BBR Rejects VC Mega-Funds and Hybrid Crossover Growth Funds
“We have not generally done any venture capital funds who have gotten larger and merged into growth equity funds, and they're obviously the well-known hedge funds that have launched Big growth equity private equity funds. We've done neither. It has been much mo…”
Assertion Supported
Barth: Ivy League endowments are structurally tax-efficient through VC and low-turnover equity
“The big Ivy League endowments haven't been huge private credit owners. They've done a lot of Growth equity in VC, it's actually pretty tax efficient, and they've done a lot of public equity that's not been high turnover.”
Disclosure
Barth: BBR Partners decided the firm will never be for sale
“Making the decision that the company would never be for sale, and that how do we think about Super long-term for how the firm be structured, and that was a huge mind shift for us.”
Disclosure
Barth: BBR Partners has never allocated to hedge funds
“I think that's different than certainly most other folks who just say, oh yeah, we're going to allocate to hedge funds. We've never allocated to hedge funds.”
Insight
Barth: The most interesting alpha originates from capital scarcity
“And so I think the most interesting alpha today comes from a lack of capital. And that lack of capital can either be because it's unfavored or And that goes to being contrarian. Something's cheap because people hate it. It can be a lack of capital because of a…”
Disclosure
Barth: Core real estate became investable in 2022 after 20 years
“For 20 plus years, core real estate was uninvestable for us. In 22, core real estate became investable for us again, just from a lack of capital.”
Disclosure
Barth: BBR stays passive in US large-cap equities, avoids L/S funds
“We are passive for US large cap equities. We've been passive Since day one, we own significantly fewer long short equity hedge funds, and we don't do any that do US large cap stocks, with the exception of industrial focused firm that is doing some market timin…”
Disclosure
Barth: BBR invests almost nothing in standard on-the-run private credit
“We do almost no on the run private credit.”
Disclosure
Barth: BBR provides structured lending to bourbon producers amid declining consumption
“There's actually terrible technicals, because liquor consumption's going down, and Brown Forman's talking about volumes dropping, and so there's no capital going into that, and so the ability to be a structured lender to these small producers is incredibly int…”
Insight
Barth: Emerging markets favor active hedge funds over buy-and-hold investing
“Emerging markets is not a good buy and hold marketplace, but between being macro informed, more alpha opportunity, more short opportunities, it's a good place to own hedge funds.”
Insight
Barth: Deglobalization makes global portfolio diversification more valuable
“A deglobalization in the world being less flat means capital flows are going to be less connected. Therefore, being globally diversified is a better thing.”
Insight
Barth: Toe-dipping in emerging assets means backing focused specialists, not whole ecosystems
“Dipping your toe in isn't getting long the ecosystem. It's finding one or two really thoughtful partners who are sharpshooters. So you're not buying the asset class, so to speak. You're finding thought partners who can help educate you, and you're finding thou…”
Insight
Barth: Small PE firms create repeatable value selling to mega-funds
“One of the other things we love about private equity is if you can create food for that ecosystem, it's a risk, wash, repeat process of I buy something small and I sell it to the big guys.”
Disclosure
Barth: BBR Pays Far Below Rack-Rate Fees for Small Long/Short Managers
“Because it's been such an unloved asset class, we don't pay anywhere near rack rate fees. It's smaller managers. For us with families, it's also managers who've been much more focused on tax efficiency, and so our ability to generate really attractive After fe…”
Opinion
Barth: Asian financial markets have nearly caught up to Western sophistication
“I think it is light years ahead. They have, if not fully caught up, come very, very close. The management teams are sophisticated. The investors are sophisticated. The pools of capital are deep.”
Insight
Barth: Be passive in efficient markets and highly concentrated in inefficient ones
“We take a core satellite approach where you want to be passive, and you particularly want to be passive in the most efficient markets, and you want to be active in niche managers where there's a lot of inefficiencies, and they've got a structure to be concentr…”
Disclosure
Barth: BBR Targets 50/50 Active-Passive Split in Public Equities
“All else being equal in public equities, we want to be about fifty-fifty passive and active on the long side.”
Disclosure
Barth: BBR Allocates 65% to Higher-Risk Assets, Half in Public Equities
“So if you looked at your average high net worth portfolio, you know, 65% equities is probably about right. We're 65% higher risk strategies, but call it only roughly half of that in public equities.”
Disclosure
Barth: BBR demands 3-4 unprovided references before backing managers
“There shouldn't be anyone who's such a secret That I can't find at least three or four third-party unprovided references where we can get very detailed, thoughtful opinions on those managers. If I can't do that, and they can't all be positive, we can't make an…”
Insight
Barth: Allocating across different manager temperaments is a powerful diversification tool
“Temperament and approach is one of the ways to get diversification, and so I'll get a question from a client or prospective client, you know, if a stock's down, do you like managers who buy more, or do you like managers who have stopped losses and cut their lo…”
