Disclosure
Miranda: Partners Capital seeks to pay performance fees only on alpha
“We're always trying to make sure we're only paying performance fees on the alpha, not the beta.”
Insight
Miranda: Information ratio is probably the most important metric in liquid securities
“Turns out information ratio is probably the most important metric in liquid securities or asset classes, ok?”
Disclosure
Miranda: Partners Capital is exploring an internal brown-to-green energy transition strategy
“Right now, we're looking at one in the energy transition space. It's all about owning brown to green. We cannot find anyone else doing it.”
Insight
Alpha in niche alternative assets decays rapidly without deep specialization
“The problem with them is that they have limited capacity. And as soon as I start talking about them on a podcast, then all of a sudden the alpha goes away. But in most of those categories, it has gone away unless they're in certain specialist areas.”
Insight
Investors should avoid double promote fee structures in real estate
“Real estate, first of all, stay away from the double promote. You don't pay a private equity firm to pay a private equity firm.”
Disclosure
Miranda: Partners Capital avoids crypto except through blockchain venture capital
“On crypto, we have studied it. And we have come to a decision not to invest other than in blockchain venture capital.”
Insight
Miranda: Succession requires giving candidates the job before they officially take it
“I think succession in all companies, not just investment companies, is about giving the job to the individual before they take it on.”
Insight
Catastrophe insurance investments failed because global warming outpaced insurance pricing
“I think invest in catastrophe insurance. You already said we're long global warming. That's what catastrophe insurance is, but global warming has always been ahead of pricing, so that was a painful experience.”
Insight
Miranda: Board meetings should focus on underperformance rather than pitching successes
“You don't go into the board meeting to convince them that our investment performance is great. You find the area that's not great. You spend all the time on that, and you're honest about it, and you focus them on it, and you face into the unvarnished truth.”
Insight
Miranda: Portfolio Customization Focuses on Allocation Sizing, Not Asset Selection
“Almost all asset classes are included in almost all client portfolios, even the private equity GPs today. So the customization came down to really sizing of managers or simple allocation decisions, whether it's eight percent private debt versus 10% private deb…”
Disclosure
Partners Capital averages 300 to 500 diligence hours per private equity fund
“We do, on average, 300 to 500 hours of due diligence on the average private equity fund, for example. So later in the due diligence, we learn that, but also from references. We do a ton of reference. Typically, 20 references”
Disclosure
Miranda: Partners Capital uses liquid futures and ETFs to offset overweights
“The main impact is that we will counterbalance certain overweights that we don't want as intentional overweights. So we have to have enough liquidity in the portfolio where we can use ETFs or index funds or futures that we can offset those.”
Disclosure
Partners Capital passes on Fund I spin-outs to monitor for Fund II
“We'll typically meet the management team the first time. We pass in most cases, not in all cases. We've done some fund ones, but generally we say, we're going to watch you. Please hold some space for us for fund two, and we're in fund two.”
Disclosure
Partners Capital capped growth at $1.5B annually before the financial crisis
“The next year was three billion, and we capped ourselves about one and a half billion a year until the global financial crisis.”
Disclosure
Miranda: Partners Capital shares a 70-page value-add playbook with PE managers
“We have actually a best demonstrated practices book. It's about 70 pages on post acquisition operating value added that we share with private equity managers.”
