The Ledger
Every statement that passed quotation and attribution checks. Mix any filter with any other: certainty 1/5, debate potential 5/5, or both at once.
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Friedman: Institutional allocators copy foolish market trends due to peer benchmarking
“Sometimes they get a little too caught up in the competition of what everyone else is doing because they all get benchmarked and paid based on how everybody else is doing in the industry. So if everybody's doing goofy things, they might just do the same goofy …”
Friedman: Oaktree Outpaced Early Canyon by Targeting Institutional Asset Allocation Boxes
“I remember when our good friends, Bruce Karsh and Howard Marks left Trust Company in the West to start Oak Tree and almost instantly had more capital than we did, or at least as much, and we had started a few years earlier, and part of it was that they underst…”
Friedman: Distressed debt capital flows are almost always counter-cyclical to opportunity
“It drives me crazy, but I find that capital flows in our business are almost always counter-cyclical from what they should be.”
Friedman: Top distressed investments get paid for solving problems, not taking risk
“Those are always good because you get paid not for taking risk, but for solving a problem.”
Friedman: Transparency gives LPs a reason to stay during underperformance
“And I also think that no investor will always do a great job at every point in every cycle. So you may as well give people a second reason to stick with you if you happen to do a poor job on the investing side, and I think having good transparency and complian…”
Friedman: Corporate distress is delayed by low coupons and cov-lite debt
“I would expect there will be some distress, but I think it's going to take a little while before that develops because a lot of the paper that's been issued doesn't have covenants or has very, very light covenants, and coupons are really low.”
Friedman: Credit firms must compensate their analysts for not investing
“You have to reward people for not investing, as well as for investing, because there's a time when their areas are not particularly attractive, and you don't want to push people to invest, so you want them to own a piece of the overall firm carry, if you will,…”
Friedman: Canyon Operates Under the Mantra 'Prepare, Don't Predict'
“We try to prepare ourselves as opposed to predict. That's one of the mantras we repeat often here is prepare, don't predict.”
Friedman: Financial crises are always caused by leverage and liquidity mismatch
“The entire history of the financial world is one of crises that are born of exactly what you say, where you have a combination of illiquid assets held by a firm that has liquid liabilities, like a bank, and is leveraged. So leveraged and a mismatch is always t…”
Friedman: Buy unloved, complex credit assets that will eventually simplify
“So what was complicated today was going to be simple in the future because the bankruptcy process has run its course or because the buyer was going to divest of things and then be a nice, pure play, simple company or whatever. But generally speaking, complex t…”