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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Rattner: Over-diversifying across 100 fund managers guarantees index-like mean reversion
“If you do the math, right, a firm has, let's just say, a hundred managers. So each manager has one percent of your capital on average. And each of those managers has 20 top positions. What is that? Five basis points of your capital is in some given position. N…”
Rattner: Firing underperforming fund managers rarely creates value compared to holding them
“One of the things that I force the team to do once a year is go back and look at our terminated managers, because it's easy to fire a manager. And in most firms, you fire a manager, nobody's ever going to ask you again, well, how did that manager do? Did you m…”
Briner admits staying largely active in developed public equities was a mistake
“And so we kept going down that road with largely active. And I think that's proven to be a mistake over time.”
Briner: Team co-investment is an essential alignment tool, not a conflict
“I always find it interesting that people view it as a conflict of interest for the investment team to invest alongside whoever's capital you're investing. Structured correctly, I think that should be essential. You want people to have more than just their psyc…”
Briner: Willett vetted emerging managers via single-deal co-investments before committing
“We would often do a deal alongside a manager before we'd invest in their fund, set up an economic structure, That allowed us the optionality to not go in the fund if we didn't like what we saw. So the economics would stand on their own and then they would fade…”
Rattner: Endowments should use a specialist model rather than generalists
“I believed in the specialist model. The idea that you have five or six smart senior people, and they all go off and do whatever they feel like doing, and often they're doing different things from one investment to another, it didn't make perfect sense to me.”
Rattner: Willett is significantly underweight Europe due to profoundly unattractive fundamentals
“We're way underweight Europe. There are many days when I wake up and think we should just leave altogether. There's nothing attractive about the fundamentals.”
Briner: Availability and candor are the essential traits for investment approvers
“And those are the two most essential characteristics, in my view, for people who approve investments, is availability and candor.”
Rattner: Willett willingly pays high fees if net performance is demonstrably superior
“I believe that it's a little bit of reverse engineering, that I'm willing to pay almost any level of fees if I believe the net performance is going to be superior. So we have people that we pay very high fees to, because I really believe they're exceptional pe…”
Rattner: Willett strictly avoids non-top-quartile venture managers, slowing portfolio growth
“One of the early decisions that Alice and I made was that if we couldn't be in what we thought was a top quartile manager, we just wouldn't do it, and so the result was it has taken us 11 or 12 years now And we still do not have as big of a venture portfolio a…”
Rattner: Willett Advisors avoids investing in Russia and likely always will
“We don't invest in Russia, I can't imagine we ever would”
Rattner: Willett's most successful managers are fiercely independent owner-operators
“We like owner operators. We want Firms that are owned by the people who are actually managing the money, not part of some colossus. We want the lead person, or lead couple people, if that's what it is, to just be so driven that you can feel that they taste thi…”
Rattner: Willett backs more female-led private managers in China than the US
“I'll make one observation you didn't ask about, but it does, I found it fascinating, which is that we have more investment managers in China on the private side with a senior partner or the CEO of the firm as a woman than we have here, because here we have zer…”
Rattner: Willett maintains a far lower unfunded liability ratio than typical endowments
“And so our unfunded liability ratio is very, which again, I don't want to get into specifics, is very low compared to what the typical endowment or foundation has.”
Rattner: Bloomberg's family office will always manage most capital externally
“Most of our money is and always will be managed externally because we do believe in diversification.”
Rattner: Banking and private equity skills do not translate to asset management
“People assume, and maybe Mike assumed this, that because I had been a banker and a private equity guy, I could run an investment management firm, but it's like asking a cardiologist to look at your elbow that you think you might have broken that's really belon…”
Briner: Willett Advisors entirely avoided credit until 2022 interest rate hikes
“Credit was the biggest of all of those from a factor perspective that really changed. We had never bought credit before. It wasn't really in our mandate. Will is a high risk, high return investor, equity oriented, perpetual life, all those things.”
Rattner: Bloomberg's family office fortunately launched with mostly cash in 2008
“We actually opened our doors for business, his business on January one of 2008, which I mentioned because you know what happened in 2008. And so we went right down the water slide with everybody else. Fortunately, most of our money was in cash in 2008.”