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.
why aren't all 75 resolved? a statement only gets an assessment when the public record can support or contradict it. opinions and what-ifs never can, and 2 checkable ones are still open, waiting for their date. predictions held up or didn't; assertions are supported or contradicted. on every card: ▮▮▮▮▮ certainty · ▮▮▮▮▮ debate potential. speakers are clickable
Giannini: Private equity marks are legitimate and outperformance is real
“So I think what you're seeing in the private markets is actually what's happening. It's not that the value's Are inflated, or there's a lag factor. They're legitimate valuations, and it's why, by the way, you're in private equity. It just, sorry, it performs b…”
Giannini: A Broad Distressed Debt Cycle Will Not Materialize
“There's not going to be a distress cycle. Sorry, there'll be some distress deals that are interesting, I'm sure, but you sort of had this period where, oh my gosh, things are going bad, let's raise a distress debt fund, and they still are trying, but just tell…”
Giannini: The 2008 financial crisis was private equity's best event
“That is when, to me, private equity, private markets established themselves. It was the greatest thing that happened to the industry. And I know people will go, that asshole, what's he saying that for such a horrible time. But it's because at that point, every…”
Giannini: LP advisory boards are a total waste of time
“I think advisory boards are a total effing waste of time. I have learned nothing. Here's what I've learned. Zero. Advisory boards are a place where LPs want to feel important and feel really good, and GPs want to make them feel important and really good, and s…”
Giannini: A Large Number of Venture-Backed Companies Will Fail
“I think certainly on the venture side, there's no doubt that you're going to see a lot of venture companies just hit the wall.”
Giannini: Recent PE Vintages Will Deliver Lower IRRs and Disappointing Returns
“We will have elongated hold periods, which means IRRs are coming down. Now, presumably the public market returns are also coming down from what they were the last five, 10 years. But I think people need to recognize that. I know general partners in particular …”
Giannini: Private Equity Has Outgrown LP Capacity to Fund GP Ambitions
“The industry has simply outgrown both in terms of its size and its desire for more size. Has outgrown the limited partner capacity to fund it for a period of time. There's just not enough money in the world to give GPs everything that they want, whether it's a…”
Giannini: High equity cushions will protect private credit from broad losses
“We have had more equity in companies than we've had in prior cycles. So if we think about the risk to the credit compared to what it was in The risk going forward of deals that have been done is more on the equity, I believe, than on the credit. The credit is …”
Giannini: Most institutions lack the resources to pick direct co-investments
“The reality is for most institutions, not all, but for most institutions, they're simply not resourced enough to do co-investments. And so our view is they either ought to do every co-investment that walks in the door and just make sure you do enough of them, …”
Giannini: An ESG Filter Would Have Prevented Investors From Backing FTX
“It wasn't a fraud issue. It was a pure governance issue. If people had an ESG filter, they'd have never done that deal ever.”
Giannini: Global Tech Leaders Will Split Into Regional Entities Like Apple
“If you wanted to make money in smartphones, 20 years ago, whenever it was, you invested in Apple, and you had a global industry leader. That's not going to happen anymore. You will have Apple US, Apple China”
Giannini: PE Outperforms Public Markets Due to Superior Corporate Governance
“Private equity outperforms because it's a better form of governance, period. I mean, I get the leverage and I get all that other crap, but it is a better form of governance. You'd much rather be private than public in terms of your ability to do things.”
Giannini: Private equity brings intense public dislike upon itself through arrogance
“This is an industry that is really disliked. It's extraordinary how, how disliked we are, and we do it to ourselves. We do it to ourselves with the amount of money that sloshes around and the way generally as an industry we act like, well, we deserve it becaus…”
Giannini: Private investors overemphasize entry valuation to their own detriment
“And so I think from a pricing perspective, we spend so much time on pricing and obsess on it as the only thing that matters, and it just is not. It's important, especially at the extreme. So late last year, especially in some of the high growth areas, you kind…”
Giannini: Private equity GP-to-GP deals deliver the same returns as other exits
“We've run numbers. The return is basically the same. There's no real difference between A GP to GP deal return and a non-GP to GP deal return. So there's no advantage or disadvantage.”
Giannini: LP Overallocation and GP Fund Expansion Will Cause an Inevitable Shakeout
“It's kind of this two forces colliding, and I think it's going to lead to a reasonable shakeout under any market scenario. I don't care if the market Flattens out here, goes up here a little. It will take a market going up 50% for some of this to ease, and tha…”
Giannini: Venture capital is entering a difficult five-year downturn
“That cyclicality has not been changed, and I suspect we're in for a fairly difficult period of time in the venture world. And unfortunately, That takes time. Look at the 2000 and I'm not at all suggesting we're going to be like 2000. I don't think we are, but …”
Giannini: Extending private equity to mom-and-pop retail investors is a bridge too far
“I worry a little bit about the idea that the mom and pop investor, the people who really do not know how private equity works, are all of a sudden going to come into private equity. Man, that just seems like a bridge too far today.”
Giannini: Portfolios will be 50% private and 50% public within 15 years
“I believe in 10 years, 15 years, that portfolios will, by and large, be 50% private, 50% public.”
Giannini: Global Economies Face Shallow Recession, Not 2008 Crisis
“I think that inflation peaked a while back and is headed down. I don't know if it'll get down to two percent. I don't think it really matters. I think the most global economies outside of perhaps China are going to go into a recession and it will be a shallow …”
Giannini: 4% Interest Rates Are Not Catastrophic for Private Equity
“In terms of the financing markets on the regular private equity world, if rates stay where they are, and in my world, obviously, they're not going to go up that much, this isn't catastrophic.”
Giannini: Record dry powder indicates a healthy, growing private market
“I would argue it's a sign of a very healthy market and a growing market when you have more dry powder coming in, and that's what's happened in private equity, private credit, all those different illiquid markets.”
Giannini: LP Capital Crunch Will Pressure Private Equity for Years
“So I think this is really where the industry is going to have a pressure point over the next two, three, four years. This is not a, oh, the market goes up 20% and everything's magically solved.”
Giannini: PE Investors Should Cut Manager Relationships and Concentrate Capital
“I'm not a big believer in the amount of diversification that most of this industry says you got to have. You have to cut back the number of relationships you have and concentrate them on those groups that right or wrong you believe are going to get you through…”
Giannini: Private Equity Chases Shiny Trends Rather Than Building Portfolios
“You're hearing portfolio construction, which is not what this industry talks about. This industry is nothing if not the chaser of the shiniest ball that comes in the room.”
Giannini: Newer PE managers will struggle over next two to three years
“I don't think being a newer manager in the next two or three years, unless you have some incredibly great area you're in, or have something unique, are going to do very well. It just seems like the more conservative, I'll call them, organizations are Probably …”
Giannini: Private Wealth Will Grow for 10 Years but Favor Scaled GPs
“That will continue to be a growing part of the market. It will have hiccups. We saw the ones at the end of last year on some of the name products, and so I think people need to be careful in terms of how they're selling into that market, the investor base that…”
Giannini: Bank retrenchment will drive continued expansion in private credit
“The movement away from traditional sources of credit Is only going to continue. Banks are getting out of that business, and what's happened in the U.S. With Silicon Valley and Signature, I mean, there's just going to be more need for private credit. The amount…”
Giannini: Active Co-Investor Demand Per Deal Dropped From 50 to 12
“Three years ago, on any deal, there were a 150 people that said they wanted to do a co-invest on that deal. Maybe 50 of them actually ended up answering the phone and doing it, and now it's down to 10, eight, 12. It has very, very significantly shrunk the univ…”
Giannini: ESG will remain superficial talk or political tools without clear metrics
“Until we get there, I just think ESG will be either a bunch of happy talk on one side, or a bunch of political tools, essentially, on the other side.”
Giannini: Private Equity Needs to Learn to Be Socially Acceptable
“It needs to learn how to now be socially acceptable, if you will. It's kind of like an awkward teenager that goes, oh, I didn't know how to behave that way. We'll get there.”
Giannini: Portfolios without illiquid assets will underperform and lack balance
“The illiquid part of portfolios is now an established part of how you invest. If you're not in it in some way, you're not really having a balanced portfolio that's going to perform.”
Giannini: Scaling in a growing industry is harder than a corporate turnaround
“What I've learned about a growing company in a growing industry is that it is much harder than a turnaround, oddly enough. A turnaround focuses you on sort of the existential crisis. The problem and the challenges for growing a company is that you have a numbe…”
Giannini: Mid-Sized PE Firms Lag on Seamless Succession Planning
“I think it's the middle size firms where Then we're really going to have to see, because many of those firms really are, at the end of the day, dominated by a couple of people, and I'm not sure that a lot of them are setting up the kind of succession planning …”
Giannini: Sector concentration in software is acceptable due to diverse sub-segment dynamics
“Is the sector, when they say they're in infotech or software, it's so vast that the drivers of return, the drivers of what will make, the industry will not rise or fall. The multiples may in the public markets because they lump them in together, but the indust…”
Giannini: Private equity dynamics involve mutual abuse between GPs and LPs
“This is a tense subject because GPs abuse LPs and LPs abuse GPs.”
Giannini: Most GPs fundamentally do not understand LPs
“The thing GPs, and I say this to them all the time, they do not understand LPs. Most of them just don't understand where an LP is coming from.”
Giannini: Portfolio construction drives at least 50% of private market returns
“I think portfolio construction is at least 50% of return in the private markets.”
Giannini: PE hypocritically resists tech and data internally
“To a private equity person, we're the only industry that does not believe technology and data will change the way we operate. And yet we tell every other industry that we buy or control that, oh my god, technology and data are going to change your industry.”
Giannini: Cheaper middle-market private equity pricing is a complete myth
“So I would say the pricing myth is exactly that. It's a myth. There's as much competition in the mid-market as there is in the larger end of the market.”
Giannini: Proprietary deal flow does not exist in private equity
“The other myth is we have proprietary deal flow. No, you don't. You might have a proprietary deal. You do not have proprietary deal flow because the reality is everybody knows private equity is around, and so there's no way to get a deal without someone going,…”
Giannini: Middle-market return dispersion is vast and widened over 10 years
“The larger firms, the largest, have a narrower dispersion of return. In other words, the difference in return is not that great between XYZ big firm. Don't tell them that, because they're also a top quartile. In the mid-market, there's a vast spread of return.…”
Giannini: Continuation funds are currently used for GPs' better-quality portfolio companies
“Why I think continuation deals are really interesting is that by and large, today, you are seeing the better companies go out in those deals. I think where you worry is when it starts to be, oh shoot, this is so easy, I'm just going to throw out any deal. I do…”
Giannini: GPs change deal risk profiles between fund start and fund end
“General partners will do different deals at the beginning of their fund than they will do at the end of their fund, and how does that work for you? If it's at the end of their fund and they want a very low risk, but lower return deal, they're looking for more …”
Giannini: Much of the ESG movement is hype and happy talk
“I would say a lot of it is hype. It's a lot of happy talk. It's a lot of feeling better about yourself saying you care about ESG.”
Giannini: More capital in private equity does not necessarily lower returns
“I am not Of the view that more money necessarily means lower returns.”