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 13,421 resolved? a statement only gets an assessment when the public record can support or contradict it. opinions and what-ifs never can, and 112 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
Ballou: Sun Capital Used Section 363 Sale to Offload Friendly's Pensions
“When Sun Capital bought Friendly's, the diner chain in the Northeast, they did a lot of the tactics that we were talking about, push the company into bankruptcy, but they were not just the largest equity owner in the company, they're also the largest lender. A…”
Ballou: Private equity is the latest flawed 20-year financial model cycle
“We lawyers have this incredible ability to invent a flawed business model every 20 years. Right now, I would argue that it's in large part private equity. 20 years ago, it would have been subprime lenders. 40 years ago, it would have been SNLs. 60 years ago, i…”
Ballou: PE insurance failures leave state guaranty funds holding the bag
“The challenge that we've got is if these insurance companies fail, the responsibility for paying the continuing obligations will essentially default to the state guarantee corporations in which the insurance companies are incorporated. So if you have an Iowa i…”
Klarman: Pockets of private credit could blow up during downturns
“The nature of most Wall Street innovation is it's never stress tested for a rainy day, because that wouldn't be any fun. It's fun to sell a lot of bonds, sell a lot of stocks, sell a lot of partnerships, and rake in the investment banking fees, but when the ra…”
Klarman: Private equity returns would look far worse without government rescues
“Had that rescue not happened when it did, you might see very, very different numbers out of private equity.”
Aitken: The right allocation to Chinese renminbi assets is zero
“I'll just say generally that the right size exposure to renminbi assets is zero, and perhaps that's something we should take up in another conversation ahead of the Taiwanese presidential elections.”
Collins: Citadel's pod shop model is risk management, not actual investing
“No one has done it better than Ken Griffin. But one of the things that really struck me was that it's not investing. There's actually no part of investing to it. It's managing a bunch of tickers within a risk framework.”
Mullen: Institutional rentals invest billions annually in new home construction
“We're putting billions every year into building new houses that during a cycle like this wouldn't take place.”
Sacca: No reason to hire a financial analyst again after GPT-4
“I don't know why I'd hire a financial analyst again. It's a job I value, but at the same time, this thing in moments spit back compound annual growth rate analysis.”
Monk: Asset allocation performance depends 100% on organizational capabilities
“I think what we think is a best practice is to say, actually, 100% of your performance in your asset allocation is a function of your organizational capabilities.”
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…”
Douvos: Opportunity funds are a sneaky workaround to LP fund-size limits
“Now we've just started calling them opportunity funds, which by the way is just a sneaky way around the issue of my LPs don't want me to get too big. So I'll leave my core fund the same size, but I'll raise this opportunity fund.”
Douvos: Long venture horizons make lucky investors think they are smart
“That's the thing that's crazy about venture. It's like, you have a whole community of people who've been lucky who think they're really smart and the evaluation horizons are so long. There's like no feedback.”
Geremia: ESG will cease to be an investment term within three years
“The most exciting to me is that ESG will go away. It will not be an investment term in three years, and it has nothing to do with it not being super important.”
Jack Bogle carefully staged his personal origin story for journalists
“The only thing that's a real common denominator is Jack had this wonderful vision of who he was and how he wanted to be seen, and he nurtured that vision, and he had it down pat, so every journalist who came to spend some time with Jack would get the same stor…”
Van Vleet: Institutional Allocators Cannot Afford to Avoid China
“I think you can't afford not to be in China.”
Full-Fee LPs Subsidize Large Institutional Investors Taking Free Co-Investments
“Because of that, I'm not real thrilled when our GPs will raise five hundred million and then raise five hundred million worth of opportunity for direct co-invest. And my pushback on that is, well, so I'm really just subsidizing the other guy who's taking the c…”
Wall Street Repackaged Basic Governance As ESG To Charge 40 Basis Points
“I'll tell you how it happens because we have a lot of Wall Street firms who have a conflict of interest. They can wrap it into this new bottle and slap on another 40 base points of fees for it.”
UK Pension Rules Mandating Consultants And Beneficiaries Fueled The LDI Meltdown
“The UK were required to have a consultant, and were required to have participant beneficiaries on the committee, which are two problems that also led to this little fiasco in the UK around their LBI programs. You have too many amateurs in the room, and so you …”
Accounting stability in private assets may induce a negative illiquidity premium
“I'm even concerned that there are some large institutional investors who would be willing to pay up for the accounting stability of private assets, which might In some points of the cycle, induce a negative illiquidity premium.”
Gave: US workforce obesity and opioid use severely constrain manufacturing reshoring
“The whole lockdown thing made a couple of problems that are inherent to the US and to the US labor force worse, most notably obesity, which prevents a lot of people from holding the type of manufacturing jobs where you have to be sitting up and doing a lot of …”
Harris: There are probably only 20 good long/short equity managers
“No, it's a very difficult model. There's probably only 20 good managers out there.”
Stavros: Private equity makes a mistake by concentrating equity in management
“I think private equity is making a mistake by aggregating all the economics in such a sliver of the company. We would all be better off as investors put aside the good to society by more evenly distributing it because the senior people are going to quickly tap…”
Seides: Warren Buffett won 10-year wager with a questionable decision process
“So I would say he won with the decision process that was questionable. We lost with a decision process that looked pretty good.”
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…”
China Will Become Uninvestable If Xi Retains His Current Advisors
“If he stays in power, which it looks like he's going to, and he's got the same people around him, the same advisors, I think China is going to ultimately become an uninvestable market.”
Distressed Russian Assets Will Return 50x Rapidly Upon Any Regime Change
“Just a small amount of investment in those stocks, and some people can retire on it because you're going to make 50 times your money on any regime change in a very quick period of time, so.”
Argentina Might Be the World's Best Performing Market in 2023
“Next year might be the best performing market in the world on the back of that election.”
Chhabra: The institutionalized David Swensen endowment model no longer works
“I'm not clear that the entire ecosystem of the Swenson model that had become so super institutionalized really works any longer. The fees are high, the fees are asymmetric, the LPGP risks are different, and I think we should explore different models, and I thi…”
Dixon: Google and Facebook will become low-growth legacy giants like IBM
“I think they're very likely going to become like IBM and HP and just chugging along and not really doing much new innovative stuff. They'll still be around and they'll still have their services, but I think that their relevance and growth are limited.”
Dixon: a16z owns less than 5% of most Web3 networks
“Generally what we own, contrary to Jack Dorsey and others saying that we own web three, we generally own sub five percent of most of these networks.”
Dixon: Web3 payouts will pass Web2 payouts in next couple years
“I believe we'll see in the next couple of years, web three payouts past web two payouts.”
Layer-2 scaling systems will eventually decouple from Ethereum and become independent
“So yes, these systems are tightly coupled to Ethereum today, but once they get substantial use and substantial capital inside them and all sorts of app developers deploying straight to them, at some point they're going to say, wow, why don't we integrate to a …”
Olaf Carlson-Wee: Every global financial transaction will eventually occur on DeFi
“I really do view it as where every financial transaction in the world will take place.”
Veremis: Crypto Regulatory Risk Is No Longer Systemic
“And then regulatory risk.
I don't think it's systemic anymore.
I could be wrong.
I think it was systemic in 2018.
You could have seen some really aggressive action against crypto back then.
Now, how can it be?
Like, I think, 30, forty million Americans hold so…”
Zell says he would repeat the Tribune buyout today
“If the Tribune scenario were presented to me today, I can't believe that I wouldn't do it again, because my assumptions were realistic.”
Drogen: Most long/short equity hedge funds gamble with beta, not alpha
“The biggest thing that coming into this world, even being a Geller, That I learned at Estimize in talking to so many of these firms about their process for generating trading ideas and fundamental estimates and all of this stuff is really that at the end of th…”
Drogen: Bitcoin is an investable global digital religion and Ponzi scheme
“This stuff was just religious proselytization as a financial asset. Like if you could own a digital religion, would you want to? Yes, absolutely. The first global digital religion that is basically a Ponzi scheme But you can own it. And that seems like a great…”
Drogen: Anyone claiming to know which crypto tech wins is lying
“My hypothesis here in this entire technology ecosystem, and this goes back to the mistakes that I made in 13 and 15, is I don't think anybody understands which one of these technologies is going to win long term. And if they tell you they do, I think they're f…”
Drogen: Bitcoin will not become a global reserve currency or inflation hedge
“The techno libertarians who felt that this could be a new global reserve currency, that it was an inflation hedge, that you could extricate yourself from holding fiat government currency and things like that. I think a lot of people drank that Kool-Aid, and it…”
Chris Voss: Relying on penalty clauses reveals poor negotiation skills
“If you're putting penalty clauses in your contracts, that means you're not a good negotiator.”
Libby: Lower-cost ETF equivalents will disrupt traditional venture capital fee structures
“I think that that's going to come to the venture world too. It's been a momentum trade. And so if you're Sequoia or Forerunner or Bessemer, you have services and tools. I think it's going to be hard to prove that you should be getting two in 20 versus an ETF e…”
Libby: Non-lead venture capital firms offering generic operational help are redundant
“If you're not going to get one of the top VCs, you don't need five VCs that are all doing the same thing. Like, oh, we'll help you with talent, and we'll do this and that. 10 years ago that mattered, but now all those tools are available to the companies.”
Drobny: The modern Yale model is effectively a levered S&P 500 position
“The problem with it today, as we discussed, is that most of the investments are equity allocations, and so you're basically getting a levered S&P position.”
Drobny: 14 years in, crypto lacks any use case beyond speculation
“And so right now I hear the word constantly, we're in the early innings, but crypto has been going on since 2008 now, so we're 14 years into it. And there still isn't really a core use case other than speculation and capital raising. There's no businesses that…”
Drobny: Endowments are not smart money; committees just fund obvious investments
“People think endowments are the smart money, and I disagree. I think endowments are often run by committee And of a dozen smart people in the room that are paid a lot of money that give money to the obvious stuff. And committees kind of push people towards tha…”