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 70 resolved? a statement only gets an assessment when the public record can support or contradict it. opinions and what-ifs never can, and 1 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
Barth: Retail flows will swamp Ivy League endowment private market capital
“And notwithstanding the endowment headlines, we think a much bigger fund flow that's going to swamp that is the democratization. It's the retail flows. Almost everything we're doing in illiquids is either to get paid to access that, seed things that can take a…”
Barth: Multi-manager hedge funds will take the biggest hit if endowments face taxes
“The places where you're going to see bigger hits are on the multi-manager pod hedge funds, which are incredibly tax inefficient, but have been a good source of risk-adjusted returns for some of the larger tax-exempt allocators. That's where I think the bigger …”
Barth: International betas are the most attractive in 15 to 20 years
“I think the betas are more interesting than they've been in 15 or 20 years because of not just the entry point, but because of the deglobalization, and you've got a declining correlation of those markets, and the only free lunch we get as allocators is diversi…”
Barth: Dislocated biotech sector presents massive multi-asset investment opportunities
“One of the places where we see public, private, and credit incredibly dislocated, unloved, and where we think there's huge opportunity is biotech. It has been such a bubble through the pandemic where biotech and vaccines were going to solve everything, and now…”
Barth: Private equity returns will drop over the next 25 years
“Private equity returns will be lower over the next 25 years than they've been over the past 25 years.”
Barth: Stock-picking alpha is permanently harder and will not mean-revert
“Alpha in stock picking is as hard as it's ever been. I'm not a big believer that that's going to mean revert in a meaningful way.”
Barth: LPs are cutting routine re-ups to second-quartile private equity managers
“The re-up process was relatively straightforward. That is unequivocally not the case anymore. We would be investing two times more than we have just in re-ups if that was the case. There are a lot of good, not great managers that would have their big LPs write…”
Barth: Capital destruction in crypto could wipe out profits despite game-changing technology
“Like this could be a game changing technology but the destruction of capital because of so much money flowing in, we could all be changing how we trade, how we clear, how we transact, how we communicate, but it's not clear any of us will have made money on tha…”
Barth: U.S. small cap offers the biggest alpha and valuation opportunity
“But I think the biggest opportunity, both alpha and relative valuations in U.S. Small cap, I'd agree with that.”
Barth: General Atlantic uses an AI bot on its investment committee
“I mean, I think what GA is doing is really cool in terms of having an AI bot on their investment committee, thinking about investment decisions they made in the past and having that institutional memory in a bot.”
Barth: LLMs will outperform humans at underwriting small-balance asset-backed loans
“The underwriting process might have software that scores something first, but if that score can be a LLM that is looking at your data and outcomes and learning, it will do that better than a human.”
Barth: AI efficiency enhancements will reduce entry-level hiring in investment firms
“If what we're really using AI for early is efficiency enhancements, that just means in the future, I'm going to be hiring less junior people because the junior people I have are going to be more efficient.”
Barth: Financial markets today significantly underreact to major geopolitical events
“Geopolitical is an interesting one because 30 years ago, 20 years ago, a geopolitical event would have massive market implications. Since then, geopolitical events have had less and less and less implications to the market. I feel like the pendulum went from o…”
Barth: BBR does not require position-level reporting or separate accounts
“People ask about what reporting do we want to see? And I always turn the question back around to the manager and say, what do you look at? I want to see what's their dashboard, and that's what I want them to share with us, not what they think some consultant w…”
Barth: Venture capital is a mediocre asset class unless accessing top quartile
“Venture capital is a mediocre asset class. We got to be in the top quartile managers. It is very difficult to be in top quartile venture capital managers, given their limited capacity.”
Barth: Niche credit yielding double-digits is more attractive than S&P 500
“As much as I'm dismissive of private credit, these longer duration, niche-y credit opportunities continue to grow as part of our portfolio, because from our perspective, even if a lot of it is ordinary income, earning mid to high double-digit returns, because …”
Barth: BBR rarely invests with public or PE-backed asset managers
“That's not to say we not do business with investment firms that are public or investment firms that don't have minority stakes, but it's more the exception than the rule because we're focused on people who are waking up and thinking about their returns and the…”
Barth: Private markets will see slower realizations rather than valuation volatility
“Obviously, they all have to get audited, and it all has to be gap, and you've got to get Houlihan Loki or someone else to sign off on the valuation, but I don't think you're going to see the volatility in private markets. You're just going to see a real slowdo…”
Barth: Fund flows matter more than fundamentals in frontier markets
“When you look at those markets, though, my counter would be, one, fund flows probably matter more than fundamentals. Two, things like rising US interest rates are particularly bad for emerging markets or speculative markets of any kind, but particularly emergi…”
Barth: JGB market distortions will cause systemic issues for banks
“There aren't any JGBs left to own. The markets effectively become completely privatized, and that's going to have some real systematic issues, particularly as it relates to banks.”
Barth: Systemic US lending risk sits outside regulated banks
“I think there's a lot of systematic risk in the lending market in the United States that's not in financial institutions.”
Barth: Firm avoids crypto because its only thesis is greater-fool pricing
“I think of crypto as a commodity like gold, and I have a very hard time, or we as a firm have a very hard time investing in anything where the only investment case is that someone will pay more in the future than you do today.”
Barth: Oil exploration cash flows are unanalyzable due to uncertain terminal value
“If you don't have a sustainable business model, back to the, we invest in cash flows, you can't analyze what the cash flows are of a Oil exploration and production company. Cause I can't tell you what the terminal value is.”
Barth: Hedge funds are not an asset class; allocate to underlying strategies
“Our asset allocation approach, we allocate to strategies, not to asset classes, right? Hedge funds aren't an asset class. You know, long short equity is a strategy you either do or don't want to be allocated to.”
Barth: Why BBR uses generalists instead of asset-class investment specialists
“First, from a structural perspective, all of the senior people are generalists, and so if you're a hammer, everything looks like a nail. If you're the private equity specialist, Every investment problem has a solution that looks like a private equity fund.”
Barth: BBR avoids asset-gathering managers focused on fee retention
“At the end of the day, managers who are focused on earning a management fee and keeping assets and just not underperforming, you know, your average mutual fund whose job it is, is to never be below three or four Morningstar stars so that the four one K consult…”
Barth: BBR adds capital to underperforming managers while other investors redeem
“All the things you loved about a manager and the strategy and the people and the approach aren't changing and they're underperforming. Most folks pull money. We write checks.”
Barth: Investors are taking crazy risks to generate 6% in high yield
“Today people are willing to take some, I would argue, crazy risks to generate a six percent return in high yield and other places.”
Barth: BBR Rejects VC Mega-Funds and Hybrid Crossover Growth Funds
“We have not generally done any venture capital funds who have gotten larger and merged into growth equity funds, and they're obviously the well-known hedge funds that have launched Big growth equity private equity funds. We've done neither. It has been much mo…”
Barth: Ivy League endowments are structurally tax-efficient through VC and low-turnover equity
“The big Ivy League endowments haven't been huge private credit owners. They've done a lot of Growth equity in VC, it's actually pretty tax efficient, and they've done a lot of public equity that's not been high turnover.”
Barth: BBR Partners decided the firm will never be for sale
“Making the decision that the company would never be for sale, and that how do we think about Super long-term for how the firm be structured, and that was a huge mind shift for us.”
Barth: BBR Partners has never allocated to hedge funds
“I think that's different than certainly most other folks who just say, oh yeah, we're going to allocate to hedge funds. We've never allocated to hedge funds.”
Barth: The most interesting alpha originates from capital scarcity
“And so I think the most interesting alpha today comes from a lack of capital. And that lack of capital can either be because it's unfavored or And that goes to being contrarian. Something's cheap because people hate it. It can be a lack of capital because of a…”
Barth: Core real estate became investable in 2022 after 20 years
“For 20 plus years, core real estate was uninvestable for us. In 22, core real estate became investable for us again, just from a lack of capital.”
Barth: BBR stays passive in US large-cap equities, avoids L/S funds
“We are passive for US large cap equities. We've been passive Since day one, we own significantly fewer long short equity hedge funds, and we don't do any that do US large cap stocks, with the exception of industrial focused firm that is doing some market timin…”
Barth: BBR invests almost nothing in standard on-the-run private credit
“We do almost no on the run private credit.”
Barth: BBR provides structured lending to bourbon producers amid declining consumption
“There's actually terrible technicals, because liquor consumption's going down, and Brown Forman's talking about volumes dropping, and so there's no capital going into that, and so the ability to be a structured lender to these small producers is incredibly int…”
Barth: Emerging markets favor active hedge funds over buy-and-hold investing
“Emerging markets is not a good buy and hold marketplace, but between being macro informed, more alpha opportunity, more short opportunities, it's a good place to own hedge funds.”
Barth: Deglobalization makes global portfolio diversification more valuable
“A deglobalization in the world being less flat means capital flows are going to be less connected. Therefore, being globally diversified is a better thing.”
Barth: Toe-dipping in emerging assets means backing focused specialists, not whole ecosystems
“Dipping your toe in isn't getting long the ecosystem. It's finding one or two really thoughtful partners who are sharpshooters. So you're not buying the asset class, so to speak. You're finding thought partners who can help educate you, and you're finding thou…”
Barth: Small PE firms create repeatable value selling to mega-funds
“One of the other things we love about private equity is if you can create food for that ecosystem, it's a risk, wash, repeat process of I buy something small and I sell it to the big guys.”
Barth: BBR Pays Far Below Rack-Rate Fees for Small Long/Short Managers
“Because it's been such an unloved asset class, we don't pay anywhere near rack rate fees. It's smaller managers. For us with families, it's also managers who've been much more focused on tax efficiency, and so our ability to generate really attractive After fe…”
Barth: Asian financial markets have nearly caught up to Western sophistication
“I think it is light years ahead. They have, if not fully caught up, come very, very close. The management teams are sophisticated. The investors are sophisticated. The pools of capital are deep.”
Barth: Be passive in efficient markets and highly concentrated in inefficient ones
“We take a core satellite approach where you want to be passive, and you particularly want to be passive in the most efficient markets, and you want to be active in niche managers where there's a lot of inefficiencies, and they've got a structure to be concentr…”
Barth: BBR Targets 50/50 Active-Passive Split in Public Equities
“All else being equal in public equities, we want to be about fifty-fifty passive and active on the long side.”
Barth: BBR Allocates 65% to Higher-Risk Assets, Half in Public Equities
“So if you looked at your average high net worth portfolio, you know, 65% equities is probably about right. We're 65% higher risk strategies, but call it only roughly half of that in public equities.”
Barth: BBR demands 3-4 unprovided references before backing managers
“There shouldn't be anyone who's such a secret That I can't find at least three or four third-party unprovided references where we can get very detailed, thoughtful opinions on those managers. If I can't do that, and they can't all be positive, we can't make an…”
Barth: Allocating across different manager temperaments is a powerful diversification tool
“Temperament and approach is one of the ways to get diversification, and so I'll get a question from a client or prospective client, you know, if a stock's down, do you like managers who buy more, or do you like managers who have stopped losses and cut their lo…”