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 46 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
Charles: Market shifts impact PE firms by scale level more than strategy
“Changes in the market impact firms that share a level a lot more than firms that share the same strategy. That's pretty unique. A level eight infrastructure firm and a level eight buyout firm are impacted by the market in more similar ways Than a level two and…”
Charles: Many private equity firms fail to justify illiquidity net of fees
“First of all, have you generated enough alpha to justify taking illiquidity from the client? A lot of firms, the answer is no. Especially net a fee and carry.”
Charles: Private equity faces a massive maturity wall in 2025 and 2026
“There is a maturity wall coming in 25 and 26 for a ton of firms who've been able to bootstrap it and scrape through the last three or four years.”
Charles: High-performing PE firms will miss fundraising targets in coming years
“There is tremendous unrealized value and unrealized gain Managed by really talented people and the firms that they're a part of are going to come to market in the next 12 to 24 months, and they will not achieve the fundraising target that they need to feed all…”
Charles: PE buyers are now suspicious of assets sold without continuation vehicles
“Well, now, if I'm a sponsor, and I'm getting a book from another sponsor, and they're not CV-ing it, I'm a little suspicious.”
Charles: The private equity asset class is currently 10% overvalued
“We think the asset class today is overvalued by about 10%.”
Charles: Only a third of mega PE firms have true competitive advantages
“If you have firm level OCAs that are transferable across strategies and across markets, you can be a high conviction alpha generator across products Across industries, size strata, but it is rare. I bet only about a third of those level nine and level 10 firms…”
Charles: Private equity GPs ignore broad market data outside of fundraising
“When you go talk to a GP, they are so hyper focused on their business, on their strategy, on their team. Very rarely do they have a perspective on the broader market. They tend to pop their head up every three or four years. And go ask for money. They're not i…”
Charles: Only Ares, Apollo, Blackstone, and KKR reach Level 10 scale
“There's only six firms at level 10, and they are enormous. They look more like Goldman Sachs than they look like Arctos. Aries, Apollo, Blackstone, KKRA, it's the biggest of the big.”
Charles: The top 700 private equity firms control 90% of capital
“Those 15 firms, which is .2% of the universe that we track, controls about 20% of the AUM. If you go down just two more rungs that go level seven to level 10, those 700 firms control 90% of the capital.”
Charles: Top wirehouses committed twice as much capital as top institutional LPs
“Last year, the six biggest LPs in North America committed about fifty-five billion dollars to funds. The six biggest private banking and wire house platforms committed about a hundred and ten billion dollars to funds. It's two X the number.”
Charles: Top-tier mega-firms raised $250B via captive insurance and wealth channels
“In the last 12 months, The level 10 firms in our framework have raised two hundred and fifty billion dollars from insurance companies they control or through the wealth channel with sales forces that are theirs.”
Charles: Private equity distribution yield is currently historically terrible
“The yield of private equity today is as bad as it's ever been. You're in the bottom quintile of distribution yield right now.”
Charles: Private equity drawdowns doubled to $40B and NAV tripled in five years
“Over the last decade, while distributions have been very consistent at 40 a quarter, Drawdowns have doubled to 40, and NAV has tripled in the last five years, so the yield has just nosedived.”
Charles: Average distribution yield today would beat PE exit records by 25%
“If you just get an average yield on all of the accumulated NAV, this year would be the biggest exit year ever, and it would exceed the best year ever by about 20, 25% in dollar volume of exits.”
Charles: Inorganic transactions account for 20% of recent PE exit activity
“By our estimate, between 15 and 20% of all the exit activity the last two years has come from inorganic transactions.”
Charles: Some PE Wealth Products Will Deliver Expensive Beta, Not Alpha
“If the packaging costs more than the alpha, then we're just selling people a bunch of really expensive beta, and that's not good. I think some firms are going to do a really great job helping bring some of the benefits of this asset class to a much broader par…”
Charles: Sports teams offer massive tax shields for private equity billionaires
“Sports properties create a huge tax shield. They are not correlated with healthcare or tech or finance. You're not allowed to use a lot of leverage. So if you are a titan of private markets, You have a lot of levered exposure to all kinds of equity, and you ha…”
New York Yankees equity compounded at 9.7% annually over 115 years
“Over the last, I think it's 115 years, US inflation has run at an annualized rate of around, I think it's 3.1%.
US public equities have compounded at around a 5.9%.
And equity in the New York Yankees has compounded at 9.7% per year for a 115 years.”
North American sports leagues restrict franchise debt to an average 14% LTV
“So an owner is not allowed to use their team as a piece of collateral on a loan. And the leagues regulate maximum leverage at the franchise level to the point at which across the big four North American leagues, the average loan to value is about 13, 14%, whic…”
Pro sports franchises returned 12% to 14% annually over 20 years
“It has a correlation to traditional asset classes in the U.S. Of between -.2 and positive .3. And over the last 20 years has generated Compounded returns of 12 to 14% per year, which is about a 500 basis point premia to the S&P 500.”
Research shows 90% of alternative asset managers generate no excess return
“And if you look at the research, I think it's something like 90% of the managers in alternatives don't create any excess return. Not a fee and carry.”
Charles: Complexity in private equity management companies grows non-linearly with scale
“The management company, the GP, that is a complex business. And as the firms grow, And mature. That complexity increases in non-linear ways.”
Charles: PE emphasizes value-add because leverage and asset pricing remain prohibitive
“We think it's because it's time to do deals, the cost of leverage is prohibitive, pricing is prohibitive, so you've got to craft a narrative about how you can do great deals while still buying at full prices with very expensive leverage.”
Charles: Post-election optimism drove non-market rallies in public alt manager stocks
“There's this animal spirit around the election results, the new administration, deregulation, and you can see that animal spirit in the price change of publicly traded adults, managers, strategic advisory firms. Their share prices have moved in non-market ways…”
Charles: Fundraising pressures and product proliferation drive PE manager consolidation
“Manager consolidation and M&A is a theme that has been emerging and dominant for the last couple of years. But it is an emergent trend from several themes that are happening under the surface within this asset class around fundraising, product proliferation, i…”
Charles: Higher Skill in Competitive Fields Increases the Role of Luck
“The higher the skill level in a competitive game, the more luck determines the outcome.”
Charles: US public equities top 90th percentile, PE entry multiples hit record highs
“You're in the 90th percentile plus in every valuation metric that matters for US public equities, and entry multiples in private equity have never been this high, and holding multiples have rarely been this high.”
Ian Charles: Institution spin-outs achieve smoother generational transitions than founder-led firms
“If your firm started as a spin out from a big financial institution, which is actually quite common in Europe, it's less common in the US, but in a spin out, there's less of a founder mentality. There's a stewardship, a shepherding mentality. If the firm start…”
Charles: LinkedIn network dominance predicts VC performance better than quartile tracking
“We, a long time ago, supported some really cool academic research on using network dominance to predict venture fund performance. It was actually better than core tiles. You could actually measure how important and how connected someone was mathematically Thro…”
Charles: 80% of Recent Sports Team Buyers Come from Tech or Private Markets
“If you look at the people who have purchased control of North American sports teams over the last decade, 80% of them come from tech or private markets.”
Sports team minority stakes blend infrastructure, real estate, and growth equity
“It had a lack of correlation. It's really hard to find. It had attributes that looked a little bit like a blend of core infrastructure, core real estate, but also growth equity.”
Sports ownership is a closed garden resistant to Wall Street mindsets
“This wasn't going to work unless our founding team included well-known senior members of this community. Cause it really is a community. It's a closed walled garden. They're really not into the wall street private equity mentality.”
Major North American sports leagues are standalone $25B to $150B businesses
“These leagues by themselves should be valued anywhere between 25 and one hundred and fifty billion dollars by themselves.”
Ninety-five percent of major professional sports teams generate positive operating income
“And 95% of these businesses have positive operating income.”
Major League Baseball will continue to hold a World Series in 2071
“I do know 50 years from now, there will be a world series in October.”
Sports leagues ban institutional funds from using leverage or holding governance control
“You're not allowed to use leverage. You're not allowed to use the assets as collateral in a back levering package. You're not allowed to have formal governance control.”
Real estate development surrounding sports venues is a $50 billion opportunity
“Then you've got all of the real estate around the venue. It's a massive 20 to fifty billion dollar opportunity over the next five to 10 years.”
Tech and finance executives comprise 60% of new sports team owners
“So if you look at control ownership transactions over the last decade,
I think something like 60, 65% of the new control owners in North American pro sports have either come from the technology sector or finance.”
The average Big Four sports franchise is valued around $2 billion
“I think the average evaluation for one of the teams in Major League Baseball, National Basketball Association, NFL, NHL, I think it's about two billion dollars, 2.2 billion dollars, something like that.”
Forced selling impairs long-term asset returns by establishing depressed transaction comps
“Forced selling is one of the ways you impair long-term returns. If you go through a phase of forced selling, you get bad prints and it suppresses price appreciation until you can get inertia back in a positive direction.”
League-level revenue accounts for 40% to 80% of sports team economics
“Depending on the league, 40 to 80% of the economics for each team are generated at the league level.”
Arctos is contractually prohibited from accessing player or coaching information
“Anything that touches players, drafts, free agency, farm system, anything that has to do with players, coaches, we can't be involved. We can't have any information. We can't have any dialogue. We actually are prohibited from receiving any information on those …”
Some sports leagues mandate institutional funds have 10 years of remaining term
“So some of the leagues require that a fund have at least 10 years left in its term to be considered for approval.”
Some leagues require funds to dedicate $500M to $700M for ownership
“Some of the leagues Require that you have at least 500 or seven hundred million of capital dedicated to their league.”
Major sports leagues recently locked in media rights for 12 years
“For us, a big part of that risk has been taken out of the system for the next seven to 12 years because Major League Baseball, the National Hockey League, and the NFL, and a couple of the European soccer leagues have all repriced their national and internation…”