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 20 resolved? a statement only gets an assessment when the public record can support or contradict it. opinions and what-ifs never can, and 0 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
Credit investors never know companies as well as private equity investors
“What I learned back then, and it remains true to this day, no matter what anyone else may say to the contrary, credit investors do not know companies as well as private equity investors, and no one will ever convince me otherwise.”
Centerbridge spent years evaluating First Brands and Tricolor but passed entirely
“First Brands and Tricolor. We looked at both for years. People said there's never been a picture of Patrick James. We flew to his office. We met him in person. We had the Tricolor management team at our office. We spent a lot of time with both these businesses…”
Retail wealth influx into alternatives will inevitably trigger a major issue
“A lot of capital will come in from the wealth side. Inevitably, there'll be an issue, and it's just the way it is. And I don't know what it'll be about, but there'll be something. If we're now dealing with small investors who don't have the sophistication leve…”
Most distressed companies are fundamentally lousy businesses and should be avoided
“Most people forget most distressed companies are distressed for a reason. They're lousy. You don't want to go near them. So there's nothing good to do there.”
Great investors must operate like investigative journalists constantly looking under rocks
“People say, well, what else would a good investor be good at? I said, like an investigative journalist. You're always asking questions, you're looking under rocks, you ask a question one way, you listen, listen, listen, then you ask the same question, but you …”
Credit investor alpha comes strictly from the right-hand side of the balance sheet
“The alpha of a credit investor, particularly in a special situation, credit investor, opportunistic credit, call it what you will, the alpha is on the right hand side of the balance sheet.”
Distressed-for-control is just private equity done by de-leveraging the company
“Distress for control is just a buyout. The only difference between a distress for control transaction, buying debt, converting it to equity to own a company is that in a traditional bio you're using leverage to acquire a company. Distress for control. You're d…”
Private equity expects the moon while credit investors expect going to zero
“I thought back then, and I continue to think today, it leads to better thinking, because if I were to overly generalize, the private equity investors think everything is going to the moon, the credit investors think everything is going to zero, and it's good t…”
Investors rarely excel across both debt and equity without specializing
“What we learned over time, it's rare that you find someone who can hit 300 from both sides of the plate. People who are natural lefties or natural righties. So we evolved that terminology of being a switch hitter to having majors and minors.”
Credit market investors are increasingly abandoning safety in late-cycle behavior
“There's less of a focus on safety today than there used to be. Again, another manifestation of late cycle behavior, but safety first.”
IG credit spreads are at their tightest levels since the late 1990s
“Spreads are super tight. They're tighter now than they were before the GFC in the investment grade world, which is mind blowing. Spreads tightened the tightest level since pre-long-term capital management in the late nineties.”
Centerbridge sees no broad economic softness across its portfolio companies
“We have not seen softness. Any given company can go through a patch. We have some building products companies that we own. They're going through some stuff now. We haven't seen a particular sector of the economy start to keel over”
Subprime auto lending constantly blows up because people do dumb things
“Subprime auto always blows up as long as I've been doing this for nearly 40 years. Always it's constant. People do dumb things.”
The influx of private wealth will commoditize alternatives and depress returns
“At some point, alternatives are no longer going to be an alternative. And they're like mainstream. And when that happens, it means it will be harder to generate outsized returns. That's what worries me. I think about that in terms of influx of wealth capital. …”
Second-guessing colleagues after an investment mistake is culturally corrosive
“When people get into the shoulda, woulda, coulda game, it drives me bananas because we all make mistakes. It's the nature of investing. If you're a professional, you don't need to be told by your coworkers, we should have done this, could have done that, it wo…”
Centerbridge professionals earn a substantial minority of compensation from other firm strategies
“We make sure that people have meaningful components of their compensation come from across the firm. You still may have a major, which is perhaps a majority of your compensation, but a substantial minority, and I mean substantial, will come from other areas in…”
Direct lending accounts for over half of Centerbridge Partners' opportunistic credit business
“And that was really a sea change in opportunistic credit investing to the point that it's more than half our business now as opportunistic credit investors, We're lenders and not just LMEs. In fact, LMEs are only a small portion of it”
Jeff Aronson left Angelo Gordon because founders refused to let him lead
“What I wanted
Was a chance to do my own thing.
I wanted to drive the bus.
That was something that they were not prepared to do.”
Centerbridge name bridges private equity and private credit into the center
“The name center bridge, even though it sounds like just one of those other names involving a direction or a structure, there was some thought to it in that we were taking two strategies. Private equity, and now it's called private credit, but that phrase didn'…”