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 27 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
MacDonald: Spinning out HMC internal teams to pay 1.5-and-20 was illogical
“All these initiatives at Harvard lead to spinning out these firms. You think about Adage, Highfields, Convexity, Charles Bank. Now you go from them being internal paying them that to them being external in paying them one and a half and 20. And pause some of t…”
MacDonald: Harvard's oil and gas divestment caused meaningful financial losses
“The loss to Harvard by not investing in a sector of oil and gas over the last eight, 10 years is very meaningful because it was a target rich environment for returns that go to support the financial aid for students.”
MacDonald: Five-Million-Dollar LP Commitments Struggle to Be Meaningful to GPs
“When times are a little bit tough, you lean in and you understand things, but you also show up with a real check. You have to be a meaningful investor. If you're a five million dollar investor, it's hard to be meaningful.”
MacDonald: HMC internal managers earned 4% to 8% carry on alpha
“Those folks were generally making roughly four to eight percent carry the alpha that they were generating while they were at HMC.”
MacDonald: Family offices doing direct investing without top teams are tourist investors
“The flaws in many family offices, they don't hire the teams. If you're going to focus on direct investing in an area like private equity, in a sector like manufacturing, you better hire a world-class team who's got a real edge, experience, top quartile track r…”
MacDonald: Lack of checks and balances in family offices causes suboptimal decisions
“In many family offices, there aren't enough checks and balances on the decision-making process. The family calls the shot. That leads to suboptimal decision-making.”
MacDonald: Mean PE returns without fee and carry reach top-quartile performance
“If you take the mean return in most vintage years from a Cambridge associate and you back out fee and carry, that's top quartile.”
MacDonald: PE alpha is concentrated in small-cap and micro-cap funds
“I'm a believer that the alpha is in the smaller end of the market, mid cap, small cap, micro cap funds.”
MacDonald: Co-investing should not involve re-underwriting the GP's deal
“The point of co-investing is not to re-underwrite the deal. It's to benefit from what they're doing, but what they've done and how they share is incredibly informative to let you know about how deep they are, how knowledgeable, what their edge is.”
MacDonald: Fund managers rationalizing fund size increases signal allocators should exit
“With GPs who rationalize raising more money without being intellectually honest about it, Is a first indication that you should be thinking about heading for the exit.”
MacDonald: Large venture funds have more opportunity to perform than large buyout funds
“There's more opportunity for the larger venture funds, frankly, to continue to perform than on the buyout side.”
MacDonald: Investor Skill Cannot Overcome Cyclical and Secular Industry Declines
“When an industry that is facing a cyclical and secular decline, which was happening in the late 2000, no matter how good an investor you are, it doesn't matter. I learned about You got to be picking the right sector, technology, healthcare, the importance of l…”
MacDonald: Many investment track records are statistically insignificant and misleading
“In our sector, many people build track records that are not statistically significant, not meaningful. You have a few early wins. You think you're smart.”
MacDonald: $30B to $100B is the sweet spot for institutional platform scale
“Being in platforms like HMC, which was 30, forty billion when I was there, 30 to a hundred is the sweet spot where you can have enough capital to matter, but if a five or ten million dollar opportunity comes up that's compelling, you still have the ability to …”
MacDonald: SCS runs 70% tax-managed passive in public equities
“I still believe there's alpha out there, but we're a 70% tax managed passive, and if you can generate a hundred to 200 basis points of tax alpha, and there are now extension strategies that build upon that, if you're thoughtful about it and don't put too much …”
MacDonald: Go passive in low dispersion and active in high dispersion
“Where there's dispersion, you go active. Where there's low dispersion, like public equity, you go passive.”
MacDonald: Changing an Investment Process Forces Allocators to Re-Underwrite Managers
“So many times, though, people change and evolve the process, whether it's public or private, and when that happens, you're re-underwriting a whole new strategy or a whole new manager.”
MacDonald: SCS refuses co-investments if the GP writes a smaller check
“If a co-invest comes to us, and the GP's putting in a small check and looking for us to put in a bigger check than them, that's not happening.”
MacDonald: Anchoring emerging managers for GP equity captures structural alpha
“Where those things align, you can de-risk it, and you can own a piece of the GP going forward. That is where you can find more structural alpha.”
MacDonald: Capacity constraints force better LP allocation decisions
“What you want is a capacity constrained environment for investing. I want it with my GPs. I want it for us, where you're having to make hard decisions about what GPs you're backing in the equity long short space, private space, co-investment space. The only wa…”
MacDonald: Too few LPs adopt an active GP sourcing mindset
“Sourcing to me, whether you're a GP or an LP, too few LPs, Take the GP mindset. As an LP, you better have a GP mindset, and you better source. You better be out there finding opportunities.”
MacDonald: Private markets historically beat public markets by 580 bps over 10-year periods
“From a math standpoint, if you look back over any 10 year rolling period, Privates have performed publics by 580 basis points. Over three-year rolling periods, 500 basis points. This last three years is one of the rare three-year cycles that hasn't.”
MacDonald: Over 60 PE-backed roll-ups operate in RIA space
“Now there are over, I think, 60 private equity-backed roll-ups in the RIA space.”
MacDonald: Successful firm succession requires founders to over-share economics
“The most important thing for succession to be handled well is having founders who along the way share more than they should.”
MacDonald: Fidelity's Johnson family office prioritizes direct investing over fund managers
“The Johnson family, as entrepreneurs, lean more directly, as opposed to investing through managers.”