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.
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Leffell: FDIC gave away SVB and Signature Bank assets at advantageous prices
“We saw a similar situation recently when Silicon Valley Bank and Signature Bank went bust, and the FDIC took over their books. The FDIC was selling it. They were giving it away at very, very advantageous prices.”
Leffell: Large private fund incentives drive indiscriminate capital deployment
“Some of the large investors are geared to certain strategies that incentivize them to write huge tickets irrespective of the market environment. In a way, that's indiscriminate capital deployment, which is really a big no-no in investing.”
Leffell: Newly matched co-founders pose high risk of a six-month breakup
“First off, if we're looking at a sponsor and there's two partners and they've never worked together before, that's something I'm always apprehensive about. I think that one of them will not be there in six months, and I don't want that institutional risk.”
Leffell: VC-backed alternative investment platforms are run by techies, not investors
“Those firms had all raised a lot of money from venture capitalists, and none of them were investors. They were all techies. And the key difference from them to what we do is the quality of our investments were materially better.”
Leffell: Gov. Newsom insisted PG&E replace its entire board after bankruptcy
“And the governor had insinuated his staff into the process and was very engaged in what we were doing and insisted that the entire board change after bankruptcy.”
Leffell refuses any investment opportunity if counterparties rush his decision
“The other big coaching thing here is never rush. When somebody is rushing you to make a decision, back then it was enough to say I'm not doing it, and to this day I won't do it. If somebody's rushing me that you have to act now on a new idea, say what was tomo…”
Leffell: Davidson Kempner pooled partner profits to prevent desk capital hoarding
“Every partner in the firm did well if the firm did well, and did poorly if the firm did poorly. And the hope there was that If merger arbitrage is having a gangbang year, then the guys in distress where I was would not glom onto capital for mediocre ideas. We …”
Leffell: Aging VC and PE funds will soon create forced-selling opportunities
“Whether it's banks or fund selling, we're going to see opportunities where venture capital and private equity funds are winding down. They're at their ten-year Limit. Maybe they can get another year. They're gonna have to sell things.”
Leffell: Intelligent investment ideas must fit on a single page
“I think quite frankly, if somebody cannot communicate an intelligent investment idea in one page, they should go back and do it again. There's no reason certainly for an intelligent executive summary to be more than a page long, and I'm not talking about eight…”
Leffell: 10 East refuses investments in China, Latin America, and Russia
“We're not going to invest in China. We're not going to invest in the Far East. Not going to go to Latin America. Certainly not Russia. We will only invest in places where the rule of law is recognized.”
Leffell: PG&E settled with Baupost near par on subrogated insurance claims
“We settled first with Baupost, which made an absolutely brilliant investment by purchasing the subrogated claims of the insurance companies, and we settled with them for close to par.”
Leffell: Distressed Bank Debt Did Not Historically Trade Before Late 1980s
“Buying bank debt, and bank debt did not historically trade. So these were one-off transactions. It was pretty much a small group of banks and funds that were doing it.”
Leffell: Davidson Kempner acquired unfunded revolvers while being paid 50 cents
“To try to explain to somebody that you were buying an unfunded revolver at 50 cents on the dollar, and the seller was going to give you 50 cents, so forever unfunded, you just pocketed 50 cents, was pretty entertaining, and we ended up doing it.”
Leffell: Physical edge of faxing SEC filings is dead in modern markets
“So in the early years, we would have someone stationed at the SEC, and when a company we were following filed something, this person or company would take it and fax it back to us, and We had those rolls of fax paper that if you didn't read it quickly enough, …”
Leffell: Committing investment theses to writing creates crucial institutional accountability
“The third thing would be always commit things to writing. That was one of the early disciplines we took on because having something in writing creates accountability. There's no he said, she said. The analyst has committed something. You know what was said and…”
Leffell personally co-invests in every single 10 East deal
“Some people think this is highly relevant, but I personally invest in everything that we do.”
Leffell: 10 East achieved 20% return financing a Boy Scouts litigation firm
“So we were able to make a loan to a law firm And we were secured by the value of the claims that they were amassing. I think we had nine to one collateral coverage, and it generated a better than 20% return in a year and a half.”