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 32 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
Kelly: Middle-Market Private Equity Outperformance Over Mega-Caps Will Accelerate
“So I do think that the outperformance that you've seen over time with middle market private equity funds over their large and mega cap peers Is only going to not just continue, but move even higher.”
Kelly: 401(k) Plans Will Inevitably Integrate Alternative Assets
“Ultimately, we will see more partnerships between traditional asset managers and alternative asset managers that create structures like collective investment trust to be put into target date funds and for one K plans that have a mix of Liquid traditional inves…”
Kelly: Buying Poor-Quality Companies Works if Improvement is Mispriced
“Somebody who says, well, I like to be long, high quality companies and short, poor quality companies. Well, I wouldn't mind being long a poor quality company if it's going to get better, if I have a variant view on that and vice versa.”
Kelly: The Era of Financial Engineering in Private Equity is Over
“The days of financial engineering, your way to higher returns, in my view, are over.”
Kelly: Private Credit Boom is Driven by Structural Demand, Not a Bubble
“If you look at the sheer amount of economic activity, US GDP going from 11, 12 trillion of GDP pre-great financial crisis to 30 trillion today. The number of banks and the consolidation in banks and their move away from lending to private companies and middle …”
Kelly: Private Wealth Will Be the Fastest Growing Source of Alternatives Capital
“The demand from private wealth will be the fastest growing source of capital into alternatives for the foreseeable future.”
Kelly: Indexing and ETFs Killed Traditional Hedge Fund Information Edges
“As time went on, as we saw through the 2000, the passive indexation and ETFs and the capital markets changes in the public market rendered some of those advantages obsolete.”
Kelly: Building Asset Managers is Less Competitive Than Stock Picking
“There are a lot of people fishing in that pond, but actually building asset management companies and managing them, there seemed to be nobody that sets out to do that. I thought maybe that is my career path. If I can do that, there are a few people fishing in …”
Kelly: Investment management failures typically stem from misaligned incentive frameworks
“If you want individuals to act in a way where they are collaborating and working towards a client outcome, you have to appropriately construct those incentives correctly. That's often where in investment management things go awry. So I'm having a problem getti…”
Kelly: Wealth Platforms Should Evolve to Create Proprietary Alts Strategies
“Just like Netflix eventually came to the conclusion that building your own TV and movie studio and putting it through your own pipes might be a good idea, as long as the quality content is high. I thought, we can do that here.”
Kelly: Private Credit Yields Remain Attractive Post-Tax for Individual Investors
“If you look at the profile, the investments will often be put into a retirement account where taxes will be less the issue in factoring into the decision making. In other cases, even with A taxable account, the level of yield one can generate is oftentimes eve…”
Kelly: Individuals Now Access Institutional-Grade Alternatives at Institutional Fees
“It's a big sea change from the early days of those offerings and the access to those original investments to today where you have individual investors accessing the exact same investments as the largest, most sophisticated pools of institutional capital in the…”
Kelly: Few Alternative Investment Firms Are Well-Equipped to Serve Private Wealth
“Still to this day, there aren't many firms that are well equipped to bring their offerings to the private wealth market.”
Kelly: Middle-Market Private Equity Sponsor Networks Take Years to Replicate
“You could try to replicate this, but it would take many, many years to replicate this business, and you can't replicate several hundred relationships overnight.”
Kelly: Private Equity Capital Has Become an Undifferentiated Commodity
“There's a lot of capital out there, and capital has become more and more of a commodity. Everyone in that ecosystem, you need to prove why you're not just a commoditized Piece of capital.”
Kelly: Credit Fits Evergreen Fund Structures Better Than Private Equity
“In evergreen strategies, credit fits quite well into those wrappers because they're more cash flowing than private equity. You have cash income Refinancings, shorter duration, three to five year assets. Whereas in private equity, these are longer duration asse…”
Kelly: Evergreen Private Equity Will Yield 12% to 13% Net Returns
“The trade-off, and there's always trade-offs, include the fact that these are not liquid strategies, so they're in semi-liquid structures, that you're not going to generate The same level of returns in a private equity evergreen structure as you will in a priv…”
Kelly: Private Credit Floating-Rate Yields Will Fall as Base Rates Drop
“The expectations have to be base rates are coming down. Distribution rates and yields will come down in those private credit floating rate vehicles.”
Kelly: Alternative Investments Are Not Inherently Superior, Just Different Trade-Offs
“Alternatives aren't better than traditional investments. They're different. They bring different trade-offs in liquidity and fees and complexity”
Kelly: Mega-Cap Alts Managers Finance Companies That Were Historically Public
“They're providing equity and credit capital to companies that 10 years ago would have been publicly traded. That is the upper middle market.”
Kelly: Retail Access to Blackstone, KKR, and Apollo is a Great Evolution
“But I think it's tremendous that individual investors now get access to the likes of Blackstone and KKR and Aries and Apollo. These are tremendous firms. It's a great evolution for all individual investors.”
Kelly: Unmet Liquidity Expectations Are Private Markets' Biggest Systemic Risk
“The bigger risks revolve around this idea of management of expectations, ensuring that why investors are embracing this match up with what can be delivered. It's awareness, education, and expectations management where it has the greatest surface area for risk.”
Kelly: Evergreen Funds Drive Secondary Demand for Endowment Private Equity
“If you take endowments that are looking at selling some of their private equity and venture positions, the primary demand for those secondary positions are coming from evergreen private equity vehicles.”
Kelly: The 1987–2021 Market Golden Era Ended with Zero Interest Rates
“In some ways, what I would call the golden era of the market backdrop that started in 1987 when Volcker stepped down, ended in 2021 with the end of zero interest rates. And thus began a cycle of more challenging backdrops for, say, stocks and bonds together in…”
Kelly: Digitization and Tokenization of Private Assets Will Arrive
“Digitization and tokenization of private assets will come, and it's going to provide a significant amount of opportunities in the future.”
Kelly: Credit Managers Need Workout Capabilities Because Problems Always Arise
“As with all forms of credit. It's not just someone who can source and originate and underwrite credit, but also someone who can deal with problems when they arise and credit problems always arise.”
Kelly: Secondaries Volume Represents Just 2% of $10 Trillion Private Equity Market
“In the secondaries market, we have a 10 trillion dollar private equity market globally. Only two hundred billion dollars of volume in private equity secondaries this year. It's two percent of the stock”
Kelly: 1990s Hedge Funds Were Funded Primarily by Family Offices
“When you're in the nineties, you're still at a point where it was mostly family office capital. Invest in these types of strategies.”
Kelly: Illiquidity and Complexity Premiums Drove Private Wealth into Private Credit
“To be able to complement that with credit exposures that were less liquid, that had higher credit risk, or a shorter duration through their floating rate characteristics, was a nice offset and balance to what was in the traditional fixed income portfolios, and…”
Kelly: 200,000 Private Companies Generate Between $10 Million and $1 Billion
“They've been operating in the middle market space of private equity, which the middle market's a broad definition of ten million to a billion dollars of revenues, private companies, there's 200,000 of them.”
Kelly: BDCs Shifted from a Venture Model to Private Credit Post-GFC
“BDCs originally were created through a congressional act in 1980 as a way to bring capital into private businesses in the United States. The original BDCs back then was more of a venture capital model. It was really only after the great financial crisis that B…”