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 339 resolved? a statement only gets an assessment when the public record can support or contradict it. opinions and what-ifs never can, and 2 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
Seides: Believed Buffett was 'the patsy' for picking the S&P 500
“I thought Warren was the patsy at the poker table, because he threw out the S&P as the index. I thought that was the wrong index to be picking, and it was something that was going to be an easy hurdle to overcome.”
Seides: Many Private Equity Firms Have Already Raised Their Last Fund
“There are a lot of private equity firms out there today who don't realize they've already raised their last fund.”
NAV Loan Dividend Recaps Are a Gimmick to Juice IRR
“The dividend recap of a private equity portfolio seems like a gimmick to juice distributions and IRR so the GP can ask for a commitment to its next fund. In fact, NAV lenders are pitching this concept to GPs as part of the value proposition for accepting a loa…”
NAV Loans Signal the End of the Private Equity Boom
“NAV loans strike me as a canary in the coal mine signaling the end of the private equity boom.”
NAV Loans Resemble Pre-2008 Subprime AAA CDO Tranches
“In many ways, NAV loans resembled the AAA tranches of subprime CDOs 15 years ago.”
Swensen: Private Equity Fee Burden Almost Guarantees Disappointing Returns
“He said, while illiquid markets provide a much greater range of mispriced assets, private investors fare little better than their marketable security counterparts, as the extraordinary fee burden typical of private equity funds almost guarantees delivery of di…”
Seides: Buyouts underperform public equities after risk and illiquidity adjustments
“He said, in aggregate, buyout investments failed to match public market alternatives. After adjusting for the higher level of risk and the greater degree of illiquidity in buyout transactions, publicly traded equity securities gain a clear advantage.”
Seides: Aggregate venture capital returns fail to compensate for risk
“Over reasonably long periods of time, aggregate venture returns more or less match marketable equity returns, indicating the providers of capital fail to receive compensation for the substantial risk inherent in startup investing.”
Seides: Warren Buffett won 10-year wager with a questionable decision process
“So I would say he won with the decision process that was questionable. We lost with a decision process that looked pretty good.”
Seides: Immediate push to back new diverse-owned funds is structurally misguided
“A lot of the response that I've seen from the people I talked to is we're going to go invest in a diverse manager, a diverse owned manager and my contention all along is that's incredibly misguided because the structure of the industry today was created based …”
Seides: SPAC Sponsor Equity Offers Best Risk-Reward Since Subprime Short
“The sponsor equity in a SPAC is the best risk reward available in the markets anywhere that I've seen since the subprime short.”
Seides: Warren Buffett lacked a robust thesis for their 2008 index bet
“So he didn't have a robust thesis. He was just plying it, you know, to hope to make the point that fees, you know, in hedge fund world are expensive.”
Seides: Would make the 10-year Buffett bet again based on favorable odds
“I would make the bet again, over and over and over again, enough times so that the odds played out.”
Seides: Private Equity Exit Recovery Is Two to Four Years Away
“I continue to think this takes several years. Maybe it's two, three, four years away. It's a question of how long does it take for that bid-ask spread to narrow?”
Seides: Sovereign and Private Wealth Capital Exclusively Benefits Mega-Funds
“The private wealth channel is a whole different distribution mechanism. What those two things have in common is they benefit the largest firms. They don't benefit the middle market player. So the middle market, you have contraction, and then you have expansion…”
Seides: Private Credit Structures Prevent a Bank-Like Systemic Calamity
“I do not think there's going to be some calamity. The structure that the asset managers are using is just much better than what the banks used to use. You know, borrow short, lend long. So these are very long dated structures, which is great. You can work thro…”
Seides: Massive Inflows Will Compress Private Credit Returns to Roughly 6%
“Where I think there is a challenge is when all this money comes in, the one thing it does for sure is compress spreads. I don't think the people buying in the wealth channel have the right understanding of what returns they should expect. There was a pocket of…”
Seides: Venture Capital Has Structurally Shifted Toward Remaining Private Forever
“The one interesting aspect of venture, structurally, is to the extent private equity is private for longer, venture feels like it's private forever.”
Seides: Unlocked Private Market Capital Will Flow Back Into Public Equities
“The biggest impact of that over the next couple of years is that when private markets unlock for liquidity, the first wave of that money from the institutional market is going to go back to the public markets. It's not going to get recycled in the private mark…”
Seides: Wealth investors in mega PE funds will likely get median returns
“I think that's most of what the wealth channel today is going to get. Median, maybe median plus. Maybe you can get to top quartile with some of these funds, but at 20, twenty-five billion dollar private equity funds, it's hard to do that”
Seides: Median private equity has a 40% chance of outperforming the S&P
“I wrote in this piece that I think the chances of private equity average, so the median private equity outperforming S&P's 40%.”
Seides: Allocating to private equity is now mostly about diversification, not alpha
“I think most of it today is about diversification. It used to be the case that you only participated in these alt strategies for alpha.”
Seides: Public markets alone no longer provide a globally diversified portfolio
“It's not clear that you can get the globally diversified portfolio of assets just in the public markets the way you definitely could 25 years ago.”
Seides: Private equity risks hedge-fund-style fee scrutiny as returns compress
“You had this one and a half and 20 And the net returns were 10 to 12, and everyone was happy, and when they got to be six, all of a sudden, people have scrutiny. I think that's the concern with private equity today.”
Seides: Private equity faces a shakeout of undifferentiated mid-market firms
“Every industry as it matures gets concentrated into winners, and then some losers, and then specialists that have a place but are smaller.
Saw that in hedge funds, and you're going to see it in private equity.
There's going to be a shakeout of what's called th…”
Seides: Major private equity platforms will acquire deal teams within five years
“I'd be very surprised if you don't see one of the larger private equity players try to grow through acquiring teams. They are long capital and short origination or dealmaking capability relative to the capital they could command. So it does make sense that if …”
Seides Predicts 14 of 15 Yale Prospect Fellows Will Not Graduate
“The TRS data implies that one of Yale's lucky fellows will graduate to its core portfolio every three cohorts. In other words, 14 of 15 won't make it.”
Seides: Surviving hedge funds almost always expand beyond initial products
“Almost every instance of a hedge fund lasting beyond its first generation has followed a business strategy that expanded beyond the manager's initial product offering.”
David Swensen accepted illiquidity only as a necessity for equity diversification
“If you want to diversify your equity exposure away from the US equity market, by definition, everything else you do in the world is less liquid. You have to embrace some level of illiquidity in order to get the diversification. In the book, he described illiqu…”
Seides: The US economy cannot sustain private debt loans at 15%
“Fresh money opportunities in private debt are really interesting, because rates have gone up, and there's a dearth of capital, particularly in the middle market. The problem with that is that the economy can't sustain itself on loans at 15%. It just won't work…”
Seides: Future money management compensation won't match the last 20 years
“I don't think the remuneration for that in the future will be anything like it has been over the last 20 years.”
NAV Loans Destroy Private Equity's Cross-Collateralization Protections
“A portfolio of options is more valuable than an option on a portfolio. One of the attractive features of private equity is the absence of cross-collateralization of debt across portfolio companies. Nav loans take away that benefit.”
Using NAV Loans to Do More Deals Rarely Saves Failing GPs
“Borrowing to do more deals is the ultimate misalignment of interest. If a GP is out of dry powder and unable to raise money, the market has told that GP that it's not supportive of their future deal-making ability. Their response of using more debt to reload i…”
Cross-Collateralization Could Boost PE Returns by Lowering Debt Costs
“With long track records of low losses at the portfolio level, maybe all sponsors would generate higher returns by exchanging cross-collateralization for a lower cost of capital.”
Lenders Pitch NAV Loans for Up to 50% of Portfolio Value
“I've already seen presentations from lenders offering NAV loans for up to 50% of a private equity portfolio value.”
Ten NAV Loans Cure GP Woes for Every One Value-Enhancing Deal
“For every VISTA Nav loan, there are probably 10 used to cure the woes of a GP.”
Late-Cycle NAV Loans Bring Uncompensated Risk to LPs
“No matter how you look at it, NAV loans are a late-cycle response to the higher cost of debt and slowing fund flows that will bring uncompensated risk to LPs.”
Seides: Nearly every aspect of fund management suffers from principal-agent conflicts
“Nearly every aspect of fund management suffers from decisions made in the self-interest of the agents at the expense of the best interest of the principals.”
Seides: Hedge fund odds were highly favorable; I would bet Buffett again
“I would make that bet at the same time. Again, I think the odds were highly favorable of winning. It just didn't play out that way.”
Seides: Proving manager selection skill quantitatively requires 30 to 40 years
“Well, the first thing you go in knowing is that you will absolutely have the data to figure out if that was a decision, probably in 30 or 40 years. So you know that you can't do that quantitatively, right?”
Seides: A good hedge fund portfolio has 50-50 odds against the market
“I think that it's probably fifty-fifty if you had a good hedge fund portfolio versus the market for the next 10 years, but I would never make what I thought was a fifty-fifty bet in public with Warren Buffett.”
Seides: Top investment managers are only right 55% of the time
“The best guys in the world are in this business are right about 55% of the time. Barely over, like, you flip a coin, you're fifty-fifty. Barely better than that, and those are the guys who eventually become billionaires.”
By 2027, hedge funds will only charge 20% on true alpha
“So I think what you're likely to see is 10 years from now, there'll be an active management fee on the long side. And the hedge funds that are charging a 20% incentive fee, they're really going to be charging a fee on what's truly value added.”
Dedicated short-only hedge funds are commercially unfit to survive, says Seides
“But as a dedicated short pool, I think Darwin has shown that that is not a species fit to survive.”
SAC Capital spinouts struggled independently, whereas Tiger Management alumni thrived
“The old SAC was a great example for many, many years SAC generated phenomenal returns on the capital, and yet, with somewhat, some great consistency, the people that spun out couldn't come anywhere near replicating it on its own, and back then, SAC was really …”
A young Warren Buffett starting today would likely avoid public stock markets
“I think if you gave him a million bucks today, in 15 or 20 years, he'd be a billionaire again. But he probably wouldn't do it in the stock market.”