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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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: Dietrich Foundation allocates 90% to private assets and 30% to China
“Earlier this year, I had Ed Grefenstedt, who's the CIO of the Dietrich Foundation. And I'll just tell you one thing, then you'll say, wait, that's possible. 90% in privates, like half of that's in venture, like as much as 20 or 30% in China.”
Seides: Top Six Wealth Platforms Committed $110B to Funds Last Year
“According to Arctos Partners, the six largest private banking and wire house platforms committed a hundred and ten billion dollars to funds last year. Approximately twice the amount invested from the six largest institutional investors in North America.”
Seides details his famous $1M hedge fund bet against Warren Buffett
“So he picked the Vanguard S&P, 500 index fund. We picked five fund of funds for 10 years for a million dollars for charity. The bet started in January one of 2008.”
Vista Equity Took $1B NAV Loan for Finastra Refinancing
“In a recently publicized NAV loan transaction, Vista Equity Partners took a one billion dollar NAV loan to complete a five billion dollar refinancing for portfolio company Finastra.”
Carlyle, Hg Capital, and SoftBank Used NAV Loans for Distributions
“Carlyle, HG Capital, and SoftBank reportedly used NAV loans to distribute capital this year.”
Seides: Research shows active managers buy well but sell terribly
“I think there's a research study this past year that showed that generally speaking, active managers are quite good at buying securities. They're just really lousy at selling them.”
Seides: Buffett is right that aggregate active management loses after fees
“When Warren looks at this, he's looking at the entire universe of active managers, and saying that if you take all these people together, and they charge fees, together they make the market, you charge fees, and you're going to lose. And he's absolutely right.”
Seides: Hedge funds add gross value over long-only, but fees consume it
“And even if you look at the academic data that consistently maligns hedge funds, what you find is that for whatever reason, this universe of hedge funds on a gross basis adds value. And far more value than the traditional long only does on a manager by manager…”
Seides: David Swensen's Yale disciples consistently outperformed peer endowments
“There is something to the structure of what Yale did and the discipline that has been proven that David has been able to teach other people. It could Seth Alexander, who I worked with, and Paul Valente at Bowdoin, and Andy Golden at Princeton, and Peter Ammon …”
Seides: Hedge fund-of-funds tied MSCI World over the bet's nine-year period
“If you measured these fund-to-funds against the Morgan Stanley World Index, which is not the right index because it's a hundred percent invested, it's almost a tie. International stocks, so everything but the US, are actually down over this nine-year period.”
Seides: Merger arbitrage hedge funds formerly produced 14% net returns for Yale
“I could look back at my time at Yale and say, boy, investing in hedge funds was so easy. You could invest in a diversified group of mergers, doing merger arbitrage, and make 14% net with very little risk.”
Top six wealth platforms committed $110B, doubling top six institutions
“According to Arctos Partners, the six largest private banking and wire house platforms committed a hundred and ten billion dollars to funds last year. Approximately twice the amount invested from the six largest institutional investors in North America.”
Texas TRS Graduated Just 12 of 190 Emerging Managers Over 20 Years
“Texas Teachers Employee Retirement System has run an emerging manager program for 20 years. Chief Investment Officer Jace Obby described on a recent Capital Allocators podcast that TRS has backed a 190 managers with a similar 25 to fifty million dollars. Jace …”
Private Credit Lenders Issue NAV Loans at 12-14% Yields and 10-20% LTV
“Accustomed to providing leverage to individual companies, lenders can now issue 12 to 14% senior paper at 10 to 20% LTV backed by a diversified portfolio of companies.”
Seides: Hedge funds were up 50% early in the wager against Buffett
“You go about a year and a half into the bet. And I think the hedge funds were up at one point about 50%.”
TDM Growth Partners manages $1.5B for just 20 individual investors
“An Australia-based investment firm that manages a billion and a half dollars in growth companies ranging from early stage privates to publicly listed companies on behalf of just 20 individuals.”
Seides: Talent has heavily concentrated into mega hedge funds over the past decade
“What's happened particularly in the last 10 years
Is a significant concentration in the hedge fund industry.
Means the large firms are getting bigger and bigger and are effectively hoovering up talent that wasn't able to sustain itself at a small firm.”
Seides: Most hedge fund fees have compressed below historic 1.5-and-20 levels
“For a long time, I would say that the industry fee looked like a one and a half percent management fee and a 20% incentive fee. And for most of the participants in the hedge fund industry, the fees are lower than that today and continue to come down.”
Seides: Allocators are skeptical of hedge funds but bullish on their picks
“One of the things that we see in the hedge fund industry is that most investors are kind of skeptical of hedge funds as a whole, but they're very positive on the hedge fund managers that they've picked for their portfolio.”
Yale's endowment never took equity stakes in hedge fund managers
“Yale did not ever take economics in businesses. However, they Often were very early. I'm not sure about first or very early and meaningful in the success of many of the funds that people know of today. And I think that's consistent with how David views the wor…”
Seides: Yale systematically required cost-of-capital hurdles from 1990s hedge funds
“In the early nineties, Yale systematically went out and imposed cost of capital hurdles on their managers, and managers who understood those economics, most of which did, they were the beneficiary of it would do something reasonable because the supply and dema…”
Protégé Partners was the largest day-one investor in John Paulson's subprime fund
“The most obvious one that sticks out was protege was the largest day one investor in John Paulson's subprime fund.”
Seides: Hedge funds disproportionately concentrate investments in tech and consumer sectors
“Hedge funds tend to traffic in technology where there's a lot of winners and losers and consumer names where they can walk into the stores and understand them, and you see that in the data.”
Seides: S&P 10-year return was historically anomalous given starting Shiller P/E
“In fact, I think from this starting Shiller PE valuation from nine and a half years ago, this was the best, if not one of the best tenure periods ever.”
Seides: Private Equity Has $1.2 Trillion in Dry Powder
“Well, there's tons of dry powder, trillion two of dry powder. You need debt capital, and there's almost an infinite amount of corporate private credit available. You need companies that are willing to transact, and there's tens of thousands of private companie…”
Seides: Each 1% Shift of Wealth to Alts Equals $500B
“Every one percent asset allocation shift would equate to approximately five hundred billion dollars of new investments.”
Swensen Backed Farallon, Bracebridge, and Lone Pine Close to Day One
“David invested with hedge fund managers Tom Steyer at Farallon, Nancy Zimmerman at Bracebridge, and Steve Mandel at Lone Pine on or close to day one.”
Yale's Initial Prospect Fellowship Cohort Comprises 30 to 60 Basis Points
“The fifty million dollar commitment to each manager is just 12 basis points of the Yale Endowment, and the initial cohort of two hundred and fifty million will comprise between 30 and 60 basis points in total.”
Raise Global Conference Received 900 Emerging VC Applicants in 2024
“Similarly, the raise global conference received 900 applicants from emerging venture capital managers this year.”
Preqin: 645 Private Equity Firms Haven't Raised Since 2015
“According to Prequin, 645 firms have not raised a new vehicle since 2015.”
Seides: Joel Greenblatt's early Gotham fund compounded at 50% for ten years
“And not only were they six to eight positions, but he took as much risk as he could. He used to use leaps instead of just cash, you know, securities or stocks. And they compounded at 50% a year for 10 years, and then he retired.”
Seides: D.E. Shaw raised fees to 3-and-30 to restrain fund asset size
“D E Shaw earlier this year, I don't remember the exact numbers, but I think they went from two and a half and 25 to three and 30. And it was a mechanism that they were trying to use so that their clients could self-select. They wanted to restrain their asset s…”
Fund-of-funds controlled up to 60% of pre-2008 hedge fund assets
“If you looked pre-crisis, the fund-to-fund investments in hedge funds constituted something like 50 or 60% of all the industry's investments in hedge funds.”
Yale's 1990s equity portfolios were deliberately biased toward small-cap value
“In the early nineties, Yale's US equity portfolio and international equity portfolio long only were by choice biased towards small cap and value.”
Seides: Hedge funds dropped ~24% vs. S&P's 37% decline in 2008
“In 2008, the market, the S&P was down 37%. The hedge funds after Lehman, it was a big difference before and after, but after Lehman had a tough time, but were down, I don't remember the number, maybe it was 24%. This was the group of fund-to-funds.”
Seides: Buffett displayed the wager scoreboard right before lunch when trailing
“In the subsequent few years, he always put the results up, which he still does, right before lunch. And he would say, well, as you see, as you can see, I'm losing, so let's go to lunch.”
Seides: Ted Weschler left private equity to avoid forced business exits
“Ted went from investing at, he was at a private equity firm, And he switched to creating his own public equity vehicle. And he said that the reason he did that was he felt like if they did a great deal with a great business, it would take every year that went …”