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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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The 1999 Repeal of Glass-Steagall Contributed to the 2008 Financial Crisis
“I think There was definitely some attribution to it. I don't think that was clearly not the only reason, but my view it's some combination, but ultimately it had to do with the system and the set of incentives.”
Asset-Liability Mismatches, Not Bad Credit, Drive Financial Crises
“All crises is generally a cause from not credit issues or others. There's, they might start in other issues, but it's mismatched assets and liability.”
Industrialized Capital Fundraising Forces Asset Managers Into Factory-Model Deployment
“The two parts to it are, first part is the industrialization of the fundraising process, right?
It's a liability gathering.
So literally raising as much capital as you possibly can, literally as fast as you can.
So that's sort of the industrialization of the l…”
Credit Investors Must Reject Collateral Stripping for a Mere 10% Return
“If you have capped upside and you're earning a 10% return and all the collateral that your 10% is based on can literally be basically taken out of your collateral package overnight. Or for that 10% return, you can be levered up because let's say there's an AI …”
Waxman: 'Semi-Liquid' Assets Do Not Exist; Investments Are Liquid or Illiquid
“There's no semi-liquid, ok? There's no such thing as semi-liquid. Like, anyone that's an investor that's been through a bunch of cycles, there's liquid, and then there's illiquid”
Private BDC Liquidity Bottlenecks Do Not Pose a Systemic Financial Risk
“I don't think this is a systemic issue yet for two reasons. One, we're only five years into this, so it's early. And the second, second thing, at least for now, there's a pretty strong economic backdrop. There's definitely risk to it. So I don't think this is …”
A good investment theme has a 12 to 36 month shelf life
“Any theme that is good as a shelf life of somewhere between 12 months and 36 months, because ultimately there's a lot of smart people out there, and all of a sudden it's a really good theme. It comes in and it's a good theme, then it's a less good theme, then …”
Goldman Sachs' Special Situations Group avoided losing capital during the 2008 crisis
“We're, I think the only principal investing group, maybe there's one other that didn't lose money in 2008 on a lot of capital. Now, we didn't make any returns, but we protected capital”
Glass-Steagall Delivered 50 Years of Stability But Constrained US Growth
“When you look at post-World War II with this separation of commercial banks and investment banks, you basically have really after post-World War II, Kind of, 50 years, a pretty stable system other than the SNL crisis in the 19 eighties, which was a big event. …”
Glass-Steagall Left US Banks Uncompetitive Against Globalizing European Rivals
“As you go to a more globalized world and you're competing with say European banks, you become less and less competitive. So in a non-globalized world, it was probably okay. But as we got to a more globalized world, it wasn't really optimized to maximize econom…”
The Post-GFC Regulatory System Could Be the Best in US History
“So system three, in my opinion, is, and we took like 125 years to get here. ... Has the potential to be the best system American finance has ever had.”
Wealth Channel Capital Is Easy to Raise but Flees in Downturns
“The wealth space in general, just for, just from a historical perspective, it is typically the easiest to raise, the simplest to raise. It's typically the cheapest. That doesn't mean that they're not smart, just the cheapest. But the other characterization of …”
Perpetual Private BDC Redemption Requests Have Exceeded Standard 5% Limits
“And basically a lot of in the perpetual private BTC space, the amount of money people have asked for has exceeded what is the five percent limit.”
Exposing Retail Capital Directly to Principal Risk Historically Triggers Crises
“Any time society or finance system puts, you know, wealth or retail individuals next to principal risk taking, if you look throughout history, there's, that's where problems start to happen.”
Institutional Capital Discipline Regulates Investment Risk Better Than Government Legislation
“There can be good legislation, but there's a risk that it's not the right guardrail and it's not good for competitiveness. And it creates like the next crisis, the best. Answer is a market mechanism like you have within institutional investors, where if you do…”
Why Sixth Street Refuses to Hold Perpetual Private BDCs
“Exactly zero. It's not that we couldn't have, we just didn't think it was the right thing, and we didn't think it was consistent with our clarity of purpose, and that's why we didn't do it.”
Narrow Investment Strategies Fail During Macro Shifts Unless Fund Capital Is Capped
“The idea that you're gonna have a narrow investment strategy when the world's changing so much. You're gonna have oscillating supply-demand dynamics of good time, bad time. Like, it's just crazy to raise it, or too narrow strategy, unless you, like, Put a gove…”
Sixth Street holds decade-long strategic partnerships with Real Madrid and FC Barcelona
“We have a strategic partnership with Real Madrid and also a strategic partnership with FC Barcelona. We're probably the only people in the world that actually partners with, you know, Real Madrid and FC Barcelona because they trust us, but we're, you know, tho…”
Sixth Street's Airbnb pandemic investment relied entirely on assuming a vaccine cure
“One of them in the case of Airbnb, it was like, we're assuming a way that that there will be a cure. We can't all be locked in our houses forever. We were willing to take that risk, but we had to think about that because that was part, part of the investment”
Sixth Street has never lost a single partner since the firm's inception
“We've never lost a partner at Sixth Street.”
Asset-Liability Mismatches Will Ruin Even the Best Illiquid Investors
“Leverage always plays a role, but the, and they're all connected, but just the mismatching of assets and liabilities, you could be the best investor in the world, making the best illiquid investments. But if someone comes and asks for your money in a quarter, …”
Factory-Model Investing Began Spreading Across Asset Managers in 2018
“It filtered down to midsize firms, smaller firms for a whole bunch of reasons, but this whole factory model behavior started to reveal itself in 2018.”
Historical Private Capital Maintained Perfectly Matched Assets and Liabilities
“Going back to just the financial system, the private capital pro was pretty perfectly mass assets and liabilities.”
Tapering SMA Growth Forced Private Asset Managers Into Retail Wealth Channels
“The growth in institutional SMA started to really taper off. So the next place where the industry started to go was the wealth space.”
Alternative Asset Manager FRE Multiples Expanded From 10x to 30x
“These things for our industry started, you know, traded between in, let's say, early 2010, call it 10 to 15 times FRE. In 2018, when all this started, it stepped up to call it 15 to 20 times, obviously depends on the comp set. And before this current moment, w…”
The Private Credit Industry Will Recalibrate Toward More Prudent Underwriting Standards
“I think and hope that this is going to be a recalibration. People are going to readopt a more prudent underwriting. I think people in the industry will change behaviors. And by the way, in some cases, the market will change their behaviors because you may not …”
Sixth Street Mandates Annual Personal Business Plans for Every Firm Employee
“That's why we make everyone in our firm do Personal business plans.”
Why Ages 40 to 50 Are an Investor's Prime Operating Years
“You've made, if you've spent time, you know, learning, and again, continue to learn, you've made enough mistakes, you kind of really know who you are at that point, know who you are as an investor, and how you approach things, it's like prime time.”
Comparing relative risk and return units across assets reveals optimal risk-reward
“You constantly comparing relative risk, risk units and return units, and it gives you the ability to find the best risk reward at that time.”
Goldman Sachs operated ten siloed investing fiefdoms before forming Special Situations Group
“There were 10 fiefdoms, different partners running investing businesses, and none of them talked to each other. They all had their own balance sheets, never spoke to each other.”
Multi-strategy investing breaks down when internal silos prevent cross-asset risk comparison
“Because if you think about a multi-strategy investing business, the enemy of a multi-strategy investing businesses is fiefdoms and silos. And if you have people who don't want to be team players and share information and share relationships, The whole sort of …”
Alan Waxman avoids speaking with competitor investors to prevent cognitive groupthink
“I never taught, I've never talked to competitors, ever. Not because They're not super talented and great investors. Cause I don't want to be sort of, you know, infiltrated with their thinking. So I get into group think”
AI will eventually learn to quantify units of risk for private capital
“And at some point, I think the AI is going to figure out how to quantify unit units of risk for private capital. That'll happen someday.”
Sixth Street was only defrauded once on a structured European equity investment
“You know, there's one of our worst investments of all time. It was a plastic bottle company, and I'll never forget. It was the only time at Sixth Street, knock on wood, we got defrauded. We made a structured equity investment, a company, I won't say which one,…”
Spotify's pre-IPO convertible debt from Sixth Street carried a $25B valuation cap
“And that came up with, it was a convertible debt instrument. It had a cap. I think the cap was at twenty five billion dollars. It had some, a current yield component.”
General partners fail by scaling fund sizes beyond actual market opportunity sets
“Where people get into trouble as they raise larger and larger funds in a strategy that maybe it's the right time to raise a larger fund, but maybe it's not. It just, it, what's the opportunity set? So they kept raising larger and larger funds”
Every complex investment ultimately hinges on understanding three to five critical variables
“Ultimately investments come down to three or four or five things. And we try to figure out, I wouldn't say we simplify the overall investment, but we try to simplify what are the three or four or five things that matter. And we know those things inside out.”
Most investors obsess over explicit risks while failing to evaluate implicit assumptions
“People only think about sort of explicit risks. They don't think about implicit risk. So we always try to put that lens on it. What are the implicit risks that we're assuming away?”
Technology is transforming historically local sports franchises into global digital entertainment platforms
“Our whole thesis in sports is the biggest global brands in the world, and our whole thesis in sports, and we can talk about live entertainment, is that these are historically local brands, and because of technology, Because you can be on your phone, and you ca…”
Sixth Street funded Real Madrid's Bernabéu renovation via an equity joint venture
“That structure we did with Real Madrid, where we basically formed a joint venture with them, or partner with them on their stadium renovation, which is the Bernabea. Yeah, that was the use of funds. That was the use of funds, but you know, we formed like a rea…”
Sixth Street formed a $20 billion joint venture partnership with Affirm
“You know, we did the affirm affirm, you know, Max Levchin's company. You know, we did a twenty billion dollar partnership with them. Where we formed a joint venture with them so they could originate more assets and have more operating leverage.”
Blackstone acquired Sixth Street-backed data center operator AirTrunk for roughly $16 billion
“Airtrunk, which we can talk about, because that's a company we started, literally started the white sheet of paper, which is actually just got bought Blackstone for, I think sixteen billion dollars or something like that.”
Sovereign wealth funds face rising competition from retail wealth for top GPs
“And by the way, I think for some of the traditional sovereign wealth funds in, in, in pension funds, you know, they've had sort of unfettered access to GPs. And I think that they've got more competition coming in from the wealth channel and insurance channel.”
The term direct lending did not exist when Goldman entered middle-market credit
“And that business plan was basically to do middle market direct lending, which at the time Goldman Sachs had never done. First of all, direct lending didn't exist. It wasn't a word. And Goldman Sachs had never done anything in the middle market.”
Achieving 100 percent of personal development goals means they lacked sufficient ambition
“Shoot high, because if you're doing a hundred percent of your plan of what you're trying to work on, you're probably not aiming high enough, but try to knock down 70, 75%, and keep adding to it”
Mid-Century Investment Banks Priced Securities to Move, Not to Hold
“Investment banks were more in the moving business than the storage business, meaning they were like pricing securities to basically sell to other people. They weren't pricing it to hold for their own balance sheet.”