Peter Lacaillade: Why Now is the Best Time to Invest in Emerging Managers | E1096

you just have onfair advantages over the public market but the reality is when I joined SCS we had $7 billion under management I was investing maybe turn 50 million a year now it's like about a

billion and a half it's amazing to me that the wealth management industry it continues to be so fragmented cylinder Serv if I do 10 funds what I found is 3

to five exceed expectations 3 to 5 meet expectations 1 to three underperform how quickly do you think you know the outperformers and the underperformers like

Peter I am so excited for this we've been friends for a while you've been an amazing partner to me so thank you so much for joining me today Harry it's an honor I I'm big big listener and uh great great friendship and thank you for

having me not at all but you said to me before that you entered the world of LP and Venture when you didn't really know what a multif family office was and so take me to your entry to SCS and how

that came to be first yeah I mean I'll back out for a second so when I was at Georgetown I wanted to be in the investing side you know I thought I could go right to the buy side and then I found out oh actually no you know need

to do investment banking and I worked at a scrappy really kind of you know second third tier Investment Bank but it was during 04 to 06 there were a lot of deals getting done and so at a very

young age I was running around Santo Road doing financings with CEOs I was doing IPO being at the printer like leading like a team of accountants and lawyers and the guy from

Deutsche Bank and so it was a very Scrappy I didn't make get the best training in some ways but formal training but like go out there and do stuff was incredible um my boss Jeff

Barlo was actually currently the head of banking or actually no CEO of can oford um was a great mentor to me there but I wanted to complement that with um a private Equity Firm and and I ended up

at Harbor vest which was kind of the opposite where great process great people and and I saw the entire private Equity world and it really was a great

insight into the different the different Pockets when I went to business school I thought um I would go into either you know low lower Middle Market investing either kind of on a control buyout or

growth Equity side and I was interviewing and calling a bunch of Tuck alumni GPS trying to get a job and one of the guys I called was like well I don't have a job for you but the guys manage my money are looking for a

private Equity person given your background at Harbor vest you could be a good fit so I I was interviewing with like four or five direct shops and then this random thing and but then when I

looked at it I said wow this is an opportunity they had 7 billion under management at the time zero private equity and there was one client that was investing 2 250 million a year in the

space the the comp was like the same like I had so I had a vice president job at one private Equity Firm where I'd be the eighth person on a 14 person team or build this out from scratch and I I took

that and it's been it's been amazing I mean it's really surpassed all expectations and this was 2011 correct yeah okay so you said before in terms of timing that 2011 was quite a fortunate

time to be kind of coming in totally can you talk to me about the impact of Market timing in that respect and then how that timing compares to today 2011 it was still people were still reeling

from the global financial crisis right I had River guides so to speak but I would just reach out cold to many GPS and they would take they would take my call they would want to meet they um and that

changed I mean I think probably in 201617 like a lot of funds were really over subscribed quickly but being in that moment where the power shifts where

there's a dir of capital on the lp side and there's that that is a a ideal time to scale a program to build the program and that's that's I was fortunate to be can I just push back on you that I'm

just interested yes but you also bed the first funds of Thrive of Andrew and of Founders fund from what I know and so actually they weren't OB bets then so

you saw ahead of time so actually is it not the same as today you just see ahead of time uh thank you yeah no you're totally right so I had a choice to make

I could have invested in you know the B+ a minus funds that were you know been around for 20 years on San Hill Road because I couldn't get into sequa Excel

graylock and Benchmark yeah but I could probably get into pretty much everyone else yeah and we manage money for the partners of founding partner of Excel and great luck so I knew that it was

tough to get into those funds because I had I had it in and still wasn't like and so we had a choice to make do we want to go into I don't want to pick on firm names but you know someone that's

not is very good but not quite in that top tier or pick the next gen emerging winners right and that's we opted to do the ladder I mean Andre I would say was

fairly obvious that that that was interesting um when we backed them in fund three founders fund Peter teal um there's just a lot of controversy and that I know the social network movie

like inspired you a little bit but that you know that was around the same time but I'll tell you like Stever Sago who is our president CIO who you know well he was extremely supportive of Founders

fund like I that was one of my first meetings was and meeting with Peter and you know doing that and that's worked out incredibly well and we were one of the only institutions in it I mean there

weren not that many institutions now everyone wants to get into it and also like Josh Kushner was 27 years old but we thought New York was interesting as a venture Market we thought Josh was

incredibly impressive it's just it's funny it it it we didn't really we weren't worried about it we were high conviction on both

those things and credit to Steve but also my CEO Pete matun Partners like Tony abatti like they really supported me from the Geto to do things on The

Fringe and I would say and not the ramble but on the buyout side there's a group called Shore Capital which Justin ish at the time was 32 years old and he

had three partners that were 27 28 and we were the first check there and I like to say that I got more push I got as

much or more push back from the get-go doing Bank Capital as I did doing short capital and there was there was an app appeti for risk and an understanding of the the you know attractiveness of the

lower Middle Market from the get-go and a really supportive culture so it was really I think it was my mindset but also being in the right place listen we said that we were going to have a very natural conversation and so I just want

to go with that which is bluntly when you say about risk appetite I think one of the broken elements of LP worlds is that there's no incentive for you to take a risk if you're in a large pension fund or if you're an large why would you

bet on a 27y old Krishna when you could just do a tier 2 tier three you're never going to get fired for doing X Brown name do you agree with me and do you think that's I I think I think that when

we can we can walk through the whole LP landscape but you know I am incentivized around performance fees and around I'm in a financial organization where multif family office we manage 30

billion from 200 families and you know the equity as well as the the carry that I generate I'm trying to and I put a lot of my own personal capital in it so I'm trying to get the best performance and

the best risk adjusted performance possible and I think that you know a lot of um like state pension plans or larger Sovereign well I mean they

structurally have major issues if you think of like some of the big States right they can only they have a rule in their in their Charter that they can't be more than 10%

of a fund and they can't write less than $100 million check MH therefore they can't invest in funds that are smaller than a billion dollars like that that is

a structural like impediment to what they do you layer in the fact that there's political considerations and the fact that the people get paid not that well you're going to have a lot of

turnover yeah I mean that is that is the issue with a lot of you know the big pools of capital in in in the private Equity World um if you think of the endowments I think so just think I'm

just FAS so what would you do if you them you I would partner with SCS you would or you know a fun a niche fun I would carve out a mandate or do it you

know state of Wisconsin with Brian Novis who I love and now he's back at Liberty Mutual Brian was doing like very edgy stuff so there is like in the lower

Middle Market land and he he's a great talent and so there is precedent for certain certain like big institutional

pensions to do stuff but it's I mean I can't think of a second example I goci and so if we just go through typically you partner with like Harbor bestest or you know whoever like pick your Niche

fund of funds carves out an SMA to do it and I think they should probably do more of that do not lose your abilities to do direct then you hand over that relationship you hand over that mandate and with that you're not going to get

the relationships and the touch point to give you access to do the directs well most of these uh bigger pools of capital don't do a lot of direct investing anyway I mean there they should I mean I

think direct own Investments are a really important part of a portfolio right and so I mean I don't I think it's difficult if you're meeting quarterly for an investment meeting you can't do you

can't do a lot of stuff right I mean I'll give you an example and we kind of in the prep for this you know mentioned uh situation with the London manager

Tenzing where there was a co-investment I was on the lpac and basically very track it's going to work out it's going to be like a 4X plus deal um but one of

the LPS so tening reaches out it's like Late July early August short time fuse on the thing and they're charging uh

carry they're charging 10% carry on the deal I respond um a single family office here in London one of my favorites Bal

responds we do the deal and one of this it's actually kind of a fun ofun it's like a fun ofun SL like consultant allocator you know takes like four weeks

to get back and then in the lpac like six months later the the GP got chewed out for you know not giving them four

weeks to do their due diligence and for charging Carrie and they they kind of negleted they they didn't mention the fact that like they didn't respond for two weeks because they're probably on

holiday but I and I I like absorbed it I was I was listening to this this allocator

just like ream out the general partner and I just my blood pressure was like rising and rising and then we finished I was like that's on you you didn't

respond to this and the fact what we want for our managers is for them to stay disciplined on fund size and generate the best returns and so by saying you can never charge carry on a

co-investment means that they're just going to solve for a bigger fund and become asset managers and not deliver the the alpha that we all want as

investors and so and the GP afterwards I could go on but like it it was pretty heated I've only had that's the that's a oneof one but you know the GP was very appreciative and I think in

general what I what I want to do what makes me I think a really good LP right is you want to be um like responsive like when they need you you respond

quickly and you want to move quickly you want to think creatively like you don't put things in a box right you you think how can we both win together because I think that's definitely if if you're too

box checking and you see that a lot in the institutional LP world where they just go through and they have like their checklist of things and the reality is that is not what's most important people

give you a reference list it's I just assume now every reference is good on that list I want to find who's not doing the fund who has

connectivity to that person that's off list because that's where you actually are going to get real insight if and and but I I think

95% of my peers just like do the reference list for sure or or or not actually I think I think they do that but they also go like oh I want to see the track record and I want to see last

one how much of an emphasis do you place on track record because I think for a lot of LPS it's it's quite a crutch yeah I mean I think track record is important like it tells you do these people know

how to invest like are they smart but for me and I say this often it's like maybe it's number four or five on my list of things that are important like the quality of the team and we can get

into what that means um but like having it be an attractive opportunity having the team have competitive advantage to persecute that having the fund be right

sized for that opportunity those are like and and good alignment with that team like those are the key things and the tracker is like okay yeah they know how to invest because we're not investing in the last fund we're

investing in the current fund I'm so pleased that you said that because I spoke to so many of your managers I spoke to Neil Mater I spoke to Jack Olman I spoke to Kevin at um Heritage um

and I mean the unifying theme with you was this unwavering ability to tell manager quality quicker than anyone else this like gut intuition where do you think that comes

from and what signals give you such confidence so so quickly you know I I was thinking about this and I me you do you I mean I know you kind of know it it's hard to articulate but I think if I

had to say it's like who's a force of nature who's going to like and you're you're one of those people right who's who's going to like run says the same who's going to run who's going to run through walls you know you combine like

ambition work ethic passion for what they do in in an attractive space it's powerful and you know it's I think it's um so Justin is yeah one of my absolute

favorite human beings he well he by the way his brother built a huge Mortgage business like he's worth like5 billion billion dollars like it's crazy but he works like he's an animal like he and

you can't I talk to him often at um it's like before 7: a.m. East Coast he's in Chicago so it's like at like 5:30 or 6 when he's on the elliptical or after his dinner and it's not about it's not about

the money it's about the passion of building you know in the case of shore you know the greatest lower midal market fund possible but you know across my set

of relationships um there's and and you would be that type of person too I mean we're often on WhatsApp yeah it's like 9 or 10 my time and I'm like Harry good or

bad it's like 3 in the morning okay like you should but I think I think that's also what makes me a good LP is that I'm kind of wired that way too which is like I love my job like I get to partner with

the smartest people in the world and give them money and I'm you know don't don't bother them when I don't need to but like kind of sit at that

10,000 ft 30,000 ft I I just I get so much positive energy from that have you always approached it with that lens or has it been an approach that you've learned over time because it's more common that you'll come in with a more

studious analytical approach and you build the Intuition or did you always have the intuition I think I always had the I mean by the way first of all I didn't know and I could have been like a

good GP I think like I I would have been like maybe very good but I wouldn't have been great I think I'm a great LP right and I didn't know like I said it was luck I stumbled into this right but from

the get-go I think I had an intuition on like you know great GPS but I have learned thing and I've gotten more confidence in my ability because when

you see 2,000 funds now I know what great is so when I see when I see great it's like okay it's not when I was B 50 funds and like thinking that they were

great and you know I have evolved a little bit in I think I've so talking about the force of nature like I've always kind of been attracted to the force of nature people if I look back at

mistakes I think you know probably number one thing is doing off lless references like don't don't get in the Echo chamber of talking to like the five people that are backing the fund and like they all love it like yeah

obviously right you know like you talk to their you know their founder their brother like yeah they they love them you know like try to find the contrary view but then the other one is I backed a lot of um what do you ask them when

you're trying to find that contrary view cuz you're trying to extract knowledge that is tougher for people to share it's kind of a negative well you have to have a trusted relationship on the other side

of the phone and usually it's just me I don't have like my team on that call and you just kind of ask I know I know I know you you love them they're great but

like what what are some issues like what like you kind of out like the negatives I always ask I always ask like you know if we were hiring someone underneath

Peter to support him what skills would they have and they go oh well that'd be super organized that'd be very rigorous and analytical and you like okay you just

told me what we need exactly exactly and um I love that one it's this evil feeling of like youve just won yeah no totally and uh dude has

your intuition ever been wrong on a person in terms of a manager that you've bed and if so what did that teach you I don't think I I mean it's a boring answer but I don't think I've

had bad intuition there was a situation where I and this turns into positive but my colleagues knew a

person going back like 10 years this when they were based in Boston then they moved to Silicon Valley and this is the echo this is the same example I'm not going to name names

but my senior colleagues knew this person really well when he was like 24 25 then he's like now he's like 35 36

right not the same person that he was but I had that firsthand from my colleagues like yeah like we know this and then I

did a bunch of referen I I had out of the blue the biggest some of the biggest companies in the world Founders proactively calling me me on references cuz they told me you know and I'm like

wow oh my God like this person wants to talk to me jeez that's really cool and then I talked to some of the LPS that were backing them and they're all like

yeah this is great and and then when fun two came around I was like looked at the portfolio I was kind of wondering and we were out in San

Francisco with them and I was like this is this behavior is just like off the way they were acting and and we were one

of the only LPS that passed on that fund and there was a really prominent a few really prominent new LPS that came into Fun two and they were like pretty kind

of unprofessional about our past and arrogant and whatnot and then you know believe it or not like there was some major major issues with that firm and so I think that was a really kind of like a

big learning for me do you worry about the off list reference and what I mean by that is there are many great managers that bluntly will have very negative things said about them for many reasons

take it with a take everything with a that's it do you know what I mean yeah just understand like you know haters going to hate you know they yeah to totally agree in terms of the managers

that we back I'm fascinated on the fun side how do you think about the right level of diversification because you see a lot with very large portfolios 30 40 funds and then you see some who take the

completely alternative approach and are very concentrated how do you think about the right level of diversification on the fund basis totally this is one of my favorite topics mine too which is why we

get on so well yeah what I do well and it's a barbell approach and I have some big groups but the vast majority are very Niche targeted Focus funds right say say a buy a vintage I might invest

in 10 funds right 10 or 15 funds you could also invest in you know three or four funds but those underlying funds are Diversified across different

Industries sectors so they might have a company count of 50 or 60 whereas I'm investing in you know 3x the number of funds but the the the the funds have six

to eight companies in there so it's not like you're taking that much more um portfolio div like company diversification but it's I think it's really important to have the manager account if you're going to do things

super targeted and the other thing I would say in this if I do 10 funds I'm really excited every single one because I by the way I

looked at 2000 the choose my 10 so it's the the acceptance rate is very low right and I'm super excited about all 10

but what I found is 3 to five exceed expectations 3 to five meet expectations one to three underperform and they you still make money it's really hard to

lose money in private equity in a in a fund if let's say a typical like large buyout is going to do like 2x that basket will do 2 and a half to 3x and those outperformers might do 4X right

right and the the underperformers do like one and a half but you need I don't know I don't know how quickly do you think you know the outperformers and the underperformers it's like four years it

takes a while yeah and that's the tricky thing with the Velocity in inventure for example because you have no idea right well how do how do you feel about the compression in deployment timelines you

know we saw people move from three is it's so obvious in retrospect right I mean but I I just want to know waren Zev for example we we

both th in love he's just very transparent about what he's going to do so I would size my commitments accordingly so it's like if you tell me you're going to put out your Fund in 6 to 12

months I'm just going to size you at a half bite understand expectations on what you're doing um but a lot I mean the vast majority of my managers

basically were putting out their put out their funds in 2020 21 in like a year we now look back on that and it's

obvious at the time I said spaxs were going to I made the comment like I was like 85 90% of these facts are going to be a

disaster and it turns out I was I was wrong I was too generous so I'm not but on the Fun Size

I mean on the deployment piece I think I was less uh perceptive of you know I mean you kind of realize like wow this is crazy it's not going to go on forever but like do you think we just have a

shitty vintage on performance Su we look back at 2020 2021 given High entry prices given compression of deployment timelines yeah I think I think I mean it's not going to be the best vintage but that's why it's really important to

partner with the best people like so if I look back and I did a bunch of co-investments like in what I believe to be like great in some case great companies right but they're going to

have to grow into they're multiples so rather than making four to Sixx we'll make two or three x and you seen managers remot that b you mention that

totally in my core relationships uh Founders fund's the most extreme because Peter Teal's very contrarian um and he wants to reset the

mindset of his team which I think is great um but Andrew Horwitz Green Oaks um Thrive they've all proactively marked down their their companies but there's

huge just uh dispersion between where things are marked right accountants will sign off on pretty much what the GP tells them to do and so a lot of people hold things at last round which is

ridiculous my question to you is I I I get you the challenge is you have funder funds who say no no no Peter keep it high because we need to go out and raise in q1 and so just keep it high Peter for

us you you have others that say hey we're paid on TVP well they probably don't tell you that but they are paid on tvpi and they don't want you to M on your either and I I almost feel for the

GP in way because they have all of these competing by the way there's not a right answer what matters DPI at the end of the day but we're all judged on inter room performance if fun of funds are

doing that that's like perverse and you know whatever but I mean there are endowments to pay their staff on marks

right it's weird sure many for example for me I'm incentivized by like European like long-dated carry is I mean that's

you have to have the distributions to get that right so I think the incentives are correct there I mean I don't want to look at a mirage so but I also don't want people to be like too crazy like

you know there's a middle ground but yeah I think there's there's definitely incentives like that what you're talking about with fun of funds or you think of the way some of the endowments are compensated I mean

endowments also I mean there's some that are great but I I find in general there's a lot of group think in that

world you know it's very unfair of you Peter how could yeah you know but they they I just doing oh it will do I I do think fun

ofun get painted with a bad brush but I think there's people do really good work oh do you not think that that actually just to be fair on endowments they're just under resourced they're under resourced in terms of bluntly they have

comp they buy incentives on upside are not really there and they're under resourc in terms of team for the segments that they need to cover and so they're kind of left Going H we can't

know the early stage Venture Market in the US as well as we' like sodit SCS and Peter are fantastic Players let's just follow them yeah I

think that's right I mean I also think they there's often a generalist model in the endowment world I mean I sit our investment committee and I look at what the public team does but like it is

beyond a full-time job trying to cover private Equity like yeah some do it better better than others I mean a lot of the endowments by the way are also just like with the denominator you sting

Benchmark the numbers became so big it's like you don't have any room for early stage stuff so it I'll Circle back to my earlier comment it's a really good time to start a program if you want to get

into badass like really good managers right now you can do it and that probably and that will probably be the case for the next few years when you say you can do it where would you start cuz you have the big established Brands you

have the upand comers and have the I would do both I do what I do which is a Barb approach so you can get into some of the fanciest firms in the world do you think you can like I mean you can't

get into score unless you move a huge amount you can't get into fins fun especially with the kind of Fun Size reductions I mean Andre is I'm sure you can in some of their vehicles um but

they're great I mean I love Andre but uh do you see what I mean it's not that you need to you need to be yeah I I I hear you I hear I hear you in some I mean I

think I also have like Advantage relationships where can get you know um but I'm saying for like random uh family office multi-asset manager whatever that

is if you're kind of knocking at the door of Founders fund and Lauren she's going to say yeah you got be kind of like what what I was doing which was

like you be the new Founders F right or you know someone who's edgy uh 100 might and and I look back actually and the mistakes I made in some ways is it's the

bu outside where I back some Alphas that like were not great but like backing Peter teal that was it kind of like makes up for everything else some of them other mistakes so like I I'm not

going to be too critical of myself doing that can I ask see a t one how do you think about like how long to have unwavering support for and often

LP's decited as having like three fun commitments well I'm often like one of the first people to go into a fund like a or back a firsttime fund or whatever and the one of the first people to get

out what's the reason to get out it's usually it's it's the fun size is getting too big or the team composition has changed or or the person

you know people are phasing phasing out or you just kind of like it's just Force ranking well do you not just accept though that given your incredible selection on emerging managers which you

have with Thrive with Founders fund with Andre and the best generally the buyout I do more in buyouts actually but if scale and

it's Micha Kim but you scale out of hisam and he doesn't follow them I think he should too but my point being like the best scale and so do you churn

because they scale because Thrive a great I'm I'm more talking about biots so and you know this is you're a VC guy right but like my world is right now I'm

spending like the vast majority of my time on laal am B and I'm so excited about like the the opportunities that I'm seeing and actually I'm going to

generate like Venture likee returns in small cap EOP positive businesses right so in my barbell approach the way I do

it is in Venture is probably it's like 5050 like franchise versus emerging it might even be like 70% franchise 30% emerging actually I think yeah those are

the numbers right and we actually we we realized that when like people like Josh kosner or Neil meta they went from being emerging to being franchised and that's

why we backed you and you know I you know lot Gil or Ray tzing there's like the OG like older and then but then the locky Grooms the Josh Buckley the CEOs

like Jack Altman who introduced me to Zach Beret we realized that if we just invested with Thrive it was going to be more and more growth because those funds

are 80% 70 80% % more later stage so we had to backfill that and then there's advantages to that too which is your I think the absolute return if

you build you got to build a basket right but the basket I think can do 5x of those seed funds versus what do I

think like a franchise firm can do 2 and a half 3x net maybe three and a half I mean I mean andreon has it's tough to do

a billion doll I think I I mean they've you get a coinbase of major holding that can move the needle on a billion and a half dollar fund I we saw that last week

but but it's it's it's more rare right if we just take this and I'm I'm just going for maybe say what's coinbase's market cap today 810 billion uh yeah

okay so 87 million say and they have Tam s okay we' got 800 million back to us say okay and it's a 1.6 billion fund returns half the fund amazing need quite

a few more to get to that 3x yeah and that's a coinbase and we need we need an Airbnb in that fund as well and then we might just get to one and a half X and then

the rest might wash our face and get to 2x yeah I mean I'm just I'm just do not I me no I'm just like I think people it's so hard to do those great numbers on those size funds I don't disagree I think and that's why I think at the end

of the day I would put a more banded return say 2 and 1/2 to 3 and 1/2 net and maybe if

it doesn't go well you make you know 1.

1.7 2x whatever and that's that's the beauty of like what I do too it's like it's hard to hard to lose money that's what I love about found but um yeah but well I'll say like Founders

fun injury like there if you sent you some of the data like there's I there's a number of examples of big funds being 5x plus right and so it happens but you

have to be the the best people right circling back to the emerging so yes I think on an absolute basis because Jack alman's raising raised a $20 million

fund right or you know like the numbers work well that you can do multiples of that if he catches one or two good one so I think I think the basket can do

5x um but you also you're seating the nextg leaders right so you have a you have an optionality to go from writing A10 million check to $100 million check over you know per fund over time and

then you get co-investment because they're they're early stage funds so they're going to tap out and often I might see you know Founders fund might be leading a deal from one of my seed

managers that's tapped out so I have like great insight into the company and so that's been super powerful um on that

front but but circling back to the other thing we were saying around like why do we get out I mean Harbor vest for example I love Harbor vest there's a lot of

people there and they have there on the primary team you have a lot of people and they have their relationships and they like their people and it's like when you have an organization with a ton of people people get protective of their

own relationship sure the way we run at SCS is it basically flows up through me and so you can you can have a brutal intellectual honesty and you can say

okay yes that firm's great but that leap from going from 450 million to 1.2 billion in the lower Middle Market side you just completely change your

strategy you can justify it but like it's totally different and yeah sure they fine and they're good guys but you

know there's another fund that's 200 million and that's you know I think will deliver a higher return and also then you have the optionality to what's what

is the next fund and the next like so that's where we're going to you know that Force ranking that intellectual honesty not and it requires I

think a level of trust and transparency with managers and there have been examples where I overshare and it backfires but more than the

vast vast majority of time people really appreciate transparency you mentioned the direct investing there being such an important part why do you think it is such an important part people often take binary approaches we don't we don't do

it at all they're massively in it you've done Andro I haven't you've done Andro you've done ripling you're in some of the best yeah we are

yeah I'm telling you as a neutral Observer so why is it such an important part of the program for you and what have been lessons for you from doing the direct comest program yeah sure uh great

question um well first of all like from a fee perspective and we have like over 100 it's maybe 130 or so direct Investments I think I mean essentially no management fee like 10 basis point

points Blended and the carries like 7 or 8% which is there's a bunch of deals at zero and then some at 10 and then it'll be tiered and by the way like I'm

totally fine with paying carry on Co Investments but in general it's a massive savings but more importantly I think you get to know you get to know the portfolio

better right I mean I know the co-investments I do like I know those companies a lot better but you get to you get to see how managers underwrite deals and you get to you know get to

know the people on the team too you get to know the you know the analysts so there's it just it just deepens the relationship um but I think what's really important is uh to build again

heartbe on my like you build a portfolio of Co Investments Because by the way like we've made a bunch of mistakes like you know what have you learned from the mistakes well this is obvious like management is like super important

having the right management team in place like if you don't that they can be problematic um I would say diversification like we invested in this company called Smart

Tours that did like different like tour operate in like Co smoked it okay har it's fine yeah right how do you think about position sizing with that in mind

if you think of like our vehicle right it's about 20 25% co-investments um so at the full and we raise these vehicles every 18 24 months

but at the high level it's like a co-investment would be and will max out around 2% exposure but

it's probably going to be typically you know 50 to you know 1% and and the the co-investment sleeve we want to build

probably portfolio 2025 but we'll have some like andal that will like lean into and make that you know a 10% position in the coest leag which

then equates to you know 2% in the overall vehicle so definitely there's a big range and I would say that having a range of investment size is one of the things like the best for me so I'll

write Co investment checks my typical Co Investments somewhere between kind of 10 to 25 I'll go up to 50 I'll go down to five funds I will write checks

between 20 to like 100 million and actually in the seed Venture it's kind of like 5 to 15 you showed me an opportunity like a mill I was like okay whatever like we just like million but

like but having that flexibility cuz I and I don't even remember I remember calling you about 20 grow 20 sales and you're like how much I a million yeah and I just whatever cuz I

view it as a relationship and and not to be like flip it with managers but like I don't at a certain point I don't remember what we put into each fond I

just view it as like it's a relationship with Green Oaks it's a relationship with hair it's you know and these are and now I'm 12 years in and it's like you know I feel like we're just

getting started I mean time flies can I ask on the direct canvas I feel there's also a binary approach to the diligence process he attached people are either way we're going to do a huge amount of

work and take four weeks as you said or we're just completely blindly following our managers which I'm in the middle I'm in the middle yeah no no it's a great question this is really important you

have to know you're an LP you're not a GP right I mean I think there are family offices that actually are like chees but so we only do Co Investments right now I think we'll probably evolve over time

but we only do Co Investments with our highest convection managers in their areas of expertise like deep areas of expertise where they're fully aligned so

when you put when you put that filter on it you know I would say you should want like your hit rate should be really high right um and so I'm not trying to reer

it if if a deal if a manager is putting 10% of their fund into a deal and they think it's one of their best ideas I'm not there to like reer everything first

of all the deal has to make sense for our returns and that typically is at least 2 and 1/2x like 2 and a half to 3 and a half X

base case that return um with a right tail and with a right tail where I can I mean where I hope I can make 5x plus and my goal is generally not to lose

money I I've lost money but you feel like you have 1X downside protection that's kind of the parameters of the way we do Co Investments if you go at it that way then what I'm going to do and what's going to make me good

where I have an advantage is I have this huge network of GPS and stuff for example in the bi world like if there was an auction and they won the auction I can

probably talk to the firm that was number two and see what they think or talk to another firm that's got like the competitor to the company you have to be really careful and I'm always very transparent with like GPS like there's

situations where they're like do not talk to anyone about this and I'm like okay cuz the worst thing I could do would be to blow up a deal I've never I'm I've never done

that I I know it's happened um because I remember a GP wondering who blew up their deal it was another LP

that did it but that's really important but once you have the sign off or or the implicit ability to tap into your network I can get really interesting

Insight really quickly the second best thing you can do besides say yes to co-investments Quick now and so we just we move quickly you know um on on it and

try to get an answer to a GP within um you know it's either like no within a day or we're very interested

like let's get back to you in like a day or two yeah and we can execute a deal in a week or less and often I mean two weeks is great if we if we have two

weeks but like that's just that is like super important and so we had to change our process actually with the investment committee because we do standing investment committee um every other

Monday right but for Co Investments there's no we don't need to convene investment committee we send out a memo and the investment committee has 48 hours to reply wow because that actually

was like really important now things are rejected oh very few get re what percent from by the investment committee yeah it I mean almost never it the the investment

committee I mean I can count on one hand the amount of funds or co-investments that have been declined in my 12 years and I remember them well is there a

point in having it uh yeah yeah yeah I think so which is oversight yeah I'm if there's like three

and 12 years and there is a non I don't know a 5% chance it makes us do better work right so it's like AIT like an accountability

mechanism yeah I think so I mean you're being a little cynical but yeah no no I mean it in a nice way like it's it's good to hold that barall high it's good from a governance standpoint as well

yeah there was one circumstance where something was declined um for exposure reasons and it was right but the other ones probably

were not but it's educational too for the rest because senior members of the F it's good to bring everyone else with you yeah yeah your question about like our hit rate on Co Investments is

generally it's like I don't know it's like 35% maybe it might be a little low right now because it's tight but I've I I say to my team I

push I'm like why isn't it why isn't it 50 why isn't it 60 like these are if we if we have those parameters yeah we'll see but it's super scale I mean it's

it's it's important it's scalable think what I was if you'd ask me two years ago what I was worried about was the flow and lower midle Market buyouts on the

comest side and that's we've been very active there and love so I'm feeling that was one of the only things I was kind of insecure about and now now I'm

feeling really good about that how much cash do you need to do a direct Co Investments program and to do it effectively well I feel I feel really strongly about the need for scale so this is we could pivot a little bit in

this conversation like when I joined SCS we had $7 billion under management I think that's around kind of the low end that you need if you're going to when you when you back

into what the what that equates to from a private Equity allocation um but I think in I was investing maybe 2 250 million a year

um at that point in time now it's like about a billion and a half there's a minimum scale like if you're investing $30 million a year like that's not enough money unless you want to do something

like really concentrated but I I don't believe recomend that I don't recommend that so to have a co-investment program it's like well what what what check size do you want like it kind of all solves

into like how diversifi do you want to be how much is co-investments relative to your budget but I think that uh you need to have a diversified portfolio and I think you need to be allocated

hundreds of millions of dollars a year can I ask do you think the incentives are aligned in terms of wealth managers today in terms of private Banks today and how that plays out in the ecosystem

yeah uh no um so this is It's amazing to me so if we go back to the founding of

SCS our founder CEO Pete matun or now executive chairman so force of nature he was at this firm called scotter Stevens and Clark he opened offices all over the world um

like Latin America I think as you know and at like the age of like 42 or 43 or 44 he made like 30 40 million bucks something he had a nice like wealth grate and he was like trying to figure

out like what he wanted to do with his money and also like what he wanted to do like for his life like his next ACT and he L he's like there is a gap in the market

there's all these like you know investment banks that s s smart but like they're totally conflicted and are pushing product and then there's these like really

aligned um you know small boutique you know people that are really good at like trusting State stuff and like but they're not they don't know much about Investments what if we do something in

the middle that was his thesis and I think the thesis basically it's one of those things like the pitch deck like you know it's going be refined but like it's still still it's still totally

there it's amazing to me that the wealth management industry multif family that it continues to be you know so fragmented so underserved but if you think of like if you're a Goldman Sachs

or Morgan Stanley or whatever like the funds they put on their platform are large cap funds that are having trouble Distributing that they need like we

invest in Advent in the large cap bio we invest in admin and CBC they would never have their fund on their their funds are like 2x over subscrib before they start they would never go onto an investment bank's distribution platform and you saw

with Venture by the way I mean I won't if you see I mean if you see a venture fund on a bank holy like that is not a good sign and you know I I I want to be

careful but what Wares me there and it makes me sad is there's a generation of European family officers and institutions who did just follow that and then go ah venture because they look back at those numbers now and they

look back at those funds and go and so it's like the that's yeah I mean that's well if they're smart they'll realize that they were not going about it in the right way and

that and there a lot of people right now are licking their wounds like a lot of people going back to start of our conversation like you know six and 07 like a lot of people poured a bunch of

money into like large cap buyout stuff and then you know didn't commit after the go for like 09 10 11 12 and they missed

some of the best vintages like obviously when like Market's correct that is when you want to be investing so you have to have that mindset do you believe that LPS are pulling back States the extent that people are saying if you go on

Twitter everyone's like ah the lp pullback is real the lp pullback is real look and and I'm I'm just super transparent with people I'm like look it's like we we very tight but we make

exceptions for exceptional managers but um it is causing a Force ranking of things right now and I think that some LPS are upside down and there's going to be a really interesting opportunity I

think what what are those opportunities like strip cells like buyouts how do you think about those no on the secondary side like so uh it's been announced um Square Heritage in Brookfield have

created a company called Pine Grove that's going to be dealing with kind of like liquidity in the L LP ecosystem but also if you thought you were going public this year and it's going to be

like three or five years like there's probably with employees there's there's and it can be a win-win right you know you start if you're if you're at a

company and it's goes let's just for round numbers like it's worth $20 million right you had no idea and you're you own whatever you know now you have

like 60 million of stock when you joined you didn't you didn't know it was going to go like that and if you're selling at 30 million if you if you sell 10 or 20%

of your stake at half that to buy a house you still own 80% of your shares and your wife's happy and whatever you know like this can be a win-win like it

doesn't need to be a negative I mean and I've seen that actually that like scenario actually play out the other thing that's interesting about the secondary Market is that most of the secondary people are not really comfortable in Venture what do you mean

by that they like buyouts yeah it's hard to it's hard to underwrite so what does that mean for how they deploy or how they invest well I think all the big secondary players skew towards heavily

towards bio portfolios so there's a there's a gap in the market I think also the level of cynicism they bring towards things like I've spon some like we will only engage at 80% discounts and it's like it's unreasonable for assets that

are actually very premium assets there a lot of the players out there who will do Venture and there's only a few I think Lexington will as well but they they will not do it at scale so what Pine

grve is going to try to do is you know be a solution provider at 50 million plus and it's not to say there's not like other people that will do it like I'm sure there's but there's

a it it it is a great Market opportunity I'm really excited about that one I I think it's going to take time to play out but when things were going nuts in

2021 it was like I would see pitchbooks I'm going to go back to like buyouts a little bit but every midmarket it was just like lever beta right every

mid-market fund was putting up 50 60 40 50% IRS you couldn't tell like people who had no skill number everything look great and of course in Venture Land it was like just beyond

silly and I feel like we were doing very like Nuance thoughtful work but you couldn't tell the difference between that and not and so in this new environment I think that you know the

tide is going out it's going to expose people and you know I think our our relative returns will be even if the absolute returns are not quite as high the relative returns will be better and I

feel like we've taken a lot of our lumps like you talked about the vure marks earlier like I feel like we've written down our

portfolio in the Venture I say we our managers I don't know it's like 25% 30% after having years of 100% RS so it's

still good it still looks good it's think it's a 29% net IR after all that and the buy

out's like 25 so venture has paid off for us but but it it was it would have been two years ago that number probably would have been like in the 40s right

and I don't think we've taken all our pain I think there's more to come but I think we've Tak like 70 80% of it can I ask from investing in some of the best of the last 12 13 what is it 12 years um

with SCS are there any lessons or observations when it comes to liquidity Management on how the best get out I think a generation has been told about lean in lean in and actually liquidity

management and liquidity planning and is crucial are there any lessons from the generation of managers you've seen them

back the best do you get out yeah uh well I don't I don't know if anyone did a good job at it really I mean there a few exceptions that was my

biggest mistake there was a company that we invested in2 200 million dollar valuation that had gotten bit up to six

billion and I had people like legitimately like trying to buy my shares but I was told it was going to

IPO at 10 to 12 billion in like 6 to 12 months and the people I was in it with were not sellers so I you know they were they were long it you fast forward I

mean I would sell that at a billion dollar valuation to I and I'm worried I think it's a little binary right now I think it could be worth three billion it could be worth zero would you do anything different now having had that

experience yeah yeah yeah no I will I will I will and and now to to attack and and maybe Pat myself in the back a little bit by the way that deal hurts

more than some of the stupid deals I did I like froy pricing because of like it wasn't like I like needed to seek out like a buyer like they were coming to me but the secondary thing it's it's

obvious like when you want to be a seller and a buyer like and so we sold we were able to um execute a second sale of like a bunch of like tailand stuff with

managers we weren't continuing to back at like 94 in the fall of 21 and it was bought by another multif

family office who's trying to build a secondary uh portfolio they were like trying to like build a product like I am I was very happy to be

a seller of that I also sold a manager that we got out of because of some ethical

situation um at 104 yeah I mean so there was there were I did execute a number a couple of and I have relationships with evercore as well as some boutiques and

we are now getting every 3 to six months kind of pricing because the bankers will work for free they're pricing the portfolio and right now I think if we wanted to sell some of venture stuff

it'd be very unattractive so it's yeah we'd be a buyer right now I'm a buyer not a seller but I want to continually that we were doing it but I

want to like that muscle is going to be built how do you think about liquidity planning and like forecasting when you think about kind of IPO markets being where they are and

when you think about when you know the moer and the cooler so to speak comes back like you are insatiable at finding the best talent I think and and winning it and getting I think that's where I if

you like the Lessons Learned where I think I can be better is actively managing liquidity and there's a company again I don't want to name names but it's a great company we did a CO

investment with her manager and it's been marked up Forex and it feels fully valued I think the person's complete

assassin who runs the company and so it could easily have a 2X plus from here but like am I buyer or seller like I'd

be a seller but like you can't necessarily like I talked to this person the the GP about it's like hey um could we think like how are you feeling about

this like should we try to sell because I think I would like there's a premium on getting liquidity right now yeah and that's one where I'm like it feels full it has felt full every step of the

way but yeah and so I don't I doubt we're going to get liquidity but I'm proud of us for at least like asking the question

in managing it but to tack a little bit I would say as it relates to like the private Equity Market generally I I think second

you know I worked Harbor vest I was in the secondary group and I and I've seen that Evolution and I think it's awesome private equity in general is like you

just have onfair advantages over the public market you're able to plan you know three to sevene plans not manage quarter to quarter you can optimize your capital structure

you can innovate and Venture whatever the reality is These funds like if not like cleaned up will last like 12 to 20 years like it and so the more kind of tools in the toolkit that

institutionalize and give different offrs for liquidity I think is amazing and so people talk about all the capital that's been raised and this and that I'm like yeah I it's still the penetration

of of private equity in say us UK is like it's what is it like 5 10% I mean it could be it could probably double in

markets like Germany it could Germany's a third of the penetration of wow of uh the US and UK and nordics nordics are nordics might have the highest

penetration of private Equity um get on Nordic it's always leading the way yeah they've done really well right um but I I I I I say bring it on and and all this money that's been raised people talk

about like all the dry powder and my strategy of investing in lower Middle Market guys it's great because all these Middle Market guys need to buy companies

they they raise the money to deploy it and so there's a a huge buyer universe that's out there um and you know the other thing I would just

say and and just actually to break down because I know you're a venture guy so you buy a founder-led business you professionalize you buy it at like six to eight times eita you put on like

maybe three turns of debt maybe three to four depends on the business but you professionalize it you grow it say it had 5 million IA you grow it to 25 million

I and then the next buyer the mid-market buyer will pay you know 10 to 14 times Eid for it and they're going to lever it you know I

mean changes interest rate environment but like five to seven times and that math works really well so you're able to like you you're taking

small business risk and you got to know what you're doing but you're not using as you're not using that much leverage and you're about growth and professionalization like it's it's a

it's a really repeatable and there's a huge uh basket of buyers it's like a really repeatable great way to make you know three four or five times your money

I completely agree with you um and I love that you're a venture guy H yeah no I am I whenever I talk to you I'm always like wow the depths of your level of understanding Adventure is quite astonishing given the breath that you

have yeah I don't think people appreciate that enough actually do you know what I mean though well the Venture stuff I mean the Venture stuff I get when it's a growth deal I'm like I can understand it right and but this is the

same for Venture buyouts energy real estate it's optimizing the having the best Partners right and being being the best partner to the best Partners well I think that's it exactly that because you can actually pick but if you're not

close enough to them you're not going to get the alpha especially on the direct side and I think that's where you know when I chat to Jack or I chat to Nico or Josh I mean I say this like non um we

just love working with you it is a it's a very unique relationship you build with managers which I think is a real superpower which brings me to something that I do want to talk about which is like different types of LPS because I

think a lot of managers aren't quite sure what's actually behind the rapper and so when we look at say endowments first often Blue Chip uh highly

respected what do you think managers should know about endowments as LPS that they maybe don't the endowment is probably like the team right you got to understand like what's going on like

Notre Dames endowment like they all went to Notre Dame they're very they've been around a long time Brian's awesome like that that that's a really solid one or

you know look at Harvard have had team turnover in the past but now they have like a new regime in there that's great and they're actually doing a lot of new stuff and you can't paint it with you

know the same brush so just understanding the people and like how solid that Foundation is because if on the flip side like a new CIO comes in

there's a big team change like that can that can it very stable basic Capital but there can be team instability so that that's really I think the main thing on the end do you think people

overemphasize how stable endowment fund money is there is that her mentality right and so and there's currently like a the seed manager and like I'm like you kind of

want the different food groups like you know you want to have your endowment your single multif family office which I'm biased but I think is the best um maybe a fun of funds that's can be like

they good people and be thoughtful because I mean for example like I don't wake up every day thinking about like Venture and stuff and so if you if you

have a venture specialist fund of funds like they're going to be there's things they're going to do that can be more thoughtful than than you know more

Diversified pool if you get money from endowment a endowment B endowment C endowment D that all like are very close to each other and talk to each other and

then one of them leaves then they might all leave so having diversity of like mindset and you could probably I mean there's a crew of LPS

that I do stuff with I mean but I think we think it generally independently so maybe you need to be thoughtful and like oh well they all do a lot of the same things together maybe like it would be a

problem if what do you advise managers on concentration just in terms of you know percent of funds sometimes you know some of the large Pension funds we talked about earlier yes they do have the 10% I know some there that will say

we're happy to be 75% but we need to do 100 million like is the standard 20% that's a lot it's a lot a lot I mean I'm I'm like half a couple of funds I mean I

think is that okay yeah it is but I I if I if you're asking me you're raising a fund I think you don't have too many LPs but you also want to have diversity so I

think um probably max out ideally at least at scale at call it like 20% would be a lot yeah that said there's the

number of managers wearing more than that but I think you know we've built that trust and um but I think sizing probably your LPS between you know 5 to

20% and then having a tail of strategic small checks I think is a good idea what do you think are the biggest mistakes the merching managers make when raising you see so many you've back to generation yeah if you're really good

you can have your cake and Eed too so you want to invest you want to you want to have your LPS by the way like these are long-term things right so it's like funds last longer than like the average

marriage like for sure right so totally right so think about it like that right and so don't just yeah don't just take the quick money right and you want to have um

you know a very stable basee of capital arguably growing you know because like we've grow like you want to maybe not just stable but growing base of capital you know in a place that's not too

bureaucratic right where you you know you can you can get answers quickly you don't have like a ton of red tape in my opinion is better and then it's like are these people I want to like partner with

for the long term do I enjoy them are they good people are they you know honesty Integrity smart like make me better but also not be annoying cuz my whole

thing is like like I want you to do your job I I'm not going to bug you I want to be there and you ping me on the weekends and you know whatever I'm like yeah sure

but I want to be receptive when you need me but then not put you through the ringer like I want you to spend your time with entrepreneurs not with LPS why do you

think the bar is low for competition in LP World well I think it's structural um because a lot of the big a lot of the big pools of capital have very

bureaucratic structures and low pay so that's the big one fun funds are transactional they're trying to raise their next funds you know they're often like trying

to like cut a deal like get like a spe like they want to look good early and I'm like I don't really I'm thinking about this like I only have so many bullets I'm thinking like 20 years

multiple funds doing an attractive deal with a B+ like people plus a minus manager versus doing playing the long game with an a like just play the long

game right and that will come did I answer the question yeah it I think and so and then I mean and we've

seen this like our wealthiest family the family that brought the reason I was hired at SCS um because they had the Mandate that was

like 200 250 million I built the whole thing across their base of families was 90 families and 7 billion now it's um 200 families and 30 billion at one point

like the guy got cancer and that like their allocation like went to zero for a period of time and he died actually and then there was a bit of a

upheaval around so you have single with single family offices like things happen we've had we've had another family where you know it's tragic

um but the woman we work for or her husband she was an arys and her husband like she's in her 30s he was like early 40s maybe he died like suddenly have a

heart attack couple young kids like their allocation like slowed down to close to zero for a few years right and that's by the way

like I mean totally understand that but there that's why I like I I'm I'm obviously biased talking my own book well that's why multifam office is great

I think the other thing I'll say yeah is yeah I'm I'm giving you some real examples of like really big family and like you know where if you if I were just working for a single family office

then and that happens it just it changes things 100% And like for you with that in those situations yes it might mean that your budget's a little bit less for that given year but actually you can still commit to the managers in the way

that you want you can still be there and actually yeah we we might commit 35 not 50 not a problem in in a real way that but actually if you are the cioo of that family office or they are your sole LP

or whatever that then you're you're on pause and by the way are you going to tell that like they have a legitimate reason to be on totally you know and and so that's that's the risk on the single family office side where I think and the

other thing I'll just say is like it's funny um you know people make some money they think they want to like start a single family office like why I I think that like why you have to manage them you

have to have a reason jeez I never you have to have a reason like I mean I think it's definitely not a billion dollars like I think it's you have to be maybe worth 10 billion at least five why well sorry I'm not as fascinating why

because I see people starting with 50 million with 100 million makes no sense why there's a lot of people listen who

have 50 to 100 million who either have one or thinking one why the benefits of a multi family office you get like you pay a lot like you get the scale of a big organization and all their

institutional learning earnings and like lower fees and access to Investments if you're subscale it's probably going to have you're going to have a less sophisticated Investment

Portfolio and you're going to pay a lot more unless you're doing direct deals like you know what you're doing like you want to and you can do that we we work with a private Equity guy who's like

brilliant who has like he works with us and then he has like a team of people that but like that's you have to have a reason to do it family officers make that they think

they can play Venture and play direct with you know Peter who does venture for two days if you have 50 Mill I mean so let's just like back into it like or

let's let's use 100 for round numbers okay what should be your allocation to privates like let's just say I think I'm like over 50% but our typical family is

like 35 but let's let's just say 50 like I'm probably like 70 but I eat my own cooking okay so you want to be

uh 50 50% private Equity okay that's 50 million bucks you know you shouldn't allocate that all in one year you should do that you should build that portfolio

over time 100% rule of THB the rule of thumb would be the way it works is essentially you'd want to commit a third per year so that's 15 million a year I'm

almost surprised it's that much per year given liquidity Windows if you think it's going to take 10 plus to get that back and maybe seven it's like over six do you see what I mean

though kind like I'm saying do i' do like 10 million a year over five years yeah you could do that but if you really you're not going to get

ramped you're going to end up at 30 if you if you you have to overcommit I mean you have to you have to in order to get your nav at 50 you have to have outstanding probably 20 million

commitments at all time but in this scenario okay just if you follow my swag model you're uh that's 15 million a year into

privates saying privates like generally let's just say you don't do real real estate or natural resources you just do private Equity okay what's the mix

between buyouts and Venture that's let's the way I do it the way I do it is uh yeah just even 50/50 or I don't know

you know whatever but that's okay that's 7.5 million um annually and how do you want to like invest so are you going to how many funds you going to back like you

going to write and people are going to take you seriously like unless you have personal relationships I think you can see people do seven seven 71 million CH and you're going to go into emerging managers

raising 15 to 50 yeah and there's so many shitty Venture funds out there oh my God I see it I mean yeah I'm just I'm just breaking it down and what should you

do you should probably in that scenario you should either partner with a multi family office like SCS or you should invest in a fund of funds you should not

be doing seven cuz wa how did you just find those seven like you don't have that much money you I know you like you made $100 million you feel you feel really rich but I'm just like no I get you but the best manager is not going to

meet you for a million dollars if you if you're not unless you unless you're like friends with them no I I I totally agree with you when you walk it back like that it's like it gets very real very quickly is

there else that you think that managers don't know about the lp world where you think that emerging managers make mistakes on when they come see you I

think it's just I think I think one thing I'm a big proponent of doing targeted like not meeting like 120 LPS and taking the first dollars but like

having like a thoughtful like do 20 meetings and try to have a you know 40 50% yield and also like but but so have appropriate diversification but like you

know it mean means a lot more to get referrals through trusted sources like I don't do cold emails and like you know I knew who you were but like having um his

ni out and then we had Josh as well who knew each other and then I but there was you're a different you're different animal but like if you if you reach out to me cold right now like maybe when I

started SCS I would respond but I can't you have to show some sort of like figure out a way to hit me up but then like I advise managers think about

hiring a boutique this is more on the BS side but they they they have two options they can go with like a boutique um fundraiser placement agent or like one of the big guys and um I always

generally say go with the boutique because they're much more thoughtful about it doing like you know 100 meetings with like is just yeah

it's so funny you say about fundraising agent and stuff for inventory shouldn't use one at all it's should be all all Network good I agree with you that I I see them if you see a placement agent

Venture that's I mean on the fun side or on the direct like company investing side cuz we see it in Europe on like especially France still placement agents for like companies like seed companies I

mean it's I'm not saying I would completely rule out a venture fund that had an agent but it's a terrible sign I would do maybe I'm harsher than you are yeah I

mean well never seen ever I'm just like but I mean you know yeah Peter is there anything you know now before we do a quick fight is there anything you know now that you wish You' known when you

started at SS 12 years ago uh you know I don't know I mean I think I think have my cake and E it to in terms of like good people like I think I was

attracted and still am to like the force of nature people but like sometimes those organizations if you have a certain personality there can be more

turnover they don't have to checks and balance es so like really trying to like optimize with like not just the smartest people but like good long-term Partners

yeah um you know that would that's probably that's probably the only and then like I said earlier the uh like just making sure you're trying

to find the contrary like the contrary views like Echo chamber's great like but that's let's take it as a given and then try to see what others are saying because that's why if you think of what

I scale it's like I will maybe do 5 10 15 reference calls where these funded funds will do like 60 yeah but one of my reference calls will be to the

fun of it to 60 calls right so like Ways to Work Smart you know that's and yeah that's been an

unlock I think no I I totally agree and get you there listen I want to do a quick F Peter so I say a short statement you give me your immediate thoughts does that sound okay it sounds great let's do what do others not know that

you know to be true I think it's it's the diversification piece in in uh private Equity the way to build an optimal portfolio which I think is I have 60 70 active relationships in private Equity I think there's a lot of

people out there that St should be like 20 to 30 how do how do you manage them at scale Peter you are like you're also a real partner and friend to us how do

you do that I work hard yeah I have good teammates um I have a really you know Kyle who you know you got but uh it's it's a lot there's a balance between because I have you know couple I have

11-year-old daughter six-year-old son trying to balance family and work and all the travel um but I don't go to that many I don't go to Every annual meeting you know it's like you have to pick your

spots and I wish I could do more than I do but like I you know there's the balance between that and then um if you have too many Quicks in the kitchen you can't you know so I'm

I'm working on like the time piece is like the thing I'm constantly working on tell me you can call yourself up the the night before your wife has her first child and your first child what do you

advise yourself I think like you figured out like it's I I I don't have a good good answer to that kids are the best it's I what I would just say my advice to you would be like definitely have

kids they make you they bring they're definitely the most important thing and I like I love like my managers are like my relationships are like my children too but like it's all the cliches but um

but also like I don't you just kind of like react and you kind of you know deal deal with each situation as it as it as it there's no big Grand advice I would

have like I have my my wife was a lawyer and now she's a full-time mom she's like the best mom like so pick the right spouse that that that would be that

would be uh obvious I'm very lucky and we kind of I try to be I'm very involved on the weekends with my kids but like it's definitely divide and conquer and like

having knowing that my wife is like on top of everything so I can focus on Harry and work and all that is huge what's the most controversial view you

have on venture today I think the placing track records is four F yeah I mean I think I think that's yeah it's really go where the

puck is going right and although that's probably more true buyouts I think uh where the record piece cuz in Venture there is brand right and there is I

think more Persistence of returns around brand can I ask a tough one that's not on the sheet what firm are you not in that you would love to be in yeah it's a good question probably probably

Benchmark same for me yeah so we're kind of in sequa but like and I'm very I mean Kevin Kelly is like my I love sare Heritage uh yeah definitely like

Benchmark rivet's done a really nice job too and I think if I hadn't been as capital constraint I I've you know met with Mickey many times over the years that that's another great one you can have dinner with anyone that are alive

who would you have dinner with and why them I'm going to give you two um and both both both Brits and you know I'm an angile um but Winston Churchill would be

the the the dead I just I mean the guy his life is so amazing an unwavering resilience oh my God yeah you know he and he just like he also the fortitude to stand by your beliefs in know facei

of everything yeah and his ups and downs I mean he kind of had the the different acts and me but you know he he believed like strongly he was destined for greatness and like he like when he was

in his early 20s like ran into battle he was like wasn't worried about dying because he's like you know how could I die I'm going to do like amazing things like just a total character who who um

was very irreverent and like my type of guy so that would be the de I think yeah that's it's an easy answer actually for me um who is the second so the second's

actually um one that alive and actually one who I might get dinner with so it's Chris Blackwell who's the founder of Island Records um Jamaican SL you know

British guy who had a fascinating life really you know he helped shape reggae music but also back people like Steve

mwood you two and now he's a you know Hotel air in um Jamaica he's got a hotel he bought Ian Fleming's house um golden ey and turn it into Resort and

my friend good friend Brian sheth who runs um a firm called hlli um is like good friends with Chris so uh Chris is 86 um

so uh we'll see maybe you know it gets cold in Boston and uh maybe maybe a trip to Jamaica this winter we've been I've been talking about it for about a year now some fantastic Instagram St you can

come too I I would totally come to Jamaica go to Gold I I'll put the plugin for the biography The Islander is amazing it's really it's just a

fascinating life Peter final one where Peter in 2033 what did 10 years Outlook well in

10 years my son Reed will be 16 so I'm living outside of Boston you know doing what I do I think uh I think the more interesting question is like where did

where did that go when Reed goes to college one thing I love about the lp life being an LP not being being at that 10,000 ft or 30,000 ft not like in the trenches on the deals cuz I don't take

board seats or anything like that is like I think this is something that I can do like into my 70s like I I think I can maybe not be um quite as engaged on

the front end as I am today but like I think I can continue to do this for a long time and do it do so in a way that you know lifestyle wise I can take

more time and you know enjoy travel which I love and all you know but I get so much positive energy from what I do and partnering with people like you that

like I don't see myself ever stopping this or at least not for the next what I'm 42 so probably next 40 years listen Peter I've absolutely loved doing this I want to thank you also you know your

partnership means so much to me your friendship means so much to me this has been a joy to do and so thank you thank you har