YouSaid · the spoken record

Brett Barth

lines on the record: 105
first: 2025-02-24
most recent: 2025-02-24
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“My last five years have been excellent. The role Evan and I get to play here at BBR, how I get to spend my time as my children have grown up and how I get to spend time with them. Ex a pandemic, the last five years life's been great for me. If my next five years looked exactly like my last five years, I'd be a really happy guy.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“The first thought is my daughter's taking a class in high school on conspiracy theories. And she comes home every day with a different conspiracy theory. Like how people believe that we didn't really land on the moon. And I just don't know how minds work. I really think I should, and I really would like to know more.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“Like, you're Started on the path I thought I would be on. I never wanted to be an entrepreneur. I went to Wharton. I wanted to be an investment banker. I went to go work at Goldman Sachs as an investment banker. And I thought I'd do that forever. And so if you told me that 25 years later, I would have started a business with one of my drunken idiot fraternity brothers who taught me how to handicap horses and drink bourbon and that it would be this successful. Pleasantly surprised.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“Sticking at the Kentucky theme, I thought I'd come to New York where for a couple years, validate that my wharton degree was money well spent and prove to myself I can make it the big apple. And then I would go back to Kentucky and take over be the next generation for my family's accounting business. Spent a couple years at Goldman and then was out for dinner with my dad at Yo Molino. I actually remember this in West Village. And we finished dinner and go outside and I say, dad, I'm ready to come home and I'm ready to join the business. And my dad said, you're what? He's like, you're going to give all of this up to come back to Kentucky to argue with clients about billable hours. And he's like, look, I'd love to have you, son, but stay here. That's the path I thought I was on, not on the BBR path.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“You call them balls and strikes? Were you good? Now you're one of them I was a traffic guard at the Kentucky State Fair. I was 16 years old. I was four foot 10. I didn't weigh 100 pounds. It was a miserable job sweltering in August heat in Kentucky. And I was really bad at it. I felt alone. I was dehydrated. And I knew that was not my skill set. I came from a family of accountants, I thought I'm going to go do something very different, but definitely gave me an appreciation for jobs that I am underqualified to do.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“Little League umpire, seven bucks a game, and a free Coke. Whoa, you call them balls and strikes? Were you good? Well, you rotated. Sometimes you call balls and strikes and sometimes you had to be the guy in the infield. And the worst thing were the parents.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“So Evan and I are pretty different. Not only are we physically different size and I'm the glass half empty, use glass half full guy. I could give you 20 other ways that we're polar opposites. But yet another one is he's a landlover. My happy place is on the water, near the water, on a boat.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“They're disconnected. No emails, no texts, no teams, no slacks, you are out there. So we've done our sabbatical and I try to do these go west trips a little weak here or there as a way to capture some of that.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“I do trips with a bunch of friends that we call go west young man. And we will go find somewhere in the mountains, been to tell youride, Moab, we just got back from Tucson. It's just an adventure experience. We do gravel bike riding. We do trail running, trail racing, and a lot of fun. And I think half the fun is, of course, that you're together with your old friends. The other half is being in a really cool place where you get head clearing time. And I think these closing questions don't always have to have a moral to the story, but I would say that it's an important part of being successful in business is having time outside of business. One of the principles that Breton, I believed very early on, and we started a sabbatical policy at BBR, that anybody who works at the firm for 12 years has extended time months away from the firm where”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“We've both been fortunate though one because of the reputation of BBR, I think we've both been sought out as board members for different opportunities. You got to learn to say no. And two, those board experiences have taught me a lot as someone running this company about seeing what other people do well, hearing from other people in their perspectives, most importantly, BBR has also given Evan and I an opportunity to be extremely philanthropic and we both care deeply about it. And if you are philanthropic I think there is an obligation to spend time with some of those philanthropies you care the most about.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“Good governance to me, there has to be term limits. And after your ninth year on the board, even if you feel like you are irreplaceable, you aren't. Somebody else can take your place on the board and will be good at it. So you know that the organization is going to survive past you, and you might not be able to say, oh, my fingerprints were on it to make this organization cure cancer, make K through 12 education in Brooklyn the best it can possibly be, start up a community from scratch and have it go and build a building and be there forever. You have a role to play. And your role is as a board member, not as the co-CEO of BBR for a lot of founders, entrepreneurs, I wish they knew what I know now when they started their board experience and were much more patient about trying to make impact.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“Different kinds of perspectives. Yes, it's easier because people who work for philanthropies need to feel that they're getting other recognition other than necessarily their paycheck. And how as a board you make sure you provide that is a matter of good governance and a lot of work in committees before you bring that to the leaders of that organization.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“I'll take the other side of that is serving on a nonprofit boards. I probably served on my first nonprofit board 10 years ago. And I came in guns blazing. I am going to professionalize this board. I'm going to run it like a business because I know what I'm doing because I've got BBR as my experience. And the truth is, if you try to run a nonprofit board as a business, it will fail. Giving space to see that there are people who are on the board who work at a nonprofit, who are there for the passion and the mission, and not to maximize shareholder value. And that means you have to accept a lot of inefficiency. You have to be willing to step back. You can't say it's my way. I know how to do it. I think that it's actually contributed to a much greater sense of how to work within BBR, that a lot more patients for a lot of”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“Your duties as an independent shareholder, I saw that board function at a really high level. It also taught me that I'll never be on another public employment board.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“Say a couple things. One, some of those boards were better functioning than others without naming names. And so things get difficult. And if the groups are functioning well, they can handle those difficulties much better. And the time to make sure you're functioning well is when things are good, not when things are bad. Functioning well means you've got a great group around the table. Those people bring diverse thought, significant expertise, and they're really thinking about that institution, whether it be a public company, private company, philanthropies, best interest at heart, not their own. And if you put all those things together and it functions well, it can handle difficulty. I'll name a positive one. I was on the Cowen board for a long time. I think the Cowen board really met all those criteria I talked about. We were approached for an acquisition. Having a public company get sold and how you think about the people and retention and culture and fit and public shareholders.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“If we step away from BBR alongside the success you both have had, you've had the opportunity to serve on a bunch of different types of boards. We'd love to hear about some of those experiences and the lessons you drew that helped you apply them into the business.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“Culture is so critically important to what we do for how people behave and how they act here. We've never bought anything. That doesn't mean we might not someday do something. We get approached all the time, but it's not part of our plan. It's not something we intend to do.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's probably the same tension any luxury brand has, which is the more it's known, the more it's a commoditized product, and the less it becomes a luxury item. We have no interest in moving towards a commodity business. If we can continue to grow with a handful of great families every year, our luxury will, in their mind, be only enhanced. And that brand will only be enhanced. This is part of the challenge that will happen with consolidation, which is you can't be a boutique owned by PE, owned by a bank, and still be comfortable that you're going to still play just beneath the surface because scale matters in those firms. They need an exit. We don't. And since we don't, we're much more comfortable being able to continue to feel good about who we are, what values we have, our three core values.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think there's a difference between brand and notoriety. When I think of brand, I think of our reputation. All of us have always been super hyper-focused on our reputation that we will always be acting in our clients' best interests, that we want to be making thoughtful investment decisions and continuously improving with that. I want to be known for that. We get opportunities as an investor because we are a partner of choice. I think that's part of our brand. It's not a marketing flipbook approach to things. It's how do people think of you? And so we've always been hyper focused on our reputation. And now I think maybe it's brand instead of reputation because our reputation precedes us. And I'm not a marketing guy, but maybe what brand really means is that people know of you and have thoughts of you based on your reputation without you having.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“From when we first did this podcast eight years ago, there probably weren't that many people who knew about BBR. And there's this always interesting tension of being the quiet boutique that your clients love, that they know who you are. Maybe they'll make a referral versus being a business that other people know that has benefits maybe for your relationships with managers or your next client. How have you thought about that tension between starting as this little boutique and trying to build a brand around the firm?”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think there are managers that fall into two buckets. They are managers who focus on their investment returns, and there are managers who focus on the enterprise value of their management company. And I think the decisions you make on people hiring, process, how you spend your personal capital on building your enterprise are different if you're thinking about how do I generate returns versus how do I maximize the enterprise value of my company. That's not to say we not do business with investment firms that are public or investment firms that don't have minority stakes, but it's more the exception than the rule because we're focused on people who are waking up and thinking about their returns and their strategies. And I would say we wake up thinking about how do we deliver returns for our clients in service for our clients so that our firm will be here in doing that decades from now, not because we ever want to sell it.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“A couple of aspects of the industry that have changed a lot and talked a little bit earlier about this consolidation wave. How have you thought about the strengths and weaknesses of staying independent, not just for BBR, but then also as you look at managers who are selling stakes, the strengths and weaknesses of that entire consolidation activity in the industry?”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“And on the investment side, the thing that makes people the most successful in our investment team, and this is part of the culture when we articulate it, is being intellectually curious and having thick skin, i.e. you've got to come up with interesting ideas and push the envelope and you've got to be willing to have everyone else around the table shoot arrows at it.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“And so it's just this mindset that you get into a little bit back to your question of what changing 2010, which is if we were looking to try to maximize 2025 cash flow, we wouldn't do any of that. But if you're looking to maximize 2035 cash flow, you're just much more willing to invest in long-term positive NPV projects that will make us a better firm.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“Is just a commitment to innovation. I think if we were just thinking about how do we manage existing clients and do it based on the way we've gotten successful in the beginning, which was rolling up our sleeves and saying no job is too small and we're all going to figure it out and gang tackle, I think that's going to limit our ability to be able to be successful in the future. And so we now have an amazing CTO. We have an amazing head of innovation who are partners at the firm, who are rethinking the way in which we have structure in light of AI.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“Do you have a meritocracy here, much as we talk about teamwork? The meritocracy is that we want ambitious, successful people here at BBR to become partners. And when they're partners, they own the firm. It's not a profit share. It's not a formula. They have capital value. It has real equity value. And Brett and I and other founders are committed to providing our equity to this new generation of partners in a way that allows for us to be able to give people the chance to be able to say just like it has for Brett and I, this is their firm. I don't think a lot of firms, especially ones who are selling out today, necessarily have that mindset. You have to be willing to be deluded. You have to be willing to know that you're not going to be selling at the highest print. But what you are getting is a firm that's going to be around a lot longer than we are.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“I'll talk about some of the things we've done recently industrial outdoor storage. It's become a little more institutional, but two years ago when we first did it, wasn't an asset class that anybody would own. That's, I think, particularly interesting. Other stuff that we've done, oh, bourbon aging. First of all, one, it's certainly not an institutional asset class. Two, people think we only do it because Evan's from Kentucky and is a huge bourbon fan. But three, there's actually terrible technicals because liquor consumption is going down and brown foreman's talking about volumes dropping. And so there's no capital going into that. And so the ability to be a structured lender to these small producers is incredibly interesting to us today. So that's one that we've done recently and are pretty excited about.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“And so, as much as I'm dismissive of private credit, these longer duration, nichey credit opportunities continue to grow as part of our portfolio. Because from our perspective, even if a lot of it is ordinary income, earning mid to high double digit returns because banks and other folks have exited those spaces is a lot more attractive than owning the S&P for incremental dollars today.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“Clipped is return. And by the way, if you were a bank, you'd have to take a loan loss reserve against it to report income, but not if you're a private credit fund. That's a little bothersome to me as well. But there's plenty of things, chapter 13 bankruptcies, with a group that we've been with for years that does bridge loans to a very niche real estate sector that has an agency takeout, but it takes a couple years for the agency takeout. You understand what you're investing in and those generally generate mid-double digit returns. And those are things that once upon a time a hedge fund would invest in, but they're too illiquid now. They're something that a Morgan Stanley or city would put on their prop book, but they can't for red capital charges anymore. We've got a lot of sophisticated people and some really talented partners on our research team who are the go-to people of choice. And there's a lot of folks in these specialty finance and other nichey areas that know we're a great call on that.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“We do a lot in, I would call more esoteric credit. We do almost no on-the-run private credit. There's two reasons for that. One is most of our clients are taxable, at least for a majority of their assets. And so not all 10s are created equal. A 10 that is deferred and long-term capital gained down the road versus a 10 that's ordinary income is a very different outcome for most of our clients. That makes that 10, and I think I'm being generous today with 10 pretty unattractive. Two, we don't think coupon equals return. We've always been total return investors. Whenever we look at an asset class, it's all about what am I going to get at the end? Whenever a client asks, what's the yield on my portfolio? It's like, no, no, what's the return on your portfolio? And so in a lot of private credit strategies, I think people just assume that coupon being.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“The stable value portion of what you do, private credit has replaced Wall Street lending and become this big area for investing, particularly for a lot of families. Curious your thoughts on that space.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“People have committed too much capital, whether they're institutions or big family offices. And so it's one of those places where there's not enough capital today for the business formation that's going on.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“Think it's less crowded today than it was three, four years ago. There's some interesting things. We are in a venture capital fund that's a 22 vintage that bought a lot of things in 23 and 24. It's about 60% invested. And we just got a bid for two times NAV. We're not going to take it. I think that's a good vintage venture capital investment. We did not do venture capital probably for our first decade. And the view is still the same today, which is venture capital is a mediocre asset class. We got to be in the top quartile managers. It is very difficult to be in top quartile venture capital managers given their limited capacity. Given how that market has evolved and the number of really high quality smaller managers that may but probably are not in Silicon Valley and are really, really specific in terms of their domain expertise and their ability to be the partner of choice to portfolio companies, we're very happy in venture capital today because it's also one of those areas where everyone's gotten burned.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“Industrial focused firm that is doing some market timing around cycles and industries and commodity prices, both long and short, but not because they think that this one company is going to outperform that company. There's no market neutral long short in our portfolio. There hasn't been in years and years and years. And so I think that is a phenomenon where it's been armed away and it's too crowded and it's not worth competing in anymore.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“Alpha in stock picking is as hard as it's ever been. I'm not a big believer that that's going to mean revert in a meaningful way. Now I do think you will ultimately see mean reverse. The capitalization of stocks. The MAG 7 is a phenomenon. The way the Nifty 50 was a phenomenon. GMO, Jeremy Granthwoman likes to talk about mean reversion, but he's like, but I don't know how far away from the mean and I don't know when it's going to revert. That's one that I'm really comfortable in the mean reversion, but I can't take a view on when or how. And so that means owning small cap stocks, owning non-US stocks is a more attractive go forward proposition and that reversion is going to happen. But I think in those areas, there is more stock picking alpha than in US large cap stocks and that your ability to do that in on the run US equity is very low. And so from our perspective, we have a bifurcated view. We are passive for U.S. large cap equities. We've been passive since day one. We own significantly fewer longshore equity hedge funds and we don't do any that do U.S. large cap stocks with the exception of”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, really nice indeed. We haven't been married a long time. But that's because there's so many more companies staying private. There's an ecosystem for those companies to stay private. We've had a philosophy of that's going to continue to grow. That's going to hurt returns. But that's an ecosystem. And what I want to do is be somewhere in that ecosystem where I'm creating food for it and making money in a repeatable process. And so can we invest in businesses at still higher than I probably prefer 10 years ago multiples, but that are smaller businesses that managers can really add value. They can add acquisitions. They can grow the businesses. So then all of a sudden a larger private equity firm that's part of that democratization will pay a higher multiple and it's now a big enough deal for them.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, without question, they're going down. Private equity returns will be lower over the next 25 years than they've been over the past 25 years. Given where equity markets are today, I still think equities are worth owning, but equity market returns are going to be lower. On any metric you look at, the S&P is pretty expensive today. We still own it, but we're very dogmatic about rebalancing, thinking about taxes to take those profits because those returns are going to be less attractive. And by the way, if that's the case, private equity in lots of places now, it's more expensive than public equity. One of our big themes that's worked really well is understanding that change. One of my favorite geeky bar joke, but like how many stocks are in the Wilshire 5,000? And the answer is a lot less than 5,000, right? And the reason for that is that...”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“As you look at the markets you're participating in over these last 25 years, you've grown a lot. So have a lot of your peers. There's more and more money going into the strategies that 25 years ago, you were one of the few people participating in for families and now more and more you hear about the democratization of alternatives as an example. How are you thinking about the prospective returns in some of the places like private equity that have been so good for so long?”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“There's a barrier to exit, and we know we'll never get 0% turnover, no matter how great our systems are in selecting managers, and we want to get good at being able to turn over in advance of problems.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's trust. And how do you measure trust? Part of it is delivering on what you say you will deliver on from an investment standpoint, from a information transparency standpoint. What we don't love is learning about another manager that we own from a third party. And we have to confront that manager with it. You have to trust but verify. We hire a new manager by no means is that a lifetime contract. And it's easy to get complacent in this business, complacent in the way in which you select managers. It's good enough. Keep the manager. They're doing more or less what they say. They're within the ballpark of return and risk of expectations. But if you're trying for excellence, you can't never get comfortable that it's just okay. When it's not, be ready for all the commotion that comes with turnover. You got to tell the manager. You got to tell the client that things didn't work out the way that you.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“Few things one, that we know what they own and they know what they own. So for instance, people ask about what reporting do we want to see. And I always turn the question back around to the manager and say, what do you look at? I want to see what's their dashboard. And that's what I want them to share with us, not what they think some consultant wants to see. I don't need positions. It doesn't need to be a separate account. We just need to be on the same page on a somewhat regular basis about that we're looking at the same things and we're looking at them the same way that when there's bad news, they share it with us that when someone leaves, we get that call and I don't find out about it from someone else. It's that level of trust that they can give us bad news. And we appreciate that not everything always goes perfectly. And that, you know, when we're doing a portfolio review, here are the things that worked and here are the things that didn't work. And so I think that level of honesty and integrity.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“Alongside of those strategies, you mentioned a couple of characteristics that are common, like people incentives, partnership. So when you say you want to be partners with good people, what does that mean as a BBR investment?”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“The single biggest change is our ability to do one-off things and our ability to put people in business and keep them in business. If we think there's an incredibly talented individual that needs a few hundred million dollars to execute their strategy, we're comfortable being that person. There are situations where managers have come to us and said, listen, these are my three favorite portfolio positions. They're 10% each. I'm like, great, let's create an SPV where based on that theme, we own bigger pieces of them. And that doesn't work if you're giving them $10 million. But if you're giving them $50 or $100 or $200 million, they're happy to be in business with us. Credit managers where we've done really interesting short duration investment grade credit with attractive returns on a big separate account. But that's a separate account that only works on a few hundred million dollars. So that size has allowed us to co-invest with private equity managers.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“What are some of the ways you've thought about changing the implementation of the investing? So you mentioned other people have evolved into doing direct investing alongside of just allocating to managers. As you've grown in scaled, how have you changed how you've gone about implementing the investment strategy?”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“Hated markets have changed or it's pre institutional that we can get excited about because of the fundamentals and the investment. And there's this kicker that liquidity is going to come in and going to allow us to take advantage. You know, we've done it in core real estate in the last couple years. For 20 plus years, core real estate was uninvestable for us. In 22, core real estate became investable for us again just from a lack of capital. It doesn't have to be esoteric.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“And so I think the most interesting alpha today comes from a lack of capital. And that lack of capital can either be because it's unfavored. And that goes to being contrarian. Something's cheap because people hate it. It can be a lack of capital because of a institutional or regulatory change. I mean, one of the things that I loved post-08 are things like the Volcker rule, which took Goldman and Morgan Stanley out of proprietary trading businesses. And at the same time took hedge funds where side pocket became a dirty word out of certain private credit type businesses. That's a lack of capital. We could fill that void. Or interesting investments that once upon a time were pre-institutional and are now institutional, carbon credits, music royalties, that's stuff that people do today that five, seven, ten years ago they didn't. So anything where I can figure out because it's”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“And we learn slowly that we needed to change expectations on returns in those strategies. I mean, we absolutely presented any of our stable return low risk, absolute return strategies. Merger arb, convert ARB, that alpha doesn't exist anymore.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“When we started there were inefficiencies in the market that were just really easy. Convertible arbitrage was cheap, and you could make one percent a month. Convertible arbitrage is not even really a thing anymore. That doesn't mean there aren't people that we hire that do a good job doing capital structures that include convertibles and make money doing it, but that's an inefficiency that's gone.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“Has it gotten too small? Have they drifted so that we can then make a fire decision in advance of the performance being negative? And if performance is mediocre for a quarter or two, but none of those things have changed, then we can be a buyer of those dips and not use one, two quarter or even one two-year performance to drive decisions. At some point, if it's just performance after a couple years, maybe we've missed something on the underwriting, but it's to revisit the why did we hire you and what those key criteria are, we actually list those crew criteria, come to a conclusion, and every quarter we look at the previous quarter's conclusion just to make sure nothing's changed in our thought process.”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source
“There are several they tend to be people, they tend to be incentives, they tend to be specialization. And I would say that partnership of those people. I talk about it as the shower thought. What do they think about in the shower in the morning when they get up? What's the first thing they think about in the day? If it's about their portfolio and about their area of expertise, that's someone I want to do business with. And if they've structured their business in a way where they're compensated and they will be successful, if they execute on that and we're aligned, then I'm not a client. I'm partners with them in doing that. Then our process is focused on regularly re-underwriting that so that it has their approach changed? Has their passion changed? Have the keep contributors to that process changed? Has the asset size gotten too big to execute on it?”
2025-02-24 · Capital Allocators · Brett Barth and Evan Roth – Stewarding Family Wealth at BBR (EP.433) · IDENTIFIED FROM THE TRANSCRIPT · source