YouSaid · the spoken record

David Lyon

lines on the record: 86
first: 2025-11-17
most recent: 2025-11-17
sittings or episodes: 1
sources: podcast

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“As a result, lots of competition in that space. The other thing I realized that there is no barrier to distress. It's only if you're crazy enough to do it. Company needs money. They're going to have a restructuring advisor. They're going to call whoever's going to give them money. There is no barrier to entry in that space. If you have the capital and you're willing to engage in it, you can do it. I was trying to do something that was less competitive, where there was a real mode around it. I realized one of those things was scale as private equity got bigger. Thematically I saw, wow, they're going to be need for larger checks. Those bigger companies that are in stable industries, they're better managed. They're more professional. We need dealing with a four million dollar EBITDA company. You're going to be rolling up your sleeves. Maybe it isn't the most sophisticated. Maybe it isn't the deepest bench. And this is going to sound stupid, but 500,000 dollars matters when you have $4 million of EBITDA. The businesses that we're looking at, $200, $300 million, management team zones significant part of them. They're professionally run. They are good systems. They are scaled. I felt much better about the underlying.”
2025-11-17 · Capital Allocators · David Lyon – Hybrid Capital Solutions for Private Assets (EP.471) · IDENTIFIED FROM THE TRANSCRIPT · source
“First fund, we were an ops fund. We were, I hate to say it, me too. And half of what we did was buying loans and buying bonds in the secondary market. And eight, nine years ago, I had an epiphany saying, God, this business is difficult. I don't have an edge. And being the 75th guy looking at the same loan at 75 cents, what edge do I have? It became apparent to me that, oh, we have lots of relationships with private equity guys. We're thoughtful about structure and how to price risk. This market's inefficient, meaning this hybrid capital market, there aren't a lot of people who do it. We began to pivot into that business in 17 and 18. Then I realized, wow, what's really interesting is in smaller deals, when transactions are 20 or 30 or 40, lots of people can do those in terms of size. Hedge funds, they'll have pockets of capital. They can write a twenty, they can write a 30, insurance companies, they'll like direct things. Any guy that raised $300 million in a cap solutions fund can do a 20 or $30 million transaction.”
2025-11-17 · Capital Allocators · David Lyon – Hybrid Capital Solutions for Private Assets (EP.471) · IDENTIFIED FROM THE TRANSCRIPT · source
“Operating executive or understand the model. Can you do that at scale? I don't think so. My opinion. That's where you're seeing most people in CAP solutions. There's some angle of distress. It's balance sheet repair. If you're injecting junior capital into a company. Most cap solutions are junior capital. They're some form of either a node at Hold Co can be a preferred stock, can be a convertible preferred stock, but it's some form of flexible junior capital. And the premise is you're somewhere between senior secured and equity. You're hybrid. If the company's got existential problems and it could potentially default, you can call yourself whatever and you're not going to do well. If you're at Hold Cove, the liquidation preference and the company can't pay its interest, that's not good. I have a fundamental bias against people pitching downside protection in junior capital and selecting things that are tricky, damaged, sexually challenged. So that's one bucket. Eight years ago when I raised our”
2025-11-17 · Capital Allocators · David Lyon – Hybrid Capital Solutions for Private Assets (EP.471) · IDENTIFIED FROM THE TRANSCRIPT · source
“They talk about debt to GDP. I call it the boogeyman slides. They're saying, world's going to end, I have capital. But before that happens, and no one knows when it's going to happen, all the things that people look at are already baked into the cake. It's the exogenous factor that no one knows that causes the thing to topple over. I always tell people, so you're going to be at the bottom with all dry powder. That's your strategy? That's silly. People are realizing that that's not the case. A lot of stress guys said, well, all right, worlds are becoming fundamentally more private. I want to pitch that I'm going to be able to inject capital into these companies. And a lot of their pitches, see how big direct lending became? There's obviously a car crash there coming. I'm going to be the guy to benefit from it. People love pitching themes. This theme is what's been proliferating around the street. I hate that investment theme. And this is my bias. I don't believe it's possible for any single person to assemble a reasonably diversified portfolio of 20 broken things. You can have an edge in one or two things where you think there's possibly a turnaround.”
2025-11-17 · Capital Allocators · David Lyon – Hybrid Capital Solutions for Private Assets (EP.471) · IDENTIFIED FROM THE TRANSCRIPT · source
“The windows to take advantage are incredibly narrow. People realized very quickly, oh, this is a 500 million dollar EBITDA software company. And it went from par to 78 because people freaked out that we were all going to be living in caves. That's silly. And that inefficiency went away. That's not a strategy. I always laugh when I tell my investors, people that show you the same decks that say wall of maturities. It's never happened in the history of finance. People say, oh my God, I forgot I have a maturity. Good companies finance those ahead of time. It's only the bad ones that can't read.”
2025-11-17 · Capital Allocators · David Lyon – Hybrid Capital Solutions for Private Assets (EP.471) · IDENTIFIED FROM THE TRANSCRIPT · source
“Essence, it's any capital that's non traditional. The first thing I alluded to was distrust. There is no distress market. What's happening is 30 years ago, there was a bigger premium to be in distress if something were complicated or hairy or on the verge of insolvency. A lot of people said, eh, I don't want to deal with that. That's gross. So you had a bigger discount at play in that space. On top of that, you actually had higher carry rates for structurally higher. You could sit on a loan and buy it at 75 and make a rate of return just by taking in the coop. When rates got super low and the notional yields were four percent, it was hard to make any money buying something at 77. More people came into the industry. What happened is distress only became interesting when there was dislocation. Right now, if you look at dislocation, during COVID, syndicated loans trade at below eighty cents for eight days. During the GFC, two hundred ninety four. Big difference.”
2025-11-17 · Capital Allocators · David Lyon – Hybrid Capital Solutions for Private Assets (EP.471) · IDENTIFIED FROM THE TRANSCRIPT · source
“Go back to the private markets. You have this disconnect and bottleneck between credit and the equity. As you mentioned, you're now in the capital solutions business. Talk about That is, and where it came from.”
2025-11-17 · Capital Allocators · David Lyon – Hybrid Capital Solutions for Private Assets (EP.471) · IDENTIFIED FROM THE TRANSCRIPT · source
“What I did and what multi-strats do is a very different animal. My experience in the business was a relatively small pocket of capital doing event-driven stuff. We weren't stock pickers. It was a pretty narrow universe of guys that did this stuff. We knew which lanes we were swimming in. There's been a massive evolution in the products. You have quant funds and you had multistrats that became huge. Not all of them have fared well. Some have had some issues, but I'm always impressed with the people that are running these 10, 15, $20 billion that manage to put up decent numbers and really stay ahead of flows and focus on three or four industries. It's very, very difficult to do that. The industry had a tremendous backlash for a while when it was dead. It's come back. If you talk to people in that space that manage real dollars, it's a challenge. You know it very well. You used to allocate it to it. There are very few people that are gifted in doing that.”
2025-11-17 · Capital Allocators · David Lyon – Hybrid Capital Solutions for Private Assets (EP.471) · IDENTIFIED FROM THE TRANSCRIPT · source
“You're seeing those folks with difficulty in returning capital. At the same time, some of them don't want to say, hey, this is a great asset. I think comps say at 17. I'm not going to mark it down because I still got to raise my next fund. That circle is pretty powerful. We're seeing a reluctance for people to say, hey, I think this is a good company. This is what comp suggests. It's fair value. But when you go put it out for auction, it's hard to get that number, especially if it requires a billion and a half dollars of equity. That's right now what you're seeing in the industry.”
2025-11-17 · Capital Allocators · David Lyon – Hybrid Capital Solutions for Private Assets (EP.471) · IDENTIFIED FROM THE TRANSCRIPT · source
“Credit's still hot. The uni markets are back to where they were. You can get six and a half, seven times leverage on the right assets if you need to. It's more expensive because of base rates, but spreads are very tight. Credit's not the problem. The problem is bid ask. If you looked at 2022, the S&P was down 20%. The NASDAQ was down 30%. Let's say private equity lives somewhere between those two worlds. Private equity was flat for the year. Compounding is pretty powerful. People now look at public comps. That's where you're having issues with these marks. You've never had any dip in the number. A lot of private equity firms, what you're seeing is the biggest institutions are capital formation machines. They're excellent. They're well run. They're well managed. The vast majority of capital being raised in private equity. I think the number is two-thirds is the top ten firms. What you're seeing is a shakeout in middle market. Middle market, by the way, is not tiny. It's $2 billion or $15 billion somewhere in there. You're seeing real issues there. There are thousands of those players.”
2025-11-17 · Capital Allocators · David Lyon – Hybrid Capital Solutions for Private Assets (EP.471) · IDENTIFIED FROM THE TRANSCRIPT · source
“Two things work together where there seems to be an endless abundance of credit capital available for a sponsor. But sponsors have this pricing issue in terms of generating the returns they need to for their LPs.”
2025-11-17 · Capital Allocators · David Lyon – Hybrid Capital Solutions for Private Assets (EP.471) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's more difficult to innovate because other people see what you do and can copy it very quickly. Private equity is not dead. It's mature and it's cyclical. People are going to have real impact of the activities in 2019 and 20 and 21. We're seeing that. It's a real factor today.”
2025-11-17 · Capital Allocators · David Lyon – Hybrid Capital Solutions for Private Assets (EP.471) · IDENTIFIED FROM THE TRANSCRIPT · source
“And added DNA to it, it wouldn't be the number that's presented to you. There isn't a ton of free cash flow in these models. You really have to grow the top line. You have to think about who's going to pay the same price for this asset in five years. That's what's confounding the industry, which is it's very difficult to pay 16 times for something and then assume multiple contraction in your buyout model three, four, five years into it, the implied growth is huge for you to make a 20 plus percent return. That's impacting the industry. What you're seeing in private equity was a golden age. Rates were low. Capital formation was awesome. People doing smart things. The advent of BioSep never happened, meaning in the past you couldn't do a software deal. Lenders wouldn't give you the capital. And they would say, oh, your assets walk in and out the door every single day. And now they're the most aggressively financed companies on the street because people realize, wow, there's a lot of recurring revenue and people don't throw out three ERP systems. There were innovations. As the industry got more competitive.”
2025-11-17 · Capital Allocators · David Lyon – Hybrid Capital Solutions for Private Assets (EP.471) · IDENTIFIED FROM THE TRANSCRIPT · source
“Funds got raised, bigger and bigger funds. What's happened is that a lot of these assets are huge. A lot of these companies that are good businesses and business services and things with high margins that are low capital intensity, a lot of them are valued at $15,000, 16, 17 times EPITA. And if it's $150 or $200 million of EBITDA, the exit alternatives are limited for that. It's very different when you were writing an equity checkup 50. Exits available to you were multifold. You could get out through another sponsor. You could do more M&A. There was always someone big enough that says, oh, this platform's interesting. I want to grow it. Today, if you have a margin optimized company that's worth 16 times and it has a billion dollars of equity in it, and you want to just do some basic math and you want to earn a 15% return over five years, that's a double. You got to take a billion and turn it into 2 billion. A lot of these companies don't really delever because as you know, EBITDA is not a gap principle. If you took operating income.”
2025-11-17 · Capital Allocators · David Lyon – Hybrid Capital Solutions for Private Assets (EP.471) · IDENTIFIED FROM THE TRANSCRIPT · source
“What I would say in private equity is you had a couple things happen rates were low for a long time. If you're paying 16 times EBITDA for something, and your capital structure is only six, the incremental pickup in basically spread and rate don't crater your LBO model because a small part of your structure. What it does do is hampers your flexibility, your ability to do real aggressive add-on M&A. If your coverage ratios are really tight, you have to have confidence about what you're buying. You can't just say, I'll buy a bunch of stuff and see what happens. You're going to have real issues with solvency if you get these wrong. If you do a bunch of M&A and it doesn't produce the earnings you think it can and you keep levering yourself up on a pro forma number, you got to be careful, especially with rates going from zero. You used to be able to borrow Unitranche back in 21 at six and a quarter percent. Now those numbers are around 9 and change today. They were 13. You can get a sense of the impact of that. That impacted buy and built. The other thing at private equity.”
2025-11-17 · Capital Allocators · David Lyon – Hybrid Capital Solutions for Private Assets (EP.471) · IDENTIFIED FROM THE TRANSCRIPT · source
“In a diversified pool and make you 15. That caused a lot of capital to flood into the ecosystem. Now what you're seeing is those businesses are attached to very large alternative asset managers, many of whom trade on FRE. A good way to create FRE is to take several billion dollars of loans and charge 1% on them. That's what you're seeing in the ecosystem. So it's incentives. I'm not saying that the world's going to end. What I'm saying is you're seeing a lot of competition for larger deals because scale participants want to invest big dollars in larger deals. And deals that are pursued to be high quality where lower probability of impairment spreads are very tight. And that's what's going on in that ecosystem. You're going to have to calibrate.”
2025-11-17 · Capital Allocators · David Lyon – Hybrid Capital Solutions for Private Assets (EP.471) · IDENTIFIED FROM THE TRANSCRIPT · source
“A fine asset class. What you're seeing is if new buyouts are the lifeblood of that business and new buyout activity has been muted for the last several years, you're seeing a lot of competition in that space and spreads have come down. You have an interesting environment where the height of direct lending was in 2023 because of the failure of the syndicated loan market. There were a lot of hung deals in 2022 and banks lost a lot of money on paper. You had a major participant out. And a lot of these direct lenders were financing deals that were getting done at spreads of 700. What that means at the time, S, the base rate was 5.5. Adding 7 to 5.5 is 12.5% for senior secured paper. If you look at prices that were being paid for the assets, they were paying eighteen times seventeen times. So you were a third into the capital structure being paid 13%, unlevered. That was Nirvana. Everyone went all over the world and said, hey, forget equity. I can give you 13%. I can leverage it.”
2025-11-17 · Capital Allocators · David Lyon – Hybrid Capital Solutions for Private Assets (EP.471) · IDENTIFIED FROM THE TRANSCRIPT · source
“Majority of sponsor backed, which kind of gets us the other parts of credit. You have big explosion asset-backed, which is Basel IV, Basel V, banks will be out of this business. I'm going to finance rail cars. I'm going to finance planes. I'm going to finance all these different things. You've had fintech-related things, consumer loans, that's all being aided by technology. You've also had guys do what I do, which is cap solutions. I used to always laugh because distressed always got thrown into private credit. And I'm like, if you're buying things that trade, it's not private. That was always amusing to me. More and more distressed guys have pivoted to brand themselves capital solutions. Capital solutions is just hybrid capital. That's all it is. You don't fit in a box. Traditionally, you're neither just first lien debt or equity.”
2025-11-17 · Capital Allocators · David Lyon – Hybrid Capital Solutions for Private Assets (EP.471) · IDENTIFIED FROM THE TRANSCRIPT · source
“Figured out, well, gee, in direct lending, I can introduce leverage. I can create what I call a baby CLO. CLOs are 10 times levered vehicles whose sole purpose is to buy loans. Because coupons are S325, you have to lever it 10 times to produce 12 to 15% in equity. In a direct lending fund, leverage is a lot lower because you're getting a significant pickup in spread. You're getting an extra 150, 250 BIPs. The asset class exploded because institutions needed yield. Today, direct lending competes with the syndicated loan market. Big players have hundreds of billions of dollars. They will hold $2 billion in a name, so it's no longer a cottage industry supporting the underbanked. It is a direct competitor, the syndicated loan market. Most of the activity is in private equity-owned companies. because they're the most prolific users. They're the most active, and it's hard to get real reliable statistics on how much is private equity and how much is non, but vast.”
2025-11-17 · Capital Allocators · David Lyon – Hybrid Capital Solutions for Private Assets (EP.471) · IDENTIFIED FROM THE TRANSCRIPT · source
“Private credit, if you look at the different pockets of capital in there, the biggest one by far is direct lending. That's what everyone's talking about. And it came out of the GFC when all of the regional banks went away. This was the story they'll tell you. Hey, the syndicated loan market can't support these smaller loans. The banks are in the moving business, not the storage business. They get paid a couple points to syndicate the CLOs. And as such, we need a home for these smaller things. You can make a real spread in doing that. That was the genesis of direct lending. It was a beta strategy from the start. I'm getting beta spread. You can think that maybe you were getting paid too much, but the whole point was I'm going to invest in a smaller business. I'm going to provide flexible first lien capital and help a lot of sponsor-backed stuff get done. The industry exploded over time because rates were zero and people desperately needed yield. As rates stayed zero for longer and longer, and you look what traditional fixed income assets were returning, there became a huge spread.”
2025-11-17 · Capital Allocators · David Lyon – Hybrid Capital Solutions for Private Assets (EP.471) · IDENTIFIED FROM THE TRANSCRIPT · source
“Things like that. It was a different business for them. That was a big eye opener. And of course, I was in that seat during the GFC. That was an unbelievable time to be there and to do that and have that capital base and see the advent of CDS and what happened to that, all those different things at one time. That was a pretty unique experience for me.”
2025-11-17 · Capital Allocators · David Lyon – Hybrid Capital Solutions for Private Assets (EP.471) · IDENTIFIED FROM THE TRANSCRIPT · source
“Like, hey, what am I playing for? What is my real downside? And I remember they used to tell me, I don't want you to be conservative. I want you to be accurate. What I learned from them is, listen, we can take advantage of risk reversion. Often in the market we get paid because people are risk averse. And if we have a big enough diversified pool of capital, we can take advantage of that. We can buy those risks and assemble them in a pool. So I don't want your risk averse estimates. I want your real ones. And then we can decide whether we want to take that risk and whether actually mathematically it makes sense to do that. That was a bit of an eye-opener because if you come from private equity, it's like, oh, these are conservative assumptions and your downside case was 10%. I used to laugh, your downside case is negative 100. If you're a six-time lever company, it goes wrong. You're going to lose all your money. There was a lot of that. Gaming the system running five-year models and going to a place that was just rigorously quantitative. That was a massive eye-opener. They weren't big into the more qualitative parts of the business. Relationships, building benches of management teams.”
2025-11-17 · Capital Allocators · David Lyon – Hybrid Capital Solutions for Private Assets (EP.471) · IDENTIFIED FROM THE TRANSCRIPT · source
“I went to a large hedge fund. This was the 07 cycle when we were long in the tooth, and people thought that the world might end. I pivoted to doing more distress stuff, loan to own, get into parts of the cap structure were going to become the fulcrum. The hedge fund was a quantitative hedge fund, had what we used to call our qualitative business. And I thought it would be a fantastic pace. It looked like we were long in the cycle. Using our skills, especially my skills with things that had been broken before and having learned how to think about those things and what's a good business, bad business. The aphorism, good company, bad balance sheet, by the way, never exists anymore, but being exposed to that, I pivoted to a large hedge fund that had a huge capital base to go do that. One of the things about this hedge fund that I worked at is it was incredibly quantitative, tremendous smart people. That was one of the least exposed to what they did day to day because they were a blunt shop. The one rigor and things I learned, and I think back to this day, is one always calculating you're up and you're down precise.”
2025-11-17 · Capital Allocators · David Lyon – Hybrid Capital Solutions for Private Assets (EP.471) · IDENTIFIED FROM THE TRANSCRIPT · source
“And God forbid something goes wrong and it doesn't deliver, what do you do? Replace management? Okay, but my entire thesis was, Bob. And now that I got to remove Bob because he's not doing well, did I really have conviction about the industry? Did I really like the company's position? I saw a lot of that firsthand. Those are some of the lessons I had in private equity. Dysfunction, people's trust. I'm not saying it has to be best friends and go on picnics every weekend together. What I'm saying is have professional respect, common incentives, not gun for my deal versus your deal and things like that. Those things are insidious, and they infect a culture and they go from the top down. You've got to be really cognizant of putting the right motivations in place.”
2025-11-17 · Capital Allocators · David Lyon – Hybrid Capital Solutions for Private Assets (EP.471) · IDENTIFIED FROM THE TRANSCRIPT · source
“And it was a big jolt to my fragile ego. I got this really exciting job. I was at a big buyout firm. There weren't a lot of people. Then you realize all the things zoom away? They're hard. When things go the wrong way, it's tough. I spent many, many years early in my career dealing with things that some of them went bankrupt. Some of them were disasters. I'd also taught me a lot about why did we invest in this? What was our thesis? What were we thinking about? The final thing that I learned is when your thesis in private equity is a person, so-and-so is amazing.”
2025-11-17 · Capital Allocators · David Lyon – Hybrid Capital Solutions for Private Assets (EP.471) · IDENTIFIED FROM THE TRANSCRIPT · source
“Capitalize on it because it was a lot easier in the day. I also found basic things that when you have a team of people, because mostly private equity firms have different partners that do different industries, they have to get along. And there has to be management. What I learned is having a bunch of fiefdoms and people that have different incentives leads to bad outcomes. Aside from bad investments that I learned about day one, organization matters, having someone driving a culture, having someone drive accountability is difficult in a partnership. That's something when I look back is what I learned about that space is how you're going to organize it, how you're going to invest. Do you have specific themes? Are there industries you care about? Being a generalist looking at auctions and trying to get as much leverage as possible and do an LBO model? I don't think was a winning recipe for long-term success. A lot of this benefit of hindsight, but early on I got to witness some things that went sideways or backwards pretty quickly.”
2025-11-17 · Capital Allocators · David Lyon – Hybrid Capital Solutions for Private Assets (EP.471) · IDENTIFIED FROM THE TRANSCRIPT · source
“I was in private equity in the late 90s through 2007 under the time. We were the top four or five largest funds in the world. It no longer exists, sadly. A couple things I learned. Raising a private equity fund, there's a lot of marketing behind it. There's a lot of IR math. There are a lot of stories. People didn't have as deep investment chops back then because at a time you could buy an asset for eight times EBITDA. You could leverage six. The LBO math did most of the work for you in terms of return. You weren't having deep level thoughts about the industry. You weren't doing advanced MA or trying to buy an asset and heave off a bad part of it or do something creative. You were using leverage. The barrier to entry was could you figure out Excel? Could you do that modeling? Could you convince a bank to give you the financing? It was a different business. I regret that the firm I was at didn't.”
2025-11-17 · Capital Allocators · David Lyon – Hybrid Capital Solutions for Private Assets (EP.471) · IDENTIFIED FROM THE TRANSCRIPT · source
“Was most exciting to me. I thought, gee, if I did it in a more concentrated way or in a liquid way where it wasn't about trading, it was about getting in the guts and interacting with management. I went off to business school. I ultimately went into the private equity industry after that.”
2025-11-17 · Capital Allocators · David Lyon – Hybrid Capital Solutions for Private Assets (EP.471) · IDENTIFIED FROM THE TRANSCRIPT · source
“Happen, especially today, how competitive finance is, you could make real returns by being one of the few players in a structurally inefficient market. That's very different now in the hedge fund space. So that was baptism by fire. I was there for a couple years. I don't think I felt incredibly fulfilled doing merger art. It wasn't like, hey, David, these two utilities are merging. Go to this conference and talk to the guy from the PUC of Iowa to make sure that the deal's going to go through. That didn't pump my blood. I started thinking about what kind of investing do I want to do. I wanted to be on the buy side, but I thought in the back of my mind, doing something more private equity oriented, only because I liked interaction with management teams. I like thinking about how does the company work? If I look back in the day, even with people that were mentors to me, my favorite conversations was, how do they make a product? How do they sell it? How does the business work? Explain it to me as if I'm an eight-year-old. Understanding a business to that level.”
2025-11-17 · Capital Allocators · David Lyon – Hybrid Capital Solutions for Private Assets (EP.471) · IDENTIFIED FROM THE TRANSCRIPT · source
“I remember asking what's our basis? What do we pay for it? The amount of anger and fury. It was like, what are you an accountant? Who cares what we paid for it? It's only what it's worth right now. That doesn't matter. I was like, oh my God, being thrown into the fire. But that was terrific because I got to firsthand deal with an investor who was on the front lines doing this. He was not afraid to tell me I was an idiot. That was a massive learning experience for me to understand how to think about updown, how to think about the source of our edge. Why do we know something that no one else knows? I originally was in a risk garb fund, a special SITS fund. We weren't doing sock picking. We were trying to take advantage of structural inefficiencies. Back in the day, Risk Arb was an amazing business. It wasn't five percent, it was twenty percent. I was thinking back about, God, I wish I knew what I know now then because having a market that could produce those rates of return by being one of the few participants is really an anomaly.”
2025-11-17 · Capital Allocators · David Lyon – Hybrid Capital Solutions for Private Assets (EP.471) · IDENTIFIED FROM THE TRANSCRIPT · source
“Four or five people there. And I remember just the absolute pain and agony I felt of I was the youngest person there probably by 15 years in terms of real chops about what to do. I had no idea. My first week someone asked me about a stock. Should we buy it or sell it or what should we do? I think we owned it and they asked, should we sell it?”
2025-11-17 · Capital Allocators · David Lyon – Hybrid Capital Solutions for Private Assets (EP.471) · IDENTIFIED FROM THE TRANSCRIPT · source
“I was a good analyst, well rated, or whatever that is in the analyst program. But you realize a lot of that is just doing a lot of perfunctory things. When you step back after 30 years, you were making sure a deck got done. You were making sure the merger model was right. Back in the day, we didn't have the internet. We had to go down to the stupid IBIS machine and get the estimates off the machine, and we had to get paper stacks of SEC documents. A lot of that was navigating a process, making sure the deck was on him. You're going down to word prop thirty years ago, we didn't have Excel. You had Lotus 1, 2, 3. You had to print it out and get word processing to transpose it. From there, make sure there were no mistakes in it. Put it in the book. Make sure the books produce correctly. A lot of your job was that. Being good at that doesn't mean you're a great investor. It means that you're good at people yelling at you. It means you're good at handling abuse and being incredibly inefficient with your time, but you thought you were efficient. Then step into day one, I joined a hedge fund.”
2025-11-17 · Capital Allocators · David Lyon – Hybrid Capital Solutions for Private Assets (EP.471) · IDENTIFIED FROM THE TRANSCRIPT · source
“Make sure that you can get jammed up in the fax machine. I was also very lucky when I started doing this in 1994, M&A was booming. We didn't have a huge team in my analyst class, and I worked on live things. I didn't do pitches. And God knows what damage I caused when I was 22 years old. I got exposure to management teams, to cell type processes, to raid defenses, all those things with a courtsite seat. That was an amazing experience for me. I got to work on some pretty large companies and get it from the inside without pitching and always losing and just doing decks. I was thrown into the boardroom and I don't think it was adding a lot of value, but I got to watch it firsthand.”
2025-11-17 · Capital Allocators · David Lyon – Hybrid Capital Solutions for Private Assets (EP.471) · IDENTIFIED FROM THE TRANSCRIPT · source
“I was very fortunate that I got exposed to a bunch of those analyst programs in the interviews and was able to figure out how to bumble and stumble my way through them. And I was lucky enough to get offers at a couple banks. And I went to Goldman Sachs. The big advantage for me joining that analyst program was since I never really learned a lot of that stuff formally, I had to figure it out for myself. I'm a common sense-oriented person. I had to understand the principles from a common sense perspective. And finance is relatively simple. I'm not talking about upper level mathematics here, but basic concepts being able to teach yourself, those things was very powerful for me. I was very lucky to have exposure to it. Very lucky to have older siblings that understood this space. And I was ready to work. I was a dumb kid. I didn't care about working 100 hours a week. I thought it was the most glamorous, sexy thing in the world to send faxes to partners Hampton's houses and number the pages.”
2025-11-17 · Capital Allocators · David Lyon – Hybrid Capital Solutions for Private Assets (EP.471) · IDENTIFIED FROM THE TRANSCRIPT · source
“Typical middle class family in New Jersey. My dad was not in the business at all. He was an engineer. My oldest brother got into the business by accident. My mother knew someone that she played golf with. Her husband was a partner at Goldman. And she asked, what is your son doing? And he said, I'm going to go work for a big oil company and do chemical engineering. She casually said, well, have you thought about investment banking? No one in my family had any idea what that was the time. My brother was a smart guy and ended up interviewing and getting a job. That's how my family accidentally discovered investment banking. I had another brother who's still in the business. He went through the process and I was really lucky because when I was in college, I knew what an analyst program was. I knew the questions they asked you in interviews and all those sorts of things. Now, I wasn't a finance major.”
2025-11-17 · Capital Allocators · David Lyon – Hybrid Capital Solutions for Private Assets (EP.471) · IDENTIFIED FROM THE TRANSCRIPT · source
“I always laugh when I tell my investors people that show you the same decks that say wall of maturities. It's never happened in the history of finance. People say, oh my God, I forgot I have a maturity. Good companies finance those ahead of time. It's only the bad ones that can't refinance themselves and people figure that out. They talk about fraud in China. They talk about debt to GDP. I call it the boogeyman slides. They're saying, world's going to end, I have capital. Ted Sidees, and this is capital allocators. Guest on today's show is David Lyon, Managing Director and Head of Capital Solutions at Newberger Berman, where he oversees $10 billion of assets and deploys $2 to $3 billion each year, originating large-scale financing solutions to premier sponsor-backed companies.”
2025-11-17 · Capital Allocators · David Lyon – Hybrid Capital Solutions for Private Assets (EP.471) · IDENTIFIED FROM THE TRANSCRIPT · source