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Erik Hirsch

lines on the record: 76
first: 2025-07-31
most recent: 2025-07-31
sittings or episodes: 1
sources: podcast

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“Exactly. Today you now see more mass affluent individuals able to access this industry, people with, say, three to five million dollars of investable assets, of which there are a lot of those people all over the globe. They've been again historically shut out, but with some regulatory changes and new product offerings, they too are now accessing this industry. So I go back to lots of different axes, all of them kind of growing in different ways, and I think that trend still has a long, long way to go.”
2025-07-31 · Masters in Business · The Future of Private Credit with Erik Hirsch · IDENTIFIED FROM THE TRANSCRIPT · source
“So we've gone decades where essentially the only entities that were able to access this industry were institutional investors, an ultra ultra high net worth investors.”
2025-07-31 · Masters in Business · The Future of Private Credit with Erik Hirsch · IDENTIFIED FROM THE TRANSCRIPT · source
“Decades, but I think what you see in front of you is, I think there are still decades more of growth to occur. The private markets are expanding across lots of different axes, so they've expanded geographically. So if we went back into sort of the eighties, it was basically a US only business, and then you expanded into Europe, et cetera. So now it's becoming much more of a global phenomenon. It's also expanded across strategy. We've talked earlier about the fact that credit, for example, is becoming a bigger part, infrastructure, real estate. So we've seen that expansion. Now you're also seeing expansion across the clientele.”
2025-07-31 · Masters in Business · The Future of Private Credit with Erik Hirsch · IDENTIFIED FROM THE TRANSCRIPT · source
“So again, there's been huge growth, but the public markets themselves have also been growing quite a bit. And so when we put it in context, just like I say Hamilton Lane in context is a relatively small company, so too are the private markets.”
2025-07-31 · Masters in Business · The Future of Private Credit with Erik Hirsch · IDENTIFIED FROM THE TRANSCRIPT · source
“The vast majority, and so they employ a huge amount of people in the country and all around the globe. So as an investor, if you want to get access to that part of the economy, a substantially large portion of the economy, the only way to do that is through investing in the private markets. So I think when you combine the performance, the diversification, all of that has resulted in the growth. And yet the private markets remain very, very small. If you took all of the capital raised last year across all of the subsectors in the industry, it wouldn't be enough to buy apple. So, if you look at total fundraising, again, all private markets fundraising, it accounts for about two percent of the MSCI market cap.”
2025-07-31 · Masters in Business · The Future of Private Credit with Erik Hirsch · IDENTIFIED FROM THE TRANSCRIPT · source
“But they're not growing from a number of publicly listed companies. In fact, if we go back to the eighties and sort of draw a chart of number of publicly listed companies in the US, that chart is essentially moving down and to the right. It's shrinking. So today about four thousand publicly traded businesses. But think about Barry, how many businesses you interact with every day that are private?”
2025-07-31 · Masters in Business · The Future of Private Credit with Erik Hirsch · IDENTIFIED FROM THE TRANSCRIPT · source
“Today, our public equity markets have never been more concentrated. A very, very small number of companies, all technology oriented, make up a huge portion of the overall market cap, and I think when you sort of see that occurring in combination with the fact that more and more investors have moved to a passive public equity mindset, it means that you're ending up with these oddly concentrated portfolios in a small number of stocks. The other thing that's happening is that the public markets themselves are growing from a market cap standpoint.”
2025-07-31 · Masters in Business · The Future of Private Credit with Erik Hirsch · IDENTIFIED FROM THE TRANSCRIPT · source
“There's a variety of factors. One, the most simple is just performance. If you take a look at aggregated private market performance and you compare that over five, ten, fifteen, twenty year time periods to the public markets, you're going to see meaningful outperformance. The second thing, though, is becoming more recognized, which is diversification.”
2025-07-31 · Masters in Business · The Future of Private Credit with Erik Hirsch · IDENTIFIED FROM THE TRANSCRIPT · source
“Still is a hallmark of our service offering today, so today while we're primarily doing asset management, we're still doing it in a very bespoke model, a very customer oriented, but to your point as an asset manager, we're making the decisions we have the discretion, and we're putting our own capital at risk alongside of the clients. And I think that alignment of interest rings true today as it rang true many, many years ago, and so today it's still the biggest user of our balance sheet capital. The firm has invested a huge amount of money alongside of our clients over our history, but doing that sort of asset management alongside of in combination with that really strong customer focus, I think that has been one of the reasons why we've been such a winner.”
2025-07-31 · Masters in Business · The Future of Private Credit with Erik Hirsch · IDENTIFIED FROM THE TRANSCRIPT · source
“So, as I said, the firm really began as a consulting firm, that the idea originally was these were going to be new decisions, new asset class for these public pensions and corporate pensions primarily at that time, and that they were going to want someone to make a recommendation that they then could kind of ultimately take the decision themselves. But what we found was that the clients realized that this industry was growing quite rapidly and the need for resources was growing quite rapidly, and the decision making needed to also happen on a quicker pace, and so that consulting model began to morph to the client simply saying we want to just have you handle this for us. I think the advantage that we've had came from that consulting DNA because it rooted the firm in an incredibly client centric mindset.”
2025-07-31 · Masters in Business · The Future of Private Credit with Erik Hirsch · IDENTIFIED FROM THE TRANSCRIPT · source
“Became bigger, so did we in that space. As infrastructure and real estate developed, so too did we in that space. And so I sort of say that we've been kind of growing right alongside of the asset class.”
2025-07-31 · Masters in Business · The Future of Private Credit with Erik Hirsch · IDENTIFIED FROM THE TRANSCRIPT · source
“Some regulatory changes and with greater awareness, that began to shift, and the founders of Hamilton Lane had a very simple concept which is people are going to want and need help. And so we were really designed then as we are today, to really be a solutions provider, to help whichever kind of client is trying to access the private markets, to do so in a way that most and best fits their needs. Our view was that we didn't think that most limited partners were going to invest the time, resources, and energy to build out large internal teams to cover this asset class. And that has proven to be correct. Most don't. They primarily find a partner solutions provider, and we've been that partner of choice now for over thirty years. But that was the business model. And so our evolution has really just kind of mirrored what the industry itself has been doing. As credit came online.”
2025-07-31 · Masters in Business · The Future of Private Credit with Erik Hirsch · IDENTIFIED FROM THE TRANSCRIPT · source
“It was primarily private equity, the firm was at that point not really engaged in things like private infrastructure or real estate, and as I had mentioned, credit wasn't a huge part of the industry. So it was mostly leveraged byout's venture capital. And we were again a manager of managers, so most of our investment activity was selecting fund managers on behalf of our clients. Really, the genesis of the firm was quite simple. It was sort of late eighties, early nineties, the institutional world was just beginning to make their move into the private markets. Prior to that, kind of in the seventies and into the early eighties, most of the activity, small as it was, was primarily financed by large families, high net worth families, endowments and foundations. Things like public and corporate pensions were not a big participant in the private markets.”
2025-07-31 · Masters in Business · The Future of Private Credit with Erik Hirsch · IDENTIFIED FROM THE TRANSCRIPT · source
“I arrived there probably a 26 year old. I'm fifty two today. And so I've also kind of grown up alongside of the industry.”
2025-07-31 · Masters in Business · The Future of Private Credit with Erik Hirsch · IDENTIFIED FROM THE TRANSCRIPT · source
“Right, exactly globally. Right. So we're a total of a little under 800 employees today. And so despite having gone from sort of 20-sodd employees when I got there to about 800 today, I still think of us as a small business. But in the CIO role, everything was evolving. When I first came in, the concept of secondaries was very new. The concept of co-investing was relatively new. People were not specializing products in any great way. Fund of funds, which is something that we don't talk much about today, was sort of the norm. That was mostly how limited partners were accessing the private markets. The private markets themselves had not really developed. So back then, private credit wasn't really much of a thing, whereas today, it's a huge driver of the growth. So I was witnessing and got the experience change on lots of different axes, and it was also for me growing up in the business.”
2025-07-31 · Masters in Business · The Future of Private Credit with Erik Hirsch · IDENTIFIED FROM THE TRANSCRIPT · source
“Everything was changing, so as I said, the firm itself was very tiny when I first took that role, and while we've grown a lot, I still think of us today as relatively tiny company in the grand scheme of things on our tour in here you were mentioning the employee count, we're one tenth of the Bloomberg employee count.”
2025-07-31 · Masters in Business · The Future of Private Credit with Erik Hirsch · IDENTIFIED FROM THE TRANSCRIPT · source
“I joined the investment side as an associate, so I was still a pretty young person, and I joined the investment team back then was simply one group. There was no areas of specialization like we have today. But within a couple of quick years I became the chief investment officer, and we began to sort of think about”
2025-07-31 · Masters in Business · The Future of Private Credit with Erik Hirsch · IDENTIFIED FROM THE TRANSCRIPT · source
“Headhunter came knocking. I was, again, familiar with the concept of private equity, and I had met some private equity firms in my short time as an investment banker, but the concept of Hamilton Lane and what they did is this kind of solutions provider intermediary was not something that I was familiar with. They were also, you're going to continue to have the Philly theme here. They were also headquartered in Philadelphia. So I didn't move very far. But I went over, met some people, thought it was interesting. Firm was very tiny at the time. It was probably 2025 people. This would have been in 1999. And essentially single office business. And the firm had been around for a few years and had some early success. But at that point in time, was still very tiny.”
2025-07-31 · Masters in Business · The Future of Private Credit with Erik Hirsch · IDENTIFIED FROM THE TRANSCRIPT · source
“I suspect it's a lot of reasons. Again, there's a lot of, it's a conservative place by nature. I think it's one of the reasons why clients are attracted to them. Partners have a lot of their capital invested in the business alongside of customers, also a good business model. And so I think it's just a company that has had tremendous success. But as you said, has kind of remained true to its roots in that private partnership.”
2025-07-31 · Masters in Business · The Future of Private Credit with Erik Hirsch · IDENTIFIED FROM THE TRANSCRIPT · source
“Great people. It is a lot of tradition, incredibly long history, particularly interestingly in Philadelphia. The firm had been there going back into the eighteen hundreds where it was more of a sort of a mercantile business, and it was just a good place again to kind of get the basics and the fundamentals of what it meant to be on the corporate side of finance, again as opposed to the public side of finance.”
2025-07-31 · Masters in Business · The Future of Private Credit with Erik Hirsch · IDENTIFIED FROM THE TRANSCRIPT · source
“Gruel, I don't miss it. I think I am happy to have been moved on. I think the good thing about my time as an investment banker was that it really introduced me to private equity. We were mostly looking at selling businesses for privately held businesses with families most often and selling them into private equity. And so having come from the public finance side, it was really the first time that my eyes got opened up to the fact that there was this whole other industry out there that seemed pretty interesting. And again, in sort of the mid later nineties,”
2025-07-31 · Masters in Business · The Future of Private Credit with Erik Hirsch · IDENTIFIED FROM THE TRANSCRIPT · source
“I think what you found was it depended on the location, so Camden Yards in Baltimore, if you remember when that sort of first opened, was a money maker. It totally altered the landscape of that city. Now, that didn't prove to be true everywhere that stadiums began to be created. And so today we no longer see a lot of public finance capital going into stadiums. But there was, again, a moment in time where in the right location it did make sense for the stadium.”
2025-07-31 · Masters in Business · The Future of Private Credit with Erik Hirsch · IDENTIFIED FROM THE TRANSCRIPT · source
“Back in the mid 90s, governments were paying for stadiums. They were not being privately financed. They were the belief back then was that this was going to be a big revenue draw for cities if they had these great complexes. And so we had developed one of the expertise early on to help cities. Go through that process of raising bonds, financing that.”
2025-07-31 · Masters in Business · The Future of Private Credit with Erik Hirsch · IDENTIFIED FROM THE TRANSCRIPT · source
“And that really taught me the fundamentals of finance. They had an incredibly strong training program, Excel modeling and just learning kind of the ins and outs of finance. And it was from there that was sort of the launching point.”
2025-07-31 · Masters in Business · The Future of Private Credit with Erik Hirsch · IDENTIFIED FROM THE TRANSCRIPT · source
“I was not highly sought after when I was graduating from college, I think it was a combination of the philosophy degree and perhaps a little lack of studying. But I ended up getting lucky and found myself in a public finance firm in Philadelphia called Public Financial Management. And there we were really servicing governments and trying to help them with budgets and bond offerings and the like.”
2025-07-31 · Masters in Business · The Future of Private Credit with Erik Hirsch · IDENTIFIED FROM THE TRANSCRIPT · source
“I think I had no career plan because I originally studied philosophy, which I think is pretty much the definition of I'm not sure what I'm going to do with my life. I think I was probably thinking lawyer back then, and I luckily got on a different track and ended up in finance.”
2025-07-31 · Masters in Business · The Future of Private Credit with Erik Hirsch · IDENTIFIED FROM THE TRANSCRIPT · source