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Jay Ripley

lines on the record: 77
first: 2025-11-10
most recent: 2025-11-10
sittings or episodes: 1
sources: podcast

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“You compare an independent sponsor going about this, maybe a sole practitioner or a tiny team compared to a larger shop that they came from. Less data to analyze a company in an industry relative to history and fewer resources to then try to add value to the companies. Curious what you've seen with independent sponsors of how they've been able to compete.”
2025-11-10 · Capital Allocators · Jay Ripley – Emerging Manager Selection at GEM (EP.470) · IDENTIFIED FROM THE TRANSCRIPT · source
“In many cases, we've had sponsors who have sold deals for good returns where they thought they got lucky. There was an element of not sure that could be replicated. And we've had other sponsors where the result was pedestrian and we thought, man, that was heroic. They did an incredible job. And with a different set of facts and circumstances, they would have done a great job. We found over time that simply having strong returns pre-fund is not a good prerequisite for a fun one. It's about the intangibles we learn about you that support them.”
2025-11-10 · Capital Allocators · Jay Ripley – Emerging Manager Selection at GEM (EP.470) · IDENTIFIED FROM THE TRANSCRIPT · source
“Of private equity. There's no such thing as an investment banker who shows an independent sponsor deal. And so every deal is a story deal so the first goal was earn high returns. The second goal, though, was we felt like the best diligence you could do on a sponsor before they raised a fund one was to make pre-fund co-investments because that would give us the insights to see the things that matter before you back someone in a blind pool. For example, we've learned over time willingness to walk away from deals, very important. The independent sponsor format, it is easy to fall in love with an idea You're halfway through diligence and you get a bad Q of E finding. You know that you're going to have some broken deal costs. You would be surprised how often a very credible thoughtful sponsor is then saying I know the QV says EBITDA is down 20, but it'll be fine even at the new price. It's okay. So demonstrating a willingness to walk away from deals, we find it correlates very strongly with long-term success of a sponsor, quality of sourcing network, quality of how they bring and support value, all very important data points, and then how they handle diversity.”
2025-11-10 · Capital Allocators · Jay Ripley – Emerging Manager Selection at GEM (EP.470) · IDENTIFIED FROM THE TRANSCRIPT · source
“Are valuable relative to something like venture or public, where when we meet with a venture manager, by the time we meet with you, we've already called the 10 other VCs in the same deal as you to figure out whether you're a good partner and whether you had any value or how you got access, all that stuff. What we found with Buyout is that if you were going to do that well and you were going to solve this consultants have this refund track record idea. And a lot of that is born out of this idea that fund ones and to some degree fund twos exhibit much wider dispersion. The good ones are amazing and the bad ones are terrible. And so they'd say, I never want a terrible one and therefore I'm never going to invest in it. Just show me three funds and then I'll invest with you. We viewed that as the best time to invest with these folks. That's when you could earn the excess returns. And so you had to have some way to identify and support these sponsors and have a view on what their specific expertise was so you could then support them in a fun one. After we launched the small buyout program, we quickly added on an independent sponsor program and it had a dual mandate. Number one, we wanted to earn strong excess returns in that market. We felt like it was one of the least efficient areas.”
2025-11-10 · Capital Allocators · Jay Ripley – Emerging Manager Selection at GEM (EP.470) · IDENTIFIED FROM THE TRANSCRIPT · source
“And on the way out the door, the firm says, I'm going to hang on to that credibility. You need to go rebuild that on your own. You have a number of these folks that are very trained and very credible that then have to go out on their own and best deal by deal. It was clear that if we were going to do this well, we had to have some way to engage and support independent sponsors. Because if you think of a bioinvestor's career as I generally think the sweet spot is when you've had 15 years of experience, 25 or 30, so call it mid to late 30s to mid 50s when you're most productive, most dialed in, most hungry. We were missing four or five years of that, depending on what went on, by not backing these folks as independent sponsors. And it's worth observing in buyout, unlike venture or public markets, there's only one source of truth. When you buy control of a company, there's one sponsor. There's a couple LPs, there's a lender and a lawyer. There's not that many people that have a view of what really went on. Any sort of specific actionable insight into what that buy investor did and how they generated those returns.”
2025-11-10 · Capital Allocators · Jay Ripley – Emerging Manager Selection at GEM (EP.470) · IDENTIFIED FROM THE TRANSCRIPT · source
“Fund, that fund with sponsors. There are people who will back deal by deal and get comfortable with someone. How have you decided to approach that space? When I originally did the work in 2014 to look at, okay, it appears from the data, if we want to earn strong excess returns, targeting emerging managers would make a lot of sense. We presented that as this is an area we want to pursue. We call that our small buyout program. I had a number of folks in mind that I knew from my private equity days that I wanted to see what they were up to in the coming years. We quickly realized that a lot of the folks when they're leaving their prior firm, they don't jump into a fund one. In many cases, even if the credentials might suggest that they could. The reason I later learned is that when you leave those places, especially when you've been there for 15 or 20 years, is they say three things to you on the way out. They say, number one, track record's not yours. Number two, don't talk to LPs. And number three, here's a bag of money if you sign an agreement agreeing to the first two things. And so you end up in this interesting situation where someone has worked at a firm for 15 or 20 years. They're running an industry vertical at a multi-industry PE fund, trained track record, team loyal to them, and they've built real credit.”
2025-11-10 · Capital Allocators · Jay Ripley – Emerging Manager Selection at GEM (EP.470) · IDENTIFIED FROM THE TRANSCRIPT · source
“Folks that are saying, look, this fund will not raise the fund it did last time. We're going to go from eight partner sheets to five. Maybe my carry is worth half of what I thought it was. We've seen a bigger influx of talented people, but who are doing it for a different reason than we maybe would have seen in 2017 or 2018. There's a related strain of that as the search fund community has become more and more prominent. There are a lot of folks who have graduated from a lead business school, gone through a search, exited, and are now drifted over into the independent sponsor or some form of traditional private equity market. So an interesting new channel where we see a lot of folks who tend to be a little younger who come out of that channel and are looking to go from being a searcher to a true private equity sponsor or a private equity firm. And I would put them in the opportunistic category as well of someone who's saying this is a continuation of what I was already doing. When you and your team have surfaced someone that's come through one of these channels, there's different paths that people take to forming a”
2025-11-10 · Capital Allocators · Jay Ripley – Emerging Manager Selection at GEM (EP.470) · IDENTIFIED FROM THE TRANSCRIPT · source
“You make the leap that you say, I've turned my email off. I'm now at my house. I don't have a source of income this month. That's a really important thing when we back any emerging manager. We don't put a bridge or a floor under them because we think that discourages risk-taking behavior. It sets the wrong mindset and doesn't educate them on how hard it's going to be in most cases. The second group, and we're seeing more and more of these today, are the opportunists. Historically, interest rates have gone nowhere, but down. Multiples have gone nowhere but up. Not that it's been easy, but returns have been pretty consistent in the space for a while. And so there were a lot of benefits to just hanging out at a place where funds got raised, life was easy, you clipped your coupons. Over time, you stacked pretty meaningful carry if you stick around. That has started to erode post-pandemic where you've seen that as interest rates have gone up, maybe something you paid 12 or 13 times for with six or seven turns of debt, and you thought, oh, I'm going to earn 2x. Now the debt costs eight, nine, 10%. The deal doesn't hencel anymore. You're seeing a lot of...”
2025-11-10 · Capital Allocators · Jay Ripley – Emerging Manager Selection at GEM (EP.470) · IDENTIFIED FROM THE TRANSCRIPT · source
“Today, when the market backdrop for funds is of challenging fundraising environment, someone who's smart and good, you would think maybe would look at that landscape and say, this might not be the right time to do this. I think they're really coming to shapes and sizes. There's the sort of person who just feels on their bones, and this was always what they were going to do. We meet a lot of sponsors who are like, look, when I joined my prior firm, I told them I was going to leave one day and launch my own thing, but just something that natively They believe in, they want to do. They have that sort of risk-taking gene. I might argue while it is interestingly risk-taking asset class, most people go into private equity are not risk takers themselves. They chose a conventional career path in a lot of ways. There are less of those people than I would have thought, but they are a large cohort of folks that we see who have said, look, I always knew I wanted to do this and I got the training I needed and I did a good job and I closed the files I needed to at my old firm and this is what I want to do. We love those folks. We think it's very important when you are leaving a prior firm that”
2025-11-10 · Capital Allocators · Jay Ripley – Emerging Manager Selection at GEM (EP.470) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's hard to shake that later. That's a tough lesson to unlearn. From there, we have a dedicated investment sourcing team, and they are breakfast, lunch, and dinner out trying to find new spin-out ideas. They're talking to a combination of outbound sources. They're talking to former employees of those firms. They talk to a whole bunch of placement agents, headhunters, lawyers, accountants, all sorts of referral sources that are out there. They're also organizing all the inbound inflow because as we've done this more and more over time, what we've found is those that were the Gen 1 spinouts that we backed, they're on Gen 3 now. They're referring as people who didn't even work at the firm when they left it 10 years ago. Usually what happens is when you're considering leaving your firm and you've decided that's what you want to do, you're going to talk to folks who've already left that organization, understand what their path was. And we found that there is a compounding effect of inbound referrals that have come to us over time as a result of that. I'm curious in the buyout world of the characteristics, the type of person who leaves, particularly”
2025-11-10 · Capital Allocators · Jay Ripley – Emerging Manager Selection at GEM (EP.470) · IDENTIFIED FROM THE TRANSCRIPT · source
“Are first and foremost always keeping a library and catalog of a variety of different buyout firms to understand the quality of their results, the consistency of their results, what is the underlying nature of their trade, what do they do well fundamentally, and related to that, what would we expect a spin out from them to do well. We're constantly studying the field so that we can have a prepared mind so that if you come to us and say, hey, I've spun out of Firm X, we already know about FirmX. We have a rough sense for what the results were, and we have a rough sense for whether we'd be interested in a spin out from FirmX. And in many cases, we're trying to identify outlier results, looking for less the super buttoned up, safe, conservative, I don't use leverage. I buy A-plus assets for high-priced type folks, and much more of the, this is a deal that investment committee wouldn't know always love, but as real upside opportunity, and here's how I can protect my downside. We're generally looking for folks that trained at firms where the investment committee is a little more difficult. There's more of a culture of asymmetry internally because if you're trained to the 2x gross is acceptable.”
2025-11-10 · Capital Allocators · Jay Ripley – Emerging Manager Selection at GEM (EP.470) · IDENTIFIED FROM THE TRANSCRIPT · source
“You needed to go early and you needed to back emerging managers. And so that was a real narrative violation and surprise for me relative to what I would have expected. I'd love to dive into now sometime later how you go about that practice. There's a large world potentially of emerging managers. Where do you start looking? Just taking private equity or what I would call buyout for a minute to focus on that particular area. Buyout is an apprenticeship business fundamentally. You can't walk in off the street with no credibility or history and complete buyout deals, generally speaking, because you've got to get an investment banker to show you a deal. You've got to get a commercial banker to make a loan to you. You've got to get a seller to agree to go with you kind of thing. And so there are some real barriers to entry to doing that well in almost all cases, the folks that create new firms came from prior firms. We think that as a general rule, we need to have an opinion on the firm you came from to have an opinion on you because almost all the folks that we evaluate on the emerging manager side are a product of wherever their apprenticeship occurred.”
2025-11-10 · Capital Allocators · Jay Ripley – Emerging Manager Selection at GEM (EP.470) · IDENTIFIED FROM THE TRANSCRIPT · source
“Medium. It was surprising to me that my ground level observation as brilliant people, incredibly smart and hardworking, and just wonderful folks to deal with. And then the aggregate level of results that were net to an LP were more in accordance with what you expect from the market. There really weren't the outlier results. There were a lot of firms I had views on where you would know somebody who was a principal and then their peer would leave and start something. And they were always talked about as if it would be irresponsible to give them money. Gosh, that sounds really risky. I was surprised as I looked at the industry data to see that in many cases there was much wider dispersion at that earlier phase of a manager's lifecycle. That Fund one, Fun Two Type era. But it was dispersion in both ways. The average was better than Midcap and Midcap is a little better in large cap. It was pretty clear that I was hired a gem with the idea that someone who'd been in a GP seat would then know where best to invest as an LP. Part of that was earn strong excess returns. Don't just earn me the market return. I don't need a GP for that. If you wanted to do that,”
2025-11-10 · Capital Allocators · Jay Ripley – Emerging Manager Selection at GEM (EP.470) · IDENTIFIED FROM THE TRANSCRIPT · source
“It got me more. Would be different in the sense that instead of being in one narrow part of the world where you knew a lot about one thing, you could actually see everything and you could be looking across a much wider swath of things. That was exciting for me. When I moved over, I spent the first six months studying the industry because I didn't know anything about being an LP or what that meant. I was looking at all sorts of data. My then boss, Hugh Wrigley, said, you got to go to every AGM you get invited to. So I probably went to, I don't know, 50 of them in the first six months. I tried to consume as much information as I possibly could. There were a few things that surprised me. The first was I knew a lot of folks when I was in private equity who were peers to me, people I compared notes with, traded ideas with, in some cases Stone Point would in fact co-invest with those firms we partnered together. And so I had a pretty good perspective on them as investors. And I thought the world of them. I thought these are talented people who are dedicated and smart and hardworking. When I got to gym and I started looking through the industry data, in many cases those folks worked at larger firms and their returns were no better than...”
2025-11-10 · Capital Allocators · Jay Ripley – Emerging Manager Selection at GEM (EP.470) · IDENTIFIED FROM THE TRANSCRIPT · source
“And to invest for the rest of my career was there in a location that worked well for me. That was really got me excited about the opportunity. How did you find that transition from GP to LP? At the tail end of my time at Stone Point, we had raised fund six. And so that was a $5 or $6 billion fund. So it was a meaningful step open size. They did a lot of success. As part of that, I was the mid-level investor. They would bring to LP meetings to say that I was happy in my job and that we were properly staffed, all the things. They've got to check that box. So probably six months before I left StonePoint, it was the first time I'd meaningfully engaged with RLPs. And I was impressed with their dedication to their missions, the depth of their work. They varied in shapes and sizes and what they were focused on, but they were people that cared deeply about doing a good job for their institutions. I had a sort of abstract version of what an LP did before, and I had loosely positive interpretation of that, but I didn't really know. And as I got to know the folks that were serving in that role.”
2025-11-10 · Capital Allocators · Jay Ripley – Emerging Manager Selection at GEM (EP.470) · IDENTIFIED FROM THE TRANSCRIPT · source
“By a mutual friend as I was thinking about Charlotte Atlanta and all the potential opportunities that might be out there, that team had previously been a Dumac. Dumac were the first LP in Castle Point way back when. So they had talked to Todd, who must have said nice things about me. And so we ultimately engaged in a discussion process. I was a little bit uncertain about going from a GPC to an LP seat. That felt like something I was still trying to wrap my head around and understand. And what ultimately got me excited about, though, was as I talked to the gem team, As Matt told you when he was on the podcast, Jem had thrus and Stephanie and Hugh and the other founders of Jem had made clear that they wanted Gem to remain independent and that they had set up the structure such that folks like me who were coming in would have an opportunity over time to be owner operators ourselves and wouldn't be under the thumb of some aggregator or private equity overlord. And I'd seen that movie before at Stone Point. So I knew what that was like. So I saw at long last the opportunity to be an owner.”
2025-11-10 · Capital Allocators · Jay Ripley – Emerging Manager Selection at GEM (EP.470) · IDENTIFIED FROM THE TRANSCRIPT · source
“2012, I think it was. And as part of that, I learned about the OCIO space, firms like JEM. I took note of, oh, they're based in Charlotte, and that's an area that over time could be of interest to me. But it's very hard to leave the peak. It's very hard to leave a place where I work with people I admire. I learn something new every day. StonePoint had a lot of success when I was there and has continued to thrive. Just a terrific group of people. I felt like it needed to be the right opportunity for me to want to move on. How did that opportunity arise? A little bit serendipitously. Stone Point had ceded a hedge fund called Castle Point. So it was based in StonePoint's office. I was roommates with one of the senior analysts there and friendly with the portfolio manager, a guy named Todd Combs, who later became quite famous for joining Berkshire. Todd and I were close friends. The gem team was at a point where they had grown the business from startup to a more scaled boutique OCIO. They were looking for their next head of private equity. And I was introduced to them.”
2025-11-10 · Capital Allocators · Jay Ripley – Emerging Manager Selection at GEM (EP.470) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, we're going to have control, but it's going to be a stalemate. We've got to learn to work with you, we've got to learn to partner with you. In many cases, we were really forced to come to a consensus with the management team in a way that I later learned you wouldn't normally see in private equity. Usually, here's the plan and you can either do it or I'm going to fire you. I worked with a number of owner-operators that I'd admired. And I thought to myself, I would love to be an owner-operator one day. I loved investing. I loved private investing. I loved the craft of it. As I thought about what I wanted to do in the future, the first thing was I wanted to live in the South. I loved living in the Northeast, but I grew up in rural Georgia and she's from North Carolina. We knew we wanted to live back in the South at some point, so that was a long-term goal we had. And the second thing was I wanted to be an owner-operator myself, but I wanted to be able to invest for the rest of my career. As I was working at StonePoint, we had a group that was doing more wealth management style investing. They were looking at various aggregators. And as part of it, I was reviewing and talking to the folks that were working on it. And I had supported a landscape review of a multifamily office that we had invested in at that time.”
2025-11-10 · Capital Allocators · Jay Ripley – Emerging Manager Selection at GEM (EP.470) · IDENTIFIED FROM THE TRANSCRIPT · source
“Forced you to take a 360 perspective, whether it was aircraft leasing or mortgage origination or wealth management or pick your financial services vertical. It was a lot more complicated and complex than I'm looking at a restaurant and what's the store level EBITDA. In hindsight, financial services is the best launching pad for a future career in investing. So when you realized you reached the peak, how do you then decide to descend off the peak and go somewhere else? I loved a lot of the things that involved working in private equity. There was a lot of prestige and claimor to it. You were announcing big deals. You were working on important things. At a very young age, I was sitting on boards. But my favorite part was I loved working with the owner operators that we partnered with. And so StonePoint in particular had more of a partnership orientation at that time. They were doing a lot of 5149 deals where you would approach a founder owner who had grown their business. It was a labor of love for them. And StonePoint would say, we're going to buy 51%. You're going to own 49.”
2025-11-10 · Capital Allocators · Jay Ripley – Emerging Manager Selection at GEM (EP.470) · IDENTIFIED FROM THE TRANSCRIPT · source
“Particularly closely with Nix or B. Monagakan. They were great mentors and taught me a lot of what I know about investing. And I remember I was sitting in a meeting. There was this other group presenting and I thought to myself, this is the peak. Sitting in that room with capital behind you and the ability to effectuate a transaction was as good as it gets. When you can be a principal investor, it's an incredibly exciting opportunity. And as a fiduciary, it carries a lot of weight. And so they had a lot of trust in me. I was there for six years. I learned a ton when I was there in terms of how to prepare, how to work hard, how to analyze a variety of different businesses, financial services is a great training ground for investing broadly because you're not just looking at things at a company level, you're actually studying financial services businesses. They would look at a business that originated some form of asset and say, what do I think of the asset quality? What do I think the residual values might look like in that particular industry? Do I want to own the originator, the servicer, some form of service business serving that industry?”
2025-11-10 · Capital Allocators · Jay Ripley – Emerging Manager Selection at GEM (EP.470) · IDENTIFIED FROM THE TRANSCRIPT · source
“To go and look at the buy side as an opportunity. I think that Wakovia liked the idea that they could show exit opportunities. So I had some mentors that were pushing me in that direction and saying I should think hard about that. I went through a process and joined Snowpoint Capitol, a private equity fund focused on financial services. So what was your time at Stone Point like? It was trial by fire. I joined in August 2008. Obviously, there was a lot going on at that time. It had AIG and then ultimately Lehman a month later. We were looking for the first couple years at the carnage and financial services markets. I was in particular focused a lot on mortgages. We ultimately bought a business that sold foreclosures at auction that was one of the more successful investments at Stone Point made during that era. It was an incredible training ground because probably a year into that time period, we'd had a week where a number of very prominent folks in the financial services community had come through looking for capital or looking for advice. Stone point as a whole had Chuck and Steve and Jim and this incredible group of senior executives. I worked”
2025-11-10 · Capital Allocators · Jay Ripley – Emerging Manager Selection at GEM (EP.470) · IDENTIFIED FROM THE TRANSCRIPT · source
“Tolerate uncertainty Constantly being put in positions where My dad retired when I was in fifth grade. Just got used to making new friends and just figuring it out. Both my parents, God bless them. We're in the service. Both are veterans. You just learn to deal with uncertainty. You learn some grit because when you're going to a new school and you just made friends and now you're going to the next one, that's actually served me really well in investing. Being willing to sit with discomfort is something that a lot of folks struggle with. And I'm not saying it's easier. I always am able to do it, but that upbringing has been helpful for me in terms of living with uncertainty and discomfort and being able to soldier through it onto higher and better places. How did you internalize that into what you wanted to do next when things were certainly challenging at that time? Becoming an investment banking analyst was the North Star for anybody graduating with a finance degree. I really had pursued that path not with a lot of thought, frankly. When I was in investment banking, I was working with a lot of smart folks. I learned a ton. Kid from a small town in Georgia. I was just in awe every day that I was even there. We had worked on a number of deals when I was in banking where private equity was involved. I'd had a successful first year and they really were pushing me.”
2025-11-10 · Capital Allocators · Jay Ripley – Emerging Manager Selection at GEM (EP.470) · IDENTIFIED FROM THE TRANSCRIPT · source
“Graduating Investment banking working for. Uncalled Wak Financial crisis Joined them at a really interesting time. Of that bubble that led up to the global financial crisis. Wakovia is an institution. Jumped with two feet into that. Golden West, which I was doing all day mortgages The financial services group, which itself was at the epicenter of all these issuers and folks that were growing and innovating on the financial services side. This incredible opportunity to grow and learn and see”
2025-11-10 · Capital Allocators · Jay Ripley – Emerging Manager Selection at GEM (EP.470) · IDENTIFIED FROM THE TRANSCRIPT · source
“Having seen him succeed in business. A path I was very interested Settled on accounting or finance as the two areas where Does that have”
2025-11-10 · Capital Allocators · Jay Ripley – Emerging Manager Selection at GEM (EP.470) · IDENTIFIED FROM THE TRANSCRIPT · source
“My dad was in the service a number of different places. Settled in a small town in Georgia. My father then launched a business that had become successful. When”
2025-11-10 · Capital Allocators · Jay Ripley – Emerging Manager Selection at GEM (EP.470) · IDENTIFIED FROM THE TRANSCRIPT · source
“Challenge of manager selection amid dispersion and the art of staying early without chasing scale. We get going, I've been waiting for an easy one stop shop to follow public equity managers for more or less forever. In the Stone Age at my desk at New Haven, Connecticut, we did our work the old-fashioned way. There was no internet back then, so we sourced, diligenced, and invested using a telephone, a bunch of newspapers, and a pile of mail delivered by the friendly neighborhood postman. I've seen quite a few pieces of software over the years, but nothing like what Campbell Wilson has put together at Old Well Labs, or OWL. It's literally amazing. OWL assimilates everything that's publicly available to monitor managers combining the insights of an allocator with AI and modern technology. They find relevant news about your managers, hires and departures from their investment teams, changes in portfolio holdings, movements in AUM, changes in the GP's investment in the fund alongside”
2025-11-10 · Capital Allocators · Jay Ripley – Emerging Manager Selection at GEM (EP.470) · IDENTIFIED FROM THE TRANSCRIPT · source
“Any good endowment style investing starts with a good emerging manager program. The general thesis is usually that, hey, I worked at Airbnb and I think Airbnb will be a big startup factory going forward and therefore everybody who spends out of there, or my all my colleagues, I'm going to be able to back them. And that's my angle. That's a great angle. That has worked well over time and very fruitful for a lot of venture investors. The issue and the trick for the folks in our seat is it's got a three-fun shelf life. By the time you finish fund three, everybody you know at Airbnb has left. By fund four, you're talking to strangers. I'm Ted Sidees, and this is Capital Allocators.”
2025-11-10 · Capital Allocators · Jay Ripley – Emerging Manager Selection at GEM (EP.470) · IDENTIFIED FROM THE TRANSCRIPT · source