YouSaid · the spoken record

Jonathan Lewinsohn

lines on the record: 92
first: 2026-02-02
most recent: 2026-02-02
sittings or episodes: 1
sources: podcast

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“You for this opportunity. You have an incredible network here. What I think is cool is I listen to this podcast all the time. So I will have to skip the episode where I'm in. It's humbling to be honest with so many of the great investors and allocators and others that you've had on. Thank you.”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“Five years from now is what this is about. This is an epic of extraordinary technological change. I hope we can wake up in five years and I can say and Scott can say and our team can say we are at the forefront of using this technology to produce alpha for LPs. We'll see. But that's what I hope the five years are about.”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“Scott and I still think of ourselves as very young. This is the part of the year that we're the exact same age or both 46. The question feels alarming to me. I was talking to someone who was president of an old homeowners association and I said to her, what's your goals in your presidency? She said, keep everything the same. We don't have that luxury, though. And what's really important to me and to Scott is to be able to make the sausage and the technology is changing so quickly that you have to stay on top of things. What worries me and what I'm focused on, what I see the next five years being for me personally and for diameter is all of us learning how to use this technology, not being left behind by this technology. If they outsource the managing partner of an investment firm, I'm screwed because I want to do this for a long time. And so learning the skills to continue to compete at this level.”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“Our system is going to see through this forget about any particular politician. The mystery is the system working with A, like how did it work retraining all the steelworkers for internet technology jobs? It failed because it's impossible in a democracy. You can't say, quit your job now. We're going to teach you something else to be an internet salesperson. Doesn't work. Transitions when we're already in this period of nothing is real and everything is fake is a mystery that I am not certain we'll be able to see through as optimistic as I would like to be. I've made a life and a career out of being an optimistic person.”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think the next two years are giving us so many known unknowns that I can't really wrap my head around it. Today, just sitting here with AI not even really ready for prime time. Very high, I think almost 9% unemployment from college grads. What's going to happen if that goes to 20%? We're going to have an election maybe as that is coming around prime time. Figuring out what's fake or not is impossible. The mystery to me is we've had this great experiment with representative democracy where we send people on and most of us then just do work for two years or four years. We lift our heads up. We say, hey, were you good? Were you bad? Vote you in, vote you out. Representative democracy really only works if you have accountability. Say, hey, this person was terrible and you pull them back when Jimmy Carter was voted out of office after 2008, the Iraq war, the American people said, no, this is not working. You can't have accountability without some shared set of facts. Half the country thinks that the January 6 people were traitors. Half the country thinks they were patriots. The mystery to me is how...”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“We spend a lot of time on Zooms at diameter, both internally and externally. I don't see why the norm has become that turning on your screen is optional. The whole purpose of the Zoom is that we can have a more intimate discussion looking at each other and seeing facial expressions than we can over the phone. A diameter we have a rule that your video has to be on at all times. We do it externally also. It's a real pet peeve when people are sitting in an office with the screen off. We know that you can be looking at the screen and not focused on your work, but at least creating that illusion makes for better calls. The screen off in Zoom is my pet peeve.”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“In that meeting, who's going in here? Do they have more points than me? Are they getting this? I just invested. It did great. We've gone crazy at diameter to have as little politics as we possibly can have. It's a very flat organization. It violates a lot of the rules you learn if you buy management books in the airport. We're very transparent. I credit Scott for really teaching me that. The first place I saw how just pernicious office politics are. What was an amazing job? I loved AUDC. But that's what I learned from it.”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“First real job I had was the summer after senior year of high school. I got hired to work at the New York City Economic Development Corporation as an intern. We were working on bringing jobs to Silicon Alley in New York. This was the summer of 1997. I learned an enormous amount. But I also learned about the impact of office politics. This is a political place, political job, and boy was it political. Everybody trying to figure out where they stood, who gets invited, to which meeting and when and what your seniority level is, and its government, so who gets a driver and who doesn't. I think that politics kills organizations. I love politics, right? I'm obsessed with politics, but office politics is deadly. I remember when I was at my last firm, once I knew I was leaving at the end of my time there and I just focused on investing, it was never better investor. It wasn't like...”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“Last time I was on, I had prepared the answer and I think I talked about running and I've thought about it since I wish I could tell you that I have this great hobby where I build ships in glass bottles or I whittle wood. But the truth of the matter is I don't really have hobbies in the sense of really perfecting something to be good at it outside of work. I like to ski, I like to run, I like to read, I don't have hobbies in this traditional way because I do what I like and it makes me boring, but I like reading about the news and reading about the world. So I regret going with running last time and I hope I have writed the record that I am the hobbyless man.”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's the concentrate off. I understand why the question is asked, but it's all about that relevancy flywheel in what you're doing as opposed to the absolute size.”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“One situation that we were banking on didn't come through. There's another portfolio company that we would like to do a dividend for. We know that you guys own the syndicated debt in your CLOs and also own the bonds in your hedge fund. You must know this company very well. Would you do a juicy direct loan dividend deal between now and December 31st? He said, of course. That means there are many bigger hedge funds, there are bigger CLOs, there are bigger direct lending businesses. The question is, are you relevant to get the best deals that you want to put together your portfolios? And we are. The Supreme Court says pornography, you know it when you see it. That's also true with being too big. So we've purposely capped our funds. Our hedge fund has been hard closed, return capital on two occasions. We capped the size of our most recent dislocation fund because we don't want to be in the situation where we get too big and we can't actually invest.”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“Can continue to be relevant. And so direct lending, we didn't think we would have eight years ago when we started because it didn't complement the syndicated market. Today, it's crucial to have direct lending because sponsors and others want both. They want a syndicated solution, a direct solution. You have to be able to look at both. We don't do relative value, but when we're looking at something indirect lending and it's only say s plus 475 and there's something similar at s400 in the syndicated market, maybe you're not getting enough for the illiquidity. I don't think the absolute size matters. What matters is in the markets that you're in, are you relevant? One of our favorite examples was December 26th and Scott was on the desk. He got a call from a sponsor that said, we're trying to return money to our LPs this year. That's been a big theme in private equity.”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“We manage upwards of 25 billion. I was at a credit conference for Apollo last year, and I think on the stage it said they managed $450 billion. Our mother is a very proud of me and Scott and the whole team, but we're a pipsqueak compared to them. This question is overhyped because it's an important question as investors try to figure out, are you going to lose your edge? That's the hardest thing to do. Figure out if the past is going to be the future, whether it's a stock or a bond or if a GP who's been good is going to continue to be good. For us, it's all about do we have a flywheel that works, even when we just had a hedge fund, we've always done two things. Try to find cheap bonds or loans or overvalued bonds and provided capital solutions. We originally did it through the syndicated market only. Now we do it through the direct lending market and capital solutions. And are you of a scale that you”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“How do you think about your positioning in a world where there's this surge of very large credit players and you have scale and there's another side that's probably much too small to compete in this world”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“Alcohol, we're changing spirits buying. And that we think a mystery that's happening that really can't totally get my head around. And that's why we haven't made a lot of recent investments in packaging is it seems that Americans are using less, right? Buying less food, even with not on GLP ones. I have series. Maybe people were so oversupplied with this stuff after COVID. It said it informs us, it gives us a big advantage over others that wait and see what the bank's economists will say and then maybe or maybe not incorporates it. Also, our models have to be the same. If we have two different analysts with different macro inputs, one for autos and one for housing, then what are we doing in terms of thinking about what's better, housing or autos? What something's gotten I take seriously and that we also enjoy.”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“Packaging really gets hit. What's interesting is packaging is an industry that's supposed to be super stable. And now it's widened significantly from the index to almost be stressed. We said, is this a slowdown in the consumer? One of our analysts thought it was. Then we said, wait a minute, how is it that you can't get a concert ticket or an airline seat? Cruises are doing fine, but packaging is suffering and made us realize that part of the elements of the, I guess, the K-shaped economy that people refer to, which I don't love as an analogy we're playing through that packaging is one of the places that is even or more even across the economy, whereas in places like durables and services, the top 25% are responsible for, say, 50% of the spending. But that also something else was going on that it couldn't just be the economy that was explaining it because you actually had an incredible GDP or for personal consumption. It's that GLP1s were impacting grocery, that changes in”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“I go into it. I have my own models. I create my own charts. And most of the charts I create don't show me something. And so integrating that and constantly being in the numbers, in the data. I don't want to be someone who's receiving a PDF or a deck and just reading it. I want to see how it's made, how it goes through, understanding it has allowed us to have theories on the economy. We think that the consumer being under levered has been part of an income cycle, higher wages, higher spending, higher inflation, that will, of course, one day break, but doesn't abruptly stop. It doesn't just stop immediately because it doesn't have a lot of debt and because wages have been growing. Therefore, we can see through these scares when everyone screams, recession from the roof. We incorporate it in everything we do, the analysts all incorporated in their modeling and in their industries. They then give it back to us. This is what we're seeing. Last year we saw...”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“We're obsessed with macro. We think you can't outsource your macro. The team has to be on the same macro footing. If someone comes and says, I want to make an investment in a retailer or a building products company or an industrial company, the first question is, what GDP assumption are we using? What inflation assumption are we using? Are we making an economy bet, a market share bet? We're not economists, but during COVID, we were pretending to be epidemiologists. It wasn't that we were saying, oh, wow, this is going to happen. It was, hey, we need to understand ourselves what the outlines of the potential spread could be. Every single morning I would wake up, analyze the data on COVID, and send a note to the whole team that turned into kind of my pet COVID blog project. We do the same with macro. Scott and I really believe in making the sausage. Scott does an enormous number of our trades. I do our macro. When CPI comes out, when the jobs report comes out,”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“Impact of being asleep in 08 and not appreciating that while subprime was small on its face, it had turned itself into every crevice of banks and therefore was a much more systemic problem, the impact of getting that wrong was so enormous that we all think about what our systematic problems here, the systematic problem would be that you'd have really bad returns in your interval fund. You'd have really bad returns in your special situations funds, not that the global economy comes down.”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't know. I do think that ABF has grown dramatically. I do think that the assets are demanded by insurers and others. If you could not create structured products out of asset-backed loans, we should have said asset-backed loans is everything from a loan on airline parts, a loan on a plane, a loan on an engine, consumer loans from companies like a firm, Pagaya to, we were even looked at a deal where it was buy now payload for Botox, which was an excellent transaction because people want to keep getting Botox and they tend to be high quality borrowers. All of those things, if that engine slowed, it would make it harder for insurance to have attractive assets and to earn the yields that they've been doing. I don't think that it would create systemic problems just like every hedge fund in the world wants to call a recession constantly because they're desperate for the volatility. Everyone wants to constantly say, what's the nexistic thing? Because the”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“Equity, which is a highly levered asset, is an amazing asset class because when anyone models a CLO, they say there will be a recession sometime in the next 18 months. I had an old boss who told me that if anything is coming in 18 months or the back half of the year, it means no one has any clue. But you model a recession every 18 months. What happens then when CLOs, you might get that recession to end all recessions. And that will be bad for the assets, the levered loans. But you take cash off the table right away if you were the equity. That helps pay down your basis right away. While we love this IG-like insurance solutions market, we're worried about the stumps and where they're going. If you're going to invest in ABF, you need to invest in people who are underwriting the whole thing correctly, who are thinking about, do we want stumps? If we want stumps, how are we underwriting them? And do we have enough milk to get them down, so to speak?”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“They ended up closing. It failed because they had nothing to do with the stumps. One thing we're seeing is we really love the IG market. We love creating these assets for insurers, investing in them when they make sense for our funds. But some insurance solutions involve creating a muffin top and a stump. Because if you create a muffin top, you are creating structural seniority that makes for less risk. Makes a lot of sense and the insurer's balance sheet makes a lot of sense. What do you do with the stump? We've spent a lot of time trying to look at the stumps. The stumps often are residuals that don't generate any cash in the near term, but offer a nice kind of mid-teens return. We think that Wall Street is getting a little short on places to stick the stumps. They're coming up in special situations funds. They're coming up in interval funds. They're coming up in places that people may not appreciate what happens when you're not getting cash for a long period of time. This is technical, but CLO.”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“didn't work because when you just baked the top of the muffin it didn't taste like a popped off top of the muffin it didn't have the structure and the texture then i think it was elaine and mr lippman they decided to bake the whole muffin pop the top and then they needed something to do with the stumps the garbage dump wouldn't take it because it's food not garbage i think they donated it to a homeless shelter and the person running it came and screamed at them that it was inhumane to give this to the homeless they want the tops too they don't want the stumps”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“I can match my asset durations with my liabilities. And what has emerged is insurance solutions business that provides these type of assets to insurers that oftentimes will give 50, 75, 100, 200 base points of extra spread. It's a great business. We are involved in it. We're doing a decent amount of asset-backed finance. We want to do more. It's a responsible way that Wall Street is providing solutions that work for people. But there is a danger to it you're alluding to, which is when you're creating lots of tranche structures, the thing that we all remember is during the”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“I would say the private IG market has been a great place to invest because we've been investing in companies of consequence with really good structures to earn a little more. The earning a little more is the answer. If you think about the insurance business or the annuities business, it's taken off over the last few years for good reason as rates have been higher and as Americans have aged, annuity products make a lot of sense. Annuity is a long duration liability that you get premiums in for that you have to invest over time. The way you invest is highly regulated. You can't buy crazy products. You have to do it in a very conservative way. If you are an insurer like this, the holy grail to you is a non-risky asset, an IG or IG-like asset that yields a little bit more than what invests in grade. Invest in grade is very tight at the moment. You're able to say to the world, hey, I can take illiquidity. So I have many.”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“We do a lot of IG. We are very involved in IG New issue and IG trading and IG investing. We never want to be a tourist in anything. IG is sometimes interesting for our hedge fund, sometimes less interesting, unless we were native to it and had every day in that market, we would be a tourist and you never want to be a tourist. The best explanation I give is I was once around COVID time traveling internationally seeing a client and they still required a COVID test. So the night before we're like, what are we going to do? My colleague from IR, Ryan and I, we spent $450 each for a COVID test in the hotel. The next morning we drive up to the client, negative, free COVID test in the lobby. Tourist, IG is a very important part of what we do in structured credit and in corporate credit, which you're referring to is the explosion in IG type capital solutions, really driven by insurance. And we're very active there too.”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“One of the other big trends in the credit world is the growth of IG from insurance companies and the demand for that paper. I would love to get your perspective on what's happening there and how it may or may not impact you in what you see the credits you're looking at.”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“Distress, it's part of the process being a repeat player helps, but you have to make sure you're well positioned because at the end of the day, people will be economic analysts.”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“I remember the first restructuring I worked on in great detail, the Lear restructuring. It was so clear to me how it should go. I had my model, I had my spreadsheet, it was so clear to me. We sit in the room with bank debt lenders and the company and the revolver and the unsecure bonds and everyone's yelling at each other. I turn to my colleague at the time, Charles Tauber, who's now at PJT. He was older than me then and older than me now. I said, this is crazy. Let's just tell we're like the largest secure, the largest unsecured. And he said, you need time to pound their chest. Everyone needs time to scream and yell, and then we will get something together. To some degree, you want to allow that to happen.”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“Who had over 50%, which by the way was a mistake from us, don't want to be in a situation where a very small number of creditors can get to voting thresholds. What accompanied it? Called and said, hey, you guys have 51%. Amend the doc to let yourself be senior to everybody else and give us the $250 million we need to fix the business. One of the people said diameters in this, they're small or we want to call diameter, we want to get them involved. We ended up doing something different and we got a great M&A outcome and no one knows how terrible it could have been. That's really worth something to me. That was a firm that we do a lot of business with and we all know the ethos. We're not going to hurt ourselves in situations to bend over backwards to make sure nobody ever loses money. That's not our responsibility. But if you're a repeat player, then the market treats you differently than if you're a one-time player. What I've learned from restructurings now is you need to give everyone time to pound their chest.”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“We are very active in stress and distressed, for better or for worse. Sometimes it works really well, sometimes it doesn't. What that creates is a repeat player dynamic where I don't think there have been many firms on more ad hoc committees around potential restructurings in court or out of court than us. There have not been more firms involved in more par syndicated loans than us from hedge fund side. I think there is a repeat player perspective that if someone is going to really screw diameter, I'd like to hope that they don't want to do that because they think they'll be on the other side of us and we should have goodwill. We were in a situation two years ago over Christmas where boy did we get it wrong. We underwrote this thing in August and by December it was out of money. Really not our finest moment and we're going to have to liquidate a company over the Christmas season, which is the worst possible thing you can do. There were two creditors in the stack.”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“There's fighting back against that now. There's publicized litigation against it. I think it's just a living organism while cooperatives allow you to do is say to the company, we as creditors will give you a capital solution, not one individual creditor to screw other creditors. You're seeing that now in bigger situations, smaller situations remain an enormous wild west. 18 months ago, I was pretty down undistressed in the sense that I thought it would get worse and worse than your ability to invest as the world turns and cooperative agreements and finding sponsors that are amazing to work with, that love their businesses want to keep them and want to find capital solutions for it, I'm more optimistic that it's not going to be bloodying each other, but it's investing.”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's happened over the last few years. It's gotten a lot of headlines. It's made it harder to invest in distressed businesses because what we do is we say this business was once great. We think it could come back to being maybe good. Where should we buy the debt if it was worth a billion once and if we can buy the debt for 500 million, do we think it's definitely worth 500 million? You might say yes. But if you say aha, you may think it's worth 500. But it could be that when you buy the debt, in reality, there are 750 that's going to go ahead of you. Really, you're buying it more expensive than it was before the world change. I don't want to invest in that at all. So it's made it much harder to invest. I think everyone's acting rationally and responsibly. The world is turning. And one thing you're seeing is co-ops, which are cooperative agreements between creditors, to say, we're not going to do a deal with the company alone. Neither should you have really come into vogue over the last 18 months.”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“Then you went into inflation, you got the war in Ukraine. The Suez Canal is basically closed. And companies run from one thing to the next. They're resilient and they can handle it. Owners of companies said, look, inflation was worse than we thought. We don't want to lose.”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“Necessarily the most glamorous, and fighting is part of it. The norms held it together in the sense that there was just so much you could do. People wouldn't be willing to use loopholes in documents that were clearly there, but were designed for a different purpose. Those norms have really disappeared for good reason. Not only does capitalism require it to some degree, but I think also that a lot of lever deals got into trouble over the last few years, not because the owner, the sponsor, whoever it was, made a terrible underwriting mistake. That's usually what happened. It's because inflation came in a way that wasn't expecting. If you think about what corporates have gone through in the last few years, one of our themes is the resiliency of the economy in the financial crisis. Auto companies went from selling 16 million cars to 15 million cars and they were all immediately insolvent. Today we had a pandemic that shut all production of everything.”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“norms evolve faster than laws evolve faster than capital structures evolve i have found one thing to understand is and i was trained as a lawyer inequities there are fiduciary duties to minorities you could own 51 you can own 80 you can even own 40 if you really screw the little guy you have violated fiduciary duties to them and you can be held liable for that In credit that doesn't really exist. The way the law has worked is it's a contract, it's not being an analyzed under fiduciary duties law, it's not being analyzed under what the securities laws say about fiduciary duties. It's contract. What does the contract let you do? Okay, there were norms that existed for a long time not to take advantage of those things. What's interesting is creditors, we've long been willing to beat the living daylights out of each other. It's a part of finance that isn't”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“I joke you can't have credit conference without a panel on credit or violence, which is exciting because people like UFC and this is credit nerds trying to pretend that they're warriors. I sell very much included. There are norms and there are laws.”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“Within all of the microcycle investing, there's been lots of change over time in how creditors participate relative to other creditors or the company, those LMEs and other stuff. Where are we today in how you're assessing the landscape of other players in any of the credit you're underwriting?”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“And more employers pushing that down onto employees. But in places where the cost is just getting out of hand. And the first place you're seeing it is with the ACA subsidies. The big debate over will they be extended. We're talking in late January. They haven't been extended. And that means that more Americans are going to be out of pocket for healthcare. Then if employers start saying to employees, you need to pay for parts of this. Is inflation in healthcare going to suddenly impact how Americans spend for the first time in a while? It matters. There's a great study that Australia, their Medicare system, which is universal healthcare, they did an experiment where they said if people just have to pay one or two dollars for prescriptions, what does it do to utilization? It really impacted demand. We think you could start seeing inflation impact consumer choices in healthcare for the first time in a while. And there's not every business model set up for that.”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“Actually, the return on capital that would make sense for them to provide was much lower than they were being paid. We look for businesses where we think not only is the current administration liking those elements of where they are, but what they earn today doesn't seem silly to us. It seems like a normal return on capital that would be supported by anybody. That's what we find. What the challenge in America for healthcare now is that healthcare costs are really rising again after a period of being less aggressive if you think about elections healthcare was the most important thing that we talked about in elections in 2000, 2004, 2008, and it really disappeared from our election rhetoric. Last year, you saw health care costs up across the board, commercial healthcare costs up seven and a half percent. Employer payment for healthcare up 7%. The theme that could happen this year or the coming years is you see more people.”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“And I take the fact that every four to eight years we change what administration priorities are. Medicare advantage is great. Now Medicare Advantage is terrible. We want to get rid of Medicaid payments. We want to increase Medicaid. It's become a consistent opportunity to find businesses that should exist, need to exist, that aren't frauds, although you see them in healthcare more than other places. It's been an opportunity for us. It's hard because you have to realize that we could be investing on the back of policy volatility and then get impacted by that same policy volatility. And so we tend to say away from things that are single product or single payer. We like it if there's a mix of commercial Medicare and Medicaid. We like larger businesses. We like return on capital. I once looked at a business in radiation oncology. The analysts are trying to think about what is going to be the government's payment for this product. I said, the government wants radiation oncology, but thinks it's being overused. If you're sitting in a government office and you are being reasonable, what is...”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“Healthcare is supposed to be stable. We know all about the aging of the population that impacts the economy. We know the demographic data. We know how regularly everyone gets the flu. But there's enormous policy volatility in healthcare. We have decided in the United States that every four to eight years we want to take a 180 degree turn in our policies in terms of who runs the country and what they support, which is crazy if you think about the long-term history that impacts healthcare almost like no other. Healthcare because it's predictable historically is a place with a lot of whether it's healthcare services, hospitals, roll-ups. These roll-ups create enormous value for doctors and for sponsors and for others, but they've run into a problem because if inflation was high in labor in healthcare. And so if I take the fact that I had labor and healthcare go crazy because they had a labor problem before the rest of the country had a labor problem.”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's more like are there fundamental changes we tend to be positive on certain industries and negative on other industries. We don't try and match or we're not trying to be beta neutral or anything along those lines. What we're trying to do is find winners and losers as this kind of crazy global economy turns. In our hedge fund, shorting is a big part of what we do, but it's not a part of what we do in the other things. It informs it. Companies that were short, industries that were short, we don't touch them in direct lending. We don't touch them in the CLO. We run this business that's totally integrated where Scott and I sit in the middle of it. There are no walls and there are many firms that have all these products, but not integrated in the way that everyone is talking to each other all the time. We have a Zoom that's open 24-7 and we're popping in and out of it. It helps us have better risk management. And hopefully better investments across everything we do. So the shorting is important.”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“People don't like talking about shorting because in general, you want to be an optimist and you want to bet on things succeeding. But we do short. We short companies that are either frauds, that we think are frauds, although I will say we call nine out of every two frauds. What we look in a portfolio is a company about to have a microcycle or less that the way they make money. Again, if you are obsessed with business quality and your analysts can say, how does this company make money? The second they see holes in that, then they're saying, wow, this is a problem. Is it changing? So we short companies that have very overlevered balance sheets or are overlever.”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“Father was an equity research analyst for many years, and I told him what I was going to do. I was going to go to the buy side and work at a hedge fund. This was a long time ago. He said, the buy side, who goes to the buy side? He was shocked. Then he said, shorting is unAmerican.”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“Not just on cost, that they're taking share on cost and quality, technological know-how. They're quickly moving up the chain in chemicals. They want to be making specialty chemicals. They think they're going to have an advantage because they've also will obliterate margins in base chemicals. We don't think the chemicals industry is ready for it. There's going to be enormous upheaval in the global chemical market even starting this year. We'll be really interested in playing that microcycle as it goes through.”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“And you're great. If your base chemical, you're more cyclical. China's going up the text stack. All of us have to take Chinese technology more seriously everywhere. I went to China in 2009 on an autos trip. I was an autos analyst. I went around to all the auto plants. And in almost all the auto plants, we saw usually a Toyota Camry, sometimes it was a Honda Accord that was being stripped down to literally copy what it was being done. That colored my view on how to think about Chinese technology in autos. Fast forward to today, Chinese EVs, and you're saying, I thought we were talking about chemicals, right? But Chinese EVs are not only competing on cost, they're better. They're really good. People want them. They'd be all over the US if we weren't having geopolitical reasons not to allow them in. Just go to Europe, go to the Middle East. People are paying for them. This is the first instance where China is taking share.”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“Country and free up spectrum for AI and other things. We think we get another bite at the telecom microcycle as this transition happens away from legacy ways to connect to fixed wireless into fiber. There's many companies that are in the crosshairs. I think about things that are developing now. Software is obviously everyone's talking about its doom, but it hasn't developed yet. Places that we're looking at are chemicals. We take seriously the Chinese five-year plans. Seems very clear to us that China is focused on reducing the cost of base chemicals, ethylene and propylene. If you look at the amount of ethylene and propylene that they're bringing on and then go to 2030 and shut all of the European and Japanese capacity in 2030, you'd have more overcapacity than you have now. On top of that, China is moving up the tech stack. So in chemicals, the Holy Grail is, are you especially chemical or not? And if you're especially chemical, you have a high margin, high multiple.”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“mobile or ATT have to provide a broadband solution in the household. But it uses a lot more data than the wireless we're just going around on our phones. It's upended once again the telecom ecosystem, which historically all you had was a cable company for fast internet. And now in some markets it's cable plus fiber. And now it's cable plus fiber plus maybe Starlink plus Fix Wireless. This is an industry that was rewarded with tons of debt because it's supposed to be super stable. You're supposed to be able to just raise price every single quarter. No matter what you do, you call up and you beg it doesn't matter. What we think is going to happen in telecom is more and more legacy, perhaps coaxial companies are going to be impacted by not only fixed wireless share, but fiber as they get laid all over the country. And that fixed wireless is like a transitionary technology that eventually the large carriers will want to move those new subscribers to fiber that they've put all over the country.”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source
“I mentioned Telecom. Telecom continues to turn. AI has become important for fiber. You need to get the data back and forth, the fiber. And then it's become important in wireless, where spectrum is going to become more crucial as we enter this inference phase makes me think of waiting for Godot again because in many ways we're partially there while we're training while we're doing other things. fiber and wireless continue to be important assets. My partner Scott coined good terms for the highway and Skyway of AI that will continue to be important understanding how companies that their core business models might not be as interesting today, but they have an AI angle that's real. The other element I think that's fascinating telecom is fixed wireless has taken over as a very important part of the broadband ecosystem. It was 150% of the growth last year in broadband across the country. It's basically using excess capacity in wireless spectrum that team”
2026-02-02 · Capital Allocators · Jonathan Lewinsohn – Credit Microcycles at Diameter (EP.484) · IDENTIFIED FROM THE TRANSCRIPT · source