YouSaid · the spoken record

Michael Carmen

lines on the record: 68
first: 2023-10-27
most recent: 2023-10-27
sittings or episodes: 1
sources: podcast

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

“No, I think it's a very fair characterization of the way to think about this because it's kind of the way that I thought about this. And in fact, what's interesting is that in my product, we have several clients that use us as a small cap growth alternative. And the reason being is that if you believe in my premise that companies are staying private longer, what's happening is many companies today are going public and skipping small cap, right? If you think about the Arabnbs and Ubers and many, many others, they're coming public not at $300 million. They're coming public at $10 billion, $20 billion, $30 billion. And so their view is that, well, if we want to continue to have exposure to the next generation of gray companies, this is a product that will”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“Correct. So we're at about 8 billion of commitments and money under management. We now have five products in the space. In fact, my original product invested in biotech in 2019. We spun out biotech into a separate dedicated product for the biotech space. And now we've added products in investment grade private credit. We have a product in the sustainability climate area. We have a product called Wave, which is focused on diverse founders. And so now we've built out the space further. And our hopes are to launch additional products in the space over the next several years and really build a very multi-dimensional, multi-asset platform that will address private equity, mostly inventure, credit, as well as real estate.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“In 2014, and we were fortunate to have several of our clients who believed in us and believed in the team. And so we had our first close in November of 2014. And ultimately, we raised a billion dollars for our first fund in the private space.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't remember. So the rubbing of the chin occurred in October of 2012 when I wrote a memo to my partner in Crime Channel O'Reilly, who's now my co-head on Privates, and I said, hey, I think this might be a really long-term secular trend of companies staying private longer. And I do think it's challenging to buy illiquids in publicly traded vehicles because of the illiquidity aspect of it. We should consider doing a dedicated fund to take advantage of this trend for our clients. And so that was about two years before our first close. And so we had never, as you noted, we've never done private, so we had to socialize. If this was a business and a direction that we wanted to take, and I think that Wellington has always been very bottom up and very entrepreneurial. And so after explaining why I thought we can do super well in this category, we launched the process.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't know specifically the answer to the whys of this since it was done. Another thing that was done before my time, 1940, but”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“Correct under the 40 Act, you could have up to and you wouldn't do this, but you could have up to 15% in illiquid securities. And for me, in my mutual funds, I was in the mid to high single digits, but I started getting involved in buying a lot of these companies as I realized that companies were beginning to stay private longer”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“Correct. And today, as you know, you have companies like Stripe doing $55 billion rounds, right? Post money valuations until the market has changed dramatically. And so to your question, the way I started getting into this market was effectively the FOMO of now seeing companies staying private longer as a public market investor. And I was running mutual funds at Wellington as well as one of our hedge funds. And I had the latitude to invest a certain percentage of my assets in ill-liquid investments.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“They are shades of the same thing. So no doubt all of the skills that I garnered on the public side have been transferable to the private side. And in fact, in terms of what I do specifically in late stage growth, my message has always been that we've been able to bring our public market expertise to the private markets because the companies we're investing in, as you're aware, used to go public at a much earlier stage. When I was going back to that small cap fund I ran, I would sit across the table from companies that had two, three, four hundred million dollar market caps that were going public, right? The best example I always love to give is that Amazon's last private round was at a 60 million dollar post-money valuation.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“So my first fund that I ran when I was at Montgomery was a mutual fund. So it was all individual investors. And that was the period of time where you can be in some news publication and your fund would become hot and you would get hundreds of millions of dollars in assets in a short period of time. And that's literally what happened to us. But when you think about what I'm doing today and the types of investors I have today, today it's more of a combination of wealth management, so more in the family office, high net worth, ultra high net worth, and then the other half of our business is large and medium-sized institutions.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“It was diversified, but as a growth manager, obviously you're going to have a reasonable weight to the tech sector. And I was, I started as a tech analyst, but I became over the years, I became a much more diversified investor. That's probably the biggest reason I was able to navigate the other side of the tech bubble, because I grew up in a period where I did invest in other sectors besides tech. And so that was very helpful when tech went out of favor for basically a decade.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“Investing directly in the public market, small cap, mid-cap, various styles, how did you find your way to that side of the street, the more private side of the street? Yeah, it's a great question. And so to your point, I was a public portfolio manager, started as a tech analyst, and made my way to associate portfolio manager, and then began managing public portfolios in 1996 prior to getting to Wellington. Where were you managing those four in 96 for a hedge fund? So that was actually Montgomery Asset Management. I don't know if you remember the old Montgomery securities. Old school. Correct. And I love Montgomery and Robertson Stevens and all these boutique firms that are all gone. But they started an asset management division. And my family and I moved out to California and that was my first job in being a portfolio manager was running a small cap fund for them back in 1996.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“Securities are in the liquid public markets versus private equity, which are in illiquid private markets. So it applies to both you, the investor, have a much shorter period of illiquidity and specifically the assets that the fund is investing in. Correct, and definitely more emphasis on the types of investments the fund is making. So you started out”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“There are occasional windows or gates that open, and you could take some capital out. So when you commit to PE or Venture, whatever, that money is figure seven to ten years, you're not going to touch it. When you say liquid alts, what you're really saying is if you need this money back within X period of time, you could get some or all of it. What is distinguished liquid alts from these illiquid locked up privates? Sure. When I think of liquid alts, there's probably two parts of it. So one is, to your point, the money is not locked up for multiple years. Generally, we have a one to maybe two-year lockup where you can't access that capital. But more importantly, when I heard a liquid alt, it's generally the investments that they're making are in liquid products, mostly public market products. And you can go long, you can go short, you can have leverage, you can have higher exposure levels.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“Liquid alts I basically define as versions of hedge funds basically it's a synonym for a hedge funds and thinking about the alts market right there's liquid alts and then there's non-liquid alts which would be mostly on the private side right and so our initial thrust was what our first hedge fund was a financial services hedge fund started by Nick Adams back in 1994 which will I guess be celebrating its 30th anniversary next year and now we have a number of different hedge funds some we have in the macro we have multi-strat we have point hedge funds with in technology in the healthcare field and so we've built out over 20 billion dollar hedge fund liquid alt business and now we've added privates to that so so I want to focus on on the phrase liquid alts which I don't think a lot of lay people understand typically when you're invested in a hedge fund or private equity you agree to be locked up for a certain period of time”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“Product in late stage growth. So you weren't there in 28, you weren't there in 79. When did you join Wellington? I joined in 1999 in the middle of the tech bubble as a growth investor. Great timing for the first nine months, sure. It was April of 99. I had an amazing 99 and early 2000 and I had left a hedge fund. So I was probably one of the few people to leave a hedge fund and go to a larger institution in the middle of the tech bubble, but I wanted to be on a larger platform. I love being with a lot of other investors and being very collaborative and collegial. And I felt that that's what embodied Wellington's culture, which was exactly what I got and what we continue to be today. And so I loved it from the first day I got there. And now I've been there for just under 25 years. So let's define some terms. Everybody knows what a hedge fund is, but let's talk about liquid alts. How do you define liquid?”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“One point in the 1970s, the company went private the 1979 and we became a partnership, 29 original partners. We now have almost 200 partners and we've gone through probably about three generations of partnership change, which is very unusual, as you know, in the business. It usually is very difficult. But because the ownership was very dispersed among all of the partners, it made those transitions very easy. And so we've grown from a very small company with 29 partners back in 1979 to, as you noted, over a trillion dollars of assets. And it became very diversified. We were originally very equity heavy back in the day, and we made a lot of investments on the fixed income side. So fixed income is now a substantial percentage of our assets. We entered the liquid alts market with hedge funds back in 1994, and we entered the private market in 2014 with my”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“Fascinating and informative. I found this to be an interesting discussion, and I think you will also, with no further ado, my conversation with Wellington Management's Michael Carmen. Thank you, Barry. Thank you for having me. So let's talk a little bit about Wellington, which has really a fascinating history, not only have they been around since, I think, 1925, almost 100 years old, at one point in time Jack Bogle was their chairman, at least of the mutual fund division. Tell us a little bit about the firm's history and how it's evolved over the past hundred years. Sure. Well, I haven't been there for most of the 100 years. Just so you're aware. Okay. You look a little younger than that. Thank you. I appreciate that. And as you noted, the firm's almost 100 years old, started in 1928. 28. One of the interesting aspects of the firm is that it was a public company.”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source
“This week on the podcast, I have an extra special guest, Michael Carman is co head of private markets at Wellington Management, Wellington's a fascinating company. They've been around literally nearly a century. At one point in time, Jack Bogle, founder of Vanguard, was chairman of their mutual funds. Just really a fascinating history from a private company to a public company, back to a partnership. Really interesting. And Michael has had a bird's eye view of this for really the past 25 years. He is uniquely situated because he has run both public mutual funds as well as privates, including late stage venture, private equity, credit down the list. He really sees all sides of the elephant and is capable of describing it in a way that I thought was both”
2023-10-27 · Masters in Business · Michael Carmen on Late-Stage Venture Capital and IPOs · IDENTIFIED FROM THE TRANSCRIPT · source