YouSaid · the spoken record

Michael Leffell

lines on the record: 72
first: 2024-03-11
most recent: 2024-03-11
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

“Think it's perspective. I think it's understanding that when you're in the heat of things, in the heat of the moment and the world's on fire, you tend to think everything's going to hell in a handbasket. It's not. There's always tomorrow. Things settle down. You don't know how things will shake out. So try to remain calm and it'll work out.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“I would say it's probably Marvin Davidson and Tom Kempler. I think they showed a way of investing, discipline, thoroughness, intellect, honesty, transparency, a certain sense of humility that you wouldn't expect. Marvin would teach that the best way to generate wealth is compounded returns and avoid loss. Stop looking for greener fields. Stick to what you know and you'll be fine.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“On the investment side, my pet peeve is when somebody comes to me and says, this is the best thing out there. And my response is, I don't care. I want to know if it's really the best thing in absolute terms. Subjective quality doesn't work for me. And the other thing I don't like is failure to accept responsibility. I don't like it when somebody tells me it's always somebody else's fault. Accept it, learn from it, and move on.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“Part from woodworking. I guess most people might be I played hockey growing up right through college. And then we had a game up here in Westchester. And that was pretty good also because the people who played range from beginners to Division I players, from firemen and policemen or electricians to bankers and lawyers and doctors. And when you get on the ice, everyone's the same. It's humbling and brings you back to your roots.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“I really like woodworking. I enjoy crafting things. I think that there's a certain satisfaction that I derive from starting something with literally a piece of wood and seeing what it looks like at the end. It's physical, it's tangible, it's right there. And I can leave it for three months and then come back to it and it hasn't moved. There's no change at all.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“Short term and long term needs. So we dealt with the short-term needs with a very quick grant to UJA Federation of New York. Some people were advocating that we should go and look for different organizations on the ground in Israel. And I didn't want to waste my time doing that. I felt that the federation had teams on the ground, they knew where the money was needed. They would be the best capital allocators for that. I'm actually going to Israel to take a look and get a better understanding of what the long-term needs are going to be. And I think those long-term needs are going to be focused primarily on the dislocated refugees within Israel who cannot right now go back to their homes in the south near Gaza or up north near Lebanon.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“We created a foundation in 1999, and the vast majority of the effort goes to Jewish education and dealing with Israel. This is going back to 2000, well before the current situation. And we spent a lot of time teaching people in the diaspora about the importance and centrality of Israel to their Jewish peoplehood. Obviously, after October 7th, there were immediate.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“Is a very complex and dangerous business. PGE has a nuclear reactor that would have to decommission. And like all utilities, PG&E is subject to cyber attack. So this guy was a dream director. And when his name came up, the California governor's representative said, quote, he's just another army guy. Not even they. They didn't read his resident, just another army guy that floored me. Personally, I have incredible respect for everyone who serves in our military and all branches of it. When you meet them personally, you realize the skill, the talent, the commitment, the brain power that they have. And to be so dismissive is just incredibly offensive. And I think reflects very poorly on the state and the laws themselves who were selected by the governor to represent them.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“In my life, did I imagine I would have to find 11 directors between April and May to change upcome June. We had two different firms working for us and we were actually reporting to the governor's lawyers at the time or the governor's lawyers were involved in the selection process. And we had some really good candidates. Needless to say, we had to be consistent with certain California DEI initiatives and that was fine. But what really sticks out is we had the resume of a retired Navy admiral who had commanded, I believe, a nuclear aircraft carrier or submarine. So he was nuclear certified. He was cybersecurity certified. And if anyone has ever been on nuclear sub or an aircraft carrier, the very complex, dangerous machines. So bringing that back to PG&A, running a utility.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“The subrogated claims of the insurance companies. And we settled with them for close to par. And then we put together a settlement with the campfire victims themselves, with their law firms and company pledged guilty. And this is right around COVID hitting March 2020. And the governor had insinuated his staff into the process and was very engaged in what we were doing and insisted that the entire board change after bankruptcy. Now, I don't know why the governor was picking on our board since we had just paid off everybody, but he insisted that everyone change. And some people on the board persuaded his representatives that getting rid of 14 directors is not the smartest thing. We had to keep at least three. I had the fortune of being chairman of the governance and nominating committee. And when I said yes,”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“There were some people I thought were my friends who had equity in PG&E right before it went bankrupt. They had persuaded that PG&E board that it had to be changed and they asked me if I would go on the board as one of several new directors. And I said, sure, it sounds interesting. I went on the board and it was a rude introduction to doing business in California. We had a very deep and detailed lesson that went on virtually every week for a few hours learning about the campfire where several people unfortunately were killed. And the reason for the PG&E liability for that fire, we came to the conclusion rather quickly that we had to settle trying to fight this in court would not be a winning opportunity. And we settled first with Bao Post, which made an absolutely brilliant investment by purchasing.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think the place to begin is about the quality of our membership. We're seeing investors come in from so many top institutions in finance, and that's a great signal about the fact that we have something tangible here. So really the key question is how do you solve for enduring performance and create broader access to that without the trade off that comes with scale? We see the answer really as being choice and solving for choice, and in that regard letting our members pick and choose what makes sense for them. That may be higher octane deals, it may be lower risk exposures, but everyone is different, and that's why our flexibility matters so much. Over the last ten or so years we've learned that not everyone opts into the same opportunities, so I'm not really concerned but having to scale up or bespoke our hearts.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's an interesting question for you to answer. I usually don't know what I'm going to wear to work the next day, so thinking about how a business will evolve over the years is a little bit of a challenge. Having said that, Mr.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think the main value driver of what we do resides in our discipline and focus. When you combine that focus with our institutional quality diligence and the opportunity to share our ideas with investment professionals and derive their intellectual capital and thoughts on those ideas that creates a rather dynamic investing situation. Many of our partners are in and of themselves very successful investment professionals, whether in real estate or handling. And they bring all that investment, expertise and experience when we're discussing an opportunity. Where do you hope to go?”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“Claim would be worth some dollar amount, college, somewhere between $5 and $10,000 per claimant. So the gain for the law firms was to go and collect as many claimants as they could. So we were able to make a loan to a law firm. And we were secured by the value of the claims that they were amassing. I think we had nine to one collateral coverage. And it generated a better than 20% return a year and a half. So I like those kinds of things because they're completely asymmetric. The law firm didn't care about paying us 20% because they were going to make so much money anyways.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well before today's digital age. So somebody had to figure out how to go and get the invoices and talk to the purchasing people about those trucks. But assuming that could happen, this presented a very interesting opportunity. And it would not be heavily exploited because it would have to be litigated in several different countries. So wouldn't have the immediacy that a lot of funds require. So that was fun. That was interesting to me. More recently, we've had success in some other domestic litigation finance where we don't bet really on having a slice of the equity, of the ultimate outcome. We would finance a law firm, for example, in the Boy Scout litigation. We knew there was going to be a settlement. It was going to be X billion dollars. And you knew there was somewhere between Y and Z number of claims and that each.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“One of the things that I really get excited about are private credit situations. So for example, a few years ago, someone came to us and described how the truck manufacturers in Europe had all signed a consent decree with the European Union, admitting that they had conspired to fix the price of certain types of trucks. And then these investors came and said, we're raising a small fund. We're doing it privately and we have a large hedge fund co-investing with us to go and find the claims of the truck purchasers who were hurt by that conspiracy. So I'm saying to myself, I have the opportunity to buy claims where liability is admitted. And I just have to prove damages. That sounds pretty interesting. Now, the risk there is the liability was incurred back in 2001 through 2000.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“Alignment is pretty clear. All the team members have a huge stake in the equity value of what we're doing. We're not taking cash out to pay big salaries or bonuses. We're taking the cash to build the team and to build research. And again, the key effort here is that we invest directly in the exact same things. We're not putting things out there to generate fees. We're not salesmen. And that should be obvious from hearing me speak.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“At this point, I would say no, but given my experience, I don't rule anything out. There are things I will rule out. We're not going to invest in China. We're not going to invest in the Far East. I'm not going to go to Latin America. Certainly not Russia. We will only invest in places where the rule of law is recognized. We will not invest in things where we don't claim to have any kind of expertise.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's a little early to tell right now, but I think we're seeing more incoming calls from people wanting to get exposure to us and asking us to look at things.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“private bank that can sell to their entire network. We're interested in our smaller opportunities. So in that respect, we're very different from the large institutional banks. Our members will derive the benefits from a community-based ecosystem flying will, high quality and well-bedded deal flow, and that will in turn attract more sophisticated clients. This increased purchasing power opens up new sourcing opportunities and the ability to hire more people to diligence better.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“Basically, except they do it on a pay as you go basis. They pay fees that vary depending on the particular investment. What has driven this in large part is that private markets are increasingly becoming a focal point for sophisticated investors and their portfolios. So these dynamics all combine to create an opportunity for portage to expand beyond its core families. We started tene to create a community of sophisticated investors who could curate their own alternative portfolios from our opportunities. We are seeing incredible enthusiasm from our membership in this because they are seeing opportunities that they would not get from JP Morgan or Citibank or Goldman Sachs. They have a different priority. They have to put items in their”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“We hired Travis Stevens, who was at business school at the time, and he did a market study and concluded that there were a bunch of other firms out there who were selling alternative investments using financial technology. Those firms had all raised a lot of money from venture capitalists, and none of them were investors. They were all techies. And the key difference from them to what we do is the quality of our investments were materially better. We had an institutional approach. We were focused. We diligent them on our own. And some people think this is highly relevant, but I personally invest in everything that we do. Travis Stevens then came and joined us full-time. Then we hired Jay Gregory to be our COO. And we built a customer service business. Tennys is a way for individuals to participate in the same investment.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“Several years ago we realized that the demand for what portage had been doing was growing, that demand was driven by the fact of shrinking opportunities in public markets with increased competition compounded by limited access to private markets, which is very resource intensive, to have a really diversified portfolio than I think it's clear, that alternatives or private investments have to be part of it. Our track record over the previous decade has been pretty strong, and we had de risked our thesis in many ways, so here we were, we had this great track record, and we had built up a very deep bench of talented investment partners. And the rebrand to Tennys was just a natural extension of what we had been doing for the previous decade or so.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, canoe's not the only business that seems to be coming out of your original family office activities, one that I've gotten involved with you over the last couple years, 10 East, and I'd love to hear the whole impetus behind it”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“In 20 different funds, and you get a quarterly letter from each one, and each has 10 data points, that's 200 data points that would typically be manually input. And if we could extract it automatically, that's something meaningful. So instead of doing something that was beneficial for me and tracking my investments, they decided they had something which is more of a business-to-business opportunity and completely shifted the direction of the firm. We spun it out, raised money for it on three separate occasions. The most recent was February 2023. The enterprise called Canoe Intelligence now has 140 employees, offices in New York and London, its customer bases comprised of blue chip banks, asset managers, administrators, and it's only getting better.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“So back in 2013, we'd begun to assemble a portfolio of alternative investments. If you own stocks and bonds, it's pretty easy to go to Goldman Sachs or Schwab and see what you own. If you own real estate and funds and venture capital opportunities and direct investments, there was no way to track those. So we hired an engineer and taught him about the investment business to track these investments. And he created a very nice monitor for us. In the course of doing that, he stumbled upon a way to extract all sorts of data from any type of document, whether it's a PDF, an email, a text message, or anything, and then he could spit back that data in any format you wanted. He could take the data and give it to me in an Excel format if that's what I wanted. It dawned on the people at the time that if you have invested,”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“Where people know that as something grows their responsibilities will grow, and they'll continue to be intellectually and professionally challenged down the road”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it's similar we look at how the firm in general does, and everyone's individual contribution is of course extremely relevant to how they are personally compensated, but it still has to be how the firm is done we take into account the way people work together, their personal contributions to the success, but at both Davidson and here I think one of the key elements to retaining talented people is to create a tableau where people have a sense that they will be doing something different and more challenging tomorrow than they are doing today. If somebody thinks they're going to be doing the same thing every day by rote, there's not much incentive to really wake up in the morning and dig your teeth into it, so I think you have to create opportunities.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“Me, it has to be shorter than what I'm given. I think, quite frankly, if somebody cannot communicate an intelligent investment idea in one page, they should go back and do it again. There's no reason, certainly for an intelligent executive summary, to be more than a page long. And I'm not talking about eight-point type with quarter inch margins. I think the write-up typically would have a one-page executive summary of who the sponsor is, how much capital they're looking for, what the opportunity set is, what the expected return is, what the downside is, and who the people are. And the subsequent pages would go into more detail about that.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“Think that as we expand and we're about to having more investment research skills would be helpful to dig deeper into some of the funds. Because when we do research, we're not just looking at their due diligence documents. We want to go into the companies they've invested in. We're interested in what the metrics are of those companies, how they're performing, what value add the firm is bringing to it. and whether they're marking it appropriately. So that's important for us as well.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“An example of a recent investment you made? We invested recently in a medical device fund where the guys came out of some large medical device companies. And as they explained it to us, their friends at the large device companies would say, we're looking for a new ankle. So they would go and find the three or four firms that are developing new ankles. They would choose the best one, try to take a controlling stake, build it up from X dollar revenues to Y dollar of revenues to make it of interest to the big guys. And then they'd sell it. So in some ways, it's like a retained search. They know exactly what they're looking for. They know who the end buyer is. So they can do it right. They're going to have this enterprise with all the I's dotted and T's crossed for FDA purposes and sell it to the big guys.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“We also always ask more about the mistakes they've made and what they've learned rather than their winners. If there's reluctance to discuss mistakes or what they've learned from them or what the lesson is, that's not really a good sign about their intellectual honesty or transparency. Of course, we also looked at whether our interests are aligned. Are they investing alongside us? And are the fees that they are taking out much greater than the capital investment they're actually making? And with respect to that capital investment, is it actually cash invested or are they just not taking their fees out? Finally, there's something having to do with misleading marketing information or they cherry picking data are there graphs and charts skewed so as to obfuscate what really happened. And the last thing would be any inconsistency.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“There's about five or six things that are really important to understand whether something's a no-go. First off, if we're looking at a sponsor and there's two partners and they've never worked together before, that's something I'm always apprehensive about. I think that one of them will not be there in six months, and I don't want that institutional risk. Along the same vein, when there are two partners who are co chiefs, who's the ultimate decision maker? If in meeting them there's not a clear answer to that, that's a red flag.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“track with a performance that they had underwritten, if not why not, if so, why is it doing as well or better than expected? If there is a problem, how are they working on it? How are they working it out? It's mostly when there's a problem that we get really involved and start pushing the sponsor to force a resolution.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“South Carolina It all drives down to who's bringing the idea and what's the nature of the thesis behind it. If we can get comfortable with those two things, then I will often do a test transaction with the sponsor to validate how they work and how we work with them, is that reporting good are they responsive to our questions? Do they talk to us? You would be surprised at the number of sponsors who once they get your money as investor don't really want to pick up the phone, and we would be remiss to put our investors and our partners in a situation where a sponsor doesn't want to speak with us. Once the investment is made, there's ongoing work in monitoring it that requires quarterly calls or biannual calls with the sponsor, following up on the performance does the performance that's being reported”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“The diligence comes In several very interesting aspects first you must diligence the sponsor who's bringing the idea to you. You want it to background checks on them, validate their honesty, their integrity, their transparency. You want to get a sense of whether they are good investors. What's the quality of their diligence? And to do this the team meets with the sponsor several times, and before we actually make an investment, I have a face to face meeting with them. Then we would also diligence the specifics of the idea, the thesis of the idea. Is it something that makes sense to us? Is it in a geographic area that we understand? So if somebody brings us an opportunity in Spain, I'm less likely to jump on it than if somebody brings us an opportunity to redevelop garden apartments.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“Are your favorite types of investments Someone who's an uneconomic seller and something that interests me. So when banks are selling because the regulators tell them they have to get stuff off their balance sheets, that's heaven. They have to sell, so they're going to take a price. And I really like that kind of opportunity, whether it's banks or fund selling. We're going to see opportunities where venture capital and private equity funds are winding down. They're at their 10-year limit. Maybe they can get another year. They're going to have to sell things. So hopefully we can be in a position to take advantage of that. How do you conduct diligence when you're on your own?”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“Onshoring of production and manufacturing, logistics and multifamily real estate. Every time we extend our tentacles into something new, we do it very gradually, we take baby steps to make sure we understand the area and gradually get more aggressive. The fundamental strategy is to bring institutional quality diligence to mid market opportunities where we believe we can generate outsized returns. Over the last twelve years, I guess that has proved to be the case.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“Over time we had some other investors come into the fold, and they were pretty shrewd guys who liked our model, who had all made money on their own in the markets. Each of these individuals added significant value to us, and we call them partners. Today we have a thesis driven focus on capacity constrained niche exposures across all sorts of private markets. We opportunistically invest across all sectors, vehicles, but it is usually under a particular theme that unifies the investment. Some of these themes we have focused on in the past, for example, would be cyber security,”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“To create a vehicle for finding those investment opportunities I started what originated as my family office. It was called Portage Partners. The original idea was to create a nimble vehicle that could compound my personal capital through cycles. I wanted to be diversified, I wanted to be flexible. So when we look at the private markets, some of the large investors are geared to certain strategies that incentivize them to write huge tickets irrespective of the market environment. In a way that's indiscriminate capital deployment, which is really a big no no in investing, it's something to avoid.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“I began to look at ways to my own portfolio, and I began to think about where could I find inefficiencies, where would there be room to create an edge, and by that I mean a serious edge, and that arena was obviously in the private markets. In those markets we see mispricing and information asymmetry. Now, of course, you have to be on the right side of that, and that's something we spend a lot of time trying to assure we are.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“And you'd had some success, you now have your own balance sheet. How did you think about investing your capital on your own?”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“So I discussed with my partners, they had asked me to stay on for a year beyond my original target to make for an orderly transition. And it went very smoothly, I'm happy to say. And it gave me the opportunity to spend more time with my children, to really delve into some reading that I had not focused on for years, and to develop my philanthropy in a more meaningful way. The biggest concern I had when I decided to step back was intellectual engagement. And affirm like Davidson, I don't know how many people we had there at the time, probably 100 or so. And each one of them was incredibly smart and talented. They kept each other and beyond my toes. And I knew that if I step back, I would have to replicate that somehow because I didn't want to go and play golf six days a week. Once you stepped away,”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“There were two things. First is a year or two before I retired, a very good friend of mine was taking the train from Westchester County to New York to the city. He got to Grand Central Terminal, felt pain in his left chest, got back on the train, went back to White Plains, and was rushed to the hospital with a heart attack. And that just reinforced from me that life changes on a dime. And what is the good of having a fair measure of success and not having the time to really enjoy it and use it when things can just turn on you right away? So that was part of it. Another part of it was I wanted to have more control over my time. There were other things I was interested in doing. And if you're in a partnership, I believe you have to be 100% in or not there. And if you're not 100% in, you're not doing your partners a favor and you're not doing yourself a favor.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“Key element is something I said earlier, which is can we extend our core skill set into something different? So I think having been a credit guy for many years, more recently we decided to do some venture. That was not a natural extension of the skill sets. We had to think carefully about how we're going to do that. But to go from understanding balance sheets and credit to trying to identify direct investment opportunities, it's a similar skill that you're using.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“Bit of a juxtaposition of two things you said. One is this idea of looking for the next opportunity. And then the other is sticking to what you know. How did you decide over the years what were appropriate things to move into that you hadn't been doing and which ones you wanted to avoid?”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think just having to go up and explain an investment idea repeatedly is a way of coaching. It's not overt coaching, but it's a way of coaching. Tell me what you think. Tell me why you think it, why we should do it, how much capital we should commit, then do it again. Over time, you get to really know whether you have a good idea or not. The other big coaching thing here is never rush. When somebody is rushing you to make a decision, back then it was enough to say I'm not doing it. And to this day, I won't do it. If somebody's rushing me that you have to act now on a new idea, San Roman was tomorrow, forget about it. I'm not that interested. There's millions of investment ideas out there.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“DK just celebrated its 40th year. I think the key element there is hiring the right people, coaching them in the right way. There's a way of thinking about things. There's a way of being disciplined in what you do, of being focused in what you do, being honest, transparent, logical. It's bad news first. Don't try to hide it. It's always going to come out. Accept it. Accepting responsibility for your actions and moving forward. There was not much second guessing when something went wrong. It's what lesson can I learn from this? There's always tomorrow.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source
“What was M.H. Davidson became Davidson Kempner and has been one of the longest standing funds through a few iterations of succession and What you saw in the dynamics of the organization that allowed it to continue to succeed as long as it has.”
2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source