YouSaid · the spoken record

Michael Leffell

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72
first
2024-03-11
most recent
2024-03-11
sittings or episodes
1
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podcast

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  1. “Investment opportunity. The third thing would be always commit things to writing. That was one of the early disciplines we took on because having something in writing creates accountability. There's no, he said she said. The analyst has committed something. You know what was said and when it was said. And if it proves out correct, great. If it proves out wrong, there's a lesson to be learned. And the final thing, I think, is to always take advantage of uncorrelated opportunities. So when you had the savings and loan crisis, banks became forced sellers of debt for regulatory reasons. They often didn't care what the price was. They had to get it off their books. We were the beneficiaries of that. We saw a similar situation recently when Silicon Valley Bank and Signature Bank went bust and the FDIC took over their books. The FDIC was selling it. They were giving it away at very, very administrative.”

    2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “The first thing is always look for an advantage. What kind of edge can you get in something? So in the early years, we would have someone stationed at the SEC. And when a company we were following filed something, this person or company would take it and fax it back to us. And we had those rolls of fax paper that if you didn't read it quickly enough, the print would disappear. You can't get that edge anymore. Information is too quick and too free flowing. But that was a lawful edge we could get. So that's number one. The second thing was to always react to dynamics. When something changes, whether it is the legal background, the business itself, the personnel involved or delays, something is going on. So be sensitive to that and try to figure out what. Don't just pass it off and go on to the next.”

    2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “I think back then there's probably more opportunities in capital chasing it. It was a club of people. There were people you'd want to invest alongside. And there were people you would avoid. So there were some investors that I would never want to go into a transaction with. There were some types of companies or industries I'd never want to go into a transaction with. I was never really fond of gambling businesses because of issues about the licenses. We were very fond of utilities because it would always be needed.”

    2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “But the lesson there was we were completely focused on what we were doing. We were buying senior and secure debt in bankrupt and troubled companies. The bankruptcy laws at the time entitled us to collect interest, either current or to accrue it. And if our analysis was correct, there was relatively modest risk of losing capital. The point there was to take those fundamental skills and gradually extend them into other areas. We weren't going off on adventures. We weren't going off in tangents. We were taking baby steps one at a time to extend what we did into newer areas.”

    2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “He would call you up to his office several times for the proponent of an investment to explain it. And you'd go over it and over it and over it. And he'd pick up any difference in the presentation and question you about it. So to try to explain to somebody that you were buying an unfunded revolver at 50 cents on the dollar and the seller is going to give you 50 cents. So if we're ever unfunded, you just pocketed 50 cents was pretty entertaining. And we ended up doing it.”

    2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “So that would have been 1988 that I went there. And shortly thereafter, Drexel started to go bankrupt. And then we had the savings and loan crisis. So that created a bunch of unforced sellers of bank debt and bonds. So the first big opportunity we really transacted in that was new was buying bank debt. And Bank Debt did not historically trade. So these were one-off transactions. It was pretty much a small group of banks and funds that were doing and I think Gold and Sachs, Oppenheimer& Company, Lehman Brothers, Bear Stearns, we were there, Randy Smith was there, maybe Chuck Davidson was playing around at Steinhardt Partners a little bit. So we started buying bank debt. And then the real entertainment came and we had the opportunity to buy an unfunded revolver. Marvin had this thing.”

    2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “We had $20 million under management. I think I was the fifth professional and it was Tommy, Marvin, Steve, Scott, and then myself. They were doing merger arbitrage. And Tommy was going to start doing some credit stuff, investing in distress and bankrupt companies. I started there and I was given a telephone and a quotron machine, not even a computer. The first assignment that Tommy asked me to do was to model out the five-year financials for the public service company of New Hampshire, which was then in bankruptcy because of the Seabrook nuclear reactor. And I modeled it out with a Hewlett-Packard 19B2 and an accounting ledger. And the amazing lesson from that is when I look at a spreadsheet today, I actually understand what each cell means.”

    2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “The first step was not enjoying being a litigator. I found it not very rewarding and the hours were brutal. By matter of serendipity, I was introduced to Marvin Davidson, who was running M.H. Davidson and company at the time. I was told it was a hedge fund. I had no idea what a hedge fund was. I met Marvin and spent 45 minutes talking to him on the parlor level of a brownstone on East 63rd Street. And he said they were interested in hiring somebody to invest in the financial instruments of distressed and troubled companies. I said, okay, that sounds interesting. And as I was leaving, he said, make sure to introduce yourself to Tommy. Tom Keller, and don't let the grass grow under your feet. I met Tommy, we spoke. They guaranteed me the same salary I'd have made as a lawyer. We shook hands and that was it.”

    2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “After college, I went to law school. I got a job at a law firm. It was interesting because I had interned for a smallish firm after my second year. I would continue to work there during my third year. And toward the end of that year, probably in late April, the firm announced that they were bringing in a lateral litigator to run the litigation department. By that time, I had accepted an offer from them to return after graduation as a litigator. I went and introduced myself to this gentleman and he said, well, show me a resume. I'll see if we have room for you. So here I am about to graduate from law school, studying for finals at the worry about the bar exam, and I quickly decided I had to go find a job as well. So I had a plateful that month and I ended up finding a job with a firm called K-Sholler.”

    2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “Quite frankly. Although something must have triggered an interest in history for me, because as soon as I was ready to go off to college, it's the only thing I had interest in studying.”

    2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “Lot of politics, literature, history, things we were studying in school, I wouldn't say necessarily heavy, but topics of interest, and we'd have a constant stream of guests coming through the house who were guest lecturers. So there'd be people coming to discuss recent archaeological digs in Jerusalem. This would be late 60s and early 70s when Israel was still pretty young. And it was a different situation in society than it has become. We'd have chancellors of universities come and tell us what was going on in their schools. So it was a pretty dynamic environment. And as the youngest of four, I tended to listen more than speak.”

    2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “Certainly by 1976 and 1977, that if French was not your native language, your So my brothers all went to university in the United States, as did I. And the transition going to the states from Canada was not that difficult. And quite frankly, coming from a day school, I was a little surprised that the light course load I had at university seemed easy at the time. Any conversations that we had at the table, aside from the Montreal Canadians or Montreal Expos, focused on ideas. There was not much discussion about gossip or people. It was idea drone.”

    2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “God, thanks so much for joining me. That's a great pleasure. Thank you for having me. Why don't you take me all the way back to your upbringing? That's going back quite a ways. I grew up in Montreal. My father was a congregational rabbi growing up in Quebec in the 60s and 70s was interesting, highlighted particularly by what's going on today since there was pretty significant anti-Semitism from the Roman Catholic Church at the time. That wasn't a driving factor for us. In the late 60s and early 70s, the separatist party began to emerge in Quebec, which wanted to separate Quebec from the rest of Canada. At one time, that resulted in some terrorist kidnappings and the imposition by Prime Minister Pierre Trudeau of the martial law in Montreal and Quebec. So at a time there were tanks and soldiers stationed all over Montreal. In any event, it became obvious.”

    2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “Allocators. And by the way, so as not to gloss over the real issues of diversity, we featured women on 72 of the 477 release shows on our platform where 15% of the total. It's not a high number, but my hunches, it's in line or above the industry representation. And with that, please enjoy my conversation with Michael Laf”

    2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “And you might have noticed an unusual trend. Three of the last four Monday guests are all named Michael, and all four subjects are Michael's. First Mobison, then two on Milken, and now Lafelle. All three legends in the business, all three with incredible experience and wisdom to share, and all three with the first name in common. We all recognize there's a diversity issue in the industry, and usually that refers to a lack of women. And we also think about ethnic and racial diversity. But this might be the first time we've suffered a lack of cognitive diversity across similar-minded parents when it came time to signing their children's birth certificates. In other words, it's not that kind of diversity issue. We typically release our shows in the order we record so this scheduling falls completely on May. Thanks so much for spreading the word about the abundance of Michael's on capital.”

    2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “Our conversation covers Michael's professional investment career, personal investing following his retirement, and businesses created from those activities. And a little disclaimers in order. I've known Michael for about a decade, and after becoming impressed by the quality of ten-east offerings, its research process, and high-quality investment team, I became an advisor to the organization and an investor in multiple offerings. Before we get going, I doubt you remember the 1996 movie starring John Travolta called Michael. His characters and archangels sent to Earth to mend wounded hearts. I don't remember much about the movie, nor should you, as I don't think it was all that great, but I do remember one line when Trivoltus questioned about his angelic status while smoking a cigarette. He replies, I'm not that kind of angel. Now we've had a particularly good run of guests on the show of late.”

    2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “Guest on today's show is Michael Lafelle, the managing member of Portage Partners, Chairman of Canoe Intelligence, and founder and chairman of Ten East, an investment platform for sophisticated investors to access private markets by co-investing alongside Michael and his team. Michael was former deputy executive managing member of Davidson Kempner, where he spent 21 years before retiring in 2010. He formed a family office shortly thereafter and developed portage, canoe, and ten east out of his investing activities.”

    2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “Hello, I'm Ted Sides, and this is Capital Allocators. This show is an open exploration of the people and process behind capital allocation through conversations with leaders in the money game, we learn how these holders of the keys to the kingdom allocate their time and their capital. You can join our mailing list and access premium content at capital allocators.com.”

    2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source

  19. “Capital out hitters is also brought to you by admired leadership. Back in April on episode 497, I sat down with Randall Studman, the executive coach behind admired leadership, who advised more than 500 CEOs, including some of the most respected names in asset management. Randall introduced me to Alex, an AI leadership coach's team built on 40 years of proprietary research into what the best leaders actually do. For investment professionals, that means your entire team gets on-demand coaching grounded in the behaviors that drive results, and build the kind of followership that retains your top talent. We use Alex and our team at Capital Allocators swears by it. Try Alex for yourself at the link in our show notes. Try Alex. Leadership.com.”

    2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source

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    2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source

  21. “To an exact verifiable source because the answer is only as good as what's underneath it, and without the sense you know exactly what that is. See it for yourself. Try a free trial at alpha-sense.com slash capital. That's alphacense.com with a hyphen in the middle slash capital.”

    2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source

  22. “Capital allocators is brought to you by AlphaCents. Here's something for you. Most AI tools today are very good at sounding right. But can you actually trace it back to a filing, transcript, or specific passage that drove the answer? Or are you just trusting the confidence of the output? For allocators, that's not a minor concern. A missed filing, incorrect source, or context that gets lost somewhere in a retrieval chain aren't edge cases. They're how decisions go wrong. AlphaSense is the AI platform built specifically for this. They own the content over 500 million curated documents from broker research and expert transcripts to filings and earnings calls. And they own the retrieval layer on top of it. That means every answer can link back”

    2024-03-11 · Capital Allocators · Michael Leffell – Opening Doors to Niche Private Opportunities at 10 East (EP.373) · IDENTIFIED FROM THE TRANSCRIPT · source