YouSaid · the spoken record

Michael Weisz

lines on the record: 67
first: 2021-07-25
most recent: 2021-07-25
sittings or episodes: 1
sources: podcast

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“We're generally taking a management fee on the asset center management. That's generally our model. But if you go to any particular investment, you'll see specifically exactly the fees by that investment.”
2021-07-25 · We Study Billionaires · TIP364: How to Invest in Alternative Assets w/ Michael Weisz · IDENTIFIED FROM THE TRANSCRIPT
“So that's a great question. For us across the board, the way we think about Yolt Street is not about building a digital hedge fund, but it's about connecting what we believe are some really great opportunities and great managers to a larger audience of people who are seeking to invest. And so the difference is instead of us going out and finding Sally who got injured and trying to get 500 of them to put in a deal, we look for some of the leading consumer litigation finance companies and say, hey, here's our criteria. Here's what we care about. Here's the risk profile. You're going to have to go through a rigorous approval process. But if you could deliver this, we're going to fund it. And then we sit with about 300 plus million dollars of access.”
2021-07-25 · We Study Billionaires · TIP364: How to Invest in Alternative Assets w/ Michael Weisz · IDENTIFIED FROM THE TRANSCRIPT
“And the city of New York has 90 days to pay them from the settlement. And so at that point, you're really simply taking New York City credit risk for 90 days. The person, it's pre-holidays. They want to get, you know, they settle their big case for 10 million. They want to get 2 million now for whatever reasons. So yeah, you would invest in a single offering there with a pretty low risk, probably make around, you know, eight, nine percent. And you'd feel really good about it. In between is like the single cases, the company cases where you want to put together like a portfolio of maybe 10, 20 claims from different companies so that you have some diversification, but you still have some upside. Maybe you want to try to achieve high teens, low 20s type of returns on a portfolio basis. And so you'll see those different types of offerings available. You'll see a legal finance fund. You'll see a consumer fund. You'll see a single case settled fund. And so there's different types of products that we curate to help people access a nice healthy portfolio across the litigation spectrum.”
2021-07-25 · We Study Billionaires · TIP364: How to Invest in Alternative Assets w/ Michael Weisz · IDENTIFIED FROM THE TRANSCRIPT
“Each product that we went through poses in many ways a different level of risk. So let's go with the highest risk. The one that we spoke about where there's like an individual who got hurt and needs to borrow money, like the outcome there is very binary. It's one person, it's one case. And so the way we have historically offered those is by aggregating like hundreds of those examples into one fund. And so like the average funding, and don't quote me because I haven't looked at it in a while, but I think the average funding was like $47,000, $4,800 to a person in that situation. And so you'll have five, six, seven hundred of those opportunities in a particular fund. And so your risk of loss is really attractive because you're highly diversified and historically, I think by now you probably have almost 20 years of data since this business started that you can really understand how you're going to perform. So that's like a portfolio. The other side of the risk is like settled case financing. So a person settles their case.”
2021-07-25 · We Study Billionaires · TIP364: How to Invest in Alternative Assets w/ Michael Weisz · IDENTIFIED FROM THE TRANSCRIPT
“Big in the news for a while. There were all these different cases all around the world where merchants wanted to get some money back from Misa and MasterCard. So there's an opportunity to buy those claims at scale. There's many different ways that you could participate in sort of litigation risk that has really evolved into being an asset class in and of its own. And because in some ways it's new and there's less capital chasing it than there is maybe in real estate, the return profiles continue to be really interesting. And so that's what we brought to market for the first time really to retail investors.”
2021-07-25 · We Study Billionaires · TIP364: How to Invest in Alternative Assets w/ Michael Weisz · IDENTIFIED FROM THE TRANSCRIPT
“At different times. That's number one. Number two is the individual that that lawyer is representing. So if God forbid someone you know got hit by a car, he or she is out of work. They can't get paid. They can't function, et cetera, they need some cash flow. And so it's hard for them to go to a bank and borrow it because they don't have any assets. And most people would say, well, hey, your lawsuit's not like an asset. How do we value it? Like we're not going to lend against you. So that's the second. The third is a company. So a company says, my partner and I have a dispute. And, you know, I think this lawsuit's worth $50 million. I need to borrow five to pay my lawyers. I need a borrow to live. I need a borrow to grow my business, whatever the case is. Essentially, do you want to help me bring my case forward and ultimately get to that resolution? And the fourth is settlements or judgments or sort of different types of situations like that where you could think about visa mastercard cases.”
2021-07-25 · We Study Billionaires · TIP364: How to Invest in Alternative Assets w/ Michael Weisz · IDENTIFIED FROM THE TRANSCRIPT
“Fun fact, I was one of the first people in the US to really institutionally invest in litigation finance starting back in probably around 2009, I think it was like maybe three or four of us institutionally who are out there. And so I have a long and passionate history in putting out nearly a billion dollars in litigation finance. There are different types of ways to invest in the legal industry. And I'll give you a couple of them high level. So one is there are contingency law firms, which essentially are law firms that take on cases and the way they would get paid is based on the success that they have. So they can try a case for 10 years, a person got hit by a car and make no money until they get a settlement for a client. So that's number one. In those situations, these people need to find a way to manage the cash flow of their law firms because otherwise they're going to run out of money if they take on too many cases and they can't manage.”
2021-07-25 · We Study Billionaires · TIP364: How to Invest in Alternative Assets w/ Michael Weisz · IDENTIFIED FROM THE TRANSCRIPT
“Make sure that, hey, these aren't like two Pine Sky founders. They actually have a deep understanding of our needs, of our business, of the finance side, of the risk side of the investment side. And they're building this thing for the right reasons. And so I think that when you look back at our partnership with Melinda and I, my background is really all on the investment side. And Melinda's background is more on, hey, how do I use technology and data to solve huge problems? And so when you put the two of us together, it became a really, really powerful duo to go to both sides and say, we understand, we know, we're doing it for the right reasons, but more importantly, like here's exactly how we're going to get there.”
2021-07-25 · We Study Billionaires · TIP364: How to Invest in Alternative Assets w/ Michael Weisz · IDENTIFIED FROM THE TRANSCRIPT
“Was it as easy as that? I would say it was probably the exact converse outcome, right? So, yeah, it was definitely not easy. Nothing is, but I think that's the joy you take and the fun you take. I think the key is you got to keep your head buried and just focus on your goal. And then one day you wake up and you realize how hard you had to fight through it. And so I think that it's about building trust and credibility both with your partners on the origination side and your customers on the investor side. That's really at the essence of how you want to interact with any company. And even more so in an organization like Yield Street that's driving, how do I take dollars from your pocket to put into investments? And so what we needed to do was establish a level of trust with both sides of the house. And we had to be able to show that we're going to execute and that we had a force behind us and that we're prepared to do it. I think that was one. Two is on the origination side of the business, people wanted to say to make”
2021-07-25 · We Study Billionaires · TIP364: How to Invest in Alternative Assets w/ Michael Weisz · IDENTIFIED FROM THE TRANSCRIPT
“Small business financing. We took a theme on like rebuilding America coming out of COVID. Like, how do we support those small businesses? And third-party hedge funds.”
2021-07-25 · We Study Billionaires · TIP364: How to Invest in Alternative Assets w/ Michael Weisz · IDENTIFIED FROM THE TRANSCRIPT
“That's a great conversation around hey, how do you take a dream and a vision and build a business? And it's about execution. It's about sort of allowing your mind on one side to think outside the system, outside your own limitations that you've created, to like envision and imagine something huge, but then go back into your corner and say, okay, let's start to execute. And so how that started for us was in two sectors. It was in real estate and it was in legal finance. And there were two areas that we knew we had expertise in. that we felt comfortable we could generate significant origination and volume in and we could deliver strong returns and a total experience to the investors and so that's where we started since then we've distributed almost 2 billion dollars of investments across asset classes like real estate single family rentals we bought the largest art finance business from Carlisle to fractionalized like art lending shipping legal finance consumer finance”
2021-07-25 · We Study Billionaires · TIP364: How to Invest in Alternative Assets w/ Michael Weisz · IDENTIFIED FROM THE TRANSCRIPT
“By helping you make money, is by driving value to your pocket. It's by saying, hey, the first leg we're going to focus on is the invest leg. Let's get the right investments. Let's get the right acclets. Let's get into curated and institutional quality investments and bring them to millions of people and change the trajectory of their financial future. And that's sort of how we got to where we are in thinking through how you build that business.”
2021-07-25 · We Study Billionaires · TIP364: How to Invest in Alternative Assets w/ Michael Weisz · IDENTIFIED FROM THE TRANSCRIPT
“Like no one's taking us out for dinner for 10 grand. And so the question became, how do we solve for this? Like there's a much bigger thing going on here. Now, looking from a different lens, we're watching this massive shift, a generational shift of wealth from baby boomers to the next generation. And you have to question like, do we behave the same way our parents do? Like, do I want to go out golfing with a financial advisor? emphatically no like i'm not interested i don't want to do that So the experience that I want to have with my money and the investments that I want to be able to access are fundamentally different than what the industry has been doing for all too long. And so Yill Street's question that we started with in 2015 and that we ultimately want to solve for is what is that experience going to look like? How do we create the like billionaire digital private bank experience and deliver that to the masses through technology? The first step”
2021-07-25 · We Study Billionaires · TIP364: How to Invest in Alternative Assets w/ Michael Weisz · IDENTIFIED FROM THE TRANSCRIPT
“Why are they doing it? It's because the 6040 model is broken. Bonds, debt yields are in the ground. You're not generating your fixed income allocation that our parents taught us to or that our school taught us to. Equities are highly volatile. It's a totally different experience. There are less companies public. So that 60-40 mile that we were used to isn't working. And so we need a modernize our portfolios. Smart money got there first and it's time for us to really wake up and say like, hey, how do I get ahead? I'm living longer. I'm trying to have more of a better quality of life. Like where does the rubber meet the road? How am I going to be able to generate enough income and growth to support that? Okay, so now I'm Michael. I'm ready to go in. I want to follow the Alts movement. Okay, how do I get it? You couldn't, right? So there were structural limitations to accessing these investments. If you wanted to invest, say, in a partnership that was buying $100 million piece of property or a company, like where are you putting your $10,000?”
2021-07-25 · We Study Billionaires · TIP364: How to Invest in Alternative Assets w/ Michael Weisz · IDENTIFIED FROM THE TRANSCRIPT
“So listen, let's zoom out, right? Why are we building Yill Street? Our mission is to help millions of people get on the road to financial independence. And the reason we're doing that is because, like I just mentioned, that access to and distribution of all is broken. Why is that important? Like what's really behind it? So let's look at a couple of things going on in the market. One, if you follow smart money, so you look at endowments and pensions, et cetera, they have up to 60% of their allocation in alts. You look at retail investors, we're still at about 6%. And so you need to look in the mirror and allow yourself to be vulnerable and say, hold up. So you got smart money paid the most, has the biggest pocket of cash, like smart people targeting real returns. Where are they going? Wait, they're moving this much of their portfolio into all it's why and wait why am I not following them? And so that triggers an initial question that's really important. When you really understand it, there's two parts to the answer. One is why are they doing it and two, why can I?”
2021-07-25 · We Study Billionaires · TIP364: How to Invest in Alternative Assets w/ Michael Weisz · IDENTIFIED FROM THE TRANSCRIPT
“Think you got to really take a step back and you got to say, hey, what are you trying to achieve? Why is it important? What are the bigger tailwinds in the market that are sort of driving this idea, right? And I think that's really the right lens to look at what we do through. Because as a business and as an early stage high growth business, we're rapidly evolving. And so our conversation today can be different in six months or in a year if you don't understand what's really under the hood and what we're doing and why. So if you want, you know, happy to jump into a bigger story. It's not a sort of drive back in.”
2021-07-25 · We Study Billionaires · TIP364: How to Invest in Alternative Assets w/ Michael Weisz · IDENTIFIED FROM THE TRANSCRIPT
“It's a great question. So, listen, I have a personal story as very much behind the founding of Yale Street that I don't lose sight of. And I think it's important to. And so I feel the same is for my co-founder, Melinde. We really both went on this journey to build Yield Street because we felt that there was the same problem coming from our own experiences, right? And what it really comes down to is that access to and distribution of institutional quality alternatives is fundamentally broken. And the reason that was important to us is because we couldn't access them and our families and friends couldn't access the right investment portfolio. And so you can't get ahead in life. And so what we got really passionate about was, hey, if we could fractionalize access to institutional quality investments, then we can help narrow the income and opportunity gap.”
2021-07-25 · We Study Billionaires · TIP364: How to Invest in Alternative Assets w/ Michael Weisz · IDENTIFIED FROM THE TRANSCRIPT