YouSaid · the spoken record

Tony Yoseloff

lines on the record: 85
first: 2025-04-11
most recent: 2025-04-11
sittings or episodes: 1
sources: podcast

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“To be successful in your career, there's very few people who can do everything as an investor and be successful. But as you go narrow, like don't lose sight of other asset classes and what's going on in the world because you can get blinded to bigger trends if you do that.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, you know, look, when you start a career in investing, I think by definition, you start pretty broad and then you get narrower and narrower. Like you start with the premise that you want to invest and then you ultimately find a firm and the firm usually has you in a strategy. And if you do a good job, you'll learn that strategy cold over a longer period of time. And what I'd say today, and this is also colored by my experience on investment committees, but it's also just being a Davidson Kempner, is that investing is a very broad universe. Things are interlinked. So for example, if you don't know what's going on with technology investing, you may not understand what's going on with opportunistic credit, even though there are different things and you need different expertise to do well in each of them. And so it was something I didn't really think about early in my career. I started broad and then I got really narrow and I've probably gotten broader as both I've gotten more senior and I've gotten more different types of experience in the investing world in general. But to some degree, you should always stay abroad even if you're going narrow. So you're going to have to go narrow.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“I'll definitely check it out. I think both pieces of advice would apply to both. So I'll share too. The first of which is I'm going to share advice I got from a law professor I had of mine named John Quigley who had been at Nassau Capitol, which was Princeton's in-house private equity organization in the 1990s. So he was my professor in law school when I was considering going to work at Davidson Kepner. What he said to me was the best way to learn how to invest is to actually invest. And so if you get a chance to go into an investment firm, take it. Don't worry about not having the training for it. Don't worry about having to do other things first. You know, I was torn early in my career. Do I go work on the sell side first and learn some stuff before I go into investing? And it was great advice. I mean, you know, we do hire a handful of people at a college every year at DK. And I think it's super great.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“It's actually not the intelligent investor by Ben Graham. It's obviously a great book, but it's books like extraordinary popular delusions and the madness of crowds by Charles McKay or Reminiscences of a stock market operator by Edwin Lefebvre, which was a pseudonym for Jesse Livermore, who was a famous trader in the 1920s and 1930s, or where the customers yachts by Fred Swed. Very early in my career, that's how I learned even before I started at DK. That's how I learned was reading these books. And so even though they're books, maybe I haven't read in a little while, like they're all classics I still readily recommend.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“I'll start with the ones I'm reading right now, and then maybe I'll talk about some of the ones historically that I've quite enjoyed. So I'm rereading only the paranoid survived by Andy Grove. So, you know, I mentioned earlier that I think our business in general is at a strategic inflection point in terms of what's going on in alternative asset management. One of the main things he speaks about in that book is strategic inflection points and businesses and how you deal with that. I'm also part of the way through a book called Gambling Man, which is about Masayoshi Sun, written by Lionel Barber. And that's a book where he's a fascinating character. I think a lot of people know about the last 10 or 15 years of Masa's career. I don't think that many people know about how he got there all the times he had near misses with the whole thing could have blown up or things along those lines. So that's very interesting to me. You know, early in my investing career, there were a number of books that are classics that I...”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, because it's a sprint, right? So you're sprinting for two laps, right? But I had some great track coaches along the way that really helped me out as well. You know, I mentioned earlier that we had this amazing civics program at East Brunswick High School with this legendary teacher named John Calamano, who's super helpful for me in that as well. And then in the working world, you know, I was very fortunate. I learned a lot from both Tom and Marvin. They had very different styles and how they did things. But I also found people out there whose investing style I admired. And I would try to figure out what they were doing and reverse engineer it. And so that's super helpful. I mean, some of that you can do just by reading, but there's other portions of it, like when you see the trades and you see the investments and like you're involved in them and you see how someone did it better and then you can figure out after the fact like what you could do next time better like I just found that like super helpful it's I'm a little bit further removed from that today so it's probably a little bit harder for me to do that but that's some of the ways I really taught myself”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, you know, I go back further than the obvious Tom and Marvin in terms of starting. I mean, first of all, I'm very fortunate to come from a family where I had a few mentors as well. We had a family business, which was started and founded by my grandfather, and my father ultimately ran. It was book publishing. And like I mentioned before, I come from a family of book publishers and academics. And so it was good to sort of learn over the dinner table when I was a kid what was working and what wasn't working. My mother was very into volunteer work when I was younger and when I was 13, she said, you don't need me anymore. I'm going to go back to work and had a 25-year career as a senior administrator at our local community college. So that was very influential on me as well. Growing up, you know, I ran track both in high school and in college. What'd you run? I ran like half mile across country. The worst.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“So Gilded Age is an HBO show, and it's basically about life in the 1880s and 1890s, so hence the Gilded Age of the United States. And there are characters that are based on Cornelius Vanderbilt or Jay Gould or some of the leading lights of the era. It's always an era I found it very historically fascinating. And I think they've done a great job with the show. It's a great period piece. I mean, if you look around, there's more buildings left here or Newport or Albany from that era than you would think. So they've done a very good job of integrating a CGI with some of the older historic buildings.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“So, you know, I don't watch a lot of streamed content because I find when I'm at home, I want to veg. And so the good ways to do that are either watching sports or watching the news. Honestly, news is less good for vegging than sports probably. Two things I am looking forward to, though, are season three of White Lotus, which is just in the process of being out. And season three of Gilded Age, which I believe is going to come out this fall.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“It's well tried. Someone asked me, so I asked Tom Kepner. I said, Tom, is it true that David Swenson invented the term out?”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“Markets become efficient over time and things that David or Andy were doing that were completely visionary in 1980s and 1990s today are commonplace.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I mean, without maybe speaking specifically about what's going on underneath the hood at Princeton, I'll just repeat a couple of things that have been out there in the public market. So first of all, we had our longtime CIO, Andy Golden, retire during the middle of 2024. Andy was a decipher of David Swenson and worked for him for a few years earlier in his career, had a spectacular, almost 30-year running Princo. And he's been replaced by a brand new CIO, Vince Tuey, who came from MIT and had a very long career there. MIT has been among the best performing endowments as well. And the head of its endowment, Seth Alexander, is also a disciple of David Swenson. The second thing, which was came out in our recent presidents letter, which he publishes annually, is that you do have to look that endowment returns have come down over long periods of time. And that's nothing to do with Princeton or Yale or any of these august institutions. It has to do with what I mentioned earlier. Capital chases returns.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“things along those lines. And so it's been a fantastic experience and a good way to give back. But when you're at a smaller endowment, I don't view two billion as small in the real world. But when you're at a smaller endowment, you have to think about things differently. You're going to have less staffing. You can cover less number of managers, your institution's needs with respect to your cash flow might be different than a larger institution. You have to put each of them in framework in terms of what you're trying to achieve. And you have to make sure there's buy-in to that model up and down the organization. The investment committee needs to buy into what the staff is doing, which needs to buy in. There needs to be buy-in from what the management of the organization is doing. There needs to be buy-in from the full board. When you get all four of those things, right, you can do really powerful things.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“Is between one and a half and two billion, and Princeton is in the 30s in terms of what they are. They require different things in terms of being a trustee. You know, at a smaller institution, you typically have a board-driven model with a board at least formally as approving investments. We're fortunate I've got really, really strong teams in all three places. So we've got great, great investment professionals that work at each of those institutions. But smaller endowments tend to be board-driven models, and larger endowments tend to be staff-driven models where your role as being a trustee or on an investment committee is more guardrails than anything else. Each of those committees kind of has a different approach in how they want to run their portfolios and manage their portfolios. And, you know, I like to think I contribute to the meetings. I also learn a lot while I'm there, right? I'm certainly a subject matter expert in each of the areas that we invest in. I think I'm reasonably knowledgeable about all the areas and all the endowments invest in, but I'm not a subject matter expert in venture capital.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so first of all, I'm very fortunate to be involved with all three great institutions. I serve on all of their boards of trustees. They're all institutions that are very near and dear to my heart for different reasons. The supermajority of my wife and my philanthropy is in the education space. My wife served for a long time on the board of trustees of her alma mater, Brenmar College. I'm very fortunate that I can serve these institutions in a way that they find helpful. They've always asked me to serve on their investment committees, which is why I've done so. New York Presbyterian is nowhere. I got involved in that in 2021, and that was a situation where I felt like the city needed me and the healthcare organization in the city needed me. I had a very close relationship with that institution, so it wasn't random, but it was one where we kind of came to it later on. And in terms of the endowments, they're all very different. I mean, New York Presbyterian is in the low double digit billions. New York Public Library.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“Allows you to think about risk reasonably simply the risk arbitrage mantra is what can you make if your deal closes and that's a pretty defined amount of money what do you lose if your deal doesn't close and we're pretty good at calculating that what's the probability of success and then what's the probability that the market is implying with its price to success and if you can get those four things right it's basically like poker you can underwrite everything right and ultimately if you know your odds every time you can win consistently over time you know that's you try to take that mantra and you apply it everywhere else unfortunately most other parts of our portfolio there's several different scenarios things can go down so i go back in credit in particular you know one of the questions we like to ask is what are all the bad things that can happen to us where we still get our money back right and that's sort of how i sort of this trading risk and there's ultimate downside risk and i i like investments where you could really really stress it and you're still going to get most of all your money”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“Know, we have a framework where we look at individual strategies, and so there might be a different framework in how we manage risk and our convertible arbitrage strategy, for example, than how we manage risk in an opportunistic credit strategy. And then we try to look across at risk across strategies. And risk across strategies is harder to measure than risk in individual strategies. I mean, some of it's obvious, right? If you have the same QSIPs or positions in a public markets fund that happen to be in different areas, that's an obvious area that you're going to find risk. You know, industry concentration would be the second most obvious area that you're going to find risk. You know, things like how are each of our books going to perform during a COVID type crisis or a GFC crisis, you stress test, but ultimately you don't know, right? Because, you know, there are different markets that do better than you think in different markets and worse than you think in different markets. And so, you know, it goes down to my basics, you know, the thing with having a risk arbitrage business is.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“There's usually an additional amount of interest that you might get for picking versus paying cash pay. But fundamentally, that lender is marking it at par usually or some high 90s price because they're saying, hey, we're not getting this cash currently, but we're going to get it in the future. And so it's just part of the loan. And that's a different way of sort of achieving in private markets what is happening in public markets with liability management exercises. But it's been being done in a way where there's no mark to market. That only works if the loan is worth par at the end at the new amount, right? So if the loan is worth $120 at the end of this, that's when that works. If the company isn't worth more, and often the companies might be worth less through the end of this process, you end up with a loan that's got less value. If the company was worth 90 cents to begin with instead of being 90.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“So, you know, if you're a direct corporate lender and there might be five people in your group or there might be 20 people in your group, they usually try to work together on things, although I think even the fabric of that is starting to fray a bit. And they may say, okay, company, you can't pay your debt. We're going to stay marked at parks. We're going to keep the debt at par, but we're not going to make you pay interest for the next year or two while you right size your business. And we're going to tack that onto the principle. So if it's 10% coupon a year, you're not going to owe us 100%. You're going to owe us 120 of principal. And during that coupon holiday, you're going to fix your business so that business has magically worth $120 at the end.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“Hey, it's a risk. It depends on the creditor. So the term that gets used a lot, which I don't think is great, is creditor-on-credit or violence, right? So there's some of it that's driven by the companies, and there's some of it that's driven by creditors, and the creditors may say, hey, we're going to put some new money in alongside with that 75%, and we're going to make sure we're first in line for that 75 cents. So we're going to get paid first. And the other usually less than 50% of the capital structure that's not along with us, they're going to get less. And then we're going to look even better than they look because we've gotten a better return on the same. That's just a perfect phrase. Violence there. Well, you all may have invented it. I didn't invent it. I've never heard it before, but it's both perfect and amusing. So, you know, that's one of the big themes that's going on in the public markets. In the private markets more, people are doing what's called, so PIK is often called picking. It's payment in kind.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“Public markets right now, some of the companies have to do this because they don't have any other chance to right-size their capital structures. Other companies are trying to do it opportunistically. They say, hey, if we can get something from the creditors for nothing, why don't we do that?”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“Now, these are corporate issuers. So basically, if you look at corporate debt, right? So 90% of the debt that gets issued in leveraged loan markets and public markets has fairly light covenants in it. And so what that allows companies to do is basically have carve-outs of baskets where they can offer to creditors a chance to exchange their debt for a smaller amount of debt that might rank ahead of you in the capital structure, right? So if you own a bunch of unsecured debt and they come to you and they say, well, you owed 100 cents, but we're going to offer you 75 cents of debt that's got a higher coupon and it's higher in the capital structure than where you were. And so you almost are co-opted into having to take that agreement because if you everyone else takes it and you don't take it, all of a sudden you've been primed by everyone else in your capital structure, even if it's only 75% of the amount. And so that's a very active exercise that's going on in...”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“They're still valu My experience with private assets in general is eventually buyers and sellers find each other, right? Eventually. You know, that usually is more paying for the sellers and usually buyers getting a little bit more realistic about how cheap they're going to buy things. And by the way, it's also banks and owners of assets, right? So, you know, the other thing is institutions don't like to sell assets at a discount where they're marked at them, right? And so the first place is for marks to get correct, right? So whether that's real estate funds and their marks or whether it's banks and their marks, you know, once things are marked down at levels, they can sell the loan at a profit. They're much more likely to get sold. And that just takes time. I mean, that could take years in terms of where it is.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“Because I think about Midtown East, where we are right now, it actually isn't so easy to get space in Midtown East right now. Because guess what? The plaza district, which is what it's widely called, is like a super popular place to be. Not everyone wants to be in Hudson Yards, no offense. And so if you want to be in this area and you want office space, there's only so much of it, right? And by the way, because rates are high and people are down on office, they're not building a lot more of it. And it's super expensive to build more of it. I mean, the cost of what JP Morgan's doing on Park Avenue in the 40s is astronomical. And so not everyone could afford to do that or wants to invest in that. And so if you want to be in the area, actually, people are rapidly running out of space. That's not true for Class B buildings, right? Class B buildings, you can't give them away in terms of what a space is. And so, you know, you may have, you know, eventually the market will come to equilibrium, right? But it has.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“That's what I was going to say. As a starting point, right? So a lot of office buildings are square and a lot of residential buildings are rectangle. And it's because there's this rule that we have in New York City where I think every livable room has to have a window in it, right? And so very hard to put a window in all the square floor plan rooms, right? You end up with a huge amount of square footage in the middle of the building that eventually becomes unusable. And then it's a huge cost to retrofit, right? So in many cases, you're actually better just tearing the thing down and starting over. But if you look at the price that loans trade at, most of them don't assume you're doing that, right? So you're not buying them for land value or things along those lines, maybe occasionally at an opportunity, but it's not regular. So you have to kind of pick your spots. It's not to say there aren't conversions that make sense. They're definitely some of those, but I don't think it's the majority of situations. And so, you know, and it really is the 60s and 70s buildings that are the ones that are in trouble.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“Front reservat Yeah, no, I'm very fortunate that I get to go to most of the major cities in the U.S. on a regular basis. And so I get to see it with my own eyes. And I agree with you 100%. Look, it's building by building because office conversion to residential is not so easy.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“It's building by building case by case. There have been some issues in New York. I think actually we're among the best positions of any of the cities in the U.S. in terms of that. That is not the general consensus. You go to Chicago or you go to San Francisco, some of these places, it's still a ghost town. We have many more people coming to the office here because there's a vibrancy to New York that New York has in terms of.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“Term of the debt is much shorter in real estate debt than it is in corporate debt. And so the crisis in real estate is like here and coming very quickly compared to maybe corporates where companies in some cases have a little bit more duration, a little bit more time to try to solve their problems. And so, you know, for us, real estate is a very interesting asset class. It's an asset class many people avoided in the 2010s with rates where they were. I think there's a lot more allocator interest in it than there was previously. There's different approaches, there's different ways to win in it, but we think it's very worthy of our attention.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't have a mathematical answer for this, but just like there's substantial dispersion in performance and equity and credit markets, I think there's actually substantial dispersion in performance in real estate markets as well. And geography too, by the way. There's geographies that have been big winners and geographies that have been big losers. And so you could have been the best office fund manager for the last 15 years, and it's been a really hard place to make money, right? And so we try to take that out by investing across these areas. So the benefit of doing opportunistic real estate investing, and I don't just mean across geography or product type within real estate, but I mean buying into assets other people don't want to own is real estate markets have gotten hit much harder by the rise of interest rates even that corporate markets have. You know, corporates at least, there's been some growth, right? So real estate, much less growth in terms of rents in most of these areas, data centers and industrial will be an exception to that. And the covenants in real estate debt are much less forgiving than they are in corporate debt.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so I would say a couple of things. First of all, we take a very opportunistic approach into how we invest in real estate. And so we don't limit ourselves by geography. We primarily invest in the US and Europe, but we're willing to invest across those two areas. And we don't limit ourselves in product type. And so we're happy to invest in self-storage or industrial or data centers or residential or whatever it is that we think provides the best risk return in a given country. Many real estate investors don't invest that way. Many real estate investors specialize in a country or they specialize in a sector. I think that's hard. I mean, if you look at the last 15 years, right, and you were to go back, you know, I don't know, 2010, right? So I think retail assets and office assets would have been perceived much better in 2010. And I think that data center assets and industrial assets would have been perceived much worse in 2010, right? So just like.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“A lot of pent up demand, a lot of demand for new debt to finance acquisitions for sure, because there's a huge amount of demand for performing debt in general right now. So in my mind, this is probably a U.S.-centric story. First and foremost, you may see some in Europe, but I think you're going to see a lot more in the U.S. I don't know if it's two months into the administration or 10 months into the administration, but I think it's coming. And these things tend to have positive effects. Like the more M&A you get, the more M&A you'll have because all of a sudden, if you're in an industry and two of your competitors have done a deal and you haven't, you're behind and it could actually endanger your franchise. And so there's a reason why the M&A comes in buckets in terms of like specific industries. And so once that flywheel effect happens, I think you'll see a lot more of it. So that's my viewpoint on where M&A is heading in 2025.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“In 18 to 24 months of litigation, and your merger may not go through, you might just choose not to do the merger, right? And so you fast forward to 2025. It's not totally clear what the new antitrust regime is going to be, but all signs are it's going to be much more accommodating to mergers, maybe not in every industry. I'm not sure this is true in big tech, but in many other industries as well. And so you've got a number of management teams and boards that we think have been sitting on the sideline. And then people need to find growth, right? And M&A is sometimes an easy way for people to find growth in their businesses. There are a lot of businesses that deserve to be consolidated or should be consolidated. And the financing markets, I think, are very amenable to it, right?”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I put it into two categories. And so I've now been at Davidson Kampner long enough that I was at DK for multiple Democratic and Republican administrations prior to the Biden administration. And in most administrations, the people who are setting the antitrust policy are career professionals. It's a science, right? There's a lot of math behind the science. It's something I studied in law school. I'm sure you studied it in law school as well. And so my take was that the decisions would mostly be the same whether a Republican or Democrat administration. And then a couple times in administration, they'd make a case in something that they really thought they wanted to go after. So, you know, there were some prominent cases in both the First Trump administration and the Obama administration in that regard. The Biden administration tried to change the antitrust laws and they tried to use the laws as deterrence in terms of people doing mergers. And it was actually very effective in that regard because if you're a corporate CEO or you're a board and you think you're going to get stuck.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“It's a combination. I would say the supermajority of what we're doing, certainly in the public markets, is credit and it's not equities. But there are occasionally times where credit will lead us to the equities. Another strategy I will use sometimes is I may”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, look, I mean, you know, these are all public names, whether it's, you know, Greece or Argentina or Puerto Rico. There's a number of different sovereigns that have gone through restructurings of different sorts over the last several years. There are certainly times when holders of debt that's at least linked to municipalities may want to sell and there's sort of forced selling because of that. But I'd say more credits are credits, right? There's only so much that any one person can borrow, any one entity can borrow. And so, you know, there have been reasons you've had to restructure. Greece has been an incredibly successful restructuring. The Greek economy is booming right now, right? So that would be an example of one. They don't come very often. It's not a very big part of our business, but they're out there in terms of things that people have invested in.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“between when opportunistic credit funds return capital to their LPs versus when growth equity and venture capital funds return capital to their LPs. And that kind of makes sense intellectually. So if you're an allocator, you probably don't want to only have growth, equity, and venture capital funds in your portfolio. I think the allocators who had too many of those have some of them have learned that the hard way in the last couple of years. So those are strategies that manifest themselves over a very long period of time. But if you've got a mixture of both strategies in your portfolio, that's a much more powerful way to earn returns.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“Sovereign debt is not a big part of our book, but every once in a while we've got a big involvement with the sovereign as well. And I would say a couple of things about that strategy and why people are attracted to it. So number one, the outright rates of return that you can earn on strategies like that I think are compelling compared to many things in the market over time, but they also are very good diversifiers and portfolios. And so like, why are these strategies attractive to allocators? They're attractive to allocators because you can achieve your overall objectives just being in the strategy. Most people are not, obviously, but you can also do it in a way that diversifies your overall portfolio. And not only does it diversify your overall portfolio in terms of when you earn rates of return, i.e. these strategies tend to do better when other strategies aren't doing well. It's sometimes when capital is return to you too. So, you know, we did some work a couple years ago. We actually published a white paper on this in 2023 where there's actually an inverse correlation.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, I would say a couple things, we could call it distressed investments, we can call it an opportunistic credit. It's probably some combination of the two things. And so for Davidson Kempner, we're actively investing in both public and private markets in terms of distressed debt or opportunistic credit. So we're buying public securities that have declined in price or people have questions as to whether companies can mature their debt. There can be all sorts of different reasons that things are trading down. And that's one strategy. We also have a very active strategy where we've got more private equity style capital where we can basically take control of assets, fix them, sell off divisions, add things. Those are typically more like four to six year type of investments. And we're able to do this across different asset types. So we've got a big business buying real estate. We've got a big corporate business. You find a lot of things like liquidations that don't necessarily fit into any one neat category occasionally.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm very fortunate. I sort of joke. I show up at my college reunions, right? And if I'm not the only person who's been at one firm the entire time, it's virtually, I'm virtually the only person who's done that. I got very fortunate, right? And I got very fortunate that I happen to find people that I really wanted to work with in an industry that I really liked that was growing, right? And so I think if you hadn't had any one of those three factors aligned, like, you know, possibly I could have stayed. But if there wasn't going to be growth in the industry, I wanted there at least to be growth for me, right? So I wanted to be doing different things at a more senior level, 27 years in than where I started that. But fortunately, all three of those things did align. Look, there's real human capital you get by being in a place for a long time, right? I mean, you don't want to be somewhere for a long time just because of that. But the reality is there are switching costs that you have when you leave roles. And so I was very fortunate that I”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“Was the best way to communicate with people. We did some videos and things like that too, but I wanted something in writing and it was a combination of pep talk, firm news, sometimes some market insights. I'm not sure I've got amazing market insights every two weeks, but over time I certainly do, right? And when I really had something to say, I would say it. And we've kept doing those even through today. It's become like a hallmark of our firm. We get very good internal feedback on that because it was important to me. That's the way everyone knows they're going to hear from me every couple weeks no matter what.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“And by 2008, 2009, they didn't want too many of the clients to be funded funds just because fund of funds weren't doing very well at that period of time. That was a transition where more and more investors in absolute return strategies were investing directly. Obviously, there are still a few allocators that are out there of scale in that world. And then by the mid-2010s, people wanted to know not only that we had clients, but what public good are we doing, right? So we instituted a program called DK Play.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“So we have seven offices, although two of those offices are quite small, sub ten people, and another two of those offices are three of those offices. But it's still far-flung different time zones. It's far flung. So first of all, when you go from 15 people to 500 people, you have to understand there's parts of your culture that you're going to maintain and there's parts of your culture that you're not going to maintain. So for example, when I got to Davidson Kepner, every time it was someone's birthday, you get a birthday card signed by the whole office and you get a cake, right? And so we have kept the cakes, but we got rid of the birthday cards at some point, right? We have brought in different things over the years to speak to what our workforce is today, not what our workforce was 10 or 20 years ago. So the example I give is when I got to Davidson Kampner in the 1990s, I feel like our workforce mostly cared that we had clients, right?”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“I've actually wanted to retire and do other things. I mean, there's things you learn along the way. I mean, again, I wouldn't have wished a pandemic upon anybody, but it was sort of sink or swim, right? Because, you know, it was two months in, the markets were falling apart. No one wanted to be in the office in early March of 2020, right, for reasons obviously became pretty clear soon afterwards. And how do you make that all work? How do you get everyone on the same page? How do you broadcast your message out? How do you make sure the things that are happening in the portfolio are happening in a way that you want them to happen? How do you empower people when everyone's sitting in their home or whatever? So we rode through the pandemic and we learned a lot. But I did have, you know, 20 plus years of training to do this. And because I've only been a one firm in my entire career, like I didn't have the benefit of being CEO somewhere else, but I had the benefit of really knowing Davidson Keppner Cold. And that probably proved to be the biggest advantage.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, you know, I'm very fortunate in the sense that the transition with Tom and I took place over many years. And so I'm actually the third managing partner of Davidson Kampner, Marvin Davidson was the first, and Marvin Davidson ran DK for about 20 years before Tom took over and then Tom ran DK for about 15 years. I was there for the last five years of Marvin's running the firm. And so I got to actually see two models. I got to see Marvin's model and Tom's model, which were very different from each other. And then I was the deputy managing partner for several years before becoming the co-head with Tom for two years. You know, Tom was very focused on succession and leaving the place in better shape than he got there with, so to speak. And that's super helpful. I got a lot of calls because we're now third generation and running the business about how you do this. And my first thing I say to people, which is sort of a joke, but it really isn't, is the person in front of you has to want to retire. Like that's step one, you know, of transit.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I became our executive managing member with Tom in 2018 and then Tom formally retired on January 1, 2020, so I became the sole head of the firm at that point.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I mean, look, I don't necessarily expect a valuation premium for Europe, but I get it, right? So I think we can earn more money on our comparable European opportunities than we can on U.S. opportunities. And maybe some of that's getting paid for the complexity and the things that we're speaking about in terms of how we do that. I do wonder in the equity side, if you take out tech, if there's really such a valuation gap. I mean, it's something like half the market cap in the US is tech at this point when you look at the S&P. That's not the same in Europe, right? There's very little tech industry. So I do think the tech separation is a big part of the US versus European separation. For better or for worse, you don't do a lot of technology related investing and opportunistic credit. You get some chances sometimes. Tech companies are not often great for opportunistic credit. Perhaps software will be different if there's ultimately a crack in the software world. Excuse me. But I would say that in the sectors that we invest in, which is basically everything else, you know.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“I think there's a lot of different things going on in Europe. So, first of all, you know, Europe tends to be a lower growth economy structurally than the US. I think there's a couple of reasons for that. One is regulatory. But the second one really is the country by country nature and how things operate. I mean, overall, it's a giant market, but when you break it down and you've got Italian companies and French companies and German companies, that's just much of a less efficient approach. Obviously, there are some multinational companies in Europe, but it's maybe a smaller part of how things work over there. And so while I'm not sure, I'd want to be a tech investor in Europe. I'm super happy to be an opportunistic credit or an event-driven investor there because these are really very deep value markets in terms of where you're investing in terms.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“What I meant was between public markets and private markets. Because I think you learn a lot being in private markets that's helpful for public markets. And I think you learn a lot as a public markets investor that's helpful for private markets as well. So it's very complementary. And especially if you can have both pools of capital in one place and you can kind of toggle how you spend your resources between public and private markets. It's just super helpful. And so those are maybe two of the bigger things that we've done as a firm in the last 25 years to really help us to thrive where the world is in 2025 versus where it was in 2015 or 2005.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“Of 2015 timeline. So we had our first sort of private equity style strategy to do operators to credit, which launched in 2011. And even though the opportunity to buy from the banks ultimately dissipated, what we discovered was as private markets grew, this just became a bigger and bigger opportunity. And so this has really been a substantial portion of the growth of our business in the last 15 years as being in private markets and being in opportunistic credit in private markets led us ultimately to being an asset-backed lending led us to being in real estate as well, which is a big strategy for us with opportunistic credit. And I think it's really important to have both tools in your toolkit. You know, this term for technology investors, which is crossover tech investors, which is basically investing firms like Code 2 or Tiger Global that have both big public market and private market businesses, I wanted to be a crossover credit firm. And by that, I didn't mean between high yield and IJ.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source
“Change that we made, I think, set us up for, you know, continuing to grow and survive and thrive as a firm. The second one I'd reference is our entry more seriously into private markets. And so if you go back prior to 2010, all the capital we had was sort of hedge fund structure capital. It was reasonably liquid. Maybe you had the small ability to do a side pocket. We generally didn't do that. And so you had to mostly stick to liquid securities in what you were doing. We thought there was going to be a really good opportunity in buying less liquid, longer duration opportunities where you might own assets for four to six years, let's say versus things that were marked to market on a daily basis. And we thought there were things that you could do to those assets to improve them over time. This was sort of the first wave of bank selling that probably came to the US in the 2008 to 2011 timeline and probably came to Europe in the 2012.”
2025-04-11 · Masters in Business · The Absolute Return Revival with Tony Yoseloff · IDENTIFIED FROM THE TRANSCRIPT · source