David Frost

Patricia Janco-Tupper and I were so pleased to be invited by Dr. Debi Silber WBENC Certified WBE to her podcast where she helps individuals who have been shattered by betrayal to experience healing. On this podcast we focused on the steps #SuddenlySingle people should consider about their finances while going through this traumatic process. #AskBison #BisonWealth #AskPacky #Packy #FinancialAdvice #FinancialPlanning #SuddenlySingleWomen

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Interesting article from Douglas Appell in Pensions & Investments about the post-ZIRP, “higher for longer” interest rate environment that boils down to advocating for the pursuit of satisfactory investment outcomes that are relevant to asset owners’ actual spending needs and goals, rather than continuing the historically common practice – and expected future folly – of tethering one’s equity beta to that of an equity benchmark whose performance from today’s elevated levels is widely expected to be sluggish and insufficient to fund minimum liabilities (ie: payout rates, actuarial hurdles, spending goals, etc.).   Quoting the inimitable Ben Phillips, “In that world, the relevant benchmark becomes the client’s required cash flows.”   Fresh perspectives and new ideas are warranted. Satisfactory outcomes not benchmarks.

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Interesting thoughts to start a week from the Farnam Street Blog (https://fs.blog/). Classroom vs. Real Life There is a certain category of decisions that work well in the classroom but not in real life. I call these chalkboard decisions. These decisions tease us because the math always seems correct. The problem is that most decisions are less about the math and more about judgment. The math always points to the optimal immediate decision, which is rarely the best long-term decision. Consider paying off your mortgage. With 2% interest rates, the spreadsheet will tell you it doesn't make sense to pay off your mortgage. Instead, put the money you would have used to pay off your house in the stock market. Assuming an 8% return, you'd be much better off. The math in chalkboard decisions is irrefutable. And yet, the best decisions are often based on positioning yourself for things you can't see.   What if we have a pandemic? What if the stock market drops 20% or 30%? What if mortgage rates rise 10%? Can you handle these events with equanimity, or will circumstances force you to do something you don't want to do? I see the same thing in business all the time. The math says lever up, reduce inventory, pay your employees as little as possible, charge your customers as much as possible, and take advantage of the weakness of your suppliers. You don't need to look far to see companies who take this approach. In the short term, these decisions almost always seem optimal. In the long term, they almost always fail. If it helps to visualize chalkboard decisions, imagine standing at the base of a 2000m mountain with two paths in front of you. You can only see the next 100m of each, and one path looks easier. If you only consider what you can see, you'll choose the easier path. Only after you walk the first bit do you realize that choosing the easiest visible path leads to a cliff and doesn't take you where you want to go. Our ability to predict the future is never as certain in the real world as in the classroom. No matter how compelling the math, the best chalkboard decision might not be the best overall move.

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As different as foresight and hindsight are. Same asset-management bucket, completely different risk profiles, and then some.

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"...it is worth noting it takes an average of nine and ten years, respectively, for global private equity and global venture capital funds to distribute 1.0x the capital that has been paid in (DPI), which is essentially the same thing as returning cost back to investors." I'm not saying PE isn't worth it, because it categorically is...in specific scenarios involving extended time horizons. But I am saying, given the median age of accredited investors being 60-64 and skewing (obviously) older, to consider the following question: If you put your clients into any random PE fund today, knowing it takes an average of nine years just to get their money back, plus a couple/few more years to possibly get that MOIC that was dangled in front of them over a decade earlier - when said random PE fund is ultimately wound down and the final IRR is calculated, do you think your clients will still be alive to see it? I've got another one about a tree falling in a forest that will melt your mind...

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Is there opportunity for high yield in today’s new economic era? Konstantin Leidman, CFA, Portfolio Manager at Wellington Management, explores how to find the right balance between targeting emerging areas of opportunity and seeking to protect portfolios. #neweconomicera #fixedincome #highyield #wellington For professional investors only. Capital at risk.

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The investment thesis of private equity needs another evolution. To do right by all of #humanity this time.

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[Compounders Podcast Clip} Anyone who follows the podcast and my writings knows that I am obsessed with differentiation. There are so many smart investors out there that it is hard to be truly different. When I asked Thomas Bachrach, the Principal at PFH Capital, about structural advantages, he cited two primary elements. You can find the full discussion here: https://lnkd.in/gcN3G7jk

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With the tenure of chief executives shrinking to an average of 7 years, it is critical that Boards take the necessary steps to set up succession plans and pipelines early. Richard J. Bannister, Jr., Partner and COO of Farient Advisors LLC, guides us in the following article on how boards can successfully manage the transition of leadership. https://lnkd.in/gdTEgbUV #execcomp #corpgov #leadership #successionplanning

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Active vs. passive: The tectonic shift 🫨 in one chart! Long/short equity managers James Hanbury & Jamie Grimston of Lancaster Investment Management with commentary on the impact the shift to passive investing is likely to have in a major market correction 📉scenario: "As passive investing continues to gain share by definition it drives momentum investing. While this has been a very successful style over the past decade or so (partly in a self fulfilling way) it gets more and more precarious as a greater percentage of the market follows suit. Most investors buying a passive fund have no idea they are on a momentum trade and clearly they are adding to the weight of money that does not understand what it owns. The trouble with 'buying blind' is the difficulty to buy more when the price falls and with human nature, it is often the reverse that plays out." ⚠️ As a consequence, Lancaster IM sees the market vulnerable to a major correction as passive investing is likely to exhibit momentum style not just on the way up but also on the way down. Source: Minack Advisors (via Lancaster Investment Management) (+++Opinions are my own. Not investment advice. Do your own research.+++) #markets #investing #wealthmanagement #hedgefunds #absolutereturn Tap the bell 🔔 to subscribe to my profile & you'll be notified when I post. 💸

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Why does Employee Ownership work? Ellen Frank-Miller, PhD's recent Op-Ed at ImpactAlpha sums up the Employee Ownership "playbook" perfectly. And now that the top-secret EO "playbook" is out there, I might as well amplify Ellen's prescription for all to see: - Award meaningful ownership stakes to employees; - Transform operational practices to give employees more control over decisions that affect them and more autonomy to do their jobs the best way they know how; - Upskill frontline supervisors to help them manage their teams collaboratively and shed the command-and-control style that’s so counterproductive to achieving shared goals; - Activate the above-and-beyond employee behaviors that power better financial results; and - Enjoy superior returns for investors, wealth-building for employees, and all the community benefits that come from healthier businesses, workers, and families. Employee Ownership is nothing more but nothing less. This is the "playbook" that we are following at Southeast Acquisition Capital, along with a select few emerging and established managers, with surely many more to come. -- At its most basic level, employee equity is just a deal term or a part of an HR benefits package. True Employee Ownership happens when equity is paired with fundamental changes in the way that employee owners perceive their relationship to their employers (developing "organizational identification"), as well as changes to their actual work output (through a "social exchange obligation"). Or in non-academic terms, we refer to this simply as "employee owners thinking, acting, and feeling like owners." I've always said that I can't wait for the day that Southeast Acquisition Capital loses a deal to another firm pursuing Employee Ownership buyouts, because from then on we can just call them "buyouts", and Employee Ownership -- both the equity piece and the quality jobs piece -- will have truly become "market" and many more millions of employee owners will be better off for it. Thanks for the shout out, Ellen Frank-Miller, PhD, and I look forward to working more with the Ownership Impact Index by WORC (Workforce & Organizational Research Center)! Apis & Heritage Capital Partners KKR Ownership Works Mosaic Capital Partners Teamshares American Working Capital, LLC Verit Advisors https://lnkd.in/eremKFj5

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Second Round Success: Strategies for Sophomore Venture Capital Funds Raising a sophomore venture capital fund presents unique challenges, particularly for first-time fund managers who need to prove their investment thesis and operational capabilities beyond their initial fund. While securing funds from existing investors (re-ups) is common, the endeavor remains daunting due to high market expectations and the inherent pressures of maintaining or exceeding the first fund's performance. For instance, Pentathlon Ventures , focusing on early-stage B2B SaaS startups, has set a target of $55 million for its second fund, aiming to invest in 25 companies. Similarly, DigitalDx Ventures, a woman-led firm emphasizing health technology, seeks to significantly increase its fund size up to $150 million for its sophomore effort, after raising around $24 million in its debut fund. Another example is Crane Venture Partners which successfully raised $140 million for its second fund, focusing on open-source, AI, and developer tools critical for digital infrastructure. These examples illustrate both the ambition and the scale of efforts required to successfully navigate the challenges of raising a sophomore fund. https://lnkd.in/gtfZAQv6 #venturecapital #funding #capitalfunding #scaling #startups #strategy #ventures

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Listed closed-end funds are an underfollowed, underutilized tool in portfolio construction. Understanding the z-score may help navigate this small, but interesting corner of the market.

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