10+ hours of podcasts, in 5 minutes.
9 quotes from 1 episode on Fund Shack, each with a timestamped link to the source.
Adam Turtle argues that limited partners have capital to deploy but are completely overhauling their investment strategies. Institutional investors are abandoning a 10-year consensus that automatically funded specific sectors and are scrutinizing managers closely after poor returns from 2020 to 2022 vintages.
General partners frequently miss the signs that a fund is dead long after the broader market reaches that exact conclusion.
“People are often the last to know that they are a zombie fund. And often the market has made that conclusion before you realize it.”
From Adam Turtle: Private Equity Has Split Into Three Speeds
Current conditions expose which fund managers relied on favorable markets instead of lasting investment skill.
“We're also in a period which I think best links to that great Warren Buffett quote about the tide going out and you see who's wearing shorts.”
From Adam Turtle on Why Private Equity Capital Isn't Squeezed
Adam Turtle rejects the popular excuse that limited partners lack the cash to make new fund commitments.
“The truth is we're not in a period where there's a massive capital squeeze…”
From Adam Turtle on Why Private Equity Capital Isn't Squeezed
Institutional investors are dismantling 10 years of consensus that gave automatic approval to specific industries. Adam Turtle observes that this strategic shift directly slows down how fast limited partners commit to new funds.
“On the LP side, we're in a really interesting period in the market because for the last certainly for the last 10 years, there have been certain prevailing orthodoxies about which segments are almost whitelisted for investment from a sectoral perspective that have been somewhat undermined over the last 12 months or so…”
From Adam Turtle on Why Private Equity Capital Isn't Squeezed
“There's this sort of strategic realignment of appetite which clearly has an impact on the speed of their investment behavior…”
From Adam Turtle on Why Private Equity Capital Isn't Squeezed
Underperformance in 2020 to 2022 funds has forced limited partners to change how they evaluate managers. Overall returns from these specific years fell notably short of original investor goals.
“The overall performance in those vintages is reasonably disappointing…”
From Adam Turtle on Why Private Equity Capital Isn't Squeezed
“…and certainly disappointing versus what the investors were hoping to receive from those vintages.”
From Adam Turtle on Why Private Equity Capital Isn't Squeezed
When existing backers decline to reinvest, general partners struggle to raise new capital. Adam Turtle explains that this situation quickly turns into a spiral as team members abandon the firm.
“If the existings are ultimately not willing to support the manager and if you're unable to raise the fund…”
From Adam Turtle: Private Equity Has Split Into Three Speeds
“…what will then happen is your team will start to leave and then you will get into a spiral where it becomes impossible to raise money.”
From Adam Turtle: Private Equity Has Split Into Three Speeds
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The week's private equity podcasts, boiled down to one short Sunday read, for deal professionals, operating partners, and LPs.
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