David Weisburd

Why are people bullish on an industry?

Why are they bearish?

And then think from first principles, whether that makes sense.

For example, a lot of people today are bearish on large buyouts.

I think that's probably a rational thing.

There's so much capital, there's no DPI, but a lot of people are not bullish enough on lower middle market PE.

Why?

Because it's hard.

It takes a lot of effort.

You need to meet the managers.

It's not sexy.

These funds, almost by definition, no one's heard of because they're in the lower limit market.

They don't have this marketing budget.

So I think about it from, I discount the IQ of the manager and I even discount the layer of the manager because typically the manager will outperform the asset by a couple hundred basis points.

And I think about more the asset and the sub asset and why are people bearish and why are people bullish on that specific asset class?

You oftentimes hear size is the enemy of returns.

The way that plays out is if you have a very disciplined $300 million fund, now they're a billion dollars.

That incremental deal where I don't really think we may or may not want to do it with a $300 million fund, hard no.

With a billion dollar fund, well, subconscious, on a subconscious level, well, we have to do it because we have a billion dollar fund.

We have to do these marginal deals.