David Weisburd

I think CVS are here to stay for many of the reasons that we talked about.

Um,

And a great IPO run may even solve issues for one to two years.

But if you're starting to deploy in the next vintage for the next 10 to 15 years,

You should not rely on a hot bowl IPO market.

I think you really have to look at the decisions of this new normal and of all these players and how their incentives are aligning.

Because in many ways, allocators are at the mercy of the incentives of GPs and GPs are at the mercy and incentives of the portfolio companies.

Obviously, everybody has leverage and everybody has some power in the market.

But ultimately, the decision lies with the underlying asset.

There is a silver lining here, if we assume that this is a new normal, and that is that there may be the comeback of the illiquidity premium.

As more capital has come in and as liquidity has become more and more of a thing, some argue that the illiquidity premium has gone down.

If the opposite happens and now the new normal is that it's 10 to 14 years, the institutions, which primarily are these endowments and foundations and to-degree pension funds that are able to hold for that long, they should be the natural beneficiary of this

lack of liquidity?

Professor Steve Gafflin, previous guest, did a study on this and he found that the bigger funds, the more traditional and established funds had a more conservative marking than the emerging managers in that the emerging managers wanted to maybe mark a little bit more aggressively hoping to land into the next fundraising cycle.

Whereas the more established firms really focused on the long-term relationship with the LPs more.

Talk to me about why there's not more pressure from LPs towards GPs to mark down their books.

What are some other ways that there's a principal agent problem between the allocator and the pool of capital that they're managing?

We started talking about AI tools and whether they'll replace us.

The last time we chatted, you mentioned Mike Trotsky of MassPrem recently said that AI tools can be used to outsource work, but not to outsource thinking.

What do you think he meant by that?