Peter Lacaillade

People talk about like, oh, put things on the blockchain or I don't know.

We'll see where things go over time.

But the core thing that is, I think, really interesting right now that we see is the stuff going on in the lower middle market buyout end of the market and where it intersects with

Some of these circumstances with AI, many it doesn't, but that professionalization of the small businesses, like I think that continues and continues.

What worries me is that that secret has been out for many years, but like there appears to be similar to maybe some of the hype in what we see in the AI world.

There appears to be arguably too much hype in the independent sponsor, lower middle market space.

where we're seeing teams that we view as B, B pluses, maybe A minuses that would have struggled to raise capital seven years ago, even in like a hotter market, now raised because of a few different actors who have a lot of money and have identified this as a great area to invest.

And so I think they're loosening their standards

I don't know, loosening their standards, but they're doing things that we wouldn't do.

And then you worry similar to like the venture valuations.

We think that this firm should raise $150 million.

Maybe we do a budget-based management fee.

They can offset.

We can be creative to make sure they can cover their budget.

And we'll say, okay, you can get over a 3X return, 25% carry.

Over a 5X net return, you can get a 30% carry.

That might be what we would feel would be appropriate.

And instead you have a group come in who caps them at $400 million.

We see this sometimes where you have LPs that have lots of capital and are like trying to push it on GPs.

That's tricky because for a GP-