Peter Lacaillade

But there was a lot of enthusiasm around large cap buyouts leading up to that.

And when I joined SCS in 11, I looked at a bunch of our clients' portfolios and their legacy wealth managers, and they were just chock full of large cap buyout firms from 05 to 07.

That's not a great vintage because the global financial crisis, a lot of people take a pause and they miss 09, 10, 11, 12, and then maybe they start getting excited again.

And those were the best vintages.

They get excited again when things start to heat up.

And I think it's really important to be consistent in your allocation so that you capture the really good vintages.

I think you run the risk that a lot of people are going to have pretty mediocre experiences in private equity because a lot of the products that are being put together to cater to the high net worth or even like mass affluent market are done by really large cap shops.

in vehicles that have lower cost of capital.

And they might be targeting what they're trying to do is like 10, 12%.

And if they undershoot on that, you might end up- T-bills plus.

Yeah, exactly.

So I think that's the risk.

The cost of capital for some of these evergreen private equity vehicles is far lower than the standard players.

I'm talking specifically about a very high profile secondary sale.

that have been in the market a lot.

The bids from the sophisticated buyers for these assets came in at mid-80s pricing.

And then a couple of the evergreen vehicles, interval funds that have been set up that raise capital and need to put it to work so they don't have to cash drag, bid in the mid-90s.

So there's a 10% spread between

Folks that, candidly, have big funds and want to put the money out, I don't know exactly what they're underwriting to, but they were blown out of the water by these new sources of capital that really need to put money into work.

And we executed a trade.