Philippe Laffont
speaker
118 appearances
1 recordings
1 series
first heard May 2025
last heard May 2025
Philippe Laffont’s voice in public audio — every appearance, attributed to the second.
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Appearances
And the other part that's weird with the public markets is since everybody needs to be indexed, everybody needs to be fully invested at all times. I'm like, why? Why is it that you need to be fully invested in 1999 if the P multiple of the market is 60? Why is it that you want to be fully invested when you're already down 10%? Things are not working. Why not raise cash a lot?
Sort of, you know, freshen up your ideas a little bit. Go take a long walk on the beach and try to understand maybe you've made some mistakes and stuff like that. So I've always wanted to do two things, which is one on the public side, have the ability to be different in the stocks that I own, but also that if I'm nervous, then what's wrong with holding cash?
And I hate to put this in the same word, but you look at Berkshire Hathaway today and everybody wants to compare themselves to Berkshire a little bit. But Berkshire today is a trillion dollar company, a third in cash, a third in public equities, a third in private equities, right?
And so I was like, okay, well, what if we have a system where we can be in public stocks, we can be in private companies, but we also can be in lots of cash and where investors know on day one, please do not compare me to an index. If you come in, you got to give me sort of five or seven years to do my work. And I'm also going to let you take a little bit of money every year.
So in essence, I'm willing to work at much lower fees because you give me capital for longer. But you don't give me the capital forever and you're not stuck forever. And so these interval funds are really interesting because I think the minimum investment is like $50,000 or something like that. And the conditions to qualify for such a fund are much smaller.
So there's many more investors that can come. And I look at it a little bit of like, this is the democratizations of tech investing. And I really believe in it. I've been doing my thing for 30 years for institutional investors. Why can't I do it for like people who don't have access to- Let me ask you a question.
Something like that.
Yeah. So... We got a little bit lucky in that we studied the fees of other funds. These are things called interval funds. And it seems like the fees were more like 1.25 and 12. And so we're like, well, can we live at 1.25 and 12? And I was like, yeah, you know, it's a really good deal for other people, but I get something for it, which is I get near permanent capital.
And in exchange for that near permanent capital, I'm willing to live. at lower fees because I think I'm going to be able to compound it for longer. So in essence, it's not like I'm being altruistic. I'm not claiming, oh, I just want to do a good deal for people. It's I'm being selfish.
If I can compound capital at 12.5% incentive fee for a very long time, it's better than 20% for a short period of time. And for the investor, I love the fact that I'm sort of investing. Like if you told me, Philippe, start from scratch, write on a little blank piece of paper, what would you do?
I think all of us on the show would say, well, it would have to be something that looks like Berkshire Hathaway, right? Berkshire is the model. And you want to do cash. You want to do publics. You want to do private. You want it to be a good deal for people. You want it to be permanent capital for you. And you want to try to be able to do that for a long time.
And I think that's sort of what those things do. And then I was like, OK, but then the problem is like you have a snowball at the top of the mountain. How do you get it to roll and to be big? And I was like, you know, we're not very well known. I have to admit, this is sort of one of my first podcasts, you know, ever. So I really appreciate you're doing great being here with you guys.
So I was like, I got to get the ball rolling at the top. And so I thought, okay, maybe I can get some tech entrepreneurs to help me out who believe in this concept of democratizing tech investing and stuff like that. So I went to see the family offices. I didn't quite see the founders directly, but the family offices for both the Bezos family and then the Dell family.
And I sort of pitched them the idea. They liked the idea. Then we pitched it. to the founders. And then we got to some agreement and they gave us a combined billion dollars to get going. And then we're also going to put a lot of personal money in it. And I was like, great.
And I had read, I don't know if it's true that the largest fund that was ever launched was the, one of the first Blackstone song was 1.3. So then I said, okay, I need to launch the fund. That's 1.301 like that. I can claim that it's the largest launch. Yeah. ever, so I don't know if I'll get there or not, but that was the idea, and I think it's nice to have the backing of these guys.
You mean you as an LPA now?
So this fund in particular starts to be marketed by one of the Wall Street firms. In this one, we picked UBS. They were the first ones who believed in us, but many other firms did. We'll work with others and we have great relationships with JP Morgan and others. So in time, you'll be available on all these different platforms.
And then most of the people that we target usually have a relationship with a wealth management firm. And our hope in time is to work with a bit the leading wealth management firms and you can invest. And frankly, I'm like, hey, just start giving me a little bit of money.
Of course, I knew I should be more prepared doing this. I don't remember exactly all the gaps are. But the point is, is that the number of people that can join the fund is much greater and the number and the amount of money they can put in is also much smaller. And as a result of that, you're reaching a wider audience.
And that particular audience, they're happy because if you think about that fund, right? One thing that's a pain in the ass. How do you manage all the capital calls? They drive me crazy. How do you manage all the distributions? Oh, I just got some stock in a public IPO. Should I keep it? Should I not keep it? Is it a good company like Google that's going to 20x post IPO?
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