Year in Review 2025 (EP.478)

Summary

Capital Allocators – Year in Review 2025 (EP.478)

Podcast: Capital Allocators – Inside the Institutional Investment Industry
Host: Ted Seides
Date: December 22, 2025

---

Overview

In their annual "Year in Review," host Ted Seides and CEO Hank dissect the top trends, challenges, and shifts in institutional investing throughout 2025. The conversation spans a wide range of topics, focusing especially on private markets' liquidity challenges, the evolving structure of asset allocation and manager relationships, and key developments in public markets, private credit, and venture. The duo also reflects on favorite podcast moments, experiments in their business, the state of podcast discoverability, and what excites them for the year ahead.

---

Key Discussion Points and Insights

1. The Dominant Issue of 2025: Private Markets

Liquidity Dilemma:

• Private equity is "frozen" despite all the necessary capital and companies available.
  • "If you think about making a pizza, you need dough and cheese and sauce and toppings... so how come there's no pizza? And the answer is the oven's not on." — Ted Seides (08:15–08:42)
• General Partners (GPs) are hesitant to sell under current valuations, fearing LP disappointment and fundraising challenges.
• Limited Partners (LPs) are conservative in new commitments due to prior liquidity scares, even if not currently overexposed.

Industry Structure Shift:

• Institutional allocations to private equity are saturated; future growth is from sovereign wealth and private wealth, favoring the biggest managers.
  • "So the middle market, you have contraction and then you have expansion of the already large managers." — Hank (12:10–12:15)
• Many mid-market PE firms may have already raised their last fund without realizing it.
• Larger funds look to acquire from mid-market sponsors, possibly offering opportunities for returns down-market.

Status Quo and the Frozen Pizza Metaphor:

• The main drivers holding back transactions are "greed and fear":
  • "You could say that private equity is frozen because of fear." — Hank (08:51–08:54)
• Bid-ask spread remains wide: GPs want premium exits; buyers want bargains; deals aren’t happening.

Institutional Allocation:

• Most CIOs are "at target or above" for private assets and want to bring allocation back to targets over coming years, not increase.
  • "If their target is 30, they probably have 35 or 40% in privates today. It doesn't scare them. But over the next five years they want to bring that down to 30." — Ted Seides (11:25–11:38)

2. Performance, Returns, and Industry Psychology

Persistence of Optimism:

• Every LP believes their managers are top quartile, even though median outcomes persist. None self-identify as "average."
  • "Please raise your hand if you think your private equity portfolio is median or below... and there isn’t a single hand that’s ever gone up." — Ted Seides (13:48–13:55)
• The classic “we like ours” conundrum, applied to both hedge funds and private equity.

The Private Equity vs. Public Markets Bet:

• Ted attempted a repeat of the famous Buffett bet, targeting PE returns vs. S&P 500, but couldn’t find anyone to take the public side—even at Vanguard.
  • "At the end of the day, there wasn't anyone to take the public equity side of the bet." — Ted Seides (14:42–15:04)
• PE managers were eager to bet; public market champions were hesitant—a telling signal for industry sentiment.

3. Private Credit’s Rise—Especially with Wealth Channels

Private Credit vs. PE in Wealth:

• The main driver of alternative flows in wealth management is private credit, not private equity.
• Key appeal: "It’s really hard to lose money in a year” in private credit. Portfolio yields of 8–10%, low risk of loss, built-in liquidity via coupons (15:44–16:15).
• The institutional market remains less attracted due to lower returns relative to illiquidity.
  • "If you have a known illiquidity budget, you want to make sure you get compensated for that with return." — Ted Seides (16:39–16:44)
• Return expectations are misaligned; wealth investors may be anchored to unsustainable numbers (18:02–18:09).

4. Venture and Growth Equity Dynamics

Structural Shift and Illiquidity:

• Venture portfolios now include significant, illiquid growth equity exposures as successful VC-backed companies stay private longer.
  • "What’s happened is a lot of the institutional allocation portfolios... their most successful venture investments have created a very meaningful bucket of growth equity that they can’t exit." — Ted Seides (18:52–19:09)
• This trend increases overall portfolio illiquidity and reduces new commitment capacity.

5. Impact on Public Markets

• Public markets have been relatively quiet except for passive flows.

• 2025 saw a "sneaky" resurgence of active management performance; increasing allocators' attention.

• When private markets unlock liquidity, “first wave” of redeployment will go into public equities, not back to privates.

  • "When private markets unlock for liquidity, the first wave... is going to go back to the public markets." — Ted Seides (20:35–20:49)

• Ongoing focus on the "Mag 7" (mega-cap techs) and their aggressive AI spending, raising bubble fears.

6. Geopolitics and Other Allocator Focus Areas

• Major global events like "Liberation Day" create nervousness but have little immediate impact as most allocator pools move slowly ("like tanker boats, not fleet boats").

• China exposure has become more cyclical and nuanced as relationships thaw.

• Artificial Intelligence: Growing operational adoption and strategic interest, but much current discussion is "disbelief at the size of these valuations." — Ted Seides (23:34–23:39)

7. Industry Practices and Approaches

• Growing interest in “total portfolio approach” (TPA): not just rebalancing asset classes, but using data to understand risk and manager exposure more dynamically.
  • "Total portfolio approach is using data to have a better understanding of what you own." — Ted Seides (23:47–24:10)

8. Business Updates and Podcast Highlights

Podcast Discoverability/Playlists:

• The expanding episode library makes discoverability tough.
• Capital Allocators created themed Spotify playlists (most popular, legendary investors, public/private equity, interdisciplinary, etc.) — a step-change in user experience (03:08–03:50; 31:35–32:09).

Podcast Guest Reflections:

• Ted’s favorite guests this year include both new acquaintances (Adrian Meli; Herb Wagner; KK Rowland) and longtime friends (Alex Sasserdote, Dave Lyon, Ed Grefensted, Tim Sullivan).
• Great value from guests open about setbacks (e.g. WCM’s Mike Trigg and Sanjay A sharing the story of overcoming a drawdown — 28:23–28:49).

Private Wealth Mini-Series Learnings:

• Early-stage concentration in mega-managers; private banks like JP Morgan act like institutions, but there remains huge diversity in private wealth orgs.
• "How much this accrues to the biggest asset managers and the incredible amount of resources they have..." — Ted Seides (29:50–30:02)
• Private wealth adoption curve mirrors past phases: first need brand, then move to smaller “satellite” managers.

Business Ventures and Team Growth:

• Coaching business launched—retired CIOs aiding managers with storytelling and fundraising.
• Strategic investments in fintech tools:
  • Labs Campbell Wilson: allocator intel
  • Thema: AI-driven private company mapping
  • Third Ascension: HR/comp software (33:50–35:07)
• Capital Allocators University moved online, expanding curriculum and increasing accessibility—a shift to lower-cost, subscription-based model (35:18–35:56).
• Addition of key hires (Tamara Auerbach for relationships; Liz Smith for media) and growth of core team.

---

Notable Quotes & Memorable Moments

• On the Private Market Stalemate:
  "You have all these ingredients in place, so how come there's no pizza? And the answer is the oven's not on."
  — Ted Seides (01:03–01:13; 08:42)

• On Manager & LP Psychology:
  "Please raise your hand if you think your private equity portfolio is median or below... and there isn’t a single hand that’s ever gone up."
  — Ted Seides (13:48–13:55)

• On Private Credit’s Popularity:
  "It's really hard to lose money in a year. So if you make a portfolio of loans ... to lose money, you need a 20% default rate at 50% severity...almost never happens."
  — Ted Seides (15:44–16:09)

• On Total Portfolio Approach:
  "Total portfolio approach is using data to have a better understanding of what you own. It starts with a very simple reference portfolio."
  — Ted Seides (23:47–24:10)

Fun and Personal Closing

Favorite Podcast Moment:
Ted recommends Patrick O’Shaughnessy’s and Acquired’s podcast episodes, and tennis content from Andy Roddick/Andre Agassi (40:00–40:47).

Personal Takeaways & Advice:

• Lesson from the year: the importance of understanding both the "best self" and "true self" of a fund manager (Kim Liu’s framework — 39:17–39:47).
• Best advice: "You can't do things alone." — Ted Seides (43:20–44:15)
• Joy: “I love nothing more than connecting the dots between people in the industry to create some compounding of value.” (44:44–45:06)
• Fun fact: Ted is a chocolate chip cookie connoisseur.

---

Timestamps for Key Segments

• 00:00–01:13: Setting the table—liquidity and structure in private markets (“pizza” metaphor)
• 07:01–13:26: Deep dive on private market liquidity and changing structure
• 13:48–15:31: Return persistence, industry psychology, the “Buffett bet” on PE vs. S&P
• 15:38–18:09: Private credit — rise in wealth channel, return dynamics
• 18:20–19:27: Venture/growth equity’s new portfolio role, exit challenges
• 20:05–21:15: Public markets — implications, Mag 7, AI
• 22:25–23:39: Geopolitics, AI, China, and allocator perspectives
• 23:43–24:46: Total portfolio approach (TPA) explained
• 24:51–25:48: Predictions for 2026; what’s likely to be top of mind
• 26:28–31:12: Podcast guest reflections and key conversations from 2025
• 31:35–32:49: Podcast discoverability; Spotify playlists and new initiatives
• 33:01–35:07: Business experiments and strategic fintech investments
• 35:18–35:56: Capital Allocators University update and future plans
• 36:14–37:15: Team and partnership growth
• 39:03–44:15: Fun/closing Q&A: learning, book recs, joy, advice, cookies

---

Thematic Wrap-Up & What’s Ahead for 2026

• Industry-wide illiquidity in private markets won’t resolve quickly; expect further pressure on GPs and possibly compressed returns.
• LPs' allocations to privates are at or above plan — limited appetite for new commitments.
• Anticipate eventual reallocation from privates into public markets as liquidity returns.
• Business-wise, Capital Allocators is focused on content discoverability, community-building (summits, CAU), and selective investments/partnerships.

Looking ahead:
Increasing focus on AI (miniseries coming in 2026), growing the team, and strengthening the foundation to explore new optionality in the business.

---

For New and Returning Listeners

• Spotify and web playlists are live to help you discover the best past episodes (“Most Popular,” “Legends,” “CIOs,” etc.)
• Exciting interviews ahead—both new names and longtime industry friends.
• Expect more innovation in allocators’ education and networking, plus candid insider perspectives on what’s shaping the industry.

---

End of Summary

Transcript

[Ted Seides]

The biggest topic this year, driving everything is private markets. I would categorize that in two ways.

[Hank]

The first is liquidity and the second.

[Ted Seides]

Is the changing structure of the industry.

[Hank]

So liquidity has been an issue for.

[Ted Seides]

Several years and it all comes down to why aren't dollars coming out the back end the way they used to? It's a really tricky question because if.

[Hank]

You think about making a pizza, you need dough and cheese and sauce and toppings. And in private equity, you need equity capital. Well, there's tons of dry powder, trillion.

[Ted Seides]

Two of dry powder.

[Hank]

You need debt capital, and there's almost.

[Ted Seides]

An infinite amount of corporate private credit available.

[Hank]

You need companies that are willing to transact and there's tens of thousands of private companies. And now there's 10,000 private equity owned.

[Ted Seides]

Businesses, a fair amount of which are later in the life of that investment chapter.

[Hank]

So there's a lot of businesses that need to transact. You have all these ingredients in place, so how come there's no pizza?

[Ted Seides]

And the answer is the oven's not on.

[Narrator/Host]

I'm Ted Seides and this is Capital Allocators.

Today's episode is our annual year end review. Our CEO Hank and I cover investment trends across private and public markets and top of mind issues for Allocators. We then discuss highlights of the podcast and our efforts to improve discoverability of great episodes, outstanding asset management, fintech products.

[Ted Seides]

And Capital Allocators University.

[Narrator/Host]

With the year in review, we also kick off our countdown of the most.

[Ted Seides]

Popular episodes of 2025.

[Narrator/Host]

We'll drop two this and the top three next week. Coming in at number five is Adrian Meli from Eagle Capital. It's a fun, nuanced exploration of applying the most sophisticated tools of hedge fund investing to long only public equities. And at number four, it's Alex Sasserdote from Whalerock Capital. Alex is a passionate TMT investor who describes how he finds companies ascending their S curve of adoption. Next week we'll drop the top three. Wishing you a relaxing, enjoyable and very happy holiday. Before we get going, we have a.

[Ted Seides]

Holiday gift just for you.

[Narrator/Host]

Discovering podcast episodes you want to listen.

[Ted Seides]

To in a big library kind of sucks when you find Capital Allocators or any other podcast.

[Narrator/Host]

The natural rhythm is to listen to what comes next. After 550 episodes, it's been impossible to.

[Ted Seides]

Figure out what you'd most like to hear.

[Narrator/Host]

We started the path to help this year with our summer series of the.

[Ted Seides]

Best Best CIO interviews and will continue.

[Narrator/Host]

Pushing out a best of summer series going forward. That brings us to your holiday gift. We've taken the next step and created eight playlists of the best episodes across.

[Ted Seides]

The following Most popular legends, CIOs, fundraising, public equity, Private Equity, Private Allocators, and Interdisciplinary Knowledge.

[Narrator/Host]

Each playlist has eight amazing episodes and we'll update them as new ones rise to the top. You can find the playlists on our website or on Spotify. On Spotify, search for Capital Allocators and the most popular and Legends lists will pop up.

[Ted Seides]

If you click more, you can see.

[Hank]

The others as well.

[Narrator/Host]

Wishing you a very happy holidays and happy listening with easy discoverability. Thanks for spreading the word about the new playlists of the best episodes of.

Capital Allocators Capital Allocators is brought to you by my friends at WCM Investment Management. WCM has the courage to back future histories not evident today. Informed by their unrelenting focus on moat trajectory and elevated by insights on corporate culture, WCM's deep roots in public markets set the foundation for its approach to private investing. They didn't just want to enter the private markets, they wanted to improve the investing model itself, build something better, aligned, more thoughtful and truly long term. As a firm owned by its people and grounded in Laguna Beach, WCM is built for alignment and independent thought rather than chasing a scoreboard. WCM invests with a partnership mentality to build meaningful relationships with founders reimagining their industries. They show up earlier, stick around later.

[Ted Seides]

And let value compound over years.

[Narrator/Host]

WCM's style is their edge authenticity over formality, two way learnings over checklists and stories over slide decks. To learn more, visit wcminvest.com this testimonial.

[Disclosure Speaker]

Is being provided by TED Cites and Capital Allocators, who have been compensated a flat fee by wcm. This payment was made in connection with Capital Allocators testimonial and production of podcasts and does not depend on the success or level of business generated. The opinions expressed are solely those of Capital Allocators and may not reflect the opinions of others. Investing involves risk, including the possible loss of principle. Past performance is not indicative of future results. Please visit wcminvest.com for WCM's ADV and further information.

[Interviewer/Co-host]

Please enjoy.

[Narrator/Host]

Capital Allocators is also brought to you by SRS Acium.

[Hank]

Want to make sure your M and.

[Narrator/Host]

A processes aren't stuck in the past? Partner with a company that's been defining the future of dealmaking for nearly two decades. Instead, when it comes to M and A innovation, SRS Acquiam has reshaped the way that deals get done, streamlining processes for maximum efficiency and minimum headaches Professional shareholder representation Online MA payments Digital stockholder solicitation. SRS Acium pioneered each and continues to set the bar for game changing innovation. So leave the days of disjointed deal management behind and define your future with SRS Acium. The smartest way to run a deal. Learn [e-mail] that's SRS acquisition a c.

[Ted Seides]

Q u I o m.com joy our.

[Hank]

Year in Review so this is turning.

[Interviewer/Co-host]

Into a fun annual tradition. The genesis of this conversation was an annual letter that you used to write that outlined the business what went on in the past year, what you're excited about for the following year. Last year we spent a little bit of time talking about all that you're hearing in the institutional community. Even before we jump into what you're hearing, give us a sense of the interactions and the conversations you have with your peers.

[Ted Seides]

Institutional community well, core part of it is the podcast. There's 60 episodes a year and that's 60 podcast conversations, 60 prep calls, probably another 60 calls of people that I'm thinking about having in the future talking about what they're seeing, what's happening in markets.

[Hank]

Then we have our summits.

[Ted Seides]

That'll be for next year, which brings together 120 senior level thought leaders, decision makers on the allocator side and the manager side. They're all small group discussions, so you're getting a sense of what's most important on people's minds.

[Interviewer/Co-host]

So hundreds of conversations with different people in and around the industry. What are you hearing?

[Ted Seides]

The biggest topic this year driving everything is private markets. I would categorize that in two ways.

[Hank]

The first is liquidity and the second.

[Ted Seides]

Is the changing structure of the industry.

[Hank]

So liquidity has been an issue for.

[Ted Seides]

Several years and it all comes down to why aren't dollars coming out the back end the way they used to? It's a really tricky question because if.

[Hank]

You think about making a pizza, you need dough and cheese and sauce and toppings. And in private equity you need equity capital.

[Ted Seides]

Well, there's tons of dry powder, trillion two of dry powder.

[Hank]

You need debt capital, and there's almost.

[Ted Seides]

An infinite amount of corporate private credit available.

[Hank]

You need companies that are willing to transact and there's tens of thousands of private companies. And now there's 10,000 private equity owned.

[Ted Seides]

Businesses, a fair amount of which are later in the life of that investment chapter.

[Hank]

So there's a lot of businesses that need to transact. You have all these ingredients in place. So how come there's no pizza?

[Ted Seides]

And the answer is the oven's not on.

[Hank]

All investment either happens or doesn't happen.

[Ted Seides]

Because of greed and fear. That's basic behavior.

[Hank]

You could say that private equity is.

[Ted Seides]

Frozen because of fear.

[Hank]

It's fear on the GP side of if they sell, returns aren't what their LPs would have thought. They're afraid they're not going to be.

[Ted Seides]

Able to raise their next fund. So rather than say we'll just transact and move on, if we hold it.

[Hank]

Longer and the business continues to grow.

[Ted Seides]

We'Ll get to our MOIC target, we'll get to 1.8, we'll get to 2.0. It's just going to take a couple more years.

[Hank]

On the LP side, you still have.

[Ted Seides]

The aftermath of 2008 where you got.

[Hank]

Too skewed to privates and there were liquidity challenges. There aren't real liquidity challenges on the institutional LP side now, but they don't.

[Ted Seides]

Want to go there.

[Hank]

So they say, well, you're holding for longer, we're going to commit less. There's fear on both sides. Private equity firms only want to buy.

[Ted Seides]

If they get a great deal and they only want to sell if they're getting full value. There's a few turns of multiples in the middle and you haven't seen that thought quite yet.

[Interviewer/Co-host]

What's interesting about that is you mentioned the same dynamic last year. Why hasn't anything changed?

[Hank]

I was at an AGM where I.

[Ted Seides]

Spoke a couple weeks ago and they had done a poll the previous year of do you think exits are going.

[Hank]

To be more than 10% higher? 0 to 10% more?

[Ted Seides]

0 to 10% less and worse than 10% down. 90% were in the 0 to up 10% and the answer was minus 40.

[Hank]

At the beginning of this year I wrote a blog post that effectively said this is going to take a lot.

[Ted Seides]

Longer than people think. And then Liberation Day hit.

[Hank]

So Liberation Day had an impact on strategics. That's a significant part of exits.

[Ted Seides]

Economic uncertainty slows down strategics interest. I continue to think this takes several years.

[Hank]

Maybe it's two, three, four years away. It's a question of how long does.

[Ted Seides]

It take for that bid. Ask spread to narrow.

[Interviewer/Co-host]

Do you get the sense that GPS feel the pressure? Do they know that LPs are sitting there with their foot tapping saying when are these exits going to happen? When are these distributions going to happen?

[Hank]

Oh yeah, this isn't a secret. They feel the pressure. But it's a different kind Of a pressure because it's a pressure on the GP business. The GP needs to raise their next fund.

[Ted Seides]

They need to keep their talent, they need to keep growing.

[Hank]

The LP actually doesn't care that much. If I want 20% in privates and I have 20, I'm good. I'm just not going to commit as much because there's not coming out as.

[Ted Seides]

Much the back end.

[Hank]

But I'm okay. The LPs are not over their skis. The other is the structure of the industry. You went from 25 years ago, institutions.

[Ted Seides]

Had 0% in private equity to today they're anywhere from 10 to 50.

[Hank]

The institutions are where they want to be.

[Ted Seides]

So the market share in terms of asset allocation is not changing.

[Hank]

If anything, almost every CIU you talk to, if their target is 30, they.

[Ted Seides]

Probably have 35 or 40% in privates today.

[Hank]

It doesn't scare them. But over the next five years they.

[Ted Seides]

Want to bring that down to 30.

[Hank]

That's the institutional market, which is what's.

[Ted Seides]

Fueled private equity for 25 years.

[Hank]

What the GPS then look for is.

[Ted Seides]

What are the next areas of growth. Two, there's sovereign wealth funds and private wealth.

[Hank]

If you're sovereigns, you have huge pots of money to put to work and.

[Ted Seides]

You don't want to have 500 small relationships, so you concentrate on larger firms.

[Hank]

The private wealth channel is a whole different distribution mechanism. What those two things have in common.

[Ted Seides]

Is they benefit the largest firms, they don't benefit the middle market player.

[Hank]

So the middle market, you have contraction and then you have expansion of the already large managers.

[Ted Seides]

That's the landscape for what's happening with fund flows, particularly in private equity.

[Interviewer/Co-host]

What does that mean for the middle market?

[Hank]

There's two things it could mean. One, it probably means there's a contraction. There are a lot of private equity.

[Ted Seides]

Firms out there today who don't realize they've already raised their last fund.

[Hank]

But there's another side to that, which is, in theory, if the largest funds.

[Ted Seides]

Are raising more and more money, they need things to buy.

[Hank]

What are they going to buy? Well, the business from the mid market sponsor that's been growing is now ready to be purchased by a larger asset manager. So there should be an opportunity for returns.

[Interviewer/Co-host]

You have this joke about hedge funds. You ask a room of LPs, do you like hedge funds? They all say no. But then you ask them, do you like your hedge fund managers? They all say yes. Is that what the middle market has become?

[Hank]

Well, not yet.

[Ted Seides]

That's a classic exercise in base rates. The base Rate of a hedge fund return. Nobody likes that. But of course we like ours. Private equity still has shown returns that meet investor expectations. On average, middle market's been better than large. Small has been better than middle market. Median has outperformed the S and P. Bottom quartile, definitely not top quartile by a lot.

[Hank]

The question becomes as prices go up.

[Ted Seides]

As exits aren't there. If the returns compress to the point where you can only pencil out the magic 8%, if you get below 8% net, then you're going to be in a situation where people don't like the market. They still will love their managers. I've asked at every AGM I've spoken to this year.

[Hank]

Please raise your hand if you think.

[Ted Seides]

Your private equity portfolio is median or below.

[Hank]

And there isn't a single hand that's ever gone up. Everyone playing is playing for the top quartile.

[Interviewer/Co-host]

Earlier this year you posed another bet similar to the one you made with Warren Buffett back in 2007. This one was private equity returns versus the S&P 500. What happened with that bet?

[Ted Seides]

There was a lot of interest when that paper came out and for several months it looked like another charitable wager would come to formation. I had everything from several private equity firms coming out, including Carbervest and Hamilton Lane that have fantastic databases where you could get at an average realistic private equity return. I had a conversation with Todd Semkin from Susquehanna. They own Kalshi. So there was the potential for taking the bet and putting it on a prediction market.

[Hank]

So a lot of things that looked interesting.

[Ted Seides]

At the end of the day, there wasn't anyone to take the public equity side of the bet. I reached out to some friends at Vanguard, but Vanguard isn't just a public equity index fund manager. They are a low cost provider of solutions, including an early adopter of adding privates to 401ks through a partnership with Harborvest. So there just wasn't any natural person to do it.

[Hank]

Warren might have been a natural person.

[Ted Seides]

To do it, but unfortunately at his age and his retirement, I don't think he had an interest in doing it in the public eye.

[Hank]

So we'll track the bet. But I thought it was interesting that on the margin, given all of the.

[Ted Seides]

Challenges in private equity, it's the private equity managers that were more than willing to step up and take that bet. Maybe someone will hear this and want to support the index side of the bet and we can do something for charity, but for now it's just a.

[Interviewer/Co-host]

Concept where does private credit fit into this dynamic with this market structure and private equity?

[Hank]

Most of the move to alternatives in.

[Ted Seides]

The wealth channel has been in private credit.

[Hank]

There's a bunch of reasons for that. One is it's a great vehicle for wealth.

[Ted Seides]

It's really hard to lose money in a year. So if you make a portfolio of loans and let's say they're yielding 8 to 10%, unlevered, let's call it 10%. To make the math easy for you.

[Hank]

To lose money, you need a 20%.

[Ted Seides]

Default rate at 50% severity almost never happens.

[Hank]

So the returns might not be great.

[Ted Seides]

But you're never going to scare them out because you're just going to be making money.

[Hank]

The other piece of it is that.

[Ted Seides]

The wealth channel is used to liquidity. And by design, all of these alternative assets are less liquid than stocks and bonds. Well, private credit creates its own liquidity through coupons. So all that has led to the design of structures like interval funds and all this money is going in. The funny part about that is that private credit's never been all that interesting to the institutional market.

[Hank]

And the reason is if you have a known illiquidity budget, you want to.

[Ted Seides]

Make sure you get compensated for that with return. Not just risk adjusted return, but return.

[Hank]

Now, if you're compressing your allocations, you're.

[Ted Seides]

Going to focus more on early stage venture, growth venture and some buyout, you're.

[Hank]

Certainly not going to do it in.

[Ted Seides]

Something that has a lower expected return.

[Hank]

So it's this really interesting setup where.

[Ted Seides]

The move of all the wealth has almost all been private credit. And the large alternative asset managers are trying to figure out, can you create a structure that works in private equity, but it's much smaller than private credit's been today.

[Interviewer/Co-host]

So with all that said, what happens with returns in private credit?

[Hank]

So you have the beginning of some defaults.

[Ted Seides]

No surprise. There's lots of businesses, businesses do default and Jamie Dimon says something about cockroaches and people freak out. I do not think there's going to be some calamity. The structure that the asset managers are using is just much better than what the banks used to use. Borrow short, lend long. So these are very long dated structures, which is great. You can work through problems.

[Hank]

Where I think there is a challenge is when all this money comes in, the one thing it does for sure is compress spreads.

[Ted Seides]

I don't think the people buying in the wealth channel have the right understanding of what returns they should expect.

[Hank]

There was a pocket of time coming.

[Ted Seides]

Out of 2022 where these corporate unlevered loans could yield 12 or 13%.

[Hank]

I think people are anchored to that.

[Ted Seides]

When the actual return is probably half that. That's just what happens when all this money comes into the space.

[Interviewer/Co-host]

So you previously mentioned venture. How has institutional interest in venture changed in the last year?

[Hank]

To some extent, very little.

[Ted Seides]

Venture itself went from only early stage 20 years ago to all the way to growth. The one interesting aspect of venture structurally.

[Hank]

Is to the extent private equity is.

[Ted Seides]

Private for longer, venture feels like it's private forever.

[Hank]

This power law business, you invest in.

[Ted Seides]

All these early stage companies and very few become stripe.

[Hank]

Those companies now are wildly profitable and.

[Ted Seides]

Private and if they need any funding, they can get it in the private markets. If they need any liquidity, they can do secondaries in the private markets.

[Hank]

So what's happened is a lot of the institutional allocation portfolios who never used to invest in growth equity, their most.

[Ted Seides]

Successful venture investments have created a very meaningful bucket of growth equity that they can't exit. They can in a secondary market, but they can't if that position is still being held by the venture capitalists.

[Hank]

So there's the different skew in the portfolios that used to be early stage.

[Ted Seides]

Venture exit to the public markets, rinse and repeat. And now you have this big growing allocation to illiquid growth equity that may.

[Hank]

Never have an exit.

[Ted Seides]

They're great businesses and you might want to own them for a long time.

[Hank]

But people are changing the way they.

[Ted Seides]

Have to think about those exposures.

[Interviewer/Co-host]

How has that new pop in this now growth equity allocation because these companies are staying private longer affected the rest of the portfolio.

[Hank]

The first thing it's done is increased the illiquid allocation.

[Ted Seides]

Which means that when it comes to how much are you going to put in of new funds on the other end, there's less to go around.

[Hank]

Nobody knows when that part of the.

[Ted Seides]

Private landscape will get liquidity.

[Hank]

That's the biggest impact. But in terms of allocation to great.

[Ted Seides]

Managers on the early sage side of venture, that is still highly sought after and allocations haven't changed at all.

[Interviewer/Co-host]

How about public markets? How do all of the dynamics that you've just described ultimately impact public markets? For both the allocators and GPs, public.

[Ted Seides]

Markets have been quiet for a couple years other than big move to passive. A lot of activity in POD shops.

[Hank]

But it's been a sneaky year because.

[Ted Seides]

Active performance is back.

[Hank]

Mag7 hasn't really rolled over. S&P's done well.

[Ted Seides]

And yet you've got active performance. You have really good Long, short equity performance. So people are starting to pay attention.

[Hank]

But there's still no dollars flowing because.

[Ted Seides]

Of the bottleneck in the private markets. The biggest impact of that over the next couple of years is that when private markets unlock for liquidity, the first wave of that money from the institutional market is going to go back to the public markets. It's not going to get recycled in the private markets.

[Interviewer/Co-host]

Do the GPS know that?

[Hank]

I think the public GPS are hoping that's the case. The private GPS don't know it at all. So that hasn't happened yet. You see trickles of it, but I.

[Ted Seides]

Think we'll start to see that this coming year.

[Hank]

Then there's all the questions about the.

[Ted Seides]

Mag 7 and the valuation of companies facing AI. Is that a bubble in price? Probably. It's probably not a bubble in the underlying economic activity of the businesses.

[Hank]

But Mag7 went from these dominant cash.

[Ted Seides]

Flow machines to taking all the cash flow and spending it in something that has an unknown roi. That's what a lot of people are thinking about in the public markets.

[Interviewer/Co-host]

With all those structural challenges in deploying capital, where are allocators putting new money.

[Ted Seides]

To work when capital is scarce? You need to have a really high bar for the opportunities that you do pursue. That still happens every year on the margin. There's a lot of intrigue about Japan, particularly in the public markets. It's very much a self help corporate governance story. There's more interest in Europe as the value play.

[Hank]

And then you could think about what.

[Ted Seides]

Josh Wolff calls directional arrows of progress. Things like defense and defense tech, certainly AI investments, particularly in infrastructure and data centers. So there's always opportunities that people will look at that meet a high bar. And of course everyone's always looking for the next great manager in any area across all asset classes.

[Interviewer/Co-host]

So we just covered a lot of ground related to different asset classes. Separate from market Dynamics. What are LPs and GPs caring about?

[Ted Seides]

Certainly first half of the year there was a lot of geopolitical uncertainty, starting with Liberation Day. The interesting thing about that in this.

[Hank]

Community is it doesn't affect much of.

[Ted Seides]

Anything that people do.

[Hank]

And that's because these allocator pools are like tanker boats.

[Ted Seides]

They're not fleet boats.

[Hank]

So unless it's an allocator who's outside.

[Ted Seides]

The US domiciled in a non US currency and they have to make that currency call, you don't see a lot of activity.

[Hank]

In fact, our CIO summit took place.

[Ted Seides]

The Monday, Tuesday and Wednesday after Liberation Day.

[Hank]

And there was a feeling of panic on People not even sure they should come. Once they were all there, there was this catharsis that, oh, you also know.

[Ted Seides]

The right thing to do is not much.

[Hank]

The only thing that's been interesting to watch has been China, because two, three.

[Ted Seides]

Years ago China was going to be out of portfolios.

[Hank]

Then you have a year where Chinese.

[Ted Seides]

Stocks perform really well.

[Hank]

And now these things are cyclical. The US China relationships. Isn't that thawing a little bit? Maybe it's okay to invest in China. Even something that got so extreme is.

[Ted Seides]

Starting to come back.

[Hank]

The other big one, of course, is AI.

[Ted Seides]

A lot of people are looking at it for operational efficiencies.

[Hank]

There are some pockets where it's being used pretty meaningfully in investment strategies. But mostly people are just looking at.

[Ted Seides]

This disbelief at the size of these valuations, how that's going to play out.

[Interviewer/Co-host]

Curious if there's anything else of note that you heard throughout the year from LPs and GPs.

[Ted Seides]

We've been talking about total portfolio approach for several years and in the press.

[Hank]

It's deeply misunderstood. The idea is supposed to be strategic asset allocation.

[Ted Seides]

You have a bunch of asset classes. Total portfolio approach, you're going to be more nimble. The reality is total portfolio approach is using data to have a better understanding of what you own. It starts with a very simple reference portfolio. If you're a 70:30 investor. Stocks, bonds, you can go on that passively.

[Hank]

Anytime you invest in a manager, you're.

[Ted Seides]

Going to fund it from the same exact risk as 70 30. But that doesn't tie you to my 70% has to be broken down. 20% US equities, 25 international equities, 20 hedge funds. If you like a hedge fund, you can do it, figure out what the risk is and fund it.

[Hank]

There's been a bunch of things written in the press.

[Ted Seides]

Has TPA done better than.

[Hank]

That's kind of ridiculous. It depends a lot on how you implement it, but that's something that more and more people are talking about.

[Ted Seides]

Because you have more data, you can refine risk better and you can have more flexibility. Particularly if you're looking at environments where you don't think the asset class betas get you to your spending needs.

[Interviewer/Co-host]

What will be top of mind for allocators and managers at the end of 2026?

[Ted Seides]

I'm very reluctant to make a market call because I deeply don't believe in market timing. So I will say, whether it's next year or the year after, the year after, I would be shocked if there isn't a significant compression maybe starts with the valuations of private AI companies and significant down rounds, and maybe that has downstream effects because of data center spending. I don't know how that all plays.

[Hank]

Out, but I'd be shocked if there.

[Ted Seides]

Isn'T some correction at a period of time and people will be talking about that.

[Hank]

I think people will be talking about.

[Ted Seides]

The continued lack of distributions from private.

[Hank]

Markets, at least for another year. It's just not going to unlock in any significant way.

[Ted Seides]

You're not going to see the IPO markets all of a sudden go ballistic because private CEOs don't want to be public.

[Hank]

And I don't think strategics are going.

[Ted Seides]

To immediately come back in spades. I just don't know what that unlock is.

[Hank]

I think people will be talking about public markets and the potential for outperformance from active managers because you're teed up.

[Ted Seides]

Pretty well to have a good period of time for active managers.

[Interviewer/Co-host]

That's the most Jeremy Grantham I've ever heard you on a market call. One of the things that I'm most excited about with this conversation is just to get your take on what you're hearing because you are so plugged into this community. Let's shift gears. Let's talk about our business. This is our opportunity to give updates on our business, give a rundown of what happened on the podcast over the year, what we're excited about next year. One of the things you mentioned on last year's conversation related to the podcast is that your favorite conversations are with folks you don't know and are doing interesting things. Who did you speak to this year on the podcast that you didn't know previously? That is doing interesting things.

[Ted Seides]

That's one of several buckets of my favorite guests. It's very rare that I meet them that year and then have them on the podcast, but there were a couple examples this year. Adrian Melley from Eagle, Herb Wagner at Fine Point, KK Rowland from JP Morgan who runs Alternatives, who I have met in the last few years and gotten to know. They're all total superstars at what they do.

[Hank]

Then there's a bucket of well known managers that for whatever reason through my.

[Ted Seides]

Career I've never met. Having Jeff Aronson from Centerbridge on, or Robin Mason at ValueAct Managers I've known of for a long time but had a chance to spend some time with and have them on the show. So those are always fun. The biggest bucket is the old friends.

[Hank]

Bucket people I've known for a long.

[Ted Seides]

Time and it's the Right time for them. So Alex Asterdote, who I went to business school with from Whale Rock Dave Lyon, another business school classmate who's hysterical and incredibly savvy investor Ed Grefensted at.

[Hank]

The Dietrich foundation, who I first asked.

[Ted Seides]

Seven years ago and after asking and asking, finally had him on.

[Interviewer/Co-host]

I'm so glad you did the one liners from Ed's conversation. You could hang most of them on the wall and frame them.

[Hank]

And then like Tim Sullivan, who probably.

[Ted Seides]

I've known longer than anyone I've had on the show, we worked together from my first job in 1992 and he retired from Yale after 39 years and had an incredible conversation.

[Hank]

Then there's the small bucket of organizations.

[Ted Seides]

I've gotten to know that are super dynamic and super interesting and are changing over time.

[Hank]

The two I'd put in that bucket.

[Ted Seides]

Are like WCM and Arctos and I.

[Hank]

Had another one with Ian talking about.

[Ted Seides]

The private equity landscape, another one with Mike Trigg and Sanjay A talking about what's happened with them since their first big hiccup three years ago.

[Hank]

The Last Bucket is some miniseries, so.

[Ted Seides]

Some topic that is of great interest and it's my way of getting in two or three layers deep and understanding what's going on. I did that in Private wealth this year and it's something I think I'll do in AI next year.

[Interviewer/Co-host]

The WCM conversation was incredible because it's rare that a manager is willing to share their perspective on a drawdown, and we got to hear that firsthand from Mike and Sanjay. Hopefully there's more of that because there is a lot of insight and learning. To hear the perspectives of what happened, what they changed and how they've improved from it, and what they're doing differently is remarkable and rarely do you get to hear that in a podcast forum.

[Hank]

One of the reasons I love that.

[Ted Seides]

Organization is they are super thoughtful, humble and dynamic in how they go about doing the same thing. So they're willing to have that conversation. This should be an open call for.

[Hank]

People who have really struggled. Usually they don't want to talk about.

[Ted Seides]

It until they've come out of the struggle.

[Hank]

But I agree with you, those are incredible conversations. For obvious reasons, it can be hard.

[Ted Seides]

To have them come on the podcast and tell that story.

[Interviewer/Co-host]

What did you learn from the Private wealth miniseries?

[Hank]

The first thing was the structure of.

[Ted Seides]

How all this is working. This is very much a game today, at least for the Megas.

[Hank]

It won't always be that way. I've seen this in different asset class.

[Ted Seides]

Adoption over time, where there's a new pool of capital that comes in for a new area and they need the comfort of a brand. When I started Protege Partners, they needed the comfort of a fund of funds because people couldn't spell hedge funds.

[Hank]

Over time, that pool of allocators will.

[Ted Seides]

Say, I've got my core allocations there. And they'll start to look at satellites.

[Hank]

But we're not there yet. So that's the first piece was how.

[Ted Seides]

Much this accrues to the biggest asset.

[Hank]

Managers and the incredible amount of resources.

[Ted Seides]

They have to put in to make it work. So KKR went from no. 1 in private wealth to a team of 250 reps.

[Hank]

The other thing you realize in talking.

[Ted Seides]

To the allocator side is there are different types of private wealth organizations. You have a private bank like JP Morgan and they run like an institution does. There's a small focused decision making unit. They've been investing in alternatives for a long time.

[Hank]

I had John Matthews, the head of.

[Ted Seides]

UBS's private wealth channel and he's running.

[Hank]

230 teams that manage north of a billion dollars. There's next to no alt in it.

[Ted Seides]

And that's a huge education process.

[Hank]

So there's a very wide dispersion even.

[Ted Seides]

Within that of the types of players.

[Hank]

And where that money might come from.

[Interviewer/Co-host]

What are you excited related to the podcast into next year?

[Hank]

Those buckets, people I haven't met yet.

[Ted Seides]

And I've got one or two of those teed up that I'm getting to know, people I've known for a long time, great managers that I haven't come across.

[Hank]

And then there's always a thread of.

[Ted Seides]

A discipline outside of managers and allocators that is super additive.

[Hank]

So this past year, tips and tales of the year.

[Ted Seides]

First episode, last episode was on storytelling. I'm really excited to take the lessons from Don Miller and Matt Dix and apply them better because it's pretty incredible.

[Hank]

Someone who understands storytelling, how impactful that.

[Ted Seides]

Can be in all this.

[Interviewer/Co-host]

You mentioned the interdisciplinary podcasts. One of the things that we've learned over the eight years you've been doing this, the five years that I've been with you, is podcast Discoverability sucks. We're changing that a little bit for our followers where we're going to give them access to historical episodes in a new way. You want to talk about that?

[Ted Seides]

Yeah, it does suck.

[Hank]

You can imagine someone who just hears about the podcast.

[Ted Seides]

Great.

[Hank]

They listen.

[Ted Seides]

What do they listen to? The most recent episode and what do they listen to after that? The next most recent episode.

[Hank]

That is great, but it's not necessarily after 550 episodes.

[Ted Seides]

The very, very best.

[Hank]

The first thing we did was a.

[Ted Seides]

Summer series of the Best of CIO episodes.

[Hank]

Two things came out of that.

[Ted Seides]

One is it was extraordinarily well received.

[Hank]

And some of these episodes are six, seven years old.

[Ted Seides]

So the relevance is fantastic.

[Hank]

That's a push. Next summer we're gonna have a different series and we're gonna push it out.

[Ted Seides]

To you and you can listen to.

[Hank]

It, but there should be a better pull. I don't know if anyone has done.

[Ted Seides]

This before, but we've created Spotify playlists.

[Hank]

The most popular episodes.

[Ted Seides]

Legendary investors I've had on the show. Top public market managers, top private equity managers, interdisciplinary thought leaders, marketing and branding.

[Hank]

They each have eight episodes. If you go onto Spotify and look at Capella coast, you'll see the most popular and you'll see the legends.

[Ted Seides]

You have to click more to see the other list and then we'll have.

[Hank]

Them on our website.

[Ted Seides]

I think that'll be a great way for someone who's coming to the podcast.

[Hank]

For the first time to have a.

[Ted Seides]

Really good experience if they can find that list and now they can see these are eight great episodes in a row.

[Interviewer/Co-host]

Well, that's the podcast. A lot of excitement. Playlists are going to be super helpful to allow our listeners to access older episodes that they may not have heard before. What else is going on in the business?

[Hank]

Most of the business is the podcast and our summits, and there's always a series of experiments.

[Ted Seides]

We started this coaching business this year.

[Hank]

We haven't figured out how to crack it as a business, but we have.

[Ted Seides]

A bunch of retired CIOs and asset management executives helping managers tell their story, understand the process of marketing.

[Hank]

We also started doing a few strategic investments. We sit in this intersection between GPs and LPs. The most obvious way to unlock that.

[Ted Seides]

Would be to cross sell, but I don't want to be a broker dealer. It is wildly profitable, but not the profits we're going to make. So that said, I've come across a couple of great fintech products that either serve the allocator community or the manager community. And we can significantly move the needle in business development.

[Hank]

We've done three of those this year.

[Interviewer/Co-host]

Oh well.

[Ted Seides]

Labs Campbell Wilson's business. That is the best tool I've ever seen for allocators to get information on holdings, on personnel moves, on other allocators. Holdings and managers are starting to look at it too, because for their Marketing. If you know someone you're talking to is invest in a certain subset of managers, not only can you understand them a little better, but you can then click and see well of that manager, who else one of their clients. So it's a great tool.

[Hank]

There's one called Thema, which is a UK based business that started using AI.

[Ted Seides]

Several years ago to classify private companies and map out a universe. If you're a private equity firm and you're looking at tech software businesses in some niche, it's really hard to get the information on who the comps are, information about size of the business, number of employees and they've done all the web scraping and AI. It's an incredible tool. So we're helping Finn McCabe at Thema and introducing him to a bunch of private equity firms and the Third Ascension Software, which is an HR software package that's helping the Allocator community organize their compensation workflow.

[Hank]

So you can imagine you have a bunch of employees.

[Ted Seides]

Each one's on their own comp schedule, bonus schedule. Performance gets even more complicated and I'm sure they'll get to the manager community. Imagine Carrie and how you're supposed to splitting up, carry and tracking it. Most people track it on an Excel spreadsheet, so they're doing that in an automated way.

[Interviewer/Co-host]

So we're sitting here, we just wrapped up our second cohort of Capital Cares University this year. You wanna talk about the plans that we have for CAU next year?

[Hank]

We've run the CAU for the Allocator.

[Ted Seides]

Community for five years and we started investor relations Business development last year. We decided to take the content and put it online. The content is great, the people love it. They also love the experience of being with peers. By taking the content, putting it online, it makes it much easier for us to add to that library. And we're going to bring in friends to teach great modules and people can consume that when they want. And then we'll continue to do LP only gathering a GP only gathering for IRBD and have it almost all be that networking piece which we've figured out through our summits. Rather than having it be a high priced one time experience, we're going to turn it into a low priced subscription.

[Interviewer/Co-host]

Yeah, it's something we're really excited about. We've had the help of this super production crew called Fondue. Take all of this curriculum and turn it into almost a masterclass for the frameworks that we put together from Cap Alcares University. How are we doing this all.

[Hank]

Hank.

[Ted Seides]

You and Morgan have been with me going on five years and we were fortunate this year to grow the team. Tamara Auerbach joined us at the beginning of the year to help with all the relationships, relationships with GPs, relationships with LP trying to organize our summits. In the past we only had the ability to send emails. Well, she has time to pick up.

[Hank]

The phone, so that's been a huge.

[Ted Seides]

Unlock and having the right person doing that on the team has been great. In the back half of the year we hired Liz Smith to focus on the media side. So she's gotten up the curve on all of the operational production process that goes into the podcasts coming out. And then we'll start now to play around with what else can we do with this body of content. It's the addition of Tamar and Liz that's allowed us to be able to do what we continue to do. And then alongside of our team of five, we've had incredible partnerships on the outside. So for years we've worked on our summits with Iconnections and Prosec partners and of course Rahul Moodgal as our very close partners bringing in resources to allow us to put these events together.

[Interviewer/Co-host]

We got our starting five, we got our dream team. What are you most excited for for next year?

[Ted Seides]

I had a conversation with a very long standing CIO a couple of weeks ago and I asked him, so you're going to be here for the next 10, 20 years?

[Hank]

And he said, I hope so. I said, what do you mean? What happens is after a long period.

[Ted Seides]

Of time you build the foundation. So the foundation for an allocator is the team of people on the playing field, the portfolio group of managers you just love, you respect, you learn a.

[Hank]

Lot from, and once you have that.

[Ted Seides]

Built, you get to do all the fun stuff on the margin. You can look at one off opportunities, you can look at direct investments. And that's what he's doing.

[Hank]

He said, well, as long as that's in place, he's going to stay for a long time. He said, but I can't imagine starting over.

[Ted Seides]

So for example, if his team left and he had to retrain people, it's back to the basics. I'm just going to invest in a couple of managers. Probably isn't going to be as exciting to him. I feel like the parallel exists. We've now over the last couple years built the foundation for our summits that we can just execute and do that really well. Podcast is its own gift that keeps on giving.

[Hank]

And then the question is, once you.

[Ted Seides]

Have the foundation what else might come up.

[Hank]

So that's what I get excited for. I love what we're doing, and then.

[Ted Seides]

I love the optionality of something new coming up.

[Interviewer/Co-host]

And if I could add to that, what we've done with our summits has been so well received by the institutional community that continuing to prioritize the experience they have and the value that they get out of spending two, three days together is exciting and fun and what keeps us going and very much is the foundation of what we're doing, and that's what is exciting into next year. All right, Ted, I want to turn to a couple of fun closing questions. Some of these are familiar, some of them are new. Why don't we start with the new ones? What'd you learn this year?

[Ted Seides]

Well, we already talked about private wealth. I learned a lot about that market.

[Hank]

Outside of that, I learned a lot.

[Ted Seides]

About how to tell a story. I wouldn't say I'm practiced and significantly better at it than I was a year ago, but now I understand how to do it.

[Hank]

The other one I learned, which came.

[Ted Seides]

From Kim Liu at CAU in the summer, was this concept of the evaluation of a manager.

[Hank]

We're all two people.

[Ted Seides]

We're our best self and our true self. We all present our best self first.

[Hank]

Manager comes in and they're going to.

[Ted Seides]

Present their best self to you. And your role before you decide to.

[Hank]

Commit money is to figure out what's their true self. That lens, I have found, applies in job interviews. If you are interviewing someone, you can't just learn who their best self is.

[Ted Seides]

You have to do the work and figure out the true self. So that's one of my fun little lessons from the year.

[Interviewer/Co-host]

What was your favorite podcast episode that was not a Capital Allocators episode.

[Hank]

There's always some money management podcasts.

[Ted Seides]

Patrick O' Shaughnessy had Alan Waxman from 6th street on earlier in the year was fantastic. And Nikolai Tangent in Good Company had both Chris Hahn and Paul Singer on. Both of them were just amazing episodes. Outside of investing, there were two acquired episodes I loved.

[Hank]

The first was Recent Coca Cola.

[Ted Seides]

I've been around Coke my whole life.

[Hank]

And I knew many of the stories.

[Ted Seides]

But I didn't know that the Coca Cola company created our modern image of Santa Claus. So that was kind of cool to learn. And then they interviewed Jesse Cole, who created the Savannah Bananas. I've been following the Savannah Bananas for a long time, and that's just an amazing story. So I love that one.

[Hank]

The last I'm a big tennis nut.

[Ted Seides]

Andy Roddick has a podcast called Served and he did an episode with Andre Agassi that was crack cocaine for tennis lovers. It was so insightful about strategies and understanding other players. It was really fun.

[Interviewer/Co-host]

What book is in your queue that you are most excited for?

[Hank]

There are two coming out next year.

[Ted Seides]

That I'm excited to tell people about in the fortunate position that I've read both of them ahead of time and they are amazing.

[Hank]

The first, Jonathan Tepper, who's been a.

[Ted Seides]

Guest on the show in the past, who runs a long only firm called Pravat Capital. He was a bestselling author of the Myth Capitalism, wrote a memoir called Shooting up and it's his story growing up in a heroin addict community. His parents were missionaries in Madrid. It is heartfelt, it is heart wrenching, it is deeply personal and it's one of the best memoirs I've ever read.

[Hank]

The other, John Kim, who until recently.

[Ted Seides]

Was the head of capital formation at General Catalyst, wrote a book called the Dao of Fundraising. It is the best book I've ever read describing the capital formation process. I think that'll come out in March. John's going to come on the podcast.

[Interviewer/Co-host]

What's your favorite holiday gift that you've ever received?

[Ted Seides]

I am a huge Ted Lasso fan and Rahul Mudgal, my dear friend, has over the years given me lots and lots of Ted Lasso themed swag. The best two gifts I've ever received, one came from Rahul and one came from one of my sons were signed.

[Hank]

Pilot in one instance and a signed.

[Ted Seides]

Poster of Ted Lasso.

[Interviewer/Co-host]

Super cool. Some familiar closing questions, some that you haven't answered in a long time or have not answered at all. What was your first paid job and what'd you learn from it?

[Hank]

I was a cashier at a movie.

[Ted Seides]

Theater and I learned that I love counting and keeping score and I'm really good at it.

[Interviewer/Co-host]

What's one thing that most people don't know about you that you find interesting?

[Hank]

I love.

[Ted Seides]

And when I say I love, I love chocolate chip cookies. I follow all the health stuff and I get it.

[Hank]

And Warren Buffett says this thing about.

[Ted Seides]

He had a twin and that twin only ate broccoli. He's sure that he, the current Warren Buffett, would be much happier drinking his Cherry cokes and eating McDonald's all the time.

[Hank]

I just love chocolate chip cookies. I've gotten to the point where I.

[Ted Seides]

Won'T finish one if I don't think they're good. But like grade inflation in college, like most chocolate chip cookies are an 8 or above on a scale of 1 to 10.

[Interviewer/Co-host]

Okay, so now I have to ask what is the best chocolate chip cookie?

[Ted Seides]

Conceptually, it has to come from a bakery.

[Hank]

They're the cookie that's crispy on the.

[Ted Seides]

Outside and just a little bit chewy on the inside.

[Hank]

Not massively overloaded with chocolate.

[Ted Seides]

But you gotta be able to taste the chocolate and it's just so, so good.

[Interviewer/Co-host]

What is the best advice you've ever received?

[Hank]

It's definitely, you can't do things alone.

[Ted Seides]

For whatever reason, I grew up feeling like I had to figure everything out on my own. There's this old story that when I was graduating college and I was interviewing at Goldman Sachs investment banking alongside of.

[Hank]

Yale and I ended up not getting.

[Ted Seides]

The offer at Goldman and ended up getting the job at Yale and went.

[Hank]

To Yale, my late uncle was the.

[Ted Seides]

Chairman of Capital Group. Capital Group was one of Goldman's biggest clients at the time. One might think I could have called.

[Hank]

Uncle Jim and said, hey, do you know anybody at Goldman Sachs? And maybe he might have said, I do, why are you asking? And I said, well, I'm in the final round investment banking interviews and I just thought maybe you'd know somebody and maybe that would have helped out. His last name was Rothenberg.

[Ted Seides]

Mine cites. No one would've put that together. I never understood how to ask for help.

[Hank]

In the last five years of this business, everything that's happened has only happened.

[Ted Seides]

Because I've figured out we can do a lot more with great people around you.

[Interviewer/Co-host]

Totally agree. Last one, what brings you the greatest joy?

[Ted Seides]

When Morgan Housel was on the podcast earlier this year, he talked about the difference between contentment and happiness and how happiness is a one shot deal. You're really happy for a very short period of time, but contentment is something that lasts long. So I thought a lot about that. Whenever I'm in the flow, that's what.

[Hank]

Brings me to greatest joy. So I have three kids and two step kids and there's a line that.

[Ted Seides]

You'Re only as happy as your least happy kid.

[Hank]

And right now it seems to be.

[Ted Seides]

A pretty good time for them. They're doing well. I really love spending time with my wife. We are big tennis players, enjoy playing tennis together and spending time together. And professionally I love nothing more than connecting the dots between people in the industry to create some compounding of value. It just excites me and I don't.

[Hank]

Have to get anything out of it.

[Ted Seides]

It's bringing two people I know together where they can help each other. I'M in a fortunate position to get to do that over and over and over again, and I just love it.

[Interviewer/Co-host]

Well, good thing you get to do it as often as you do, that's for sure. Well, Ted, it's fun to do another year in review. It's fun to hear what you're hearing. It's fun to hear your update on the business. Beyond excited for what's in store in 2026. Beyond grateful to get to work on this business together.

[Ted Seides]

None of this is going to happen.

[Hank]

Without you, and you're pretty damn good.

[Ted Seides]

On the mic, so we're going to.

[Hank]

Have to get you back out more.

[Ted Seides]

In front of the mic next year.

[Interviewer/Co-host]

We'll see about that.

[Ted Seides]

Thanks for listening to the show. If you like what you heard, hop on our [e-mail] where you can access.

[Narrator/Host]

Past shows, join our mailing list and.

[Ted Seides]

Sign up for Premium Content. Have a good one and see you next time.

[Disclaimer Speaker]

All opinions expressed by TED and Podcast guests are solely their own opinions and do not reflect the opinion of Capital Allocators or their firms. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of Capital Allocators or podcast guests may maintain positions in securities discussed on this podcast.