Boaz Weinstein

Summary

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Money Stuff: The Podcast — Boaz Weinstein (March 19, 2026)

Episode Overview

In this episode, Money Stuff hosts Matt Levine and Katie Greifeld welcome Boaz Weinstein, founder of Saba Capital Management, for a deep dive into the world of closed-end fund (“CEF”) and business development company (“BDC”) activism, with a particular focus on his current tender offers for private BDCs like Blue Owl (OBDC2) and Starwood S REIT. The conversation unpacks the mechanics of these trades, the underlying problems with liquidity in private credit and interval fund vehicles, structural conflicts for managers, and the implications for retail and institutional investors. Along the way, Boaz offers candid insights, practical lessons from years of activism, and memorable commentary on the challenges—and dysfunctions—of today's credit markets.

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Key Discussion Points & Insights

The Trade: Saba's Tenders for Blue Owl & Starwood S REIT

• Why Now?
  Boaz describes his firm's offer to buy 5% of OBDC2 (Blue Owl) at a ~35% discount to NAV, and a similar tender for Starwood S REIT, both intended to provide liquidity to investors who are otherwise gated (locked in) for years ([01:35–04:48]).

• Is It Activism, Value Investing, or Trolling?

  • Matt presses: “Are you hedging the credit? Are you trolling?”
  • Boaz: "Why Matt, do you assume it’s not all the above?" ([02:32])
  • The trade is born from real market need (advisors with large blocks seeking exit), not just publicity.

• Closed-End Fund Activism Playbook

  • Saba’s approach is rooted in their experience with CEFs, where similar liquidity mismatches and governance levers exist.
  • “They're not close cousins. They're literally like brother and sister...the more or less the same.” – Boaz ([04:52])
  • Legal mechanisms, tenders, and board challenges from CEF activism apply to BDCs/interval funds as well.

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Liquidity Mismatch & The Retail Injustice

• Structural Flaw: Selling Investors the Illusion of Liquidity

  • “You have fire insurance in a sell off that you can get out, but it doesn’t work if there’s actually a fire.” – Boaz, paraphrasing his partner/colleagues' criticisms ([05:38])

• Over-Promising and Miscommunication

  • Disclosures technically exist but are misunderstood. Investors don't realize that if 40% want out in a quarter designed for 5% tenders, exits take years ([06:08]).

  • Boaz: “I don’t believe the retail investor understood that the liquidity of the underlying does not at all match the liquidity of their investment.” ([07:19])

• Sales Incentives and Scandals

  • “The sales commissions were so large to draw people to want to sell it ... that I think is a scandal.”
  • “Clients should know ex post what their trusted adviser was paid for putting them into this thing my grandmother used to call dreck.” ([08:47])

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Why Managers Resist Doing The Right Thing

• “Permanent Capital” Is Too Tempting to Give Up

  • Fund managers resist converting closed-end products to open-end because “the value the stock market will ascribe to an ETF...and a closed end fund... is so different. The lure, the drug of permanent capital. It sounds so good not having to deal with investors.” ([08:47])

• Activists Face Obstacles From Both Managers and Investors

  • Retail investors often “will even vote in a way that harms themselves” because of trust in managers and misleading pitches about yield.
  • But, says Boaz: “Imagine this. ... we say we’re going to do no fees for a year. How do you like that client?” ([12:33])

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Tender Mechanics and the OBDC2 Experiment

• The Process Is Clunky and Discouraged by Managers

  • Investors receive the offer by mail, with a discouraging letter from the manager attached: “Don’t do [this]. We don’t recommend you do this.” ([15:22–15:39])
  • Blue Owl’s leadership was neutral to friendly; Starwood was on record recommending against participating.

• NAV Reality: Are The Marks Real?

  • Even a 35% discount might not be enough; funds are generally levered and NAVs may be inflated.
  • “We don’t think that there’s a lot of manager alpha in that space.” ([17:55])
  • “Navs are too high across the board, even if they’re more than too high at certain places.” ([17:55])

• Potential for Systemic Issues

  • “This could be a systemic nightmare...because so many people think we’re going to buy none.” ([19:57, 22:15])

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Broader Market Implications & Comparisons

• Public vs. Private BDCs/Funds

  • Public BDCs trade at much larger discounts (sometimes 50%), while private vehicles maintain high NAV marks.
  • Managers have little incentive to buy back their public BDCs at huge discounts, as that shrinks AUM and potential fees ([30:01–39:43]).

• Volatility Laundering and the “Illiquidity Premium” Mirage

  • Boaz, referencing Cliff Asness: “Volatility laundering...is just about the best two word quote for to talk about what’s wrong with Wall Street ever...” ([47:33–49:33])
  • Private credit marks rarely move, creating the illusion of safety, but masking risks that surface when liquidity is actually needed.

• Incentives Prevent Rational Shareholder-Friendly Action

  • “When [fund managers] don’t go into the market and buy back shares at a 50% discount...greed is laid bare.” ([38:49])

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Notable Quotes & Memorable Moments

• On Clunky Tender Offers:
  “It has to...be mailed to them and there’s a long form to fill out. And the thing that arrives in the mail is accompanied...by a letter from the manager saying, ‘don’t do [this].’” – Boaz ([15:22])

• On Managers and Permanent Capital:
  “The lure, the drug of permanent capital. It sounds so good not having to deal with investors.” – Boaz ([08:47])

• On Volatility Laundering in Private Credit:
  “...Somehow they were able to get 12 and literally zero mark-to-market volatility, back to the Cliffwater sharp of 11....For too long the problems were masked and now the curtain gets pulled back...” – Boaz ([49:35])

• On Market Structure Failure:
  “This could be a systemic nightmare...My imagination and the markets is not great enough. First of all, I don’t think people’s imagination here is great enough...” – Boaz ([22:15])

• On Activism, Innovation, and Enjoying the Process:
  “I am really enjoying kind of exploring the creative side of trying something new. I’m hoping that it doesn’t lead to nothing.” – Boaz ([54:31])

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Important Segments & Timestamps

• Intro to Boaz’s Tender Offers & Trade Mechanics: [01:35–04:48]
• Liquidity Mismatch & Over-Promise Discussion: [05:30–08:47]
• Conflicts, Commissions, and Campaigns: [08:47–12:33]
• Tender Mechanisms, Manager Opposition: [15:22–16:57]
• Are NAVs Trustworthy? Levered Funds, Markdowns: [16:57–20:23]
• Systemic Risk & Market Reactions: [20:23–23:38]
• Manager Incentives / Why No Buybacks?: [30:01–41:07]
• Cliff Asness, Volatility Laundering, and Retail Illusions: [47:18–50:42]
• Digital Asset Trusts and Special Risks: [52:18–54:30]
• What’s Next for Saba’s Tender Offers?: [50:42–51:45]

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Takeaways for Listeners

• Private BDC and interval fund investors are frequently sold an illusion of liquidity that collapses under stress, leading to long wait times or significant discounts to NAV to exit.
• Fund management structures (permanent capital, incentives, fees) create resistance to investor-friendly actions like open-ending funds or buying back shares at deep discounts—even when it could benefit remaining shareholders.
• NAVs in private credit are often overstated, with leverage and infrequent mark-to-market practices compounding risks. The divergence between public and private BDC values exposes structural weaknesses in the system.
• Boaz Weinstein’s current activism is partly an experiment—one that may inform the whole market, and ultimately help reveal the true value and risks in private credit portfolios.
• This episode offers a candid and incisive look at financial innovation, market activism, and the forces driving significant dislocation in retail-facing credit investments.

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Memorable exchange — on the market’s lack of imagination:

“My imagination and the markets is not great enough. First of all, I don’t think people’s imagination here is great enough because so many people think we’re going to buy none.” — Boaz Weinstein ([22:15])

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Listener Recommendation:
If you want a crash course in how liquidity mismatches, manager incentives, and activism play out in real-time for retail investors in complex credit vehicles, this episode is essential listening—with real-world stakes that go far beyond theory.

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Transcript

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[Matt Levine]

hello and welcome to the Money Stuff Podcast. I'm Matt Levine, I'm here with Katie Greifeld and our guest is Boaz Weinstein of Saba Capital Management. I feel like we've thought since the beginning of this podcast about having you on to talk about closed end fund activism. But man, closed end fund activism has in a new form gotten really hot. I want to talk about like what your trade is. You're out with a tender to buy what, 5, 10% of OBDC2? 5% of OBDC2 the Blue Owl private BDC at a 35ish percent discount to marked NAV. So like, what's the trade here? Are you going in the book and doing detailed credit work and being like, we think this stuff is worth 75 cents on the dollar, so we'll pay 65. Are you hedging the credit? Are you trolling? What's the sort of basic trade here?

[Boaz Weinstein]

Why Matt, do you assume it's not all the above?

[Katie Greifeld]

It's just a lot of.

[Matt Levine]

I'm going to start. I'm going to start with trolling. The reason to assume it's trolling and not all of the above is because I think you mentioned before we started, people's first natural question is, do you think you'll get any?

[Boaz Weinstein]

Okay, so I've read some people suggest, oh, this is some sort of PR blitz to get myself in the story. We actually had the tenders. It worked well. We actually had the tenders ready before the Blue Owl story became a huge part.

[Matt Levine]

You said the tenders for OBDC 2. Do you have 15 of these ready to go?

[Boaz Weinstein]

We have a few ready to go. We started with two. So you mentioned one of them. The other is Starwood. S. Reid Starwood, when B Read had its problems and B Read being an interval fund that a few years ago had very high redemptions and was able to actually cure this problem because it was somewhat in isolation. It was B REIT and S reit in part because of the rise in interest rates and the real estate portfolio suffering. They were able to cure it. They did a special transaction with CalSTRS

[Matt Levine]

and the basically CalSTRS like bought shares at Navy and they use that to cash people out.

[Boaz Weinstein]

Or is that they got to earn a very attractive yield for, I think, supplying liquidity as needed and sort of just that there wouldn't be a kind of run on the fund calmed things down. And actually redemptions went below that 5% cap. But SRE Starwood, this is already almost four years ago, is still gated. And they at some point suspended and now they let out a certain amount a month and that amount was increased. And so four years later, it's still gated. And so the way this all happened. Sorry that it's not trolling. Okay. The way it happened was we Learned from some RIAs, some. Some private wealth advisors that there was a block of 20 to 30 million from a single group of advisors of S. REIT that just wanted to sell. They wanted out. They didn't want to wait potentially multiple years. And S. Reit, actually, we felt like, you know, the NAV is actually probably pretty good. It doesn't have the private credit problems. It's real estate. B REIT has seen their NAV go up and we felt like people need liquidity. They've waited now four years. They only gone partial and so. And the percentage that's, you know, in the queue to redeem is very high. And so as that was happening, we also.

[Matt Levine]

Did you get the call because like, you do close on fund activism? Like.

[Boaz Weinstein]

Yes. So they are. They are not close cousins. They're literally like brother and sister. You might even say they're like identical Twins. But like there's one thing different about them, you know, the redemption rights. This kind of like history we have in closing funds is not just like tangentially helpful. It is front and center. The more or less the same. There are 40 ACT products that manager has the SEC to deal with. If they don't treat their investors properly, we can avail ourselves of the courts as we have in closed in funds. And so I had tenders ready for Starwood and for Blue Owl because I was aware of outflows. Then the Blue Owl story took like three legs worse and we went Starwood and Blue Owl.

[Matt Levine]

So you were like aware of outflows in particular. You were like, I'm ready for the private credit industry generally or like Blue Owl particularly. I heard of some RIAs who won out.

[Boaz Weinstein]

It was both because it was more like where do you start and prove the concept. And my colleague, my partner Kieran Goodwin has been ranting on Twitter in a good way for two and a half years, three years about how the BDP VCs and interval funds have over promised liquidity their investors. You know, you have fire insurance in a sell off that you can get out, but it doesn't work if there's actually a fire.

[Matt Levine]

What does over promise mean? Because like I think a lot of them would say we promised 5% tenders and we're doing 5% tenders.

[Boaz Weinstein]

Yes. Here's what I think over promised is, and maybe the docs even say this, but to say in a large sell off or in some scenarios where there's a lot of fear it's going to take you potentially years to get your money back. You know, like where we say, you know, you have those long disclaimers and then you actually say no assurance can be made that an entire investment won't be lost. And you're like, really, like we're going to lose 100. Do we have really to say that? I mean maybe they did. I don't have a dog in the fight of like how good were their disclosures? I might need to remodel my house. I might need to, I might need the money. And they say, well look, for the last 20 quarters you've been, you would have been able to get out of all of it because as long as it's under five, you're good. If it's 10, and that's a lot, you can get out of half, five out of 10. But what happens if it's 40? You know what happens? You're getting out of an eighth of it. And, and Then of course, the, you know, I was going to bring my George Soros reflexivity book because what about the reflexivity, you know, a term that was overused in finance very long ago, but I think is very apropos here. The reflexivity of falling navs leading to larger outflows, leading to forced selling, leading to falling navs and then you're out in three or four years. I don't believe that the retail investor understood that. And I wonder if it's even disclosed

[Matt Levine]

because I assume that like roughly none of these redemptions are people trying to remodel their houses. And like roughly all of it is like people worried about navs.

[Boaz Weinstein]

No, no, for sure. There's just the general people. Some people have cash needs, right? Like, and yes, do they have cash needs? And they're like, how should I satisfy it? Okay, there's this thing I'm a little worried about, you know, I mean some, like, I don't want to answer all of the above to a lot of the either ors that you ask me, so. But I do think in this case there is a percentage of people that want their money back because they need the money. I think when you go to like Clifford or the shocking number of 14%, which was only 4%, let's say the quarter before, you can easily argue that extra 10. Are people worried about their navs or worried that the gate's going to shut? That an interval fund can't actually suspend, a BDC can. So the products are not the same, but for sure they feed into each other. And the retail investor, I don't believe, understood that the liquidity of the underlying underlying does not at all match the liquidity of their investment.

[Katie Greifeld]

Well, you mentioned brokers and something that I've been wondering about in all of this. I mean, Matt and I were discussing on a recent pod that like we live in a disclosure based society and I'm sure that these disclaimers were laid out in the prospectuses, et cetera, but I wonder where the, the failure of communication was, whether it was on the brokers, on the salespeople putting their clients in this. And because it does feel like there's some structural mismatch of liquidity expectations here when it comes to retail investors in these products.

[Boaz Weinstein]

Yeah, so one thing is, and it's kind of why I have such a hard time getting the manager sometimes of closed end funds to do what I think is to do the right thing. It's like, and if I say to them, hey, you should turn this closed end fund into an open ended fund out of your AUM, 95% of it are open ended products. And 5 or 10 are these closed ended products. Whether they be BDCs or actual closed end funds. Why do they fight me so hard? The C suite will fight me because the value the stock market will ascribe to an ETF where in theory you can get your money back tomorrow. And a closed end fund where in theory you're locked in forever. Other than my activism is so different. And so the lure, the drug of permanent capital. It sounds so good not having to deal with investors. Bill Ackman benefited so greatly by this structure where he moved his hedge fund to be a closed end fund. Because when he went through his drawdown and he did great since 18 people couldn't leave and they left by way of a 25 to 35% discount which he also sopped up by buying back a quarter the shares. Something you don't see FS doing with fsk. So the thing is the reason you ask about the disclosures, it's kind of on the one hand, the sales commissions were so large to draw people to want to sell it. That's the private wealth. And that, you know, that I think is a scandal. I think it'd be nice if the clients know ex post what their trusted adviser was paid for putting them into this thing my grandmother used to call dreck. I don't know if that is a technical term, but if anyone understands Yiddish, they know what I mean. And so there are going to be those questions. How much were you paid? What were you paid? Oh, you know, and so, so that, that's interesting. And then the second part of it, you know, is that maybe there was some like benign, you know, ignorance. But really the, the seeds of the, the destruction of these products are really rooted in the desire for the manager to raise retail money. But having to do it in this way where retail says am I going to be able to get my money back? And you, you offer these clauses and these terms to bring them in because you want that permanent capital. Turns out it's not so permanent. And by the way, it's not so permanent because. Because it's a 40 act product, the board could be replaced and they could fire the manager just like. Just as we've done in closed info.

[Matt Levine]

Yeah, this is what I was going to say. Like when, when I first started writing about your tilted Blue Owl, I got emails being like, he's going to take over the fund, replace the manager, get the fees. I feel like with a 5% tender. That's not like top of mind. But are you, is that like a possibility for some of these Drawing from

[Boaz Weinstein]

the lessons of closed end funds in the same way that retail was in some cases sheepish enough to buy what was sold to them, you know they didn't call their broker. As I've already said in a prior podcast, a famous president of a very large fund said these products are sold, not bought. They didn't call their broker to say get me the latest interval fund. As if they even know what that nomenclature means. They were told this. You know you want yield. You're 73 years old. This is going to give you a nice yield. Great manager. So they often will, will even vote in a way that harms themselves, as BP just did in December. It just became a stock and they went from being able to get it nav to now nursing a live 30% loss, extra loss. So in order to actually take one of these over, you're going to have the manager tell the clients you shouldn't listen to them. And a lot of them are actually going to not listen to the activist. But imagine this. Matt. Okay, we say we're going to do no fees for a year. How do you like that client? And then as long as the fund is below a 30% discount, all cash flow, we will buy it back in the open market.

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[Matt Levine]

You really want to talk about publicly listed closed end fund activism, but I want to talk about OBDC too.

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Oh, ok.

[Matt Levine]

I want to talk about private bdcs.

[Boaz Weinstein]

I'll stick with that. I was not even talking about closed end funds. I was talking about public BDCs. Yeah, okay, fine.

[Matt Levine]

You're not paying for public BDCs.

[Boaz Weinstein]

I might be buying some of them.

[Matt Levine]

Yeah, sure.

[Boaz Weinstein]

Okay, fine. So let's stick. You're right. The thing we did was the interesting

[Matt Levine]

trade is tendering for the private bdc.

[Boaz Weinstein]

Yeah. So, okay, so if we tendered and got more and more and more and more the same thing, the same point would be made, I think in order.

[Matt Levine]

I'm not even sure if you can take over a private bidding seed.

[Boaz Weinstein]

Yeah, I haven't really looked into it. So this all started with. Let me dip my toe in a space where people want to get out and they don't have a way of getting out in the pace they want to. And we'll learn as we go and learn from the lessons of, of closed end funds. So yes, we, we had two of them ready before Blue Owl became a thing. We have others ready and we on the market are super curious. Are we actually going to get hit?

[Matt Levine]

And you don't know if you're going to get hit yet.

[Boaz Weinstein]

It's too early. Because first it's like this clunky process. It makes it hard to get it. It has to. They have, they have to get it mailed to them and there's a long form to fill out. And the thing that arrives in the mail is accompanied, it's sent by the manager and it's accompanied by a letter from the manager saying, don't do. We don't recommend you do this.

[Matt Levine]

I thought you had said somewhere that Blue Owl was supportive of. Is there some level of supportive between like saying you should do this in the letter and saying you shouldn't do this?

[Boaz Weinstein]

Okay, so I'll, I'll look, I'm on, I'm on your podcast. I'm all about radical honesty where possible. So when I, when I say that. So first, S. REIT has already said to their investors, we don't. We recommend against. Okay. And so the letter of ours will be accompanied by theirs from them saying, don't, you know, we don't think you should do this. What did I mean with Blue Owl? I know two of the founders pretty well. And, and so when I did this, I happened to have written to them to say, hey, by the way, as I go into this, I don't have an activist angle. I'm just here to provide a bid. And they wrote me, you know, I'm not giving away states here because I'm only sitting back saying, you know, let's continue to have a dialogue. You know, we like each other this and that. And so, like, I didn't get any hate or any anger or anything like that. And so that was, that was my take. Now, as far as I know, they have not commented on whether they can't

[Matt Levine]

really recommend, but they could say silent if they're marking it at 100. Right.

[Boaz Weinstein]

Well, I think someone could say, while we think the portfolio is really attractive, we understand the liquidity needs of the clients may require for them to find a way to sell. You know, I think there's many ways to say you like something or you don't like something. And I, I think there is a world where they could be more neutral than Starwood was. But we'll see what they say. I don't know.

[Katie Greifeld]

I am curious what you make of the marks when it comes to some of these blue Alphonse that you're tendering for. Because the fact that you're going through with this trade or you would like to execute it, I mean, does that imply that, you know, you think that the NAVs are accurate or is it just maybe there's somewhere between, you know, a 65% discount and 100%?

[Boaz Weinstein]

I actually don't think we bid conservatively. I was, I was somewhere in New York last Friday.

[Matt Levine]

Your initial announcement was 20 to 35. And then you bid down 35. Well, 23rd.

[Boaz Weinstein]

Yeah, well, I was capturing Starwood in there too, but because Starwood, I think we bid 27. Yeah. So I ran into somebody who said, you're going to get hit on all of it. You didn't bid low enough because. And he's like, you're focused on Nav, but you should be focused on Gav. And, you know, it's really looking at like the gross assets. Yeah.

[Matt Levine]

You were saying this before. I think we were filming that a 35 discount is not what it sounds like because these are levered funds. Right? You want to just.

[Boaz Weinstein]

Sure. So some funds are very levered, some are 0.75 levered, some are 1.5 levered. That means leverage on top of, you know, a dollar of stuff for the dollar that was given. So let's just say it was, you know, a turn of leverage. If you buy something at minus 30, it's like you're buying each loan 15 points below, not 30 points below. But then to your question, you have the fees and some of them earn fees on like what's distributed. So they could somehow, even with all these price declines, still earn, still earn fees. Some of them have high watermarks that don't have catch up. Some do. But like there's, there's the management fee that comes out of it. I think it's safe to say that we don't think that there's a lot of manager alpha in that space. So, like those fees are going to be eaten away. Those are not like for their brilliance. And then you have, on top of it, you have a nav that everyone knows is too high. Okay, so let's leave aside, where does Blue Owl rank in that continuum? But I think Apollo is the firm that I, Apollo and Blackstone, the firms that I have incredible respect for, Blackstone also recently for how they treated their redeeming shareholders. And I have a bunch of new counter examples. And Apollo, I think is considered the most conservative on the marks, but the marks are falling as we speak. So if you have navs that are too high across the board, even if they're more than too high at certain places, you also have to take that out of the discount. So what is appealing? Okay, so now that I've like said, what's really bad about it, you know, okay, you start with you have 15, and then it's after fees, 13 and then you have the markdown is that at least those funds do have the ability to get back 5% per quarter. So if they, if they have only 15 redeem, you're going to get back a third of your money in a quarter. But the way it's going, it was one, then it was four, now Cliffwater is 14. Boy, you know, someone should set up a poly market for what Cliffwater Redemptions are going to be next quarter. And we are aware, I'm not sure how much detail it's worthwhile going into in this podcast, but we're aware for some managers of marks on chunky positions, of second lien or other things that are not first lien that are off by compared not to our model but compared to other funds. How they mark as much as 25 points between the way Jamie Dimon now has remarked, the portfolio is Wells Fargo far behind. That constrains the manager on their leverage, their ability to leverage because of the mark to market for the leverage facility. I really think this could be a systemic nightmare and a sense of how

[Matt Levine]

constraining the markdowns are for the leverage facilities. I gather these places are run at less leverage than they could be and have some headroom there, but maybe that's not true.

[Boaz Weinstein]

Yeah, I think most of them are not near their leverage cap. So you would need a decent decline. But also just you can see the banks even just pulling back and why should they continue to lend at the same levels or the same terms Just like you saw in 08 where prime brokers pulled back. So you're probably right about that. But at the end of all that. So then why did we bid? Because it was a place to start. We are short at public debt at what I termed really optimistic level. So buying it at down 35, even with these adjustments, it's probably going to be an okay investment.

[Matt Levine]

You say you're short public debt, like what? Like, like a match like high yield debt against getting long. This stuff or like is it. Am I missing something?

[Boaz Weinstein]

Yeah. A huge part of our capital is to provide investors tail protection. And so we, our domain expertise is credit derivatives. And so the liquidity in high yield credit derivatives as such where you can put on tens of billions. And so I have that as a short. In some sense this discount fits as a long because if we're right and if These buys at minus 27 or minus 35 are bad buys, you know, look out below and I point you to when the Cliffwater news came out. Since that minute high yield has been suffering compared to.

[Matt Levine]

Yeah, I was gonna say you say look out below. Like is there like a scenario where like the stuff you can be short in high yield totally diverges from like PDC software loans?

[Boaz Weinstein]

You're bringing up a good point about basis risk.

[Matt Levine]

Right.

[Boaz Weinstein]

This is not a match trade and the average company in the high yield index is quite a bit bigger and even better than a private credit portfolio. So leave it to the ingenuity of Goldman Sachs. Now they're pitching total return swaps on private credit portfolios. People want more of a one to one.

[Matt Levine]

Are they pitching it to you?

[Boaz Weinstein]

No, to everyone.

[Matt Levine]

To everyone?

[Boaz Weinstein]

Yeah.

[Matt Levine]

Yeah. You might need it.

[Boaz Weinstein]

But also, you know what, as I saw in Covid, sometimes people who can't sell the thing they can't sell will sell what they can sell. And so private credit can certainly infect public credit. When I say what I saw in Covid, I often say like my imagination and the markets is not great enough. First of all, I don't think people's imagination here is great enough because so many people think we're going to buy none.

[Matt Levine]

I think when you say people think you're going to buy none, it's such a classic market maker adverse election question. You're either going to buy none or you're going to get filled and you're going to probably immediately regret getting filled.

[Boaz Weinstein]

Probably. If we get filled and oversubscribed, our next bid is decidedly lower. I've never been in a spot where that information, that alternative data set, if you will, is so desired by the market. Because actually I'd be curious about a polymarket on that too.

[Matt Levine]

We'll all learn something if you get filled.

[Boaz Weinstein]

Yeah, and it's not till April, by the way. But if we get filled, I mean, there's a lot of people that think we're going to unknown. So as you said. So what does it mean? I don't even necessarily.

[Matt Levine]

My instinct is you get none because. Because of the experience. And this is now a long time ago, but when they tried to convert OBDC2 to a public BDC, which was like the public BTC was trading down 20% something and the shareholders revolted. So extrapolate from that to the shareholders certainly don't want to sell to you down 35%. But that was months ago.

[Boaz Weinstein]

That was months ago. And I think the difference is the collective will of those shareholders versus the individual action of. Because again, you know, you couldn't get

[Matt Levine]

50% to vote for it, but can they get 10% to sell to you?

[Boaz Weinstein]

Yeah, like there are going to be some people that actually think our bid is high and will sell to us. And there are some people that think that they actually really need the money or they're afraid of marks coming down or getting gated worse. So I would say, I don't know, like, I don't know, like you, you know, I'm going to wait. Also, the form in which it occurs, it makes it hard to get filled, but I'd be surprised we didn't get some.

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Support for the show comes from Public Lately it feels like there are two types of investing platforms. Some are traditional brokerages that haven't changed much in decades, and others feel less like investing and more like a game. Public is positioned differently. It's an investing platform for people who are serious about building their wealth on public. You can build a portfolio of stocks, options, bonds, crypto without all the bugs or the confetti. Retirement accounts? Yep. High yield cash? Yes again. They even have direct indexing. Public has modern design, powerful tools and customer support that actually helps go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market ad paid for by Public Holdings Brokerage Services by Public Investing member finra SIPC Advisory Services by Public Advisors SEC Registered Advisor crypto services by ZeroHash all investing involves risk of loss. See complete [e-mail] Disclosures.

[Katie Greifeld]

I'm curious. I mean this is something that we were talking about and Matt makes the good point. We're all going to learn a lot if you do get filled. But is this the cleanest trade that you could have put on? Because you know, you mentioned that your short public credit, you've said elsewhere that you know, your long blue Al stock. It's a clunky process. It involves mail, there's scary letters being tossed about, and this isn't happening until April. So would there have been a cleaner, more efficient way to sort of go about this trade? Why specifically like this?

[Boaz Weinstein]

Right. So what you could do is just try to buy individual loans that you like because they're for sale. The thing is that kind of secondary market for loans, in some sense it's very competitive because the loans that they're going to be willing to sell to you at 88 instead of 98. Maybe you're not the ones, you know, so. So first, it doesn't play to our strength as like, we're not a deep distressed shop. And, you know, it's better than buying a thing at 88 that someone wants to sell to you at 88 and out of their whole portfolio is buying the whole thing at 65. And probably. So I think it is pretty clean. If we get it, the mess is in doing something new for the first time. This will be really the first time this has happened. And operationally it's, you know, you're writing thousands of tickets. They're pretty. Some of them are really small size if it happens. So I think the danger is we're early, we're going to lose money on this first trade.

[Matt Levine]

If you get it, like, how do you get out of the trade? Is it like you put in your 5% every quarter or is it like you like, like call them up and cut a deal? Or is it you just hold it until 20 years or I will be

[Boaz Weinstein]

in line like everyone else and I will get my 5% a quarter.

[Matt Levine]

Which do you do that? Because, like, clearly you think value is somewhere between 55 and 155 and 95.

[Boaz Weinstein]

Yeah. No. By the way, one thing I learned my first year at Goldman Sachs as a summer intern is because I didn't know much, I knew that, like, if you have a coupon of eight at a par and the price goes down, the eight goes up, your yield goes up. So now let's think about it in the context of this Fund your yield. Instead of, you know, getting 7% at 100, you know, you're getting 11%, you know, or 10% at 65. Your checks from Blue Owl, you're get, you know, you're. Yeah, you're getting an enhanced coupon. Let's hope the navs don't come down so quickly that you have, you know, principal losses.

[Matt Levine]

So there are people, there are dentists who are trying to get out who are very bearish on this. There are you who are a bidder at 65, but sound pretty bearish on, broadly speaking, the portfolios of private credit. And then there's the people who run these funds who say they're pretty bullish and that this is all overblown and they're still getting institutional inflows and everything's marked at par. And whatever I have written, if I were running, say, Blackstone and I were putting in my own money to cash people out when they were asking to Redeem. I would be pretty annoyed that I was doing it at par and not at 80 or 90. You are offering at 65 and Blackstone can't really do that because they have 40 act obligations and it's a marketing disaster. But I was thinking there should be a round robin where Blackstone is bidding 80 for HBS's loans and HBS is bidding 80 for Blue Owl's loans and everyone's bidding 80 for each other's loans because you have the publicly traded BDCs or closed end funds, which is trading 80. You can go do a tender if you want, but then you have these private funds where you are doing a tender at 65 and you might get filled. Why aren't the managers trying to buy back their own stuff at 65 when they think it's worth 100 without trying

[Boaz Weinstein]

to flatter the interlocutor? I read what you said and I thought that was so interesting. Why don't they just each buy their own stuff at 80 if I'm paying 65? Here's the problem with it. This is the irony of it. To pay 80 when their own BDCs are at 60 only makes sense if they're going to redeem. Why does 80 make sense? 80 makes sense only if you can get back 100 sooner. Why would you not want to buy more or less the same portfolio at 60? People are selling FSK at 48% today. Why not buy that back?

[Matt Levine]

You're saying America should buy its public BDC rather than its public.

[Boaz Weinstein]

Yeah, you don't have. Because the public BDC doesn't have the 5% a quarter put. So if someone's going to pay 80, they're going to pay 80. The whole basis of it is so you can redeem. Manager A is going to redeem from Manager B and Manager B are going to redeem from Manager A. Well, okay, but. So maybe that's a good trade. In some ways it's almost scary. Like then it's just they don't even believe in the, in the value of it. They believe in the structure giving the 5% a quarter and that would be much less bullish signal. But yes, if they did that, they would, they would have a higher bid than me. They also have their, their GP stakes to justify, you know, overpaying, if you will. But I think when you see all these BDCs at really big discounts, public BDCs, it's really hard to justify private BDCs and much smaller discounts. And that's what you're Talking about here?

[Matt Levine]

Yeah, I guess that's right.

[Katie Greifeld]

When it comes to this trade, I also wanted to ask, in both the example of Blue Owl and with Starwood, you partnered with Cox, I believe. I had never heard of them. They're based in Philly. They were founded in 2020. Why go the partnership route? How did that come together? Like did they approach you? Did you approach them? How did it happen?

[Boaz Weinstein]

From just our activity in closed end funds, we developed a following of, you know, there's people that appreciate what we're doing in closing funds and John Cox was one of them. And so we developed a relationship and he has his expertise with the private BDC market and he'd been doing in small size these kinds of transactions. And so it's something where we felt since he was aware of the flows in that market, better, certainly way better than us, it would be a very nice partnership. And that's one also that was forged through Twitter. He replied to a message I wrote many years ago. And so I actually have to say in these last two weeks I've learned so much about private BDCs thanks to people coming out of the woodwork to send us their analysis.

[Matt Levine]

You think of private credit, there's a big institutional drawdown fund, SMA business and then there's the sort of retail ish BDC stuff. Do you have a sense of what the institutional funds take? You're trying to do a trade at a 35% discount. Is there an equivalent mark in the institutional market? Are there comps in that market?

[Boaz Weinstein]

Yeah, you might imagine that aside from our phone ringing from reporters, it's.

[Matt Levine]

Our phone is ringing from institutions who want to.

[Boaz Weinstein]

Institutions that are very curious because they have these same kind of positions marked at par.

[Matt Levine]

And you'll, they'll ask if you'll buy at 65.

[Boaz Weinstein]

No, no, no. They're, they're, they're like wondering are we going to get hit at 65? And if the answer is yes and you're that institution, do you not redeem some at 100 the way you can and then go buy this at 65? Because again, I think there's a huge reflexivity here that, you know, and even if, even if I can't, okay, even if I can't, I may get it on little to none. The existence of these portfolios in public BDCs at 60 cents on the dollar, forget about 25 cents discounts, 4050 cent discounts, maybe those are the more extreme. But at least 30% discounts for really great names is a huge stain on the manager's ability with a sophisticated investor to get them to buy new things at 100. And in fact, if anything, not a lot of these institutions are not really Joe Trader like they're going to sell and buy. They are thinking about relationships and also long term movements. But it is hard to understand why their clients are not well served by redeeming a fund at 100 and buying that same manager's fund at 70 even. For example, I've said some great things about Apollo. I've known Jim Zelter since I was a kid. He's such a good guy and runs credit there and I've learned so much from him. But even like an Apollo BDC is at a 30 discount. So so that trade in the vehicles that allow nav redemption like a private bdc, but lots of other kinds of things. How do you not in a sense sell manager A at 100 and buy manager A at 70?

[Matt Levine]

Because you keep reading that there continue to be institutional inflows into the drawdown.

[Boaz Weinstein]

Not only that, I'm shocked. I keep coming back to how beautifully Blackstone has handled this and treated their investors. We saw for example, I believe it's HPS which kind of top ticked a sale to blackrock when you look at the GP stakes of all their peers and H lend. So one of their funds had a lot of inflows and they had more than 5% outflows and they chose to only pay out 5% but they could have paid out more than 5 and they had enough coming in that unless the logic, it's perverse that you say, well if I pay out more then I'm telling people they should redeem more. I don't know if it's game theory, but like If I got 6% inflows and I had 6% outflows, you know, I mean I work at a hedge fund. We have investors that want their money back quarterly and we just hand it to them. But this idea of like, no, I'm going to gate you, I'm going to suspend you. I really think the managers that do that stuff and especially the ones that convert to a closed end fund like Blue Rock did, they are destroying the value of their brand. And if they don't think they are because their investors are too unsophisticated to understand it, they might be right for a little while. But I am surprised that more funds are not acting like Blackstone and paying out extra redemptions to say, come on guys, we're going to actually treat you really well.

[Matt Levine]

Yeah, I'm Sympathetic to what HBS said is

[Boaz Weinstein]

we promise no.

[Matt Levine]

But also spreads are wide. So we're going to put money to work. We're in the business of making loans. We have inflows to make loans and we're going to make loans with our inflows. And, and there's a reason that. There's a reason there's limited liquidity here, which is that the underlying product has limited liquidity. And like, we're not going to just like shut down our business to give you money back.

[Boaz Weinstein]

But they wouldn't have had to. They had more inflows than outflows. They could have paid 5.

[Matt Levine]

What I believe is they had like something like 9% requested outflows and like they had more inflows than the 5% paid out, but not more than the 9%. Billion.

[Boaz Weinstein]

Right. So I'm used to funds shrinking and rising. I, you know, I launched in a very hard time in 09, went up to 5.4 billion. We, we then were as low as one and a quarter billion. We paid out every outflow and we didn't. We were like, here's your money, I hope you come back. But this like, kind of, we only owe you five. Yeah, but the manager does have an ability to go to seven. And so you could. And when Blackstone had more than seven, they, they actually solved it through this like, extreme action of paying 100. As you know, you were saying, why didn't they pay 80? So you're right. HBS is well within its rights to do it and I think really well them as a manager, but I think I would have done it differently. And I think these BDCs at giant discounts, that's. These public BDC, that's a whole other topic that has some interesting nuance that I'd love to talk a bit more about. So I'm not only making the news in this Blue Owl thing, but I'm also watching the news and I watched this conference call and FSK is run in part by somebody that I think very well of and works well with at Deutsche Bank, Dan Petersak. And, and I really like Dan. And I don't know whose voice was on the call. I saw this on Twitter, but basically this analyst from another fund asked so gently a question where I would in my sharp elbows from closing funds, I would have been a little bit less. I would have been polite. But he was super polite. He's like, so your fund is trading at a 50% discount to book, I'm going to paraphrase you have some Loans that came due that you got paid your money back, you got some coupons in. Why do you continue to make new investments when you can buy back your portfolio at a 50% discount? Now I'm going to paraphrase. If the NAV is right, that's 100% guaranteed return. If the NAV is wrong, and it's not, shouldn't be 100, it should be an 80, it's a 60% guaranteed return. So any kind of like, wow, I can make a new loan at 500 over and I can make an 11% awesome loan or a 13% awesome loan. So what's really going on is you don't want your fund, which has a NAV of 5.6 billion but is trading at 2.8 billion. You don't want that 5.6 to shrink because you're paid fees. By the way, they're paid fees on nav. You know, you invest in these funds at this discount, they're paid their fee on basically twice the price. You don't want to shrink. And so when they don't go into the market and buy back shares at a 50% discount, which is 100% to the upside, because they want to make a new loan at 12%, greed is laid bare.

[Matt Levine]

Yeah, I get that. I feel like the last six months until the last two weeks has been a lot of talk about like retailizing private credit. And if I were a big manager, I might think I want to have a big listed retail private credit permanent capital vehicle for the long haul to put into 401ks to like be my flagship public vehicle and earning 100% return by shrinking that down to nothing. Yeah, is short sighted. We're in a, we're in a tough optical period for retail private credit. But like, if your long term vision is you want to have a huge permanent retail private credit vehicle, then like buying back shares hand over fist is the wrong move. Now I take your point that maybe it's the right move because it's like shareholder friendly and well, you know, accretive.

[Boaz Weinstein]

Hand over fist doesn't mean buying back 100% of the shares. If you said I'm going to have a fee holiday because we're so sorry that your stock's gone From X to 0.4X. We're not going to charge fees for a year and we're going to take all cash flow and buy back stock as long as the stock is at least a 30% discount. And we're going to do that for a year and at least up to 25%, then they know they have 75% left. But in doing so they would be raising the navigation point by point by point, which would make the discount even bigger if the stock didn't go up. Okay, because the NAV would be going up and so the discount would be so they actually, for buying back 25% of the shares may only shrink in my view, 10%, 15%. But they would have been a manager that did the right thing. They raised the NAV up, which had raised the price up. So this is where my history with closing funds is so useful. I saw my friend who runs Neuberger Berman do that for a high yield fund. And that fund, after they did a tender with us, which was very hard to get them to do, that fund was able to issue equity and all of the buybacks they did, they were able to raise even more money in the secondary market, issuing at a premium a high yield fund. And so I think it so behooves managers not to pick one name managers of BDCs trading at a more than 30% discount to shrink to grow their NAV, but to show their shareholders that they care about them.

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Support for the show comes from public Lately it feels like there are two types of investing platforms. Some are traditional brokerages that haven't changed much in decades and others feel less like investing and more like a game. Public is positioned differently. It's an investing platform for people who are serious about building their wealth on public. You can build a portfolio of stocks, options, bonds, crypto without all the bugs or the Confetti retirement accounts. Yep. High yield cash. Yes again. They even have direct indexing. Public has modern design, powerful tools and customer support that actually helps go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market ad paid for by Public Holdings Brokerage services by Public Investing Member FINRA SIPC Advisory Services by Public Advisors SEC Registered Advisor Crypto Services by ZeroHash all investing involves risk of loss. See complete [e-mail] Disclosures.

[Matt Levine]

What do you think they'll do? We're sort of, I don't know halfway through this quarter's like BDC private BTC redemption requests. We have all these stories about public BDCs trading at discounts. There's going to be next quarter, you know, who knows right? Like how's this going to shake out? Is it all going to be you tendering for stuff or is like no, is someone going to find a all me?

[Boaz Weinstein]

This whole space is like 700 billion. I think that there isn't uniform everyone on the same day votes. So Blackstone maybe because they were the best manager were able to give or one of the best managers are able to give their investors the least amount of time. And so the investors had to notify the Q1 redemption at the earliest date. So Blackstone was the first to announce because they have that brand. I think if Blackstone had not announced 7.9 there would have been less redemptions with everyone else.

[Matt Levine]

I think it clearly like everyone sees the last one.

[Boaz Weinstein]

All right. And now people saw Cliffwater and Blue Owl is still open for redemptions. We'll see. You know and once you go to

[Matt Levine]

like yeah, and then like what, like what do they do? Like you get 15, 20, like what do you, what do you do about it?

[Boaz Weinstein]

Well so let me argue against.

[Matt Levine]

There's the HPS example which like, like a lot of people in the credit space are like they did the right thing in a liquid product. I know you disagree.

[Boaz Weinstein]

Well look, no one made me the head of these firms. So like, like that's just my opinion. If they're just going to pay out 5% a quarter and those redemptions are going to keep rising as they did for for example Starwood. They're going to have a multi year problem where it's also going to be hard to raise new funds and then they're going to be exposed to what's happening in private credit. And again I don't have to be a Merlin to know that the navs are too high at all of these funds and they're, they're not linked too high because it's too hard for them to mark them down. They'll mark down what they observe and then they'll do some like matrix pricing. But JP Morgan just marked everything down, so doesn't everything then have to come down? So I think that really if the idea is just pay out the five, okay, so there's going to be this huge queue and let's hope things stabilize. You know, Blackstone was able to stabilize B REIT beautifully and maybe it, maybe it doesn't become as bad a thing, but at the same time you see all these forces together from the default rate rising to the kind of NAV recalibration. It's not hard to see it getting really bad. And so I wanted at least say like on the one hand when finally the bottom comes in, this product will be really attractive. Just like in 08, close end funds got destroyed. But in 09 when it was time to buy, you're like wait, I get to buy the high yield market at the lows and I get another 30.6 discount on top. Like this will be a great long at some point. I think I'm early with this first tender but I think where we priced it we'll probably do okay.

[Matt Levine]

They talk about how is this going to shake out, how the manager is going to do it. And you mentioned BE as a shining star of what you should do. Is there a play like that here? Is there getting institutions to sign up to do something like what you're doing to provide liquidity. Again, the thing that troubles me is the talk is the institutional market is still pretty good, right? And it's like a strange disconnect from the dentists redeeming.

[Boaz Weinstein]

Yeah, I mean if only there wasn't that pesky thing called public BDCs. And we could wonder about the thought experiment of Saba bidding 65 cents when there's the real world examples of tons of stuff at 60, 55, 65, 70. So yes, you can have this kind of cognitive dissonance where the manager can still raise new money at NAV while their old money is at from smart investors while their old money is at 70 because someone has a bucket to make new private credit investments, but they don't have a bucket to do BDCs because they don't do tickers, they don't do market. You know, that gets to another thing. Back to one of your recent guests who I have like huge admiration for. Like I think if I Had to be like, on a desert island of somebody. I think it's Cliff Asness. Okay. And not just because I get to put, you know, sunscreen on his bald head to protect him, but also we were just, by the way, coincidentally, in Milan during. During the US Hockey game was just amazing. He's a huge hockey fan and I'm aspiring, but when he talked about volatility laundering, he's really like the father. This whole, like, the bug becomes the feature. I want to just tell you, really,

[Matt Levine]

I quote that all the time. Like, his point that, like, people want illiquidity and like, arguably, yeah, you know, public BTC is traded 70% traded at a 30% discount because they tell you that. And private credit prodown funds don't trade at a discount because they don't tell you that.

[Boaz Weinstein]

So there's a moment in April 2023 when I kind of howl at the moon because I saw one pager from Cliffwater that professed an 11 sharp in their fund. And, you know, we all know 11 sharp takes you back to, like the land of the dinosaurs when. When you would have had a big drawdown. But this thing where private credit gets marked every month the same. So I kind of howled at the moon, Kieran Goodwin howled at the moon, and Cliff jumped in in that debate, you know, and I was thinking about that conversation.

[Matt Levine]

You're debating again.

[Boaz Weinstein]

We're just howling at interviewing each other. Twitter first.

[Matt Levine]

No one is like, no, that 11 sharp is right.

[Boaz Weinstein]

Yeah. Well, obviously Cliffwater put it on their page, you know, so. All right, I think I've said enough about them. But the really story is about.

[Matt Levine]

I don't know how much of this we're gonna air.

[Boaz Weinstein]

Oh, my God. The story is a year. The story actually continues to September. September. I'm sitting in the office of the CEO of a really venerable insurance company, and they want to put my closed end fund product on their platform. You could look at the ETF on stock exchange. Let's say we made 12% or something. Okay. And he says, you know, here's my problem. You want me to pay these fees? By the way, they're not 2 and 20 or whatever, but I want a fee discount. And I said, well, we're capacity constrained. And he said, well, but Apollo is giving us a fee discount. And I said, well, but Apollo has basically unlimited capacity to keep making more private credit. And he said, but you don't understand. My investors for the last three years have received 1% a month like clockwork. One every single month. 12 a year. You know, with leverage minus fees, somehow they were able to get 12 and literally zero mark to market volatility back to the cliffwater sharp of 11. You on the other end have made 12 and there's plenty of volatility. And how can I justify paying your fees when I can get the 12, you know, really easily? Now I had a call with that investor yesterday. Okay, that investor is so curious because there, there are super long lots of private credit funds. They're super curious if I'm going to get hit. But they're also in super pain because they're seeing what's happening to private credit. And so you know, what kind of pain are they?

[Matt Levine]

Are they still getting 1% a month?

[Boaz Weinstein]

Nope, because you know, SOFR went down because you know, some loans made it 500 and are now at 350. So distributions were cut. By the way, what started the ball rolling with outflows were distribution cuts and retail investors were like, wait a second, we had a deal. You were going to pay me 1% a month. Now you're only paying me 84 basis points. And so that kind of started the quote. No snowflake ever believes it started the avalanche. And so that investor is now facing the first brands default, the Tricolor default. And so there's the problems of defaults, the problems of mark to market write downs, the problems of outflows, the problems of lower sofr, although so far the interest rate market is not pricing much lower rates despite the recent market moves. And so that thing of volatility laundering, which is like just about the best two word quote for to talk about what's wrong with Wall street ever is like that should be the title of what's happening here is that for too long the problems were masked and now they're, now they're the, you know, the curtain gets pulled back and Cliff was absolutely right and it took a while. And in the meantime, because it took a while, the industry is two and a half trillion.

[Katie Greifeld]

Something I'm curious about is the path forward for you because, okay, we'll find out in mid April. If you get hit at 65, maybe you'll get oversubscribed, which would certainly be informative. But what happens if you don't really get any hits? Do you then raise your bid? What is the path forward from there?

[Boaz Weinstein]

I don't know. Have you not met me before? Do I just put my bowling ball in the bag and go home? No, let me give you the answer instead of trying to be funny about it. When I put that bid in the markets were in a certain state one quarter later. Are people going to sell to me when redemptions were 9%? Maybe, maybe not. If redemptions are 20%, it stands to reason they're more likely to sell. So I don't give up easily. Especially if we're doing something, you know, that we think is a value to our, to our clients. But I, I really think if the market gets worse and then our bid probably goes lower. But I think it's clear that there's a value to provide a bid when people need a bid and there isn't one. And if we don't get hit on any, yes, maybe our bid has to go up or maybe it just. We were a little early.

[Katie Greifeld]

It's interesting that you went to bowling as the example of the Sport.

[Boaz Weinstein]

I'm a sub 100 average bowler. My best sport and is not saying much is tennis and I'm like a three and a half usta. So unless you want to call chess a sport, I guess. Yeah, I put my chess pieces in the bag and went home. Yes, you got me. I stunned you. Stunned silence for the first moment.

[Katie Greifeld]

I do want to ask about DATs,

[Matt Levine]

but yeah, we're running up on time. So let's talk about DATs.

[Katie Greifeld]

Okay.

[Boaz Weinstein]

Oh my God.

[Katie Greifeld]

DATs digital assets.

[Boaz Weinstein]

Talk about a car crash.

[Katie Greifeld]

Well, let's talk about the car crash. There's a bunch of DATs digital asset treasury companies that are trading at discounts to NAV right now. Would that entice you? You seem like a busy man, but.

[Boaz Weinstein]

Well, look, there are a couple of things that no one would disagree with about the crypto market. One is that various less than white shoe characters are present in it, you know, as evidenced by the number of that have gone to jail, been released from jail thanks to some donations or otherwise. And so that world, it has some really ethical awesome people and then it has some others. And I think one of the issues for us with DATs, which we don't have with closed end funds and you know, again, if someone can educate us or BDCs. I was going to say you're always worried about as an activist, if you wanted to actually be an activist, that they're going to do something really dilutive like effectively a poison pill. And I don't believe that it is impossible, may not be easy. I don't believe it's impossible for a DAT to issue shares way below nav, maybe even well below the price it's trading at to a select group of investors. Now if they issued it to everyone you'd say, okay, I can get my pro rata portion, but I would hate to buy something at a 35% discount. To navigate have find that they issue a lot of shares at 50 to a select group. And now I've been diluted. We saw the threat of a poison pill on a closed end fund that we owned. We went to court, court sided with us, but the manager did it for four straight quarters. And that was a closed end fund.

[Matt Levine]

That's just because like a dad is not a 40 act fund.

[Boaz Weinstein]

I don't, I'm not sure, but I, I believe they can because it's not a closed end fund. Closed end funds, they cannot do dilutive offerings without offering them to everyone. And then the second thing is like, all right, it's one thing for Elon Musk wanting to pay himself a trillion dollars, but you know, I think a dad can decide it wants to pay its CEO a lot of money and have a handpicked board and basically take money out that way. One of the cool things I think about your job is you can always go to where it's hot and interesting. And I would say that's also one of the cool things about my job is I'm supposed to stay in my sandbox. But my sandbox of RV and mispricings, you know, it doesn't include. What was that company called? Moviepay or moviefone or whatever.

[Matt Levine]

MoviePass.

[Boaz Weinstein]

MoviePass. Like, you know, like that was a fun one that I, I just was a reader about. But like, what's. I think one neat thing about this space is the ability to break new ground or do something new in a space that's central to a lot of investors, as evidenced by the size of the market. So I am really enjoying kind of exploring the creative side of trying something new. I'm hoping that it doesn't lead to nothing. But if it does and we don't get hit, it's not the end of the world. But I'm really enjoying rolling up my sleeves and learning about this space even more deeply.

[Matt Levine]

Me, Right. If you do get hit, you'll be a little more nervous. It's not that big.

[Boaz Weinstein]

Yeah. By the way, if I get hit and things change a lot, I'm happy to come back on or whatever, you know, like the. I think what's neat about this is this story will continue to be a story. I don't mean my part of it, but the private credit market. This is the story. You're going to keep bowling, keep playing chess.

[Katie Greifeld]

My big takeaway I want to launch a shop called Black Owl. I feel like that's the only iteration.

[Matt Levine]

Only white space, only blue space. That was the Money Slope podcast. Thanks to Boris Weinstein for coming up.

[Boaz Weinstein]

Thanks to both of you.

[Katie Greifeld]

All right. Rock and roll. Did you enjoy that?

[Boaz Weinstein]

I talk about this in my house. When no one's there. I just talk to the wall.

[Katie Greifeld]

Talk to the mirror.

[Matt Levine]

Yeah. And that was the Money Stuff Podcast. I'm Matt Levine.

[Katie Greifeld]

And I'm Katie Greifeld.

[Matt Levine]

You can find my work by subscribing to the Money stuff newsletter on bloomberg.com

[Katie Greifeld]

and you can find me on Bloomberg TV every day on the close between 3 and 5pm Eastern.

[Matt Levine]

We'd love to hear from you. You can send an email to moneypodloomburg.net Ask us a question and we might answer it on the air.

[Katie Greifeld]

You can also subscribe to our show wherever you're listening right now and leave us a review. It helps more people find the show.

[Matt Levine]

The Money Stuff podcast is produced by Moses Andam and Alexis Haut.

[Katie Greifeld]

Our theme music was composed by Blake Maples.

[Matt Levine]

Amy Keen is our executive producer. Thanks for listening to the Money Stuff podcast. We'll be back next week with more stuff.

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