Oh hi Silicon Valley Bank 👋

Looks like the unicorn economy is experiencing a run for liquidity.

Alexander Campbell

Mar 9, 2023

We shorted Silicon Valley Bank at Black Snow.

Twice. Once in 2016, and then again post COVID.

Terrible trade. Stopped out twice.

Always 5 years ahead…

Turns out they do a lot of intermediation for LP capital calls to funds.

LPs that took their old 60/40 portfolio, and divested to buy illiquid, levered beta in fixed income and PE/VC.

Not going to too well.

If only someone could have known.

Campbell Ramble

The Unicorn Economy - Intro (Part 1)

Imagine for a moment all the people you know involved with startups. There’s Sarah, the unflappable entrepreneur, disrupting the world, one line of code at a time. There’s Malcolm, the savvy VC, listening to pitch after pitch for “Uber…for cats” and wondering when Woz and Jobs will walk through that door…

2 years ago · Alexander Campbell

If only someone could have told us how super-accommodative monetary policy and faddish investment trends would lead institutional investors to overweight illiquid, levered beta. First PE, then VC, and finally, if you prefer balance, levered inflation linked and nominal bonds.

Campbell Ramble

The Downside of the Yale Endowment Model - part 1

As far as we can see, the downside of the Dale Swensen's Yale endowment portfolio model is it's overweight illiquid, long duration assets like PE/VC. What's the impact of 300bps of tightening on a portfolio with 30yr duration…

a year ago · Alexander Campbell

Remember, there are bonds in the stocks, and the Fed is tightening.

Be careful out there.

1 Comment

New Ventures

Mar 10

With the amount of secondaries that just happened into year end and how many of them relied on hidden leverage, there will be blood. So many funds have been deploying into investments without having finished calling capital, but relying on borrowing against those commitments (that have since been flipped since the initial LP).

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