Investing Billions - E325: Inside the $100B Continuation Vehicle Boom

Episode Date: March 16, 2026

What if the most compelling private equity opportunities aren’t brand-new deals, but the ones other investors have already “vetted” and are leaving on the table? In this episode, I sit down with Michael Woolhouse, Head of Continuation Vehicles at TPG Capital, to explore how he approaches the rapidly growing single asset continuation vehicle (CV) market—a space where sponsors can roll their most successful companies into new structures, creating liquidity while maintaining upside potential.

Today at TBG, you focus on a very specific part of the secondary market. Tell me about that. Every sponsor at some point in their history has owned a great business. They've made four or five times the money and they sold it to one of their competitors because they needed to get cash back. Their investors were looking for DPI. The management team was giving them some pressure to say, we've done what we said we would do. You've made, we could make five times the money. It's time to reset. Or you're at the end of the life of a fund. The fund is out of that house. is out of time, is out of money. All these are different pressures to sell. Historically, the sponsor would simply say, thank you very much. We've made five times of money and I'm going to sell the business to one of my competitors, notwithstanding I see a lot of upside. Their competitor would then go on to make four times the money and so on and so on. And I would go to the sponsor

and say, do you remember that company? And they'd go, oh, of course I remember that company. There was so much runway left, but we had to sell. How do you know that you're not being adversely selected? In other words, how do you know that the GP is not just taking a free option? But what's critical about this business is to approach it with sector expertise, to approach it like a private equity business, a private equity investor would do. And to that end, the core judgment, if I were to distill things down for us, is at the point of entry, at the time that we're facilitating a liquidity option for the existing investors and buying in to the continuation vehicle, we want to make sure that they could sell the business today if they could. and they're actually taking a proactive choice not to do that. They're realizing five times the money, creating a lot of liquidity or potential liquidity for the general partner,

but instead of putting it into the bank, which they could do it if they could sell the business today, they're not. They're rolling it all into the new deal. I want to double click on something you said, which is that you approach it from a buyout side, not from an LP side, meaning you're underwriting the asset from the bottoms up,

just like a blackstone KKR and Apollo would. Talk to me about that. At our core in investing in single asset continuation vehicles, we as a group are investing hundreds of millions of dollars into single companies. And hopefully it's almost self-evident why approaching that investment activity like a private equity firm, like a private equity investor just makes intuitive sense. By contrast, the origin story of the secondaries market is actually not doing that. Six or seven, seven or eight years ago, if a single asset deal was brought to the secondaries

market, the incumbent firms would have said, what's this? You've called the wrong person. That requires a private equity skill set. We don't have that. But what's one of the tremendous things about the secondaries market is innovation. And where the innovation started was in the LP business. And just by contrast, in my time at CPP, just to talk about the specialist skills that were required for that kind of investment activity, the largest at the time portfolio that we ever required was 65 fund interests, 15, 20 companies per fund, a thousand companies. like literally a thousand companies.

So as you think about the skills that are required to do that and the people and the systems and the know-how, underwriting individual companies, frankly, almost irrelevant. There's a thousand of them. What you need to be is, I used to say, right on average. So half the companies could underperform whatever you were expecting, so long as the other half outperform. You work out okay on average. You can't use that average concept in putting $6, $700, $800 million into a single company. You've got to be right every time.

So this market, the secondaries market, I think is a really fascinating one in that there's been huge growth. And underpinning that growth has been a lot of innovation. And actually with it, different segments have emerged, each of which are large, interesting. They can be different. But each require their own, in my view, specialist skills. And that was the opportunity set that I saw sitting back at CPP years ago. And we're now five years into going after that opportunity and a process. private equity-driven way in a highly differentiated manner in the marketplace.

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asset? In my experience, direct private equity investors are hunters. And when they go to make investments, it's about winning and losing. And when you're buying a company from another sponsor, you do that with a relatively high degree of competitive intensity because you compete day to day in acquiring and investing new businesses. Like if one of our teams, just by example, has a lot of experience in education, and they're trying to buy an education business from a competitor who also invest in education, you can see there can be some rivalry there. And of course, this is not just TPG, but the private equity buyer in this instance

trying to participate in the secondaries market. So you can get all these sort of dynamics at play which serve folks very well in the direct private equity business. But in the secondaries market, it is a, we call our partners, our sponsor partners. We make judgments around do we want to invest with them into the company and then turn the keys over to them,

to trust them to do everything. Because ultimately, that's how the secondaries market works. The incumbent sponsor stays in situ. And to that end, I actually do think there are both hard and soft skills that are necessary to succeed in the secondaries market. I could get into the details on the structures and how you align incentives and some of the technical parts of the business. But I think this partnership orientation and the necessity for trust that they are going to appropriately manage the business, are different and potentially conflict with the mindset and experience and skills of a private equity investor. It's kind of two different lenses to approach the dealmaking in the sector because it's

essentially two things. It's a buyout deal in terms of you're getting exposure to one asset, but also you put in a secondary structure and you have to work out all those mechanics. That's exactly right. So the way that I think about most of the beginning and the end of the private equity sort of skill set is on the buy. You know, which company, and which sponsor do you want to invest behind? How do you diligence, underwrite, value the business? There's then a secondaries package, economic package, you know, all the terms and conditions, and the structures that are associated with the secondaries deal.

But once you've made your investment, it's no longer a private equity investment. It's a secondary investment. We are usually a TPG, and this is true for any large lead investor into one of these deals. You're the largest investor. You sit on an advisory board. They report to you, but you're not sitting on the board of the company. You're not directing management. You're not in control.

You're passive. I believe if you really want to understand what's going on in a market, you have to follow the incentives. Double click on the incentives of a GP and how they might be in conflict with either you, the new investor, or the LPs. In these deals structurally, the general partner is a. seller on one hand out of the older fund and a buyer or investor into the continuation vehicle on the other hand. So those two things are inherent in any of the deals that we do in this marketplace. And that conflict, if you will, is really important to be open about and to manage.

So if you're a limited partner in their fund, there tend to be two really important questions that they have. The first is in one of these deals, who is the lead investor? And are they credible in providing the offer that's in front of them? Because they have the opportunity to waive the conflict. And then secondly, they have to find it attractive, otherwise they won't sell into it. So that's the first thing. Second thing is not every LP necessarily will think I want to sell. Notwithstanding the offer is usually for 100% of all the LP's positions.

There needs to be an opportunity. This is the second thing to address this conflict is there needs to be an opportunity for the existing investors to roll into the continuation vehicle, not to sell, not to have their hold period, call it truncated, but they can continue along for the next four to five years just the same way that the sponsor sees the upside. The new CB investors see upside. Sometimes limited partners see and believe in that upside and they want the option to participate in it. So what's critically important is that that conflict is managed appropriately.

It needs to be done with great care. Really, it comes down to having a proper process and it comes down to transparently sharing information. So in this instance, the limited partners see the same. information that buyers do so that they can make an informed decision. The sponsors know them, the LPs know them, they created them, and are widely adopted and guide how the market operates. So the conflicts are real. But in my experience over the last several years, I can only think of one or two situations where the LPs, for whatever reason, decided to reject an opportunity, 99.9. Whatever percent of them go through because this market operates in a proper way.

When I talk to LPs, institutional or otherwise, they all seem almost a cognitive dissonance around CVs. On one hand, they like the opportunity to potentially take some chips off the table. Obviously, DPI has been a big issue. On the other hand, they're not really set up to diligence these one-off opportunities, which is why the opportunity exists. Give me a sense. What percentage of the times in terms of quantum of capital are LPs selling versus rolling their equity on average? The advisors in this marketplace who really see and are close to the data would peg that somewhere around 15 to 20%. In my experience, I've seen sell volume as high as 99 or 100%. So literally

every single LP decides to sell. That's one end. On the other end of the spectrum, I've seen that number as low as 50%. In other words, 50% want to take the money and run and 50% want to continue. So I think the market average today in that 15 to 20% range is about what I would expect going forward. I think the demand for DPI today is perhaps at a cyclical high, which is perhaps driving that percentage down. Maybe it goes up a little bit more over time. But generally speaking, at least in my experience, when LP has the opportunity, these are successful deals, remember, to take five times the money off the table. They're usually very happy. and say, thank you very much.

It's a little extra work. No question about that. And that is an additional burden on LPs. And some of them are not necessarily set up to make the decision or have the ability to roll into the continuation vehicle. But it's kind of in high class problem territory for me. Five times the money, how bad is it?

Actually, that's probably a little flippant. But what we have found is in general when LPs receive the opportunity to successfully realize a very high multiple of money on the deal. All else equal, they're actually quite happy, happy to take it. A factor here is also most of the LP capital is non-taxable. So they don't have to worry about compounding their capital. There's no disadvantage to taking off their capital. I want to get it into deal specifics. What's the market for what a GP that's rolling their position? What could

they expect in a CV deal? This is a market that investors. So let me talk about that more from our perspective, because this is underpinned by what the sponsors believe and then what we choose to underwrite. This is a market that ought to deliver two times the money net or better, and a 20% RR net or better. That is, I think, what buyers in this market, and we would be part of that, are targeting for our investors at a deal level. So to that end, that gives you some insight into what the general partner sees, sees ahead of them. When you look at them, the, the, the incentives, like, do they really believe it is an important question? Because we have to make our judgments. In a typical CV deal, if you sort of think about it, the general partner has the

opportunity to take five times the money off the table. That means a very meaningful carry check plus realizing five times on their GP commitment, their GP co-invest. And they're making a proactive choice not to do that. And if you really truly have that choice today, in other words, you could sell the business if you wished you, but you're choosing not to. When you put that money back on the table in these deal, sponsors tend to roll 100% of the proceeds from the sell side of the deal. The only way that's economically rational is if they really believe that there is another three to four times the money from here. And I think that range is generally speaking, what the sponsor would say is on offer. Most buyers would bring a skeptical lens to that and be more conservative

in how they underwrite. But I think as an upside case, That is certainly what most buyers in our market are looking for and more conservatively underwrite the investment into the 2x 20% range that I described. This is still a relatively nascent market. So we have yet to see a large number of realizations proving out what I just said. That having been said, there are reports, industry reports that both Evercore and Morgan Stanley, those two groups in particular put out there on a regular basis. And what they have concluded so far as they look across the market is that continuation vehicles offer returns as high, if not higher than buyout, with lower risk as measured by lower loss ratios. So if we sort of tied together what the general partner says with what well-informed buyers see and underwrite and where the market data is beginning to come out, people are beginning to coalesce.

around this being a very, very attractive market. This is why we see groups following in TPG's footsteps to enter this marketplace because they see the attractiveness from the underlying companies and the track record of success that the sponsors have had with them. They see the return opportunity being very attractive and the risk being low. Maybe give me some intuition behind that. Why would CVE deals be better performing and lower risk? there is potentially, at least in theory of conflict between higher returns and lower risk.

How is that possible? I'd say there's three, maybe four things that are behind it. The first is there is a significant supply demand imbalance in this marketplace where there is an excess supply deals and not enough capital and capability going after that. So that is perhaps that's a temporal thing, but I think that's going to persist for quite a long time. That's at the market level. But if you look at the individual deal level, there are three things together, which I think result in this really attractive return relative to risk dynamics. The first is what we call positive selection bias.

Remember, the companies I've talked about here that are the purview of this market, they're the ones that are special. They're the ones that, you know, a sponsor invest in 15, 20, 25 companies in a fund. They've owned them all for a period of time. You never know really what the great one's going to be at the beginning. But after they've owned them for a period of time, they sure do. and it's those special companies, we call it positive selection bias. They only want to do these deals in the companies that they really think are

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That's the company that you want to hold on to for longer. So this is a positively biased opportunity set. And these companies are being selected by the general partner to put into one of these investment opportunities, one of these single asset continuation vehicles based on that track record of success. Inherently, that reduces risk. If you think about a regular way, buyout deal, groups are buying companies for the first time. They do a lot of diligence.

They evaluate it as much as they can, but they don't really understand what they've owned until they join the first board meeting, go to the second board meeting, then they find out everything that they don't know. We need to change management. We got the strategy kind of right, but we need to go in this direction, not that direction. because the sponsor has prior experience with the business, that risk is effectively eliminated. And then you come back to the alignment equation, as I was beginning to talk about before. General partners are making the largest GP commitments into these deals,

are putting as much skin in the game alongside these deals more than anywhere else in the private markets that I'm aware of. To give you some order of magnitude, maybe two fun facts. The first is GPs are typically committing somewhere between 8 to 10% of the capital of a continuation vehicle, and that's several times larger than they would in a regular way buyout deal. In our experience, we've seen the quantum involved being larger in the single asset continuation vehicle that we're involved with, relative to the main fund. So if you think about skin in the game, there's no greater place to find skin in the game than in this market. Positive selection bias, that experience definitionally lowered,

risk because they've direct experience with the company. And then third, greatest alignment you'll find in the private equity market. Reminds me of Stanley, Drunken Miller, invest, and investigate his mantra, which is the best way to diligence the company is to be an investor. It gives you this insider advantage that's almost impossible to get through traditional diligence. You mentioned 8 to 10% GP commit, obviously much more outsized than most private equity and certainly venture GP commits. what's driving that? Is that TPG and then new investors driving this need for this kind of GP commit? Double click on that. It's math. So if the general partner is realizing five times the money on the sell side of the deal and rolling their original GP co-invest, which just pick a number might have been 2%. They're rolling that into the new deal. And then they're putting all the carry that they're realizing on top of that. That's what drives it. It's just. It's just math. The expectation in this market that buyers have is that GPs will not take liquidity on the sell side of these deals and we'll roll it all into the continuation vehicle. And that's what drives the outsized GP commit. Let's look at it through the GP lens. Why do a continuation vehicle deal and talk to me about the economic incentives for GPs to do a continuation vehicle deal? Let me bring it together, maybe just making two points. First point is the private equity business.

is competitive, it's difficult, it's hard. And when you own a company and you've owned it successfully and done all that work, remember there's 15, 20, 25 businesses in a fund that you invest in. And there's the one company that everything's working. It's actually probably working better than you thought. You got the strategy right. The company is in a great competitive position. The management team is really, really strong. The last thing you want to do is sell that. And the good news is, in a sense, there's going to be one of these in every single private equity fund that exists. There's always one special company. And to that end, sponsors to the extent that they have the ability to continue to own them for longer will take advantage of that.

Again, with this narrow set of very special businesses. The second thing is we talked about the quantum of GP commit here. The continuation vehicles can be very large and very large relative to the original investment. that's five times the money. Sometimes they're also able to buy out a co-investor or another minority investor. So the continuation vehicles, relatively the original investment can actually get quite large. And then as you think about putting an economic package around a large continuation vehicle, larger than the original deal, the economic incentives when they are successful are commensarily large.

What are the standard economics that GP could expect in the market? What's the range? The typical incentive structure in continuation vehicles, single asset continuation vehicles, is a management fee between 50 and 70 basis points. And that might compare to 1.5 to maybe 2% in the regular way private equity market. So it's lower. And then the carry structure is very bespoke. Everyone will know of 20 over 8 in the regular way buyout business.

In this market, you tend to have what we call a tiered carry structure, where the sponsor starts earning a 10% carry over an 8% preferred return. Then they can earn their way into generating a 15% carry after delivering one and a half times the money in a 15% net to CV investors. And then they can get back to parity and earn 20% carry after delivering two times the money and a 20% net to investors. So to that end, there is some inherent downside protection, at least in the carry structure, which sponsors sign up to. that's a nice positive buy signal when you think about it, because that tells you they think they can get to the high end. They think they can deliver the high end of the return and get a 20% carry. The other thing that it does, one of the characteristics of this market is four to five year holds.

And in bio, they tend to be a lot longer. And if you think about the interplay between having an MOC hurdle and an RR hurdle, once you've cleared the MOC hurdle, that sponsors very focus on continuing to compound RR at 20% or greater. Otherwise, they run the risk of diluting the carry rate. So to that end, when I was talking about the best alignment of private equity, I was initially framing that for the perspective of the quantum of the GP commit. But as you think about the economics, there's tremendous upside here. But it's with some constraints. They have to perform, otherwise the carry is lower.

And there are some constraints which incentivize prolonged cold periods. And for most LPs who care a lot about IRR, that's really powerful. I know you don't play in this part of the market. And maybe because you don't play in this part of the market, tell me your views as an outsider. What do you think about the CV market for the venture? I think there is a tremendous need for liquidity in venture capital. And at its core, the secondaries market is a liquidity provider. We've been talking about this so far in a private equity context,

but I think that same need and dynamic exists within growth equity and certainly exist in venture. The lens that we that we use here, I think is analogous and appropriate in venture, which is to say something that's important to us is that the sponsor has the ability to sell the business today. That's a transaction of choice coming from a position of strength. And when the sponsor, we've been talking about this, rolls, you know, significant sums the capital into the CV, that's aligning because they have the choice they could put the money in the bank account and get the second house. or the new boat, whatever it was that you described before. But I think there's some risk.

I'll just give you an example. If the sponsor owns a business and it's financially performed very nicely but is dependent upon an IPO exit and if the IPO markets are closed, rolling 100% of your, you're actually crystallizing your carry and rolling into the CV, that actually sounds like a derisking event or derisking opportunity to me. call those life preserver deals in our market. It's really important for any participant in the secondaries market, including venture, to appreciate the problem they're solving. The problem we wish to solve is that we've had this great company. We could sell it today, but don't wish you, because we see

too much upside. The problem I'm less interested in solving is can't sell it today for one of the following long list of reasons, need to generate liquidity for my LPs because they're a little bit upset. And this is a almost a transaction from a position of weakness. It may not be the perfect tool CVs, but I do think it's the best of worst tools in venture specifically in that LPs want DPI. They're really pressuring on that. GPs don't want to sell their biggest winners. Some LPs want to exit, some don't. Nobody wants to take a 20% haircut on a secondary.

And it kind of aligns everybody as closely together as possible. It's not perfect, but I do think it could unlock some of this DPI gridlock. This market exists because of the combination of private equity now, I'm talking private equity, broadly speaking, has been growing. Companies wish to stay private for longer. Second thing is we have these closed-end fund structures, their 10-year vehicles plus 1 plus 1, finite time and finite capital. And then we have these businesses, these special businesses that we've been talking about that are long-term compounders and have a path. a clear path to generating countered, you know,

tractive compounded returns over a long period of time that doesn't necessarily fit within the constraints of the close-in funds that they're housed in. The secondaries market over time has created different solutions to provide liquidity to different, you know, stakeholders in the market as we've talked about, and it's not going away.

We had a record year hitting $226 billion of volume this last year, roughly 40% year over year. The single asset continuation vehicle market was actually driving a big part of that growth. We were $30 billion in rough numbers in 2024 and north of $50 billion a record in 2025. That's 67, 68% year-over-year growth. The need for this, call it new. And I would argue proven liquidity tool is really high. Even if you half the growth rate that we've seen,

in the last year, at least in single asset part of the market, it could be a $200 billion or larger market, just looking five years out. The older I get, the more I subscribe to this Charlie Munger, 20 punch cards. When you graduate from college, you should have a punch card of 20 investments that you make, 20 are the best ideas. I just see it over and over. There's just so many few really good investments. And this is just a way for GPs to capitalize on those best investments with insider access,

with an intimate understanding of the asset management team and all that. So I love that. What's the biggest mistake that you made and how has that evolved your strategy today? You need to know what the fair way is. And when you have the opportunity to see all the deals on offer in the market, it's really important to have discipline around where you have a real right to win. So one of the lessons that I've learned, it's not just here at TPG, but over a longer period of time is it can be very alluring. It's like the sirens call. I know this deal doesn't quite fit. But, oh, looks interesting and you can you can get distracted in a different points in my career maybe it's a quieter moment in the market or something just looks too good to be true even though it's a little maybe it's on the it's on the fringe or it's in the rough but the discipline of defining what you do

and what's of interest having that widely adopted and embrace across a team supported by an investment committee, which is a good, you know, support, support and control function in an investment business are all critical here. So, you know, I have found myself from time to time getting, you know, called by the siren and pulled onto the fringe, but we have the right systems, culture, et cetera, around here to pull us back and focus on on the core, focus on the fairway. Going back to the beginning, you said that you're a builder and your career is being an entrepreneur, creating financial products, creating funds in some of the world's leading institutions. What have you learned about being an entrepreneur within the financial sector?

Let me come at that from two perspectives. The first is a personal perspective. So what switches me on? And then secondly, from the business perspective, the actual, you know, the doing of the thing. It's always been important to me to work with a group of people that I like and that we can have fun with that we can disagree without being disagreeable and and get to the best decision. I've worked in places over the years where that's been super true and that's super true here. And I don't know about you, but I've only ever learned through making mistakes. So I've had experiences where that hasn't been true. So that's the first thing.

Personally, that's the kind of place I want to be, the kind of people I want to work with, the kind of culture I want to be part of, gets me enthusiastic. getting out of the bed every morning and going after the whatever the thing is. And in this case, building this business, uh, which has the genesis, um, from the roots of the secondaries market, but has required the investment vacuum in the skill, um, of a private equity business, um, is, is the thing that we're doing. So I find if you can put those two things together in tandem, uh, it's fun. Good thing. things can happen and you can be successful.

Reminds me of what my mentor, Eric Anderson, told me. He started a company called Adamab, which is a multi-billion dollar company, and then took a bunch of companies public and now started Alloy. And he talked about build the business that you want to work in the rest of your life. So a lot of people think about they build this company as if it's a strategic MBA case study, not realizing that they're the main character there and that they're going to have to be executing. And the best way to make a business anti-fragile is to actually love doing it, love the people that you're in, the sector that you're in.

It's a very underestimated aspect of being an entrepreneur. I love that. And when you build something new from scratch, as we've done here, it's hard. Not everything works out the way that you think it's going to work. You get surprised every day by things. And you have to sort of embrace that. You have to enjoy learning. You have to enjoy adapting and be enthusiastic about it.

Like this is, I've had a number of, you know, jobs over the years. And I kind of work, I use that word intentionally. I think a different point, I did have jobs. And at a couple points, I had things I really looked at as careers. And I feel fortunate. I'm in my six year here at TPG where this is a career. I don't plan to have another. We have a huge market opportunity that we're going after.

We have a really amazing team, really amazing culture, both within our team and across the firm, to go after it together. The second friend that I have that has started a franchise within TPG, what's quite impressive about TPG is that even though it's scaled massively, it's kept this entrepreneurial DNA. Maybe you could distill that. What makes TPG a place for finance entrepreneurs like yourself to come in and partner? If you go back to TPG's origins, this was way before my time when Jim Colter and Dave Bonderman founded the business, you'll have to remember that they initially came together in a family office with a Bass family in Texas.

then left to form TPG. And so the business in a sense has entrepreneurial roots. And somehow they have been able to translate those roots and the culture that's associated with being entrepreneurial into something at scale. I can't take credit for it. But as I had the luxury, I suppose, at CPP to partner with TPG. I mean, I had the luxury of choice. But I'd known TPG for a long time. We had worked in, I'd worked with the firm in various capacities over most of my time at CPP. And I liked the people and

like the culture. And so at least for me, it was very intentional to look to build this business from scratch, wanting to find, you know, the recipe that we talked about before, having the latitude to hire a team that was going to have the characteristics that I talked about, fun, hardworking, capable, you know, and all that. But I also wanted to be able to leverage the capabilities of what's now, kind of like big TPG, where we're one of the largest private equity houses on the planet. And being able to take that experience and those skills and apply them into this entrepreneurial venture. It was pretty special and pretty amazing and very intentional, at least on my part. If you go back to 1993, when you were just starting in Solomon Brothers,

what would one piece of advice you'd give a younger Michael that would have either accelerated your career, helped you avoid cost of mistakes? If I could go back to the beginning, I'd say, be less afraid to fail. I might have said this earlier. The only time I've really learned in my career, like really learned, you can read a book, you can talk to somebody, you can have an idea. but the only way that you can really learn is by acting and having a bias to action. And when you do that, you want to do that with some speed. Because if you just analysis, paralysis, everything,

you're just going to lose. So the implication, though, of acting quickly, you want to be intentional and thoughtful and do enough work, etc. to say this is the direction I want to go. You have to be prepared to make a mistake. I try and instill this culture in the team that I run now, which is, you know, you have to have the best intentions, but you're going to make a mistake.

We're going to make a mistake. And the obligation that we all have is when you do, you raise it quickly. You don't keep it to yourself. And you'll learn from it. So you don't make it again. And I think applying that to myself, I'm sure if I were to look back over the long arc of my career, I've probably been a little too cautious,

haven't acted as quickly as I could, and should have just got on with it. That's a hard thing for young people to embrace, especially young people, like I look at the associates and whatnot that we recruit. They're like 4.0 GPAs at school. They were top in their class here or there before they join us. And they literally have never failed at anything.

What we do is super hard. You will make a mistake. And sometimes that can really rattle, rattle young people. Would have rattled me. And so we try to create an environment where they don't get rattled, that they are actually willing to push and have a bias to action. and sometimes, you know, intention and speed make all the difference in the world to win. And you have to have a culture which actually is aligned with that.

The spies for speed is so critical. I've become completely converted to this church of quantity. I believe quantity is upstream of quality. That doesn't mean you go out and put $2 billion and make mistakes and do all these things. What it means in investing specifically is you take more meetings. You can't go to an associate and say, be smarter, make better decisions. That's nonsensical advice. You have to tell them, take 10 times more meetings.

work more, do more meetings, more and more reps. Don't worry about you took this meeting. It was a dumb meeting. You know, you shouldn't have taken it. Just do more. Do more. And then you'll become quality. Then you're going to refine your skill as an investor where so many people focus on the downstream consequences of as if somebody's sitting around saying, I don't want to be a better investor. I want to be a mediocre investor. I've never met anyone that said that. Investing is an apprenticeship business where you learn by doing. And there was this one young fellow who we recruited into the team. I'm just reminded of him telling me this,

which was he was so surprised how included he was with senior people, brought to meetings. He was in the room for all the conversations. He goes, previously, I would do analysis. I would pass it up the food chain. Then it would disappear for a while. I wasn't involved and he wasn't involved in the meeting. It would come back to him.

So a bit of a black box. and he said it was such a breath of fresh air to be included. I think that's just critical. If you want to manufacture or apprentice, great investors, they have to be in the room. Maybe there's a handful of conversations where that's not appropriate. But take lots of meetings, get lots of experience, being in a culture where you can listen, participate, say something, maybe say the wrong thing at the wrong time, and have that be okay. That's how they accelerate their development. And that's how they become great investors and at least succeed within our organization.

Michael, this has been an absolute masterclass. Thanks so much for jumping on the podcast. Thank you, David. That's it for today's episode of How I Invest. If this conversation gave you new insights or ideas, do me a quick favor. Share with one person your network who'd find a valuable or leave a short review wherever you listen. This helps more investors discover the show and keeps us bringing you these conversations week after week. Thank you for your continued support.