Navigating the Risks of Private Credit and Misunderstandings of Direct Lending

This chapter explores the intricacies of private credit, contrasting sponsor-backed with non-sponsor-backed direct lending. It highlights misconceptions about loan safety and delves into the execution risks and credit assessment challenges in varying market conditions.

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My guest today is Ali Hamed. Ali was first on Invest Like the Best six years ago. He was 26 at the time and four years into building his investing firm, CoVenture. Both then and now, Ali is an example of what’s possible when you think creatively. Six years later, CoVenture now manages two-and-a-half billion dollars, and Ali continues to find alpha in esoteric places.

We talk about YouTube catalogs, creative opportunities in real estate, and how venture investing helps them get better at credit. We also talk about his lessons from building an investment firm and what it’s been like to work with Michael Ovitz. Please enjoy this great conversation with Ali Hamed.

Listen to Ali host a Business Breakdowns on Spotter

Listen to Founders Podcast

For the full show notes, transcript, and links to mentioned content, check out the episode page here.

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Invest Like the Best is a property of Colossus, LLC. For more episodes of Invest Like the Best, visit joincolossus.com/episodes.

Past guests include Tobi Lutke, Kevin Systrom, Mike Krieger, John Collison, Kat Cole, Marc Andreessen, Matthew Ball, Bill Gurley, Anu Hariharan, Ben Thompson, and many more.

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Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes:

(00:00:00) Welcome to Invest Like the Best

(00:03:11) First Question - The Journey of Building an Investment Firm

(00:15:08) The Influence of Time and Scale on Asset Classes

(00:22:39) The Power and Potential of YouTube's Asset Class

(00:27:33) The Future of Real Estate and Housing Supply

(00:30:15) The Challenges of Investing in Platform Economies

(00:36:44) The Pitfalls of Capital Formation in Asset Management

(00:45:17) The Evolution of Venture Portfolio

(00:51:14) The Approach to AI and Other Emerging Technologies

(00:54:42) The Mispricing in Private Credit