In this episode, Brad Johnson breaks down the recent news of Bill Ackman selling 10% of his hedge fund, Pershing Square, highlighting the strategic reasons behind this move and its implications for GP stakes investing. Discover the key differences between investing in hedge funds and private equity firms and what this means for investors.

GP Stakes Research:

https://www.evergreencap.com/gp-stakes-investing

Evergreen Capital:

info@evergreencap.com

Connect with Brad Johnson

https://www.linkedin.com/in/bradleyjohnson/

• Key topics - 5-10 bullets:Why Bill Ackman sold 10% of Pershing Square for about $1 billion, valuing the fund at $10 billion
• Ackman's growth plans with a potential $25 billion fund aimed at retail investors
• The significance of valuation multiples: private equity vs hedge funds
• The importance of a fund's longevity, team stability, and strategy diversity in private equity
• Risks associated with minority stakes in hedge funds due to key man risk and firm dependence
• Comparison of private equity and hedge fund structures for minority investments
• How Ackman's move exemplifies strategic growth and capital deployment in alternative investments
• Why private equity firms tend to be more stable and less vulnerable than hedge funds
• What this case reveals about the evolving GP stakes market and investor considerations
• Brad’s perspective on Ackman’s future success with this strategic sale

Timestamps:

00:00 - Bill Ackman’s $1 billion stake sale explained

00:23 - Why hedge fund minority stakes can signal growth, not decline

00:44 - Ackman’s ambitious plans with new funds and growth strategy

01:03 - Valuation implications: what a 10% stake says about Pershing Square

01:56 - How private equity valuations compare with hedge fund multiples

02:21 - The significance of fund longevity and team stability in private equity

02:46 - Risks of investing in hedge fund minority interests

03:23 - Differences between hedge fund and private equity structures

03:46 - The stability and resilience of private equity firms

04:05 - The vulnerabilities of hedge funds in minority stakes

04:57 - Why private equity is a more reliable investment space

06:27 - Final thoughts: Ackman’s future and what this means for GP stakes investing

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• The Wake-Up Call: Why a surgeon’s salary wasn't enough to solve financial burnout.
• The Hybrid Approach: How to balance index funds with high-yield real estate.
• The First Deal: A breakdown of Jordan’s first duplex and his 10% cash-on-cash target.
• Tax Alpha: How his wife’s "Real Estate Professional Status" (REPS) supercharged their wealth.
• Scaling Secrets: Moving from one property to a portfolio that produces $11k/month in cash flow.
• Avoid the "Doctor Trap": The 3 biggest mistakes physicians make when investing in alternatives.

• The Prudent Plastic Surgeon: prudentplasticsurgeon.com
• Strategy Call with Evergreen: Book Here
• The Alternative Investor Newsletter: Join Here
• Email Jordan: jordan@prudentplasticsurgeon.com

• Website: evergreencapital.com

• 00:00 – Why financial freedom matters for doctors
• 03:09 – Index funds vs. Real Estate: The hybrid strategy
• 04:10 – Breaking down the first duplex deal
• 06:51 – Systems, automation, and team building
• 10:26 – Replacing clinical income with passive cash flow
• 23:25 – Common mistakes doctors make in alternative assets
• 30:49 – The emotional impact of recurring investment income

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To speak with our team: info@evergreencap.com

This episode challenges the common belief that family offices are only for billionaires, explaining how wealth management should evolve as income and complexity increase. It emphasizes the importance of treating personal finances like an operating system, focusing on after-tax cash flow, and integrating alternative investments for better tax efficiency and cash flow management. The discussion highlights the limitations of traditional financial advice and the benefits of a family office approach, which includes private equity, real estate, and private credit to solve problems that public markets and retirement accounts do not address effectively.

Keywords

family offices, wealth management, alternative investments, tax efficiency, cash flow, private equity, real estate, financial advice, operating system, personal balance sheet

Takeaways

• Family offices aren't just for billionaires.
• Traditional advice often stops working as wealth grows.
• Focus on after-tax cash flow, not just retirement accounts.
• Integrate private investments for better tax efficiency.
• Treat personal finances like an operating system.
• Ask how capital should be deployed for maximum returns.
• Consider alternative investments for predictable income.
• Avoid unnecessary ordinary income tax.
• Coordinate investments, taxes, and liquidity.
• Build a system, not just a portfolio.

Title Options

• Rethinking Wealth: Beyond Billionaire Family Offices
• Transforming Personal Finance into an Operating System
• The Hidden Costs of Traditional Financial Advice
• Unlocking the Power of Alternative Investments
• Family Office Strategies for Everyday Investors
• Maximizing Returns with Tax Efficiency
• Beyond ETFs: A New Approach to Wealth
• The Family Office Mindset: Not Just for the Ultra-Rich
• Building Wealth with Private Investments
• From Retail Advice to Family Office Thinking

Sound bites

Family offices aren't just for billionaires. Traditional advice stops working as wealth grows. Focus on after-tax cash flow. Integrate private investments for efficiency. Treat finances like an operating system. Maximize returns with strategic capital deployment. Predictable income through alternative investments. Avoid unnecessary ordinary income tax. Coordinate investments, taxes, and liquidity. Build a system, not just a portfolio.

Hosted on Acast. See acast.com/privacy for more information.