Joseph Shalom, formerly at BlackRock, warns against borrowing against core assets because downturns force liquidation. He stresses building teams that understand institutions and risk management. One firm has run profitably for 15 years without leverage to survive multiple market cycles.
Forget about the cycles. I think it's very, very simple. Build a team who understands institutions. Risk management is number one. Two, don't do stupid things in raising debt. Secure your debt against your asset so you're one day, when the markets go down, a forced liquidator. That's a really, really dangerous thing.
What we've done as a business is we've got an operating business that's been profitable for 15 years, you know, on a small scale, admittedly, and then we don't use leverage. So we can weather a storm pretty well and just stick to the mission. The mission is a multi decade mission.
We'll have multiple down cycles. It's really a long term play and an opportunity, which is why I enter the space after 20 years at Blackrock.
