Loews Corp (L, Financial) owns 90% of insurer CNA Financial (CNA, Financial) which has a large float of cash to invest. Because of that Loews CEO Tisch is regularly looking for opportunities to invest in various hedge funds.
According to Tisch he is very leery of investing with the larger hedge funds that have $10 billion or more to manage. His reason for being leery is that size kills returns. Generating outsized returns on $10 billion is very difficult.
Tisch also notes that the hedge fund managers that he speaks to are jealous of him because his capital is permanent. Where a hedge fund manager can have his business destroyed through redemptions after just a quarter or two of underperformance, Tisch can wait and play out his hand.
Below is a lengthy interview with this member of a true value investing family:
According to Tisch he is very leery of investing with the larger hedge funds that have $10 billion or more to manage. His reason for being leery is that size kills returns. Generating outsized returns on $10 billion is very difficult.
Tisch also notes that the hedge fund managers that he speaks to are jealous of him because his capital is permanent. Where a hedge fund manager can have his business destroyed through redemptions after just a quarter or two of underperformance, Tisch can wait and play out his hand.
Below is a lengthy interview with this member of a true value investing family:
