Author Topic: SYTE - Enterprise Diversified  (Read 244327 times)

Value^2

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Re: SYTE - Enterprise Diversified
« Reply #800 on: November 06, 2019, 10:41:59 AM »
Missing houses etc may be real reason they decided to get rid off that sub, rather than auditing costs etc.


Spekulatius

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Re: SYTE - Enterprise Diversified
« Reply #801 on: November 06, 2019, 12:05:32 PM »
Missing houses etc may be real reason they decided to get rid off that sub, rather than auditing costs etc.

Itís really a lot to ask for in terms of bookkeeping if a house is there or not. I guess the buyers DD in this case has been minimal and/ or they donít like the deal any more.
« Last Edit: November 06, 2019, 12:10:03 PM by Spekulatius »
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NoCalledStrikes

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Re: SYTE - Enterprise Diversified
« Reply #802 on: November 06, 2019, 02:27:13 PM »
Missing houses etc may be real reason they decided to get rid off that sub, rather than auditing costs etc.

Itís really a lot to ask for in terms of bookkeeping if a house is there or not. I guess the buyers DD in this case has been minimal and/ or they donít like the deal any more.

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thowed

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Re: SYTE - Enterprise Diversified
« Reply #803 on: November 07, 2019, 04:22:43 AM »
What is the point of only partnering with long-only, concentrated, small-cap strategies? It will all blow up at the same time.
Good point. They should probably roll up some HVAC contractors in Arizona or buy a bunch of residential real estate in Kentucky to diversify.


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thowed

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Re: SYTE - Enterprise Diversified
« Reply #804 on: November 07, 2019, 04:27:33 AM »
On a serious note, I can't say 100% what the governance/execution situation is like at SYTE/Enterprise.

But I sure as hell know that I don't feel 100% confident about them, in the light of the past 12 months.

So where does this put someone who thinks that a fund like Alluvial looks really interesting, and the manager a smart, very decent guy?

I wonder if some people are reluctant to invest in Alluvial purely because of the SYTE connection?

KJP

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Re: SYTE - Enterprise Diversified
« Reply #805 on: November 07, 2019, 05:10:57 AM »
So where does this put someone who thinks that a fund like Alluvial looks really interesting, and the manager a smart, very decent guy?

I wonder if some people are reluctant to invest in Alluvial purely because of the SYTE connection?

I know more about Alluvial's SMAs than Alluvial Fund, LP, but my understanding is that Alluvial invests in publicly-traded equities and the investment decisions are made by one person (Dave Waters).  So, I don't see how paying Dave Waters to make investment decisions on your behalf presents any of the corporate governance concerns or dubious M&A decision risks that have plagued SYTE.

Hielko

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Re: SYTE - Enterprise Diversified
« Reply #806 on: November 07, 2019, 05:55:17 AM »
It would probably not affect potential investors in Alluvial or the other funds in any tangible way. But at the same time, being associated with something that is starting to look like a train crash in progress isn't good for the brand. Not for the current managers, nor for the future managers they hope to attract. If you are considering investing in a fund and come across a story like this. How many people would just decide not to spend any energy on it, and just look for something else?

roark33

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Re: SYTE - Enterprise Diversified
« Reply #807 on: November 07, 2019, 06:12:44 AM »
The most direct way a blow up at ENDI could affect Alluvial is for ENDI to go down the drain and require immediate redemption of its investment, which would create forced selling among its position.  Since the position are not highly liquid, this has the potential to cause problems with Alluvial's returns in the short term. 

writser

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Re: SYTE - Enterprise Diversified
« Reply #808 on: November 07, 2019, 06:17:04 AM »
The most direct way a blow up at ENDI could affect Alluvial is for ENDI to go down the drain and require immediate redemption of its investment, which would create forced selling among its position.  Since the position are not highly liquid, this has the potential to cause problems with Alluvial's returns in the short term.

Yep. It would probably be a minor factor in case I have to determine whether I would invest with Dave (whom I think is a very solid investor) but it's something to keep in mind. Hielko points out the bigger problem though.
« Last Edit: November 07, 2019, 06:20:05 AM by writser »
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5xEBITDA

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Re: SYTE - Enterprise Diversified
« Reply #809 on: November 07, 2019, 06:34:48 AM »
The most direct way a blow up at ENDI could affect Alluvial is for ENDI to go down the drain and require immediate redemption of its investment, which would create forced selling among its position.  Since the position are not highly liquid, this has the potential to cause problems with Alluvial's returns in the short term.

Yep. It would probably be a minor factor in case I have to determine whether I would invest with Dave (whom I think is a very solid investor) but it's something to keep in mind. Hielko points out the bigger problem though.

This would usually be a major factor to institutional investors and likely a hard "no" the majority of the time until Alluvial diversifies their AUM base away from ENDI. Probably < 1/3 is when most people would ease up about it.