Anecdote Inflation

Wilbur Ross, talking

to the FT in April:

Anecdotally we syndicated a loan for one of our companies recently, and I

noticed that one of the hedge funds had bought it, bought a small piece, a

$10 million piece, but never came to any of the due diligence meetings. So

I called the fellow who runs the hedge fund, because I know him, and said:

thank you for participating, but I was surprised nobody came for diligence.

He said: for a $10m loan, it is not worth sending someone to a meeting. Makes

you wonder how many $10m pieces are in that portfolio without any due diligence.

Wilbur Ross, talking

to Reuters in June:

Ross gave an anecdote of one hedge fund who took a $20 million stake in one

of his portfolio companies. “I called him to thank him, but I told him

that nobody from his fund came to due diligence. He said ‘I know that.’

I was surprised, and he said ‘we’re only going to put $20 million

in we didn’t think it was worth sending anyone.’ So it makes me

wonder, how many of these fellows are buying the things without due diligence.”

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