May 28, 2018
John Pfeffer is an entrepreneur, investor and author of “An (Institutional) Investor’s Take on Cryptoassets.” He is currently Partner of Pfeffer Capital. In the 2000s, John was a Member at private equity firm KKR, and in the 1990s, he was Chairman of the Executive Board of leading French IT company Groupe Allium S.A. Before that, he advised on turnarounds while with McKinsey in Europe and Latin America.
Our conversation jumps in the thought process and structure behind John’s family office portfolio, which combines building new businesses alongside fund investments in public equity, private equity and venture capital. We touch on common issues like active vs. passive, access and fees, but from a very different insider’s perspective.
We then turn to his work in the crypto world and discuss his framework for incorporating crypto investing in a portfolio, conducting research in the space, defining the proposition for store of value and utility protocols, and valuing tokens and coins.
John was the first investor I’ve come across that has both done a deep dive into the crypto world and is neither all-in nor all-out. He connects markets and economics with the complex ecosystem just simply enough that a layman like me can follow along.
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2:38 – How John thinks about managing his own capital
2:51 – Process to find a business to build
5:08 – Sizing of thematic deals
5:50 – New project copying a European retail model
7:18 – Core of the portfolio
9:02 – Biases of investment alternatives
11:18 – How will tax changes impact the private equity business
11:49 – What does he know about GP’s as an insider that other LP’s might not know
13:53 – How do they tackle venture capital investing
16:25 – Fees
17:40 – First involvement in looking at cryptocurrencies
17:46 – Institutional Investors Take on Crypto Assets
19:40 – Where do crypto assets fit in the structure of the portfolio
21:20 – Holding period for an asymmetric option
22:07 – What else did he do in cryptoassets after that first investment
24:54 – Store of value and utility protocols
29:51 – Valuing crypto assets
31:51 – Velocity of crypto exchange
40:12 – Gold replacement value of bitcoin
45:21 – Closing questions