AGM week — reflecting on past mistakes

Sorry for the sparse posts…this was the week of our Annual General Meeting, and as wonderful as you all are, our limited partners deserve plenty of attention, too. 😉

As the 58-page AGM presentation came together, I invariably found myself thinking about all of the mistakes we made over the past two plus years. That’s probably just the Canadian way of doing things: pump up the errors we committed, and gloss over the successes for fear that people think you’re a peacock.

But there’s another angle to that approach, and it has nothing to do with modesty (false or otherwise): if you don’t talk through the mistakes as a team, rehash the choices made along the way, it will be tough to learn anything about your business. And the financing business is particularly prone to repeat mistakes if no one spends much time trying to learn from the last bump or two in the road.

If you ever stop by our office, you’d notice that I have just two tombstones within sight of my allegedly messy desk. They are both deals where we lost a portion of our capital during the recent recession cum financial / economic crisis. Since we did our first deal in August 2000, we’ve closed 54 financings — 49 of which have been in our Fund II (vintage 2004) and Fund III (vintage 2006). All of our deal tombstones are all in our boardroom, but those two partial losses are the ones I want to remember.

As records go, 52-2 would sound pretty good in the National Basketball Association. In the world of finance, though, particularly the debt category, it’s the two haircuts that are the most instructive.

MRM