In a recent ION Influencers Fireside Chat, Raphi Schorr, Partner and Deputy CIO at HighVista Strategy, shared valuable insights on identifying alpha in inefficient markets, private equity, private credit, and emerging investment trends. Hosted by Giovanni Amodeo, the discussion covered market inefficiencies, investment strategies, and the evolving landscape of alternative assets.

Raphi Schorr’s insights highlight that alpha generation lies in niche, inefficient markets—whether in small-cap private equity, specialized private credit, or secondary transactions. As innovation accelerates, investors must focus on edge, asset quality, and adaptability to navigate evolving opportunities. Here are the topics discussed.

1. Understanding Market Inefficiencies

Raphi Schorr emphasized that markets are never fully efficient, especially in emerging asset classes. HighVista focuses on:

• New and evolving markets (venture capital, private debt, small buyouts)

• Dispersion of opportunities in less crowded spaces

• Macro-neutral strategies—avoiding over-reliance on macroeconomic predictions

2. Private Equity: Finding Value in Small Buyouts

• HighVista targets North American small buyouts ($5M–$20M EBITDA range).

• Key advantages:

  • Lower entry multiples → higher EBITDA yields

  • Easier value creation through add-on acquisitions

  • More exit options compared to large-cap private equity

• Specialization vs. Generalization: While markets are becoming more specialized, a balanced approach is crucial.

3. Private Credit: Solving Borrower Problems

• Private credit is not just about being the cheapest lender—it’s about tailored solutions for borrowers.

• Asset quality matters most— HighVista focuses on real estate, corporate asset-backed lending, and IP-backed loans.

• Jamie Dimon’s warnings: While risks exist, Schorr believes private credit remains strong due to customized financing needs.

4. The Rise of Secondary Markets

• Private Equity Secondaries: Growing due to lack of traditional exits (IPO/sponsor-to-sponsor sales).

• Venture Secondaries: With $3T+ in unrealized unicorn value, secondaries provide liquidity for long-hold VC assets.

• Opportunity: Buying high-growth companies at discounts can still deliver strong returns.

5. Europe vs. US Investing

• HighVista remains US-focused (especially in private equity) but sees global opportunities in venture and credit.

• Europe’s appeal: Fragmented markets create unique deals, but operational challenges persist.

6. Macro Concerns & AI’s Impact

• Market signals (low volatility, strong growth) contrast with negative headlines.

• AI’s role: Will it augment or replace human talent? A major topic among investors.

Key timestamps:

00:07.12 Introduction to ION Influencers Fireside Chats
01:50.17 Understanding Market Inefficiencies
03:04.00 Historical Context of Financial Innovation
04:41.22 Analyzing Market Layers
08:36.26 Focus on Private Equity
14:07.74 Exploring Private Credit
18:43.23 The Secondary Market Dynamics
20:54.27 The Dynamics of Secondary Markets
21:38.33 The Future of Venture Capital
23:03.79 Investment Horizons and Strategies
23:55.92 Global Investment Perspectives
25:22.73 Market Sentiment and Economic Indicators
26:23.20 Innovation and the Role of AI