Episode summary
Where to Find Alpha in the Private Markets
How I Invest With David Weisburd
· · 44 min · Hosts: David Weisburd · Guests: Jeff Collins
Summary
Jeff Collins argues that Cloverlay’s edge comes from pursuing “uncorrelated private assets” in corners of the market where dispersion of returns is wide and selection matters more than capital engineering. After 14 years at Morgan Stanley Investment Management, he spun out to focus on niche opportunities like wireless spectrum, special mission aircraft, defaulted reverse mortgages, intellectual property, and industrial outdoor storage, where there may be no banker coverage and no transaction if the firm decides to pass.
A big part of the strategy is organizational: Cloverlay trains its own team, keeps a large enough bench to stay responsive, and builds sourcing through long-term reciprocity rather than conferences or cold outreach. Collins says the firm holds “kill calls” on deals it rejects, gives feedback, and often makes introductions, which helps convert no’s into future deal flow and relationships.
He also frames Cloverlay as ballast for institutional portfolios, especially pensions, because the assets are meant to have near-zero beta and low correlation. The goal is not to scale into every adjacent strategy, but to remain highly focused, preserve culture, and generate performance from unusual assets and unusually strong operator selection.
Key takeaways
- Jeff Collins says Cloverlay hunts where “the money isn’t,” because wide return dispersion creates more room for operator and strategy selection to matter.
- He says the firm’s sourcing flywheel comes from reciprocity: reference calls, follow-ups, and helping people even when Cloverlay passes on a deal.
- Collins argues that pensions use Cloverlay as an uncorrelated ballast, with returns meant to sit between spicy private credit and buyout funds.
- He says Cloverlay avoids scalable adjacencies like credit because the firm would rather stay focused than dilute its team and workflows.
- In segments like industrial outdoor storage, Collins says value comes from repositioning assets into portfolio-scale platforms that large buyers will pay up for.
Notable quotes
“The overarching theme was to go where the money isn't to go where the dispersion of returns is greatest”
“There aren't many categories within private markets where you have all the time in the world to do your work”
“We regularly hold kill calls. We we have a kill call in every deal that we end up passing on”
“our our term of art is uncorrelated private assets”
“We want to create the utility and sell it to that cost of capital that's interested in a utility”
How the episode opens
So, you ran parts of Morgan Stanley's private business before you launched Cloverlay, which today is $2 billion in assets. What made you think that there was a gap in the market?
I was at Morgan Stanley Investment Management for 14 years, 13 years before setting up Clover and we invested in all strategies, all geographies in in private markets. The overarching theme was to go where the money isn't to go where the dispersion of returns is greatest because that's where selection of partners and selection of strategy can lead to outsized returns which is a very different profile than most traditional definitions of private equity where returns are fairly banded. like you'll have some absurd outliers certainly in the venture world but in other strategies fairly banded and fairly tight dispersion of returns whereas when you wander into you know the the esoteric asset wilderness dispersion of returns is enormous.
We took that mantra applied it to our uncorrelated asset strategy while at Morgan Stanley and had great success and so that led me to weave a firm and set up Clover. I don't think I've ever met a manager that doesn't want to invest where the money isn't going. How do you go about building an organization that takes advantage of the supply demand dynamics in the capital markets?
Prep for this conversation. I pulled our weekly pipeline from last Monday. The deal we expect to close next has been on our pipeline for 291 days.
There aren't many categories within private markets where you have all the time in the world to do your work and get an opportunity surrounded and if you decide to pass, there is no transaction. That's the world that we live in. And I know that sounds like nonsense to very experienced private equity investors who say everything is competed, everything is agented.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- private markets
- uncorrelated private assets
- deal sourcing
- niche asset investing
- institutional portfolio ballast
Companies and tickers mentioned
- MS
- Morgan Stanley Investment Management
- Cloverlay
Watch the episode
Watch “Where to Find Alpha in the Private Markets” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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How I Invest With David Weisburd, this episode and its artwork belong to David Weisburd. Octagon is not affiliated with the show; this page is an independent summary.
