Nicola now has $15B AUM. They were at $8B in 2020. One advantage of money flooding in is that it dilutes past mistakes. If Nicola made bad private investment in 2019, they get to take a write-down on a much bigger pool of assets in 2024. As long as assets keep growing, Nicola has little urgency to recognize mistakes.
I mentioned that Nicola people might not have the same pedigree as their competitors in the private markets they play in. Well, the firm seems to have taken that to heart. Late last year, they appointed a former senior Deloitte guy as Vice Chair of their private assets business, with a focus on direct private equity investments and secondaries. He’ll have a mandate to expand Nicola’s offering of private capital funds. Even though I had previously said they were already involved in every strategy under the sun.
Bloomberg somehow decided to run with this story as “Ex-Goldman Exec joins Nicola in Private Capital Group”.
Robert Olsen spent 3 years at Goldman Sachs between January 2006 and January 2009. His job was to invest Goldman’s own capital in a variety of securities. That was not a fun time to be an investor given the Global Financial Crisis. He then left to join Deloitte in January 2009 in their corporate finance advisory practice, which seems to me like a downgrade. Who’d leave principal investing at Goldman to join the sell-side at Deloitte?
His official bio conflates his Goldman experience with his experience at a Canadian private lending pioneer called CCFL.
“Prior to Deloitte, Robert spent 20 years as a Private Equity and Private Debt investor at Goldman Sachs and a merchant banking group which he co-led and was funded by institutional investors.”
That would be 15 years at 8 months at CCFL and 3 years and 1 month at Goldman Sachs for a total of 18 years and 9 months, per his LinkedIn. Plus he spent 15 years at Deloitte, that was his most recent position, he's a Deloitte guy.
Nicola still has Bijal Patel as CFO and Head of Private Capital. But Robert Olsen has much more credibility in private markets. Robert was supposed to join the team in January per the press release. It’s not clear where exactly Robert Olsen fits in the executive ranks of Nicola. He’s not listed among the senior leadership. Rather, he’s listed under the “Private Capital Investment Committee” as “Vice Chair” of Private Capital and an Independent Advisor. Robert is not listed on the board of directors, while Bijal Patel is. Who’s on top: the Head or the Vice-Chair? Or am I overly concerned with dominance hierarchies? Maybe John Nicola is taking an Abraham Lincoln-like “Team of Rivals” approach. Anyways, far be it for me to sow the seeds of discord. Credit where credit is due: Robert was also a former world-ranked amateur boxer representing Canada. As of press time, I am not aware of Bijal’s abilities in combat sports.
No limits to Nicola’s dilettantism
So one of Robert Olsen’s focus areas will be the private equity secondaries market. The secondaries market is a highly specialized and sophisticated market. Whitehorse Liquidity Partners is an example of a well-regarded player in this arena. The term “secondaries” covers a few different scenarios, but one of the main ones is a limited partner who has made commitments to be an investor in a private equity fund, but then changes their mind and wants liquidity. Valuing an illiquid LP stake can be pretty complex. There are already many sharp minds working in this area. Nicola’s stated interest in this market only confirms that they’re prepared to risk their clients’ money (typically doctors and dentists) into whatever flight of fancy happens to be in vogue.
Nicola has now settled on a 3-word slogan, which is a pretty traditional thing to do for a money management firm.
A more apt slogan might be: Nicola Wealth - telling bedtime stories to bed-wetting investors.