“The room where it happens …

No one really knows how the game is played

The art of the trade

How the sausage gets made

We just assume that it happens 

But no one else is in the room where it happens …

When you got skin in the game, you stay in the game

But you don’t get a win unless you play in the game.”

Welcome back to the Alt Goes Mainstream podcast. 

These excerpts were in a song by Leslie Odom Jr. and Lin-Manuel Miranda from Hamilton. But they could also be applied to the conversation Laurence Tosi of WestCap and I had today.

Today’s show is with someone who has been in the room where it happens. Stories and perspectives shared today were from someone who has helped turn bills into laws in private markets.

Laurence Tosi has been part of building foundational technology businesses and companies in capital markets and private markets – from investing in and building Ipreo, iLevel, TMC Bonds, and Tradeweb as an executive at Merrill Lynch where he served as COO of Global Investment Banking and Trading, building Blackstone from 2008-2015 as the CFO, Management & Risk Committee Member, Head of the Tech Innovations Fund, and Blackstone Treasury Solutions Fund, and building and scaling Airbnb as CFO and Head of Payments, Customer Experience, and Corporate Development.

At Merrill Lynch and Blackstone, L.T. deployed $500M of capital, returning over $1.6B without taking a loss.

He's now building WestCap, a $7.6B growth investing firm that L.T. characterizes as an “operating equity firm” that helps founders and companies scale their businesses at the inflection point in between traditional venture capital and private equity. L.T. and WestCap have leveraged their collective operating knowledge to invest in a number of industry leaders, including two industry defining companies in private markets, iCapital and Addepar. They’ve also invested in the likes of SIMON, which was acquired by iCapital, GoodLeap, Sharegain, Klarna, Paxos, AccessFintech, Treasury4, Hopper, Avenue One, StubHub, and more.

L.T. and I had a fascinating conversation that took us to a number of places. We discussed:

• Stories from building Blackstone.
• The deeper meaning behind Blackstone CEO Stephen Schwarzman’s comment “scale is our niche” and how “scale begets skill.”
• Insights L.T. and the Blackstone team had around working with the wealth channel that enabled them to transform how Blackstone and the industry worked with private wealth.
• Why the realization that at Blackstone, they weren’t selling to the end investor but that they were selling to the financial advisor was such a critical insight as they worked with the wealth channel.
• What it means to transform Blackstone from a firm into a business.
• Parallels and patterns L.T. took from building and investing in foundation market infrastructure businesses at Merrill Lynch and Blackstone to how they are investing in private markets at WestCap.
• L.T.’s learnings from a focus on customer experience and simplifying the product at Airbnb.
• What’s the unlock for alternatives that harmonizes the industry?
• Why consortium is a “bad word” but why standardization will be so critical to the next phase of private markets.
• Why private equity firms have the best business models in finance.
• The difference between being in the business of building their business between being in the business of building your business and what L.T. is trying to accomplish at WestCap.
• Why L.T. believes in the partnership model for alternative asset managers and why he believes that’s an enduring model.

L.T., thanks so much for coming on the Alt Goes Mainstream podcast to share your wisdom, experience, and deep industry knowledge from being a pioneer in private markets.