To avoid the trap of raising ever-larger funds and being forced to invest, Sixth Street created 'Tao,' a $30B cross-platform vehicle. It acts as an overlay, allowing smaller, specialized funds to access large-scale capital for specific deals without distorting their individual investment strategies or mandates.
Alan Waxman's favorite deals are not measured by outcome but by process. He cites investments in Airbnb and large portfolios from Lloyd's Bank and Credit Suisse as favorites because they required mobilizing 50-75 people across different asset classes and geographies, demonstrating the power of the firm's collaborative culture.
Alan Waxman uses the term "tunnel investing" to describe the danger of single-strategy funds. By focusing only on their niche, they miss systemic risks visible from a broader perspective. He cites seeing the 2008 housing crisis brewing as an example of how a multi-strategy view provides crucial early warnings that specialists miss.
Sixth Street's sports strategy views iconic teams like FC Barcelona or the New York Yankees as global consumer brands, not just local franchises. This "local to global, enabled by technology" lens opens up investment opportunities based on brand value and consumer reach, moving beyond traditional sports team valuation metrics.
Alan Waxman argues that the rapid pace of global change means investment themes are no longer multi-year theses. He believes a theme's shelf life is now just 12 to 36 months, demanding a flexible, multi-strategy approach to constantly migrate capital to the best risk-reward opportunities rather than staying in one vertical.
Citing a lesson from former Goldman Sachs CFO David Viniar, Alan Waxman argues the root cause of financial crises isn't bad credit, but liquidity crunches from mismatched assets and liabilities (e.g., funding long-term assets with short-term debt). This pattern repeats as investors collectively forget the lesson over time.
Alan Waxman saw how 10 siloed Goldman Sachs investing groups made contradictory, costly bets during the 2001 telecom bust. This direct observation of dysfunctional "fiefdoms" led him to build Sixth Street with a mandatory, collaborative "one team" structure to ensure cross-functional insight and avoid repeating those same mistakes.