Episode 278: Understanding Secondary Markets: A Conversation with Nate Walton of Ares

 

Stewart: My name's Stewart Foley, I'll be your host. Hey, welcome back. It's great to have you here in 2025. We're excited to get back on the podcast circuit here.

I want to make a couple of public service announcements. One is that our event that is on ABF, real estate, infrastructure is May 7 and 8 in Philadelphia this year, and the registration is now open. So, if you are running one of those three asset classes, ABF, real estate, or infrastructure, please shoot a note to events@insuranceaum.com and we will get some information headed your way.

And we have also been talking about perhaps doing something in private equity, which leads me to our topic today, which is private equity. And we're joined today by Nate Walton, who's a partner and head of private equity secondaries at Ares Management. Nate, welcome aboard. Welcome to the family and thanks for taking some time with us. We certainly look forward to hearing what you have to say.

Nate: Thanks, Stewart. Excited to be with you today.

Stewart: You have an extensive background in a lot of different facets at Ares. Can you just give a little bit, I want to get into the whole thing about where did you grow up, what was your first job, not the fancy one? But then a little bit of how you got into your seat that you're currently in today at Ares.

Nate: Sure. So, I joined Ares back in 2006. At the time, when I started my career, I was in Los Angeles, California native, and at the time Ares had about $8 billion of assets and 100 employees across the entire firm. A lot of those employees were in Los Angeles. And I started in what we called, at the time, our capital markets group. It was actually a lending business, CLO related. I did that for about a year.

In 2007, I moved to our private equity business and I did that from 2007 until 2020. I ultimately was co-head of our direct private equity business where we were buying and selling middle market companies in many sectors. In 2021, Ares Management acquired a firm called Landmark Partners in a large acquisition for the firm to enter into the secondary space. And I was asked by our CEO to help lead that integration into the platform and then ultimately take over the private equity secondary business, given a lot of the trends that have impacted the broader private equity markets.

Stewart: Nate, that's super helpful. Where'd you grow up and what was your first job, not the fancy one? We got to cover that ground too.

Nate: So, I grew up primarily in San Diego, California. That's where my family is from. My father was born and raised there, but we moved around a decent amount. My father was a professional basketball player, and so, we lived in Boston for a bit of time, Los Angeles, and I was actually born in Portland, Oregon. 
Stewart: That's interesting. So, when you say basketball player, can you expand on that or are we leaving it there?

Nate: Yeah. My father was a Hall of Fame NBA player by the name of Bill Walton, and he passed away unfortunately last year. But he was a great father and, I think, a colorful personality in the world of sports for many, many decades.

Stewart: Wow, that's cool. I honestly did not know that until we're just talking about it right now. So, that must have been an amazing upbringing and interesting that, I think that so often athletics and finance go together. That people who excel in team sports do well in the capital markets as well. And have you ever considered that or thought about it?

Nate: Yeah. I think I had heard that when I got out of college and I was thinking about what I was going to do in my own career, and some of the people I met with had similar experiences. And I think there are some traits that you learn playing sports, being part of a team, thinking about others, thinking about the collective goal. I think there's some just basic life skills, time management, meeting deadlines, putting in the extra effort when you need to get something done, that you learn through sports, you can learn it, obviously not playing sports, there's lots of ways to learn those life lessons, but I do think a lot of the life lessons you learn are applicable to any career, not just finance.

Stewart: That's interesting. So, can you talk a little bit about the role of secondaries in private markets? I mean, I think that it's interesting that oftentimes when we're talking about private markets, we're talking about a liquidity give. And it seems to me that the secondary market in both equity and debt are improving, which I think can ultimately serve to increase allocations to those asset classes with people knowing that there's an active secondary market. So, can you talk a little bit about what the secondary market's role is and also kind of how it's evolved?

Nate: Sure. The secondary market is a critical component to private markets and not just in private equity as you pointed out, but also real estate secondaries, infrastructure secondaries, and now increasingly credit secondaries. 

And the reason secondaries are so important is if you think about it at a 30,000-foot level, private markets are illiquid, but sometimes investors need liquidity. And so, why do they need liquidity? They could need liquidity because their strategy has changed, their underlying business has changed, their objectives have changed. There's lots of reasons why institutions need liquidity. And the secondary market was originally formed in the mid-'80s, late-'80s, about a decade or so after the private markets were formed, when you started to have the first real examples of investors looking for liquidity. And there were no solutions.

And so, people said, "Well, gosh, there should be some way to buy these and price these investment opportunities. If somebody really wants liquidity, we should provide it at an appropriate and attractive cost of capital." And for the first 20 years, secondaries, I think, was getting an incredible cost of capital for providing that liquidity because it was very painful for somebody to sell. And we'll talk about what's changed in the last 10 years, but the secondary markets have grown up like a lot of the private markets and they're pretty well functioning today. And they provide this nice release valve to anybody who is either an institution or an individual investor in private markets to say, "Gosh, if I want to sell, there is a price at which I can get liquidity." Versus, "I have to make a 10-year commitment and I may have to hold this for 12, 13, 14 years regardless of what happens over the next decade."

And so, I'm not sure the right analogy, but maybe it's the grease or some kind of part of the overall product suite that allows the functioning of these private markets to grow by having some liquidity option.

Stewart: And you mentioned the evolution over the last 10 years. How have the transaction types developed over the last 10 years in secondaries? Can you talk a little bit about that?

Nate: So, it's actually one of the reasons why Ares decided to enter into the secondary market, because as we saw the evolution of the market and we saw the evolution of the opportunity set and the skill sets that were going to be required for this next stage of secondary investing, we thought that was kind of right down the middle of the fairway for what Ares does well. And so, let me take a step back. You have the mid-'80s, late-'80s, '90s, secondary firms largely providing liquidity when investors want to sell out of a private equity fund. And so, they would offer that price, there would be a sale, and that was it. And that was called a limited partner trade or an LP trade.

Fast-forward into the 2000s, you have a pretty robust private equity market in the first half of the decade, and I think there were terms being thrown around like the golden era. And then, ultimately, you had the financial crisis and all these investors woke up one day in 2008 and 2009 and said, "Oh my gosh, I need to fix my denominator effect. I have all these other issues." And they started selling into the secondary. And that was a great time to be an investor in secondaries because you could just buy at big, big discounts. There was more sellers than buyers, and you got paid very, very well for providing liquidity in a time of illiquid capital markets.

Coming on the other side of 2008 and 2009, coming out onto the 2010 time period, the secondary market was still playing its core role of LP trade and being an LP solution for those LPs who wanted liquidity. But two other trends began as well. One was what we called the beginning of the GP-led or general partner-led, because most of the solutions in the secondary market up until that point in time had been driven by limited partners looking for liquidity.

Well, now on the other side of the financial crisis, you had some situations which people referred to as zombie funds, general partners who were no longer in business, but they still had these assets on their balance sheet and they were trying to figure out how to get liquidity for their investors, themselves, and have an orderly wind down on the other side of the financial crisis. And so, they came to the market and they said, "Could you help buy out the whole fund interest for everybody?" And the early days of that, the asset quality was mixed, so-so to poor, I would say, in general. But that was where the technology began.

And then coming to about 2015, 2016, we started to have some investment banks in the world, in the US particularly say, "Gosh, what if you could keep your best companies? As a general partner, what if you could get liquidity for your highest quality companies through the secondary market?" And I remember at the time I was in our direct private equity business and I was sitting there and doing the things that you do in that business, which are buy and sell companies between private players. And occasionally, you'll sell to a strategic, occasionally you'll take a company public, and those are kind of your options, financial sponsor trade, an IPO, or a strategic sale.

And all of a sudden you start having bankers show up in our offices saying, "Hey, would you like to sell your best companies to yourself, where you continue to manage and own them and you recapitalize them out with a new group of secondary investors?" And the first time we heard it, we said, "There's no way the investors in these funds would let this happen. It just seems like there's too much potential for conflict and other issues." Look, we saw the market continuing to develop, some early general partners did that in 2015 and 2016, and it worked out quite well for the secondary investors, and I think it worked out quite well for the general partners, and allowed you to keep your companies.

2017 and 2018, more and more of people started doing it. So, Ares, in our direct private equity business, when I was helping run that business, we did a multi-asset continuation fund. We took three high-quality companies, we put them into a new vehicle and we offered liquidity to our existing investors in the fund who chose liquidity. And we offered the ability to roll into the new continuation fund it was called, for those investors in the fund who wanted to participate in the future growth of the business.

And the reason this market has exploded, the GP-led market has gone from about $10 billion a year to about $70 billion a year now, $60 to $70 billion, is because at its core, private equity has a mismatch between company lives and fund lives. Think about great companies. Great companies often grow for decades, and you see that in the public markets, but in private markets, there was no way to hold onto your best companies. You always had to sell them to return money inside of a 10-year fund life. And so, in many regards, you were forced to sell your best companies early to return capital to raise your next fund. So, you have this fundamental structural problem in the industry that was based on companies lives and companies growth prospects not always matching up exactly with the fund's life.

And so, GP-leds have largely solved that because now if you have a company that's continuing to do great, you can either sell it to another private equity firm, you could sell it to a strategic, you can sell it to an IPO, or you can offer it to your existing investors to roll their interest into the next vehicle, bring in new investors in the form of secondary investors. And for secondary investors, you're getting to buy a great company or a great group of companies in partnership with the general partner who already owns them. So, the information advantage that you have and the alignment of interest that you have with these general partners is much higher than you would ever have in any direct private equity deal where you're buying from a third party, maybe they roll a little bit of equity, but for the most part you have a transition in ownership.

And so, it's fundamentally altering the private equity landscape. And last year, I believe the number was almost 15% of all private equity transactions were in the form of GP-led and continuation funds. And so, it's really had a dramatic impact. And that's been the big development.

So, 10, 15 years ago, it was 100% LP-led. Today, roughly 50/50 or 60/40 depending on the year. And there's this component of the GP market, which is also includes the use of structure. So, a lot has changed. This is a short answer. I know that was a long answer, Stewart, but it's because a lot has changed on the other side of the financial crisis, and we're probably in the early innings still of that evolution.

Stewart: That was super helpful. I have a much better understanding of those ... I mean, it's obviously, it's not my world, right? But I have a much better understanding, particularly when you talked about the information advantage of a secondary investor coming in when a GP already owns the thing and knows the business. That makes a world of sense to me.

Nate: Stewart, let me give you an example of that. I'll just give you and example. Is the example I always use in that framework.

So, when I invested in direct private equity companies, which I did for the better part of 15 years, whenever you would buy a company, you would go to the first board meeting. And after that first board meeting, I would always ask the team, the deal team, the investment team, "What is better, what is the same and what is worse than what we thought when we bought this company?" And there's always an answer to each of those. Something's always better, something's always worse, something's always as you expected, and you don't know what those are. It could be maybe there's an issue with one of the senior executives, maybe there is a new product that's exciting or not exciting, or there's some change in the business and the competitor behavior, but things that you learned at the first board meeting.

And now compare that and contrast that with the continuation fund, GP-led. After your first board meeting, nothing has changed. Hey, it's the same people who have been on this board for the last 5 years. They put in place most of the people, they understand every strategy decision that's being made at this board. There is no new information. And so, you want to partner with people where they have all of the information of the company versus going in ... And sometimes the only caveat to that is when things are not going well. Right?

So, GP-leds are great when companies are going well. That's the purpose of them. If you need a turnaround, if you need a value creation play, if you're looking for kind of a big change in the business, that's direct private equity, right? That's where somebody's going to come in and do something different. But if something's going quite well and you just simply want to continue to own and harvest and compound capital and continue the growth plans, continuation funds are a way to achieve that.

Stewart: That's super helpful. So, if I'm an insurance investor, right? And I mean, that's kind of my role on the podcast is to ask questions from the position of an insurance investor, how should I be thinking about my secondary allocation?

Nate: That answer depends on where you are in your own development of your program. So, what I would say as a general rule of thumb is that people historically use secondaries as a way to ramp into an asset class. And the reason you use secondaries was because it gave you vintage diversification. If you start a private equity program, you don't want all of your exposure in that year, because that year may or may not be good. If you look at long periods of time, there's a lot of dispersion of returns between vintage. So, one way to minimize that over-concentration of a ramping program is to use secondaries. So, that's a lot of the historical use of secondaries.

I would say there's a new use with the GP-led market, which is, "I'm already established. I like my asset class mix. I like where I am, but I'm just looking for really good," what I'll call, "quasi-risk adjusted returns that allow you to have lower volatility." Because what we now know from the GP-led market is given that information advantage, the loss ratios are lower. So, what we've seen so far in the last five, seven years is loss ratios somewhere sub-5%, maybe even sub-2%. Private equity's loss ratios at the fund levels at the underlying portfolio companies is about 10%, which makes sense, right? Given this asymmetry of information advantage. So, tighter dispersion of returns without sacrificing total performance is actually quite a beneficial thing for any investor-

Stewart: Absolutely.

Nate: ... particularly like an insurance company who wants to minimize some of the volatility around their quarterly private markets.

Stewart: Yeah. I mean, that drives the Sharpe ratio up significantly as that denominator gets smaller, right? As that range of outcomes gets smaller.

So, insurers at the end of the day have an obligation to their policyholders and their shareholders first and foremost. And so, how does Ares think about adequate downside protection within these transactions?

Nate: So, we do this across all of Ares. Ares as a firm, since I joined the firm almost 20 years ago now, has always had a mantra that we want to be a downside protected investor. And that ethos of protecting your principal, protecting your downside is true whether it's in credit, private equity, infrastructure, real estate, secondaries, doesn't matter the asset class, the ethos of the culture of the firm is consistently downside focused. So, what does that mean in secondaries? Let's walk through different pieces of the market.

In the LP-led market, we largely want to buy existing assets that are 4 to 7 years old, where you can go in and you can do fundamental underwriting on those companies where they are. What you figure out in secondary data ... Secondary is a big data business. We have a large quantitative research group, 17 people, seven of which are PhDs. We've invested in over 3,000 funds in 30 years in our secondary. We have as much data on fund performance and dispersion of returns as anybody. And one of the things you find is that losses in funds largely occur primarily in the first 5 years, which makes sense because you buy a company, something goes wrong. Losses start to slow in the later years because at that point the shocks are out of the system. And so, years four or five and beyond, you have lower volatility in performance.

We also know there's a correlation between if a fund did well in the first 5 years, what's the next 5 years’ performance going to be? So, we look for these data trends and limited partner opportunities to buy in at a discount, at a point when that portfolio has already been, quote, "de-risked" through its investment period. And we price it at discount, such that if the market does not go as well as we think, we still generate an attractive rate of return through the discount capture. So, we're not relying solely on future NAV growth creation, we're also using discount capture to generate returns. So, that's one. That's the limited partner market.

In the general partner world, we do deep fundamental analysis on the company in partnership with the GP. And for Ares specifically, we try to find situations where Ares already knows the company, the industry, and the sponsor. Because if you're solely reliant on that general partner for the information and they have an economic incentive to get the transaction done, you've got to be able to independently verify what they're telling you. And we are able to use our platform, which is one of the largest private markets platforms in the world, to do that third-party diligence. And we ask them to roll 90% to 100% of their economic interest that they wouldn't otherwise have received into the transaction. So, they roll their collateral, they roll their capital alongside us, that helps further align interest.

Stewart: And so, let's just say that an insurance company doesn't have or has not had experience in private equity, is secondaries the right place to start for the diversification reasons that you talked about, or not so much? And the other part of that is, how do the fees compare on secondaries versus otherwise?

Nate: Two great questions and I'll take them one at a time. So, the first question is absolutely, if you're starting a private equity program, you absolutely want to start with secondaries, and we can help you with that math. Any consultant who's been around the private markets can help you with that math. And it's quite simple. You want to make sure that if something happens in the markets, you're not overly concentrated, right? If somebody said, "Hey, I want you to start investing in the stock market." Would you put all of your money in on one day? Of course not. There's techniques as to how you invest your money, and when you put it in, and when you withdraw it, so that you're never exposing yourself to one period of the market cycle. Because at any one point, it could be a great time, it could be an awful time, and that's just markets.

And so, secondaries allows you to effectively look back in time and say, "Gosh, had I been investing the prior 5 years, I would be in all these different funds." You also want to have diversification across managers and geographies and even sub-sectors. So, in our secondary funds, we look at every underlying portfolio company and every fund that we invest in, and we roll that all up through our portfolio management function to say, "What's our exposure to European industrial companies? What's our exposure to 2015, 2016, 2017 buyouts?" We're trying to make sure that we're never getting too far exposed to any one asset class sector or geography, because the whole purpose of the secondary portfolio is diversification. And that allows you to withstand volatility better than if something were to happen to one specific part of the market, one specific geography. And so, that's why it's such a great tool.

The second tool, and this will go to the fees as a segue, is a J-curve mitigation. So, when you buy into a private equity program, the first 24 months, the manager is charging you on committed capital and they are drawing down money, but you're not usually getting all your money put to work in the first year. So, you're paying the full fee base against a portion of the capital. So, many private equity funds are either at cost or even below cost on a net basis to investors below, during their ramping period.

So, experienced private equity fund investors are used to it, they're okay with it, and they're blending it into a mature portfolio, so it doesn't have a big impact. But if you start your program and the first 18 months all you're doing is explaining to your board or your CIO why you've on paper lost money on the entire program, that's not a great place to be.

So, secondaries, because they buy into mature portfolios, usually years 4 through 6, 7 or 8 of a fund, are through the J-curve. Private equity firms are usually marked at 1.5, 1.8, 2 times they're charging capital on the fund, but they've now invested the vast majority if not all of the fund. They're actually usually in distribution mode at that point. And so, you're coming in at a different point in the cycle, and so, therefore, people use secondaries as a J-curve mitigator tool as well.

So, that gets to the third point, which is fees. So, secondary investors, historically, some people had asked the question, "Am I paying a double fee because the secondary manager charges a fee plus the underlying private equity manager charges a fee?" And the answer to that is yes, but you are coming into the private equity fund after the J-curve, sometimes the private equity fund has a step-down, and so its fees may have already been stepped down. And the secondary fund fees are not as high as direct private equity.

So, as an average as the industry, it's kind of more 1% versus 1.5%. The carried interest is usually lower, somewhere in the 10% to 15% range versus 20%. And when you look at the combined impact of fees between the primary manager and the secondary manager, it's actually less than if you had been in a private equity fund from the beginning where you had this J-curve, because of the time period in which you enter relative to when you get distributions back. And so, even though there may technically be two fees, you are better off on a net basis coming in later through the secondary asset class.

Stewart: That's a helpful way to look at it. What about the other end of the spectrum where I'm an insurance investor with a mature PE portfolio, am I still thinking I need to have secondaries in that scenario as well?

Nate: So yes, and this gets back to the evolution of the market. If the market today were still just LP-led, I would argue maybe not, right? Because if you've built out a diversified portfolio, what's the benefit of additional diversification? And you would argue it's minimal. You still get the benefits of J-curve mitigation, you still get the impact of coming in later, but you'd lose some of the incremental benefit of diversification if you already had a mature portfolio.

But, and this is what we're seeing with a number of US pensions and sovereign wealth funds around the world, they're looking at this continuation fund market or the structured solutions market, and they're saying, "This is just great absolute return." Right? "This is really interesting to go in and being able to partner with GPs to buy their best companies in alignment with them, generate private equity-style returns with lower loss ratios and lower volatility, or do structured solutions where you have a mid-teens cost of capital. It looks like opportunistic credit, but very low downside and very low volatility. I like these as just standalone investments. I'm not doing this for diversification. I'm doing this because this is a great place for me to get absolute risk adjusted returns."

And that's the part of the market that I think insurance companies, pension funds, sovereign wealth funds, are all still at various stages of learning, because for so long they were taught secondaries is just a way to ramp, just a way to build diversification. For a long time, the view was, "Yes, I got diversification, I got ramping, but if I bought an LP-led portfolio my upside was limited, call it 1.5, 1.6, 1.7 multiples of capital because of when you were buying into the fund your IRRs could be attractive, but your multiple capital is limited. That has changed with continuation funds, where the multiple of capital target is 2 to 3X. Looks like private equity return targets are closer to 20%. So, it's this evolution, and I think it depends on what you're using it for, a total return or ramping, but there's an opportunity for either.

Stewart: So, if I'm looking out my window and asking you to dust off your crystal ball, how do you think this market looks for 2025? Where do you see opportunities and is there anything that you're cautious on?

Nate: To answer that question, I would go back and look at where we've come from in the last couple of years. So, 2021 was a bullish market across private markets, including secondaries. 2022 and 2023 and 2024, really I'd say the back half of 2022, post the interest rate rising environment, you saw a correction in the market where secondaries you could buy LP interest to high 80s or even mid-80s, relative to NAV. So, 10, 15 points of discount. That was rare. We hadn't seen that since the financial crisis. So, we went and bought a lot of LP interest, multiple billions of dollars of LP interest in that time period.

As the public markets have recovered, private markets often follow public markets on the way up. Interestingly, they don't follow them on the way down, which is another probably podcast or two. But on the way up, they do follow. So, we've seen the gap of discounts tighten. So, we're probably now in the 95 to 97 context for high-quality private equity portfolio. So, a three to five-point discount, which is still attractive but not quite as attractive. So, we see the market still there. Long-term, there's always going to be a role for illiquidity. Somebody wants to sell, secondary market has become more efficient. It's going to charge somewhere in the low to mid-teens expected cost of capital to provide that liquidity.

But the GP-led market is now also providing 20% return opportunities because general partners are under immense pressure to return capital and distributions to their own LPs. So, the DPI of the last five years of private equity firms is dramatically below trend. So, if you look at where private equity firms' DPI should be, it's years behind. So that you have this pressure from the investor base to these private equity funds, "Return capital. If you want to raise more capital, return capital." Well, if the private equity fund manager is saying, "Got these great businesses, I don't want to sell them at a discount to the market because the multiples have come down." So, what they are doing is looking to go more and more into the continuation fund market, which is why this has become a bigger and bigger part of the market. So, that's an area where we see real opportunity.

The other area is these structured solutions. General partners are saying, "Gosh, this is a great time to be investing in private equity. I want to put more of my own personal money up or my firm's money up into my next fund." And we help them take their commitment from $50 million to $300 million. Right? So, they go from 2% of their fund to 10% of their fund. And because they believe in the opportunity and they subordinate their own assets on their own balance sheet in exchange for this additional capital to invest inside their own businesses. So, the big picture is I think the LP markets are always a good rate of returns, because you generate returns through providing liquidity to a local market, but there's periods of time where the LP market can be better or more attractive. We just went through one of those periods. That time has likely closed until the next major shock, and now it's back to its more status quo, but the GP-led markets are continuing to boom. This will likely be a record year in 2025 because more and more general partners are using it. There's more and more secondary capital being raised to go after the opportunity. The market has kind of established the fair guidelines with both ILPA and the SEC for how this process should work. And so, there was a regulatory concern in the early days. It's now been addressed. So, I think many firms are entering into the secondary GP-led market because they see this long-term mega-trend, and we agree with it.

Stewart: I've gotten such a great education from you, Nate. I really appreciate that. I've got a couple of fun ones for you on the way out the door, if you're willing.

So, I want to take you back to when you were earlier in your career. What advice would you give someone who's freshly out of school, about to get out of school, been out of school a little bit, that would help them achieve the level of success that you've achieved there at Ares?

Nate: So, I will give some advice that I got myself when I was getting out of graduate school and I was trying to figure out what I was going to do and where. And sometimes you overthink things a little bit too much, and I often get people telling me, "This is my dream job. This is what I want to do." Rarely do you start in your dream job. You usually have to start wherever the opportunity is.

And so, the advice I give people is get in the game, get going, and do a great job at whatever you're asked to do. And good things generally tend to follow. And so, the advice is not to sit out and wait and wait and wait and wait until you find that perfect opportunity. But if you're trying to get into the financial services industry and there's an opportunity that's good enough, go and do a great job and prove that you're great at that, and then the next job will be a little bit better, and then the job after that will be a little bit better, job after that will be a little better. It goes back to your earlier question about sports. It's incrementally building upon small pieces of success versus waiting to just jump right to the finish line and say, "Hey, I won the race already." So, that's one piece of advice.

Stewart: That's very good advice.

Nate: The second one I would give is make sure you like what you do, right? Because you don't have to love what you do, but you have to at least like it. And the reason is it's hard. Right? People in financial services get paid a lot of money, and I think a lot of people go into this industry for that purpose. However, at some point in your life, and I'm now old enough to realize this, people get to the point where they say, "That's not enough. I want to wake up and be intellectually stimulated. I want to like what I do. I want to like the people that I work with. I want to be excited about going to work in the morning, not dreading it on Sunday evening." And so, whatever that is, find that.

Like I said, it doesn't have to be you love what you do, but you got to like it, because it's going to be long hours. It's going to be many, many years to get to a place in your career and probably where you wanted to be when you start your career. And so, you got to be willing to put the time in, but also enjoy it along the way so that you're not a miserable human being.

Stewart: Yeah, absolutely. I mean, it's funny, I've spent 60 years getting to the esteemed position of a podcast host in the insurance asset management arena.

Nate: Well, I now have something to aspire to, Stewart. I mean, I've set a new goal in my life.

Stewart: That's right. That's right. Okay, so last one. I think I know part of the answer to this one, but let's say that you could have lunch or dinner with three guests, whoever you wanted, alive or dead. Who would you most like to have lunch or dinner with?

Nate: Gosh, that's a good question. I was a history major when I went into college. I eventually became a politics major, so I have a liberal arts background. There's people in history, Abe Lincoln's obviously one of them that you kind of go, "What was that like?" Right? I mean, to have the United States at war with each other is such an interesting and complex topic that to just understand how he made decisions, how he made those choices.

Another person would probably be Martin Luther King. We're coming up on his birthday here in the next few weeks. And the strength that he had, the perseverance to stand up for what he believed in and what he thought was right, and those are the kinds of people that you want to understand, "How did you find that intestinal fortitude to just keep going and keep persevering?" And I'm trying to think of a third one, but those are the two that kind of jump off. It's really not somebody in finance or anything. I just-

Stewart: No, I get that.

Nate: I'm sure we could talk about some monetary theory or something, but I'd rather talk about great life stories of people who really had fundamental impacts on the world and society.

Stewart: Yeah. That's so well put. Thank you so much for coming on today. I really have gotten a great education. I understand it better than I ever have. And thanks so much for being on. We've been joined today by Nate Walton, partner and head of private equity secondaries at Ares Management. Nate, thanks so much.

Nate: Thank you, Stewart. Glad to be a part of it.

Stewart: And thanks for listening. If you have ideas for a podcast, please shoot me a note. It's stewart@insuranceaum.com. Please rate us, like us, and review us on Apple Podcasts, Spotify, or wherever you listen to your favorite shows. My name's Stewart Foley. We'll see you next time on the InsuranceAUM.com Podcast.