Sam Zell Thinks WeWork Is a Bust

If almost every other company like it has failed, then why should WeWork succeed? That’s the argument billionaire Sam Zell made after the SoftBank-backed firm posted a loss of more than $1 billion.

“Tell me about a model that works. When every player in the space has gone broke, it’s just a question of when,” Zell said this week on BTV. He cited companies like Regus, which filed for bankruptcy protection in 2003 but then re-invented itself as a new firm, IWG, that’s now seeing opportunities in the wake of the WeWork fallout.

“The good news is, it means nothing to me,” Zell said. The billionaire joined us this week on BTV with Citigroup’s Leon Kalvaria, who thinks the co-working space is something that’s here to stay. “The issue will really become valuation,” Kalvaria said. “What are these companies worth at the end of the day?”

Just because WeWork struggled to raise funds doesn’t mean all SoftBank-backed ventures are unappealing -- witness hedge funds clinging to a sinking Uber and Chase Coleman’s Tiger Global buying into a falling Slack stock. What’s more is that DoorDash, the privately held food delivery company also backed by Philippe Laffont’s Coatue and Singapore’s Temasek, raised an additional $100 million -- bringing its valuation to almost $13 billion, Bloomberg’s Candy Cheng reports. Last August, it was worth $4 billion. Earlier this summer, the firm was also working with JPMorgan to secure a $400 million pre-IPO credit line. We discuss the wagers here for BTV.

Meanwhile -- it’s no $100 billion haul -- the first close for the next Vision Fund is a mere $2 billion, Bloomberg’s Gillian Tan and Giles Turner report.

Private Equity’s Own Unicorn

Sky-high numbers aren’t reserved for Silicon Valley. Owl Rock, founded by a trio of Wall Street credit geniuses, sold a stake in itself and is now valued at about $2.5 billion just four years after its founding. Neuberger Berman’s Dyal unit recently raised more than $9 billion in the largest-ever fund created to invest in asset managers, and took a 20% stake in the direct lender, which joins a swath of its rivals filling a credit hole once occupied by the largest banks. Alix Steel and I walk you through the wagers for BTV here.

Speaking of private equity, it’s supposed to be the hottest job on Wall Street. But the industry’s recruiting strategy may have some flaws, according to Odyssey Search Partners. Here’s the view from the search firm’s founder, Anthony Keizner:

“It’s gotten to the point now that investment bankers haven’t sat down at a desk before they have to interview for a new job... They left Wharton or Harvard this summer, they started at MS or BAML in August, and in September they have to say to KKR, ‘My real career is not to be an investment banker, it’s to be in private equity.’”

His survey found that more women were hesitant to jump to private equity jobs so early in their careers, and that this could cause some issues for the Wall Street diversity push. (Remember, barely anyone at the top of most big PE firms is a woman). We discuss here for BTV.

Hedge Fund Money, Wall Street Pay

Reporters love regulatory filings. Most days, I’d rather read them than talk to a human. And even on a lagging basis, 13Fs give a good sense of who’s buying and selling. My colleagues on our investing team have this visual on where everyone is placing their trades -- it’s worth viewing.

More on Wall Street:

• Viral story here by Bloomberg’s Sridhar Natarajan and Shahien Nasiripour. After reporting on Sunday that New York’s top financial watchdog began to pry into the algorithms related to the Goldman-Apple credit card venture, others like Elizabeth Warren continued to pour on the pressure. As did Apple co-founder Steve Wozniak.
• Ken Griffin makes a longtime partner a co-CIO at Citadel in a big year of shake-ups.
• Wall Street prepares to be disappointed by their bonuses.
• Wells Fargo is making some moves under new CEO Charlie Scharf -- including hiring Bill Daley and losing Allen Parker.

More to come! If you’re interested in the future of capital markets, join us at Nasdaq where I’ll be interviewing KKR’s Adam Smith, PJT’s Michael O’Donovan and Liz Young of BNY Mellon on where big changes are coming. Next week could be a bye week for me as I’m headed to San Diego wine country -- only to come back to finish the year strong. We will be keeping track of how everyone’s year went, so look to hear from me then. More to come,

Sonali