2024 Pari Passu Year-End Letter #2

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Ladies and gentlemen, welcome to the 108th Pari Passu Newsletter.

Continuing a tradition that started in 2023, today we have a fun post to wrap up the year: The Year-End Letter of the Pari Passu Ecosystem. We will not learn about corporate restructuring, creative interpretations of credit docs, or company moats but we will dive a bit more into the behind-the-scenes of your favorite newsletter 😉 

Pari Passu by the Numbers

I will be honest, the growth that the newsletter experienced this year is beyond what I could have ever imagined.

To give you some context, I started the Pari Passu Newsletter in January 2023 and last December I wrote “I will admit that the newsletter surpassed any reasonable expectations” after reaching 4,000 subscribers. Today, we are sitting at 18,500 subscribers and once again, I will admit that the newsletter surpassed any reasonable expectations.

While I do not like setting numerical goals as growth is often outside of my control, if I had to say, I would have been ecstatic to reach 10,000 subscribers in 2024. Being at almost 20,000 is beyond any reasonable expectation. In all honesty, I did not think I would ever reach this many people when I started, let alone in less than 2 years.

Truth be told, the newsletter is only a small component of the “Restructuring / Pari Passu Ecosystem.” I first started with an Instagram account, then spun off the newsletter after a year, and more recently started two Twitter profiles, a LinkedIn company page, and a second Instagram account. See below for more details about the different channels.

A few considerations that I try to apply in real life:

• It Is Not (Supposed to Be) Easy: While a quick conclusion from the above graph might be that having a newsletter / social media is just “up to the right,” the truth is that this is not easy (all relatively speaking, I understand all I am doing is typing words on a keyboard). While sometimes I am extremely excited to work on the newsletter, sometimes it is midnight and I need to put in 2 more hours of focused work after a long day of making and tweaking models and decks work. But the struggles are the beauty of the process, it would really not be as fun if things were easy and immediately worked. Enjoy the struggle.

• “The long-way is the shortcut because the shortcut never gets you there:” I recently heard this sentence and it really struck home. I felt like an idiot often in my first year because I would literally spend 5 hours doing an Instagram post which would get 7 likes. Over time, things started to compound and it is nice to have a much bigger following today. I think this is a good reminder that (i) things just take time, commit to something, and stick to it and (ii) just because things are not working, it does not mean you are doing something wrong, you might be just too early in your journey.

• Do What You Love: After a few years on social media, I am pretty confident that no one “cracks the algo” (or that is not a game I want to play); I have heard countless times about the ~new~ way to increase reach, but the truth is that things work when you are good at it, and you are good at it when you enjoy it. This is the main reason why I do not envision myself being in PE forever. I am not as obsessed with the LBO game as some of my colleagues, so I know deep down that I do not stand a chance in the long run.

To close out the key stat section, as of today, the Pari Passu ecosystem has around 76,000 members, up 536% from last year. While this growth rate is clearly unsustainable (otherwise I will reach every single human by 2030), the compounding is just getting started, and I am really excited about the future of the Pari Passu / Restructuring Ecosystem!

Review of Plan for 2024

During last year’s letter, I wrote down three goals for the year. Let’s go through them one by one:

• Goal (1) “Prioritize the newsletter: Working in Large-Cap PE leads to frequent brutal weeks with very little free time. Therefore, if I can keep publishing regularly in 2024, I will be happy. Additionally, I want to place the newsletter on top of my time allocation cap structure (which includes Instagram, Twitter, and LinkedIn). This means the newsletter will be the last thing to be cut whenever I have limited time.”

  • Review (1): I think I did a great job at this as the newsletter was published every week with a high self-imposed bar for content quality. Publishing regularly in 2024 was my main goal and I am proud of achieving it. This will always be a goal I have, especially as I am in a very time-intensive role.

• Goal (2) “Interview people: I would love to have some guests and publish the interview with some commentary as posts in 2024. If you know anyone with 5+ years of experience working on the buy-side, feel free to get us in touch.”

  • Review (2): If you have been reading our publication regularly, you know I failed completely at this as we did not do a single interview. The reality is that I tried to ask my audience if anyone would be interested in coming in for an interview but I was not quite able to make something work. Being anonymous also makes things very complicated, and I am not a huge fan of written interviews. I still find the world of podcasts very fascinating, and I would love to make a restructuring podcast one day in the future but that will require me to give up my anonymity so you will have to wait for a few years.

• Goal (3) “Focus on Twitter / LinkedIn: Many readers suggested that my content would be a really good fit for Twitter and LinkedIn, but I never took the time to commit to it and publish regularly. I plan to publish regularly in Q1 on Twitter and see how much traction I get and reevaluate from there.”

  • Review (3): I can definitely say that those readers were spot on. I started publishing on Twitter last Christmas and I had an instant “content social media fit.” See below a comparison of our three main media channels to see what I mean. What makes me excited about this channel is that growth has been sustained tweet over tweet (it is not the result of a 10M Tweet). I think here I have a lot of room for growth, and I am excited to make connections with many of you on there as well. On LinkedIn, I have had more ups and downs as my account was shut down mid-year and therefore I had to restart as a company page. Things have started to click and I also see a lot of opportunities there. Time is really what I am lacking but that is ok.

Plan for 2025

First and foremost, I still want to keep having fun with the newsletter and the social media pages. My job is unfortunately very taxing, and I would not be able to do a great job at leading Pari Passu if I did not enjoy (almost) every minute of it. More specifically, I have a few considerations I would like to achieve in 2025:

• More Restructuring Content: I have historically had the line of thought that content should be what I am interested in. I am not trying to look selfish but I need to be interested in what we put out, or things will quickly stop working. Therefore, content has generally followed my main job. When I started the newsletter, I was a restructuring analyst, and therefore content was 100% restructuring-focused. Then, I transitioned to buyout PE and I had a bit of an identity crisis and started to expand to company deep dives because I felt I had to. My thinking was something along the lines of “That is what I do in the main job, therefore I should change what I write about.” Over this last year, I realized that the writeups I was really excited about were all restructuring-focused, and this is what makes Pari Passu different. The world does not really need another deep-dives newsletter. While I plan to occasionally publish deep dives, I want to make restructuring the focus of Pari Passu again.

• Keep Pushing Twitter and LinkedIn: 2024 was a great year as I learned a lot more about these two platforms and I am excited about the future of these channels. My thesis is that memes are overvalued and advanced educational content is undervalued and I intend to provide liquidity fill this gap.

• Think of Business Ideas: Sometimes I love wondering what the Pari Passu Ecosystem will look like in the 2030s. While I have no clue, I do know that if it is just a media business, I will be disappointed in myself. I do not have an on/off goal for this year, but I want to encourage myself to keep my eyes open and start thinking of businesses to build around Pari Passu.

2024 Pari Passu Highlights

To recap this great year, I would like to revisit my favorite writeup of each month:

• January - Lumen Technologies: Strong start to the year with a detailed analysis of the business model, key acquisitions and divestitures, and liability management exercises. What I enjoyed about this writeup is that it represented the first credit-level analysis and set the foundations for many future posts. Also fascinating to now see Lumen soaring on AI enthusiasm.

• February - Carvana: Potentially one of the greatest restructuring turnarounds ever, this post does not need an explanation. We covered the rise, the fall, the Out-of-Court Restructuring, and the ball of steel of the Garcia family. PS, I also posted an interesting follow-up on the situation and the $4.5B of missed profits from Apollo (read it here).

• March - Celsa Group: This was a special one as I got to work side by side with the Houlihan Lokey Madrid Analyst who was staffed on this incredible transaction (the power of social media). This was a very painful complicated writeup where we explored the company background, the “Spanish Scheme” and “Spanish Concurso,” the government intervention, the valuation fight, and many other topics. Also made me happy to dedicate some attention to the underappreciated European scene.

• April - Voyager Digital: This article explored how this “next-generation brokerage” ended up as something akin to a bank collapse, the story includes multiple failed rescue buyouts, precedent-setting legal debates, criminal cases, and ultimately liquidation.

• May - Party City: If you feel like this company has been restructuring for years, well, you are right. Things started to heat up in 2020 with exchange offers, but then after a strong 2021, the company fell again into trouble in 2022 and ended up filing for Chapter 11 in January 2023. Last week (14 months after emerging from the first Chapter 11), Party City filed again for Chapter 11 again and plans to close its 700-store fleet. The party is officially over.

• June - Synthetic PIK: This was a special one as it was the first time Pari Passu covered something very topical. My approach has historically been to create content with a very long shelf life but I am very glad we pivoted as this article is one of our most read ever.

• July - ESL and Sears: A classic restructuring story, while this was not something new to our more experienced readers, I felt like the latest generation never fully appreciated this situation and it was worth covering.

• August - Double Dip: Another Pari Passu classic from the summer, we covered this type of liability management transaction which we tried to break down to make it accessible to everyone.

• September - Triple Dip: In my opinion, the most advanced writeup of the year. What I loved about this post is that it was one of the first times when we ideated content when explaining some possible ways that we thought a triple-dip could be created. The write-up also included an analysis of the Spirit Situation.

• October - Trinseo: Second most complex writeup of the year where we explained the Double Dip "Pari-Plus" structure and a credit doc deep dive into Trinseo. I sincerely hope that this post was helpful in showing everyone just how fascinating the world of restructuring is.

• November - Pluralsight: This was a very special one as it was the 100th Pari Passu newsletter. This write-up felt very natural as it was a cocktail of restructuring, private equity, and private credit. Funny enough it was also a very hard week at work and I ended up working on this until very late one night, great memories!

• December - Distressed Conference Highlights: What a way to end the year on a strong note. The original goal of the Instagram page (our first channel) was to share the amazing world of restructuring with the world so that more people would appreciate it. It is really a shame that people do not get access to great events like this and therefore it was special to share a detailed summary of the conference so that everyone can learn and benefit from it.

Fun Behind the Scene

Enough restructuring, let’s move to the fun stuff. As most of you know, I am fully anonymous for obvious reasons (hint: my day job). This results in some funny events that I am now sharing in the hope of getting a smile out of you:

Seeing Annoying Colleagues Read Pari Passu

My first year in Private Equity was not amazing. I talked at length about what I did not enjoy here, but long story short, I was not thriving. One Monday in March stands out in particular. After spending the entire weekend working on some memo with no legs, it was 7pm and I had several hours of work ahead of me. I went downstairs to pick up food, and I was making my way across the bullpen to reach my desk.

I look over to a fellow associate trying to look busy to impress our colleagues, and what do I see? This person was reading THE PARI PASSU NEWSLETTER. My mood literally flipped 180 degrees, and the rest of the night flew by.

Walking into All of You

Nothing makes my day like walking into you (yes, every single one of you). As I mentioned last year, the growth of the Instagram Page was extremely slow, and therefore when I had less than 1,000 Instagram Followers, I knew the name and face of every single one of you. Creepy? I call that customer obsession 😉 

Even when the Pari Passu Ecosystem had just a few thousand members, the density of New York resulted in many encounters which really pushed me to keep going, especially in my early days.

Now that our community has grown to almost 100,000 people, I lost track a bit. This said, I really want to stress that I always want to hear from you. Nothing makes me happier than knowing that my content made you more interested in restructuring, getting replies to the weekly newsletter, and hearing that you are sharing my work with your colleagues. I really wish we could do meetups where I could talk face-to-face with all of you. This is not possible yet, but know I care and I am rooting for you!

Signing the First Ad Deal

After we reached 4,000 subscribers at the end of 2024, I thought it was time to try to sell ads for the newsletter. While I understood the money would be really minimal, the idea of having a sponsor increased the legitimacy of the newsletter (at least in my eyes). Therefore, I made a deck with our key stats and started firing off cold emails. As expected, my return rate was abysmal and I was frustrated: I was wasting time and I was not having success.

Then, an email came to brighten another of my dry days as a Private Equity Associate. I was on my way to the bathroom when an email popped up. It was an email from the Bankruptcy Data Team (a connection I had made on Twitter). A few emails later, I had signed the deal! It made me smile how I signed up to be a PE associate to work and close headline deals, and I get a lot more satisfaction from closing ad deals for my little hobby. Since then, I have had the chance to work with many other great companies like Ramp, 10 East, Daloopa, and many others, but you never forget your first one.

Conclusion

I said it last year, I will say it again this year, and I hope to say it every year for the rest of my life. I feel extremely lucky to work on something I love and that makes my weekends (and late nights) so exciting. I would not be doing this on top of 80-hour work weeks if I did not love it.

Nothing gets me as fired up as getting back from a long day at work moving numbers I (unfortunately) don’t care about, putting on a nice Restructuring Hoodie, and go work on the Pari Passu Newsletter / page.

To end the year, I would like to end the year by thanking:

• You: Thank you so much for spending your time consuming our content, it means the world to me and always pushes me to get better every single day. Always reach out and I will try to help to the best of my abilities.

• Interns: Incredible early-career professionals who help me with content creation, it is a real pleasure working with you and I derive so much happiness from mentoring you.

• The people who know my real identity: The Pari Passu Ecosystem would look a lot different without your support and discretion.

Wishing everyone an amazing 2025!

Best,
Rx