In this episode, I speak with Avy Stein, Founder & Co-Chairman of Cresset—a multi-family office known for its private markets access and co-investing model. We cover Avy’s path from Kirkland & Ellis lawyer to private-equity dealmaker, the Willis-Stein spinout from Continental Bank, why multi-strategy platforms scaled so quickly, how co-invest rights really add alpha (and where adverse selection bites), and the rise of private credit in the middle and lower-middle market. We also get into culture building at scale, how Cresset thinks about alignment with GPs, and Avy’s best career advice from four decades in law, PE, operating, and wealth.

Highlights:

• The “scrappy” early days of PE vs. today’s institutionalized playbook (sector teams, QofE, consultants, big ICs).
• Why distribution scale drove the multi-strategy model—and how large allocators should still find differentiated access with megafunds.
• Co-invest alpha math (hat tip Prof. Steve Kaplan) and how to avoid being adversely selected.
• Seeding new vehicles (including GP-stakes/interval-style concepts) and when limited GP economics make sense.
• Private credit today: typical senior-debt returns, leverage levels (lower in LMM), and why sponsor alignment limits downside.
• Culture at Cresset: a written “culture card,” extreme accountability, and hiring for behaviors using assessments plus scenario questions.
• Personal reflections: stepping away during a health battle, building an alt-energy company afterward, and the importance of being present

Guest Bio:

Avy Stein is Founder & Co-Chairman at Cresset, an award-winning multi-family office with over $70B in assets under management (as of July 1, 2025). He previously co-founded and led Willis Stein & Partners (1994) after running CIVC at Continental Illinois; he began his career in 1980 as an attorney at Kirkland & Ellis. Avy holds a J.D. from Harvard Law School and a B.S. in Accounting from the University of Illinois. He also co-founded Lincoln Clean Energy (later acquired by I Squared Capital in 2016).

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Links Cresset: https://www.linkedin.com/company/cresset-capital/

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(0:00) Introduction (0:06) Avy Stein's early career and transition into private equity (2:45) Evolution of private equity and influence of multi-fund strategies (5:32) Synergies and distribution in private equity and private credit (7:41) Strategies and trade-offs in capital allocation (11:26) Co-investment terms and access in venture capital (15:00) Seeding opportunities, GP stakes, and fund evaluations (17:06) Managing large capital pools and co-investment vehicles (20:08) Aligning GP incentives and building long-term relationships (24:44) Strategy changes, returning capital, and selecting PE firms (28:26) Culture setting, hiring, and opportunities in the lower middle market (35:56) Evolution of lending and private credit for high-net-worth individuals (41:13) Career reflections and advice to younger self (44:17) Key career decisions and building Crescent's value proposition (49:34) Closing remarks