NYAIR Episode 109
By Sarah Kuhns, December 1, 2025
Entering the Arcane: From Ukrainian Chicken Bonds to Crypto Bankruptcies — How a Family Office Platform Enables Bespoke Alternative Investments
Irvin "Irv" Schlussell, Chief Investment Officer at the Diamond Family Office, shares his battle-tested playbook for thriving in market dislocations—from PG&E backstops to FTX claims and Ukrainian war bonds. This episode reveals why family offices dominate illiquid, generational opportunities, blending event-driven mastery with asset allocation strategies for 2026's high-volatility landscape.
Featured Guests
Irvin Schlussell
Chief Investment Officer, Diamond Family Office
Irv oversees all asset allocation and direct opportunistic distressed investing for this top-decile single family office through Diamond Family Investments. With 20+ years in corporate turnarounds, distressed debt, and creditor advocacy, he previously served as Managing Director at Inglesea Capital (family office of legendary $13B Virtue Partners founder Andrew Fredman), Managing Partner at Advantage Capital Management, and Senior Analyst at Xaraf Group within Paloma Partners. A Wharton graduate (BS Economics, honors, 2003), Irv excels in bespoke bets like BWIC-driven CLO liquidations, mega-bankruptcies (Lehman, PG&E, Puerto Rico), merger arb (Activision, Twitter), and geopolitics (Belarus bonds, Ukraine GDP warrants)—delivering scalable IRRs via forced selling and embedded optionality.
Key Insights From This Episode
Hunt Forced Selling Dislocations
Target "puking" sellers like CLOs via BWICs or overwhelmed bases in mega-bankruptcies—PG&E's $12B backstop yielded ~5.8% fees in stock at 10x multiples (vs. 13-14x fair value), with heads-you-win/tails-you-walk conditions via 30+ amendments.
Barbell Size Extremes for Edge
Excel in too-small (ignored niches) or too-big (supply overwhelms buyers) deals—FTX/Lehman piled "diamonds in the rough" like Anthropic equity, bought at high-teens cents yielding 150¢+ distributions, excluding clawbacks and Robinhood stakes.
Upside Optionality in Distressed Sovereigns
Ukraine GDP warrants post-invasion paid 60 points/year on 7% real growth (to 2041)—paid 2-3¢ extra upfront for 30-40¢ recovery plus 12-point consent fees; Belarus bonds bought at 6¢ hit 80¢ via friendly-nation backstops.
Family Offices Own Illiquidity Forever
Non-CUSIP, volatile holdings suit permanent capital—McDermott's term loans (30s), equity (1x earnings), and Chicago Bridge liftout (5x EBITDA for Aramco/ADNOC clients) exploit sub-parent dynamics with Mason Capital board allies.
Gold as Anti-Dollar Diversifier
Hold 4-5% IAU/GLD (not miners)—matches S&P volatility/drawdowns but decouples in crises, best performer two years running as USD debases under stimulus/tariffs; "cash is trash" demands alts for steady high-single digits.
Allocator's Conundrum Solution
Record equity multiples + zero-yield cash force alts/hedge credit, ex-US equities, gold—avoid max-S&P beta amid AI bubble risks and Trump/Bessent policy (baby stocks, tariff checks).
Access the Full Conversation
Financial services leaders: access the complete talk with trade math, IRR models, and Q&A on distress edges, gold vehicles (IAU vs. physical), allocator pitfalls, and current bets (ex-China EM, McDermott restructurings). Download the insights deck with structures for immediate portfolio deployment amid 2026 turbulence.
Soundbites Worth Saving
“You want to find something where the guy's a puker. He has to sell the dealer comes in and he has no choice but to sell to you and that's when you want to buy and you want to throw in your low bid.”
— Irv Schlussell
“Gold is like your cash. It's not so much that gold or even stocks have gone up. It's that unfortunately our dollar has gone down.”
— Irv Schlussell
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