[REPLAY] Jonathan Lewinsohn – Diameter Capital Partners - Capital Allocators – Inside the Institutional Investment Industry Recap

Podcast: Capital Allocators – Inside the Institutional Investment Industry

Published: 2026-02-02

Duration: 59 min

Summary

In this episode, Kristen Van Gelder discusses her early investment in Diameter Capital Partners, co-founded by Jonathan Lewinsohn and Scott Goodwin, emphasizing the importance of their complementary skills and the firm's flexible approach to credit investing.

What Happened

Kristen Van Gelder, Deputy Chief Investment Officer at Evanston Capital, reflects on the firm's decision to back Diameter Capital Partners from the very beginning. She highlights their prior relationships with co-founders Jonathan Lewinsohn and Scott Goodwin, noting their impressive track records in credit and distressed debt. Kristen emphasizes Evanston's focus on early-stage investments, believing that smaller, motivated teams can offer better alignment of incentives and performance-driven outcomes.

During the conversation, Kristen details the factors that made Diameter stand out among other early-stage funds. She praises the complementary skill sets of Lewinsohn and Goodwin, with Scott bringing a trading background and Jonathan focusing on research and distressed debt. This synergy, along with their ability to invest across the credit spectrum, positioned Diameter to dynamically adapt to market conditions and seek optimal returns, distinguishing them from their competitors.

Kristen also shares insights about the due diligence process that led to Evanston's decision to invest in Diameter. She underscores the importance of leveraging existing relationships to have candid discussions about the co-founders' past performances and investment strategies. This thorough vetting process was critical in establishing trust and confidence in Diameter's potential as a new fund manager.

Key Insights

• Evanston Capital's focus on early-stage investing aligns with their strategy to support motivated fund managers.
• The complementary skill sets of Diameter's founders enhance their ability to navigate diverse credit opportunities.
• Strong prior relationships facilitated in-depth reference checks for evaluating Diameter's management team.
• Diameter's flexible investment approach allows for dynamic allocation across the credit spectrum.

Key Questions Answered

What factors influenced Evanston Capital's decision to invest in Diameter Capital?

Evanston Capital's decision to invest in Diameter Capital was influenced by a strong familiarity with the co-founders, Jonathan Lewinsohn and Scott Goodwin, from their previous successful roles in top-tier credit and distressed debt firms. Kristen noted that their prior experiences provided a solid foundation of trust and confidence, as Evanston had a history of engaging with these managers. Additionally, Evanston's emphasis on early-stage investments motivated them to seek out talent at the beginning of a fund's lifecycle, which often aligns incentives around performance-based fees.

How do Lewinsohn and Goodwin's skill sets complement each other at Diameter?

Jonathan Lewinsohn's and Scott Goodwin's skill sets complement each other well, with Jonathan bringing a research focus and expertise in distressed debt and restructurings, while Scott contributes a strong trading background with experience in performing credit. This combination allows Diameter to leverage both fundamental analysis and market dynamics effectively. Kristen Van Gelder emphasized that this synergy between research and trading creates a scenario where the whole is greater than the sum of its parts, leading to a more robust investment strategy.

What is Diameter's approach to credit investing?

Diameter Capital's approach to credit investing is characterized by flexibility and a broad mandate across the credit spectrum. They have the capability to invest long and short, which allows them to adapt to various market environments and seek the best liquidity-adjusted opportunities. Kristen pointed out that Diameter's nimble portfolio management is designed to dynamically allocate capital based on evolving market conditions, which is a significant advantage over many other credit funds that may be more rigidly tied to the credit cycle.

What role did prior relationships play in Evanston's due diligence of Diameter?

Prior relationships played a crucial role in Evanston's due diligence process for Diameter Capital. Kristen Van Gelder mentioned that having established connections allowed for frank conversations regarding the historical successes of Jonathan and Scott at their former firms. This level of communication is invaluable for new fund launches, as it provides insights that go beyond the limited track record of a newly formed firm. The ability to corroborate the co-founders' claims with references from their previous roles helped Evanston gain confidence in their decision to invest.

Why does Evanston value investing in early-stage funds like Diameter?

Evanston values investing in early-stage funds like Diameter because they believe that smaller, newly formed teams often exhibit greater motivation and alignment of incentives. Kristen highlighted that early-stage managers are typically more focused on performance-based fees, which can lead to better outcomes for investors. This emphasis on the life cycle of hedge funds allows Evanston to capitalize on the potential growth of talented managers who are eager to prove themselves and establish a solid track record.