YouSaid · the spoken record

Adam Shapiro

lines on the record: 94
first: 2024-08-04
most recent: 2024-08-04
sittings or episodes: 1
sources: podcast

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“On my firmwood really gets into this world of large acid pool managers. And I think it's a fascinating area. And I think it's going to attract great and greater talent over time. It's a great place to be.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Well, I appreciate that last comment. Look, I think one thought about that last comment, more people should do it. This world of managing large asset pools, you know, I think it has flown under the radar screen relative to hedge fund and private equity funds. It's a great place to work. And I don't just mean it east target. I mean in this discipline. I think that a lot of exciting things are going to be happening. There are something like $10 trillion in family offices across 10,000 family offices globally. There are three or four billion dollars, a trillion dollars, excuse me, in OCIO firms. This is a large growing sector where things, there's a lot of room to do things better and really distinguish yourself. And I'm sort of excited about it as an area to work in. I'm going to be teaching a class on it, fund me a business school in the fall. As you know, there was a recent HBS case.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Let's say sort of a blessing that's come more recently that I've been able to carve out room to write things and fan some subjects that I'm passionate about to do that.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“They've made you some money, but maybe they've changed, and now what they do has sort of become more like filler and you've got to get rid of it. So I think in investing is probably one of the most important things that people should do more than they do, which is vigilant around filler and cutting it out. In life, I'm not sure I have an answer that I have quite as much conviction about. I do notice, and you're a writer and I'm a fledgling writer, I guess, but there's just absolutely nothing in the world that helps you really sort through your thoughts and take those thoughts and decide which ones are really important and really impactful versus the ones that aren't, there's just no better way to do it than picture yourself writing about actually writing about it and then picturing that writing being read by thousands of people who are going to poke holes in it. It's just, it's.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, it's a great question. I think maybe I figured it out better on the investment side than on the life side. On the investment side, starting with the framing of there is this thing called filler and it's the enemy, that having this mentality that things are trying to get into your portfolio and they're trying to stay in your portfolio. And it is your job to not just add great investments, but keep those things out. And sometimes you have to be really creative to do that. You have to find ways to invest and private investments, for example. perhaps not through the traditional fund context, but find strategies where you can get more concentrated exposure to private investments you think are really good or invest in ways where you have some influence so that you can force an exit rather than have things hang around too long or have ways of partnering with managers so that if they drift for some reason, they're not hanging around the portfolio simply because there's inertia and you've been with them for a while.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Over time, if you don't invest well, there's a spend rate. It may be on consumption, it may be on charitable giving, it may be on lots of different things. And, you know, the number of people living off of that body of wealth tends to go up and up and up. And so the denominator effect is powerful. And people, I think we can suck vitality is this feeling of moving backwards of we were a relevant family in a lot of ways. And now we're now. We sort of move backwards. And that's, I think, the key thing to avoid and the investment function again can play a role in that.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“And the way I think about that is if a family member develops a true interest and true passion and caring for investing, then that is a gift to the whole family. That's not for everybody. In a lot of cases, it's one person taking on responsibility, possibly for a broader set of people. And when that happens and it works well, it's an incredible thing. And if nobody does that, there can be a vacuum that can be overcome for sure. I guess sort of a long way of saying, what I know about what I think I can speak about is how investing function can be this support mechanism for desires, but also these fears. And in the sense of responsibility and wanting to do the right thing. And of course, the math on the flip side is, you know, families don't invest well, there are real consequences to that, unfortunately, right? I mean, the”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“And know that they've made a smart decision with their money, but they don't have to spend a lot of time on it. And so, you know, the common denominators tend to be, in terms of the investment function, supporting the broader goals of the family, I think family members will tend to feel a great deal of responsibility to the family members around them and future generations. They want to feel like they're doing something smart, something responsible. certainly don't want the wealth to be a sort of acrimony. They want everybody to have this opportunity to maintain freedom and bandwidth to focus on the things they really care about. You really want no surprises. The key is no emergency family meetings to realize that something's going wrong. And one of the trickiest parts is the involvement, right? The family member involvement in the investment function.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Protection and the growing of those assets. A facilitator of all these other things that can create a meaningful life. Four families and get into that position of sort of engagement and vitality and purpose. The way families do that will vary massively. Some will be involved in the investment side of things, some will not. In my particular case, my job.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“But within that My job, which is to take care of the investing side of things. You could think of it as a facilitator. It's certainly not the solution to all these issues we're talking about.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“And at the same time, decide to give himself essentially a second full time job. Is various roles in the University of Miami community. He's been chairman of the university Currently chairman of the health system that comprises a large portion of University of Miami. And in other ways, he's just an incredible advocate and champion for the city of Miami. And she has that moving forward dynamism, vitality, all those things that, you know, I think In that sort of position and should aspire to, and which is really not easy.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“This is a you're asking a great and almost age-old and very difficult question. Like I said, I give you a few thoughts. Based on some pattern recognition, I think that certain families in this orbit have a certain vitality to them that I think is driven by a level of sort of engagement and connectedness to a community, finding things to engage in that offer. What allows that to happen, what allows certain families to have this sort of, I guess, vitality, this Engagement is sort of almost like moving forward, kind of dynamism. I could think of one person I think of who was a model for that in my life is Stuart Miller, who I was original founding investor of East Rock and controls one of the largest homebuilders in the United States. He's co-CEO A true leader, a great business leader.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Even nested in something that's not what you thought then it would be otherwise. So you just have to take that into account. People have done wonderfully investing in these firms and like, I'm not making any specific prediction and I'm not telling anybody they should go and redeem, but I do think that they should assign probably a greater risk to the fact that the history of black boxes using a lot of leverage is not a great one. And that's true in the hedge fund context. It's true in the investment bank context. leverage can be lethal stuff. And so putting a premium on situations where there's good returns to be earned without leverage is something absolutely worth doing.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“$58 billion levered six times nominally and probably maybe six times through other sort of swap type methods or you know whatever the numbers are running a lot of leverage and so you know anytime you're investing in something that's a bit of a black box you don't really know how they make the money and there's a lot of leverage involved i sort of tend to argue there's more manager risk there's more risk that”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, absolutely. As a manager of a large asset bull, whether it's a family, endowment, whatever, it may be, you're taking ultimately two kinds of risk. You're taking the risk that you're choosing the right manager and then you're taking the risk of whatever that manager is doing and it may work and it may not work. I like to argue that the risk that you're choosing the right manager, the risk is much higher if you can't really point to exactly how it is that manager makes money. There are some managers who do the things kind of like I described earlier, which in this very careful, fundamental sourcing oriented way find things that are special that almost anybody could identify as special. To me, that's a manager who's much easier to evaluate. And then there are managers who are much harder to evaluate, like ones that run”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Sort of stop me from believing that there ought to be a way for people to get exposure to high quality, truly non-correlated investments. The investments I'm talking about, they don't take them public, right? Like when you have a bank that's private and the business plan is to shrink, nobody IPOs that, right? That's not available to you on the public market. When you have an insurance company that's been put in runoff, nobody takes that public, right? There's this whole trove of things that are just never going to be public. And so finding ways to access that. And, you know, I think there are platforms that are trying, and I certainly don't encourage the impression nobody's trying to do this. It just feels very early that I haven't seen anything yet that I've been able to really get to know and recommend people that would be a way to get access to this sort of other sort of stuff.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I think it's advice that's incredibly hard to argue with. Yeah. If you can reduce your liabilities or reduce your sort of burn rate, you open up opportunities to do a bunch of different things in terms of how you invest. I'm not sure I agree that the conclusion then is, well, then it's sort of okay to just own a bunch of stocks. That's not exactly what you're saying. But that advice sounds good as long as you're happen to be investing in the United States. the last 15 years, but if you're investing in Japan in the 1980s or lots of different emerging markets almost anytime, if that's where you happen to live, again, I think of my wife and her family and her friends in Mexico City. And, you know, you tend to invest in what's around you. And if you put it all in the Mexican stock market, you may not feel the same way that you're describing. And so it doesn't.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“And I do not believe the Swanson advice, which is if you have resources to alternatives, and if you don't buy ETS, there ought to be something better. I hope to see it. Maybe in some way we could contribute to it. But I think that there's some things that are broken about investing for individuals and families. And yeah, that's probably top of the list.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Train that I'm very substantially. And by shrinking them, selling assets, freeing up that goody capital, distributing money. Again, there's one bank in Germany we invested in that is sort of an example of that where it was a very clean but oversized bank. And so we could buy that bank at a discount of book value, shrink it, free up capital, return money. And again, the performance of that investment would absolutely nothing to do with anything else that happened really in the world. It was just a question of could we shrink the bank? These types of opportunities, look, I find it very frustrating that sort of the world of retail investing, private wealth has not found a way to provide access to small investors because it leaves me in a very unfowerful position. I live in all the time, which is people ask my advice on how to invest.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Non correlation that might be zero, might even be negative. I'm thinking of things that we do, like buying insurance companies in runoff where the performance of the investment will have nothing to do with the economy, will have nothing to do with multiples. We just get cash as a bunch of policies run off. Distress loan portfolios like that used to buy Goldman. These are things that will have very, very little beta reinsurance sidecars where you sort of get exposure to the potential for natural disasters, which I think is an interesting area. We've done relatively little of, but is sort of an example of a situation where a private market could offer you a return with effectively zero beta. Maybe a better example, more actional example for us is buying companies where the business plan is to”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“It's a great question. It's what you just described as a place where I want the world to get better, and I don't think it's there. And if I have one big issue, big issue in David Swanson, he said, if you have tons of resources like Yale, you should basically put 70% of your assets in alternatives. If you don't, you should just buy ETFs. The problem is just buying ETFs exposes you to all those issues we just talked about, psychological, you know, whether you can the right index, whether you sort of over diversify, maybe buy too many bonds, all those things. And, you know, the reality is that private markets, well, good hedge funds aside for a second. Private markets is really the one place where you can make investments, you know, I'll call long investments. So you own something, you own a company or an asset cash flow stream. A long investment that truly has a beta, you know,”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“To sourcing and sourcing of investment managers into urgency of investment managers. And then they're even more slightly tactical things like very little has been written that I've seen in this world of large full asset management about, I'll say two things. One, selling discipline. So this is back to letting things not linger too long, but having frameworks for how to redeem, when to redeem, how to cut risk. Those are things that I don't see talked about nearly as much as perhaps it should be. And then more basic risk management around factor exposures correlations. These are areas that were coming out of the age of, we're relying on models that aren't very good, like value of risk, but where there's a lot of work to be done, I think ahead of us to understand. Risks inherent in portfolios that really have to do with hidden correlations”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“About nine deals per fund. 20 is too many. You will get some filler in there. You'll get some deals that are in there for the wrong reasons. I won't go into all of it. But if you can have an obsessive focus on avoiding filler, avoiding things that aren't special in the portfolio and things that linger too long in the portfolio, and I'll do a sidebar on time horizon, a lot's been said about asking about having a long time horizon, how important that is. And I agree, having the ability to be long-term is incredibly important, but being long-term, saying you're long-term can lead to, I think, a lack of discipline where things linger in the portfolio too long. And that's equally problematic as being too short-term. And so, and then beyond that, I think there are ways to be creative and entrepreneurial in the search for alpha opportunities. And part of that goes back to bringing a more rigorous discipline.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Never, ever, ever run out of liquidity. And so you want to have a very clear and strict liquidity budget, but you do want to use illiquidity as much as possible. So you budget for the liquidity you need, but not more than that. And you use a liquidity to your advantage. Again, Swin's insight there. Where I think there's real room to move things forward. Again, these are some of the things I've written about, like I think we talked about small managers. Small managers is the only sort of fundamental strategy I know of with clear outperformance over a long period of time. There should be more focus on small managers. I think there are strategies for avoiding filler in a portfolio that accumulates for a variety of reasons. And again, just one simple one I'll mention. This is part of the problem with large managers is large private equity managers tend to do about 20 deals per fund. Small managers tend to do”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Deemphasizing the asset allocation buckets, which I think can be problematic to sort of create a false sense of diversification. And it's very difficult to actually define sometimes which bucket different investments should go into. And so I think there's an opportunity to take the really key insights and apply them in a slightly different way. And so I have written an article proposing a different portfolio construction framework that revolves around you start with focusing on your two key budgets that you never want to exceed. You never want to exceed your market risk budget for the reasons we just talked about. You never want to be in a position where your market risk exposes you to a drawdown that's so painful that you make a really horrible decision at the worst possible time. The other G budget is liquidity. So you must rule number one for someone in my position.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Identify the opportunities that existed in alternative assets. And then you became really, really good at finding the best managers. And ultimately succeeding was allocating your human resources to being really good at selecting managers in areas where there was great dispersion between the best manager and the worst manager. And so I think Senso was incredibly, incredibly good at that. I say all this with hopefully a bit of humility. I know, you know, I met Sponson once and I'm not the world's best student of Swenson by any means. I know a lot of people who work with him in forum and know him a lot better. But I do think that there is room, significant room, to move the discipline forward, the core tenets of pioneering portfolio management. And I would probably start, and MIT has done this, is really.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so I find it sort of amazing that pioneering portfolio management, Svensson's book, was written, I think, 24 years ago. And there hasn't been, you know, apologies to anybody who's written a wonderful book, but there hasn't been a book that I know of in this world of large asset pool management that's really moved the thinking nearly as much as Swenson's book. I think you can have a fascinating debate about what are the true innovations in Swenson's book and what are maybe less central innovations. And for example, on some level, I think the notion of a policy portfolio and asset allocation buckets, I think is much less important to Swenson's accomplishments. I think what Swenson did was first just simply”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Reason I mention, right? There's a reason people gravitate to a 60-40 portfolio, even though it's sort of an antiquated way of thinking. But once you decide you're going to do all public markets, what you tend to do is buy a variety of ETFs and even some fixed income to mute the volatility, which otherwise might be intolerable. And once you factor in those, I guess those factors, the ETF strategy itself does lose some of its luster relative to the returns that are available from a more active strategy and of course the large endowments would be the place to see how that can really work to your benefit where you can earn similar if not better returns over a long period of time without falling into some of those traps.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“And that happens for a bunch of reasons. And a lot of course is just the psychological pain of being down massively at some point. If you're down enough, it's actually irrational even to hold on through that. So there are behavioral reasons not to only buy ETFs as a solution. There is a second reason, which is you can buy the wrong ones and be wrong for a really long time. And we all sort of look at the S&P 500 now, great, it's been. you know, there is certainly no guarantee that the next 10 or 15 or 20 years on any one index you choose will behave that way. And even in this relatively frothy period, merging markets, for example, has been a horrible place to be. So if you chose ETS but chose emerging markets, that was rough. And the third thing in practice, when people do choose to mostly invest in ETFs is they tend to spread the ETFs around for just that.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“So I get the question all the time, and it sounds like you engage with this question a lot, which is just, why should I bother with all this active management stuff, private equity, all the illiquidity that goes with it, hedge funds that charge big fees, all this stuff? Why should I bother landing on that? Shouldn't I just buy ETFs? Look at what the S&P 500 just done for the last 10 years, 15 years, big and over. And I think that there is a very powerful argument for why people should not do not just kick out alternative investing and think about a public's only strategy. And it really has a few components. So one is the one you just referred to, which is there's fair bit of research which shows that on average, individual investors, investors in my sort of seed managing a large pool of assets, they don't capture the all return of the market. They buy and sell at the wrong time.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“You really need to be looking. I'm assuming you really care about this, which I think you should. You really need to be looking in the world of private investing in an absolute return. And our hedge fund positions, the betas, the relationship to the S&P 500, they range from a high of about 0.5 or 0.6, some of them, down to negative, actually less than zero. And so”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“And so that is maybe item one on a fairly long list of why I believe so strongly in active management as a significant portion of a large asset pool. And I'll just define active management as the combination of private investing in all its forms plus absolute return and hopefully give a really simple reason why that's the case. But if you look at the S&P 500, the vast majority of the components of the S&P 500 are overwhelming portion of it has a beta between 0.5 and 1.5. So those companies, those stocks, they behave together more than they behave differently by a significant amount. To make investments that are truly non-core.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“involves these OCIO firms and internally managed endowments and family offices, that world of managing large asset pools, I think, frankly, there are a number of things that we as a group can do better. And one of them actually is probably thinking about diversification in, you know, I'll call it a more advanced or maybe nuanced way. And so first, to your point, I do think we see quite a lot of over diversification when we get into the reasons. The key, in my mind, and it trumps everything else, is the type of diversification. The type is incredibly important. You must diversify into situations that are truly non-correlated with each other. That is what protects you more so than the amount of diversification. It's not even close.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“So the key point, which is, you know, you want diversification, but not too much, right? If you need to diversify too much, you know, if you don't concentrate, and I do think most portfolios in our world tend more towards over diversification rather than under, and I should even define, I guess, what I think our world is, which I think what I do at Eastrock does, we exist in this very large arm of the investment world, but an arm that gets a lot less attention, I think, than hedge funds and private equity funds, which is, you know, we're managers of large asset pools for families.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“And I think what he has is very special, which is this ability to identify value-added opportunity up front and then execute on that and execute on it very efficiently in terms of getting it done quickly and well, but also saving his investors money by not paying third parties more than he should.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“So the diligence capability since you had a real operating team, he knew exactly how revenue management would work. He knew exactly what different cost line items were. And he could build a picture of what would happen if certain levers were pulled with respect to a hotel they acquired. For example, taking a branded hotel and removing the brand and taking a hotel independent had a lot of expertise around that. And it also This operating capability gave him early insights on individual markets that were poised for an advantageous period. And he did that sort of most notably with the Florida Keys, had a lot of success in Florida Keys. And he had that success at Northwood and then continued that in his firm EOS. And so you can tell I'm a huge fan of Jonathan's as a person, as an investor, as a platform.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, we're looking for people who are creating an advantage through building some sort of resource or expertise. And Jonathan, I think, is a poster child for that. And even better for us, in some ways, this is as good as it gets. I knew him going back to working at Goldman Together. I knew the quality of his work, his quality as a person. And then I also got to watch, he left Goldman. He went to work at Northwood, which is a real estate private equity firm highly respected. And he built there this hotel investing capability and became one of the very few, very, very few real estate private equity firms that it had its own operating capability with respect to hotels. So there was no need to rely on third-party managers of these large brands. What Jonathan built was this ability to really understand hotels up.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Had an excellent second fund and is on their third fund. And when I mentioned the name, Dune's point around in the world of buying sort of middle market industrial businesses with a lot of value add, I believe they're one of the most respected names out there”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“The person I would trust if I was going away, if I wasn't around, you know, and I needed someone to take care of my money for my family. This is the guy. Tim's the guy. So that's the level of character and validation from, you know, obviously very sophisticated, incredibly successful hedge fund founder who took the time and went out of his way to make these positive comments. And so that's what you want to hear. And that's almost like the dream. I mean, you hope that that happens more than a few times. And so we went on to be the primary source of capital for the next four investments that Tim made as Dune's point. So he did one investment with his own money, did four over several years with ours. It was a very successful relationship. And he has gone on to become a very substantial, Dunespoint is now a very substantial profit equity.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“At the time, I didn't know Bennett Goodman. I know him well now, but I didn't know him men. And I emailed Bennett, who was the G and GSO, founder of GSO, where Tim had worked. And I said, if you have a bit of time, I'd like to come over and talk to you about Tim White. And I think even that's a little bit unusual, right? People ask for a call. They ask for, back then it wasn't a Zim, but they asked for a call. And I was clear that I wanted to come meet him in person. And I just believe it's much better practice and referencing to try to do things in person. And he wrote Beth. Then I wrote back right away. Never heard of me before. When can you come? And I think I was in his office the next day. And it was very clear from that meeting. He volunteered some of the things that you'd like to hear based on probing of this.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Real value add through a network of operators that are his personal relationships. And he walked away from all the trappings, the fancy name, the fancy business card, the big salary he walked away from that to start his own firm. And he was so committed to that, he did it without raising any money. He did one investment on his own, which he funded himself. He had had success so he could afford to do that. And just a it was very clear in our diligence of him of what a just high quality person he is, super high integrity, hands-on dedicated diligent. And we knew people in common, again, which is the key to get sort of a real picture. But another indicator is will people he worked for who don't really have to be quickly responsive to a reference request? And so”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“It's a really good list. I'm going to go into reverse order. I'll start with Tim White. So Tim had an extensive and very successful career in private equity. His last job before he went off on his own. He worked at GSO. He had run their buyout. GSO, even though it was manly credit job, had a buyout effort and he ran that before it essentially had to be disbanded because of the acquisition GSO was acquired by Blackstone. And so Tim, this goes back a while, but GSL, Blackstone really wanted to keep them. They offered him my understanding of some very high paying, you know, sort of big name roles. And that's just not what he wanted. He is a bio guy. He loves buying. He loves smaller buyouts. He loves finding a gem of a business to buy and then bringing in, you know.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Have a very low tolerance for things that might be a little bit of smoke that would indicate that there might be an issue because just the worst thing that can happen to you in our world is to end up in a situation of real deception.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“The answer is almost always, and I hate to be repentant. The answer is almost always in very extensive referencing where you know people in common and therefore the views you're getting are from people who are actually motivated to tell you what's really going on. And then you have to supplement that every way you possibly can. Through research, through your own eyes and ears, but you have to be careful I think if anything in our own early years and watching other people, I think people may wait their gut instinct about a person too heavily relative to, again, the references to me are more like our data. And so you look at both, you certainly take both into consideration. I think it's reasonable people can disagree. We try to have”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“That's right, and I wouldn't want any of those things to sound like absolutes, like people are complicated and the way those complexities all come out in different setups, different environments, different organizations, you know, is something you have to be thoughtful about. And I guess on some level, I'm hesitating a little bit because important frameworks, the important things to think about, but you do this for a long time. If you waited to have every box checked that you'd like to see, you'd be waiting a long time. So people are complicated. People are in perfect what you're looking for is this the best setup you can find of someone who has a proven skill set, you know, proven approach, meet certain criteria as people and the time is right.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Work and their network of relationships. And then applying this lens that you're asking about of, you know, have they really been tested? Have they been through hardship? Have they set up their life in a way where they can make good decisions? All those sorts of things. And then you start to know it when you see it.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Their bar is higher. They tend to be the people who they bring, a deal that committee. And the conversation's a little bit shorter because everybody knows that all the work was done the right way. Investment thesis is sort of clear, maybe even obvious. And the personality types are a little different. They're a little bit more heads down doing their work. Maybe they're off in the corner. Everybody tends to know that what they do is high quality, but they're not necessarily perceived as the rising star in the organization because what they choose to focus and spend their time on. But again, I don't want to, I'm giving you one sort of pattern I see, but it's also important to remember that really good investors and really good founders come and make lots of different shapes and sizes. And so I wouldn't want to be too specific about this. The key, again, is just getting this very clear picture of the person and their body of”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“How are they found? How are they diligent? What resources were brought to bear? What partners were brought in? How is the investment sort of sold internally to the organization? How is investment committee convinced of the investment? And the more you can get this detailed picture, the more you can use some level of common sense and intuition to see, all right, this person really pushed into something new and found a new resource, didn't rely on the resources that were available in the firm to everybody, but found a new way of doing something. And what ends up happening, I guess this is a little bit of a quirk of what we do, but we do end up backing people who were less likely to run the firm where they were. They're at a big firm and they probably do a smaller number of investments per year than average.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Yes. I guess the way I would dig into that is to say the key to choosing good investment managers, in my mind, starts with getting this very detailed picture of who they are and what their body of work has been. And you're looking for here's where it becomes, again, hopefully you have the data. You have these stories and you have these insights from people observed them in different contexts. And so you can identify things like overcoming some setbacks, some difficult moment. You can observe things like I'm going to veer into a slightly different area, which is back to the was it the container or was it them, you can observe literally how they did their investments. There's a whole story behind those investments.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Oh, absolutely. I think people in our organization, and I include myself, look, we get a lot of pleasure out of giving people career advice, people who are on larger investment firms and are trying to decide what to do. People are thinking of going into finance and investing. And you can look at that as being sort of long-term greedy in that we think that comes back to our benefit over time. But that's But there's something intrinsically enjoyable about that along with being good for business. And so, yeah, give first that whole idea of give advice, give introductions, give expertise, connect people to expertise. That's a value that, look, I think works really well. I think it's worked well for us. I think it works well for lots of people.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT