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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“Sort of common dano. Look, we're all on this journey to learn more about just about everything and be better at what we do. It's a great basis for a lot of important relationships”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“I think that's right. It's on some level it is what's wonderful about investing as a career. I guess when I talk to younger people who are considering investing as a career, one of the things I like to point out is on some level, all knowledge is relevant. And all people are relevant. So Charlie Monger, of course, says be a learning machine. And I guess the wringle on that I would put is what's great about investing is it's motivation to be a learning machine. You can read anything, history, science, novels, poetry, and it is relevant to the art of investing because investing is so broad. It's about patterns. It's about trends. It's about knowledge. And people are just such a huge part of that. And so the relationships that you end up making and exploring because of this.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“I love it. And I think I work at a, you know, at a pretty high year, but I get so much out of the fact that this aligned network we have creates these special opportunities. So on some level, it's a privileged position where I don't have to be the one like I was at Goldman Sachs 20 years ago trying to find some bank somewhere that'll sell some loan portfolio, right? find ways to create leverage and then it's more sustainable.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Yes, I guess with a little bit of a caveat though, and the caveat is, you know, you don't always have to be the person, I guess I'm trying to picture Peter Len, his desire to be that person running at that incredibly high gear, you know, sort of forever and ever. And I think as investors mature, they find ways. produce a similar work product through you know through strategies and again the best one i can think of as people i mean this may sound repetitive but if you have a great network you know great and well aligned network then you don't necessarily have to be the one you know doing that forever and ever because it's not sustainable for most people your question is has me thinking i guess you know a little bit more on on a personal level but i think i can do this job pretty much forever”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Require this tremendous amount of hustle because they're more of the hidden variety and the advantage is not so much that somebody has a judgment that this is a great business for the next 10, 20 years, but it's actually some really simple insight based on better data. Seth, you referred to earlier, you know, I think if you were part of this conversation, he would say between better data and better data analysis, you'll take better data every time, new data, things data that others haven't seen. If you have access to new data, then you don't have to be the best data scientist in the world to draw a new insight. And this is a little bit the equivalent of that. Some investments, it's very simple to see why they have a certain advantage to them. But finding those investments requires”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I think when people have that, it drives them to an investment type, I guess an overly simple way where I might define two investment types. They're investment types that are driven by judgment. I see a business. I see a large moat around it, pricing power, opportunity to invest capital into the business at a high rate of return. I sort of make a judgment. maybe a company that's up for auction and lots of people know about it, but I see it a different way than others. And that is a perfectly legitimate way to invest. And a lot of people have been very successful at that. As someone observing the investor, that's much harder to know who's going to be successful, who's going to have better judgment. The other investment type, the one that we gravitate to, and the people we back gravitate to.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Tends to be where there's greater inefficiency, opportunity for multiple expansion, all sorts of good things. And so that's really the theory and the intuition behind it. And then the proof is really in the data, which is we do find, again, back to some of the things I've been writing, we do find that smaller funds and smaller deals tend to do better on average and tend to be less risky. And so the intuition seems to really match the results.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“If what I'm good at is buying biotech companies, I'm going to leave and set something up when biotech is cheap and the opportunity set is strong. So there's positive selection that is a good place to start, but certainly not the place to finish. You also, if you're in our position, you need to run a very rigorous process to determine who it is within that group you want to back. And they are, I think we've talked a little bit about our process. I'm happy to talk about it more. But once you have that set up of the positive selection, the right moment in time, then you sort of have all things really going in the right direction. You have somebody who's incredibly motivated to make those early investments work. If they don't work, they made a horrible mistake by leaving behind their high paying job. So there's incredible focus they can play in smaller situations as a new firm. They're generally going to be investing in smaller stuff.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Around large private equity firms telling people, hey, you know, now's a great time to leave and start up your own shop. This whole positive selection that I'm talking about only happens if the person, the founder is really committed to doing it and they don't really need an outside inducement. They're just something they feel they need, believe in themselves that they can do, believe it's the right moment. And maybe to summarize, you were asking me why do we choose people of this particular profile, which are skew a bit younger, their founders, so their firms certainly skew younger. Why is that a good place to be and maybe just to summarize, you know, there's positive selection, right? There's strong signal in people leaving high paying jobs to make a bet on themselves and doing it a particular moment in time. Again, they're going to be pretty strategic in saying, all right.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Upside and their downside. And so when somebody walks away from a very high paying job or prestigious job at a great place with great colleagues and lots of comforts to start their own investment, you sort of know that they've given that a lot of thought and they've picked their moment, right? They sort of know what they're good at. And in general, they're signaling this thing I do, whether it's I invest in biotech companies or I buy distressed real estate or whatever it is I'm good at, it's a good moment to do that. People don't tend to start the firm when it's not a great moment to do that. It does happen, of course. But so you have this positive selection of people betting on themselves. And, you know, in terms of our process, it's very important that we don't induce them to leave where they are. So we are not by any stretch.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“And then they've decided in a very significant way to bet on themselves and bet on themselves at this particular moment. So there is very significant positive selection. Most of these people are at really good investment firms and making a lot of money. And so they are walking away from that to start something new. And it's risky. They're taking a big pay cut. When you think about alignment, I think alignment of interest is one of the most fascinating topics there is in the world. And alignment is really almost never about, you know, William, you know, I put in a dollar, you put in a dollar, we're 50-50, and we're aligned. That's almost the worst way to measure alignment. Real alignment has a lot to do with what the person is really risking and what that means to them and how they're choosing to create their incentives and their”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Sure, it's possible. I feel like sometimes I have to be careful with the vocabulary because young cannote something that may be a little too extreme. The key thing is that the firms are young, that they're recently founded by somebody who has a certain profile. And that profile doesn't necessarily have to be very young in age in years. The key is really that the person is very well trained and proven. So that means they were at an investment firm for 10 or 15 or even 20 years. In private equity, the founders tend to be a bit older, hedge funds a bit younger. But the key is not so much the age of the person. It's that they sort of fit a certain profile that, again, they've trained well, they've proven themselves.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, and what's interesting, it seems to be the case in private equity and hedge funds and those two cases would be for different reasons. But yes, smaller funds are choosing from a generally more favorable set. They are doing fewer deals. So they're spending more time on each deal. Younger managers just have more at stake, those early deals must work. So there's a whole series of factors on the private side. And then on the public side, I tend to think it's some of those factors, but in addition, it's the nimbleness when you're a smaller fund. You can get out of the way of, you know, a short that's going against you or some trend. You may be caught sort of long value and you should be long growth and everything's going against you. If you're smaller, you just have greater liquidity. You have a better ability to move things around and get out of the way. But it seems to be the case for public sent privates.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Yes, etc. On some level, I had to take this slightly jokingly. You're leaving out the most important part, which is research shows not only that small funds do better, but they're actually safer, they're actually less risky. And that is the part that is counterintuitive to many people. It's probably the hardest thing to sort of view myself as someone who's a bit of a champion, vocal champion for smaller funds. And I noticed that in conversation, if I say smaller funds have higher returns, people kind of nod their heads, they sort of understand intuitively why that might be the case. Then I say, oh, and by the way, they're less risky. And then the conversation's lost. But it's there in the data, and I do write about that as well.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Make the argument that on any private investment, any private investment and private equity, the individual who makes that investment is four times more important in determining the outcome or predicting the outcome of that investment than the firmware they worked. And once you know that, I think, again, it's almost like seeing the world in a slightly different way. All these firms are just collections of people. And some are true outlier talent and some are not and figuring out which is which is incredibly important because you want to follow that forex talent, that person who drives those outcomes, you want to be there when there's a moment and there often is there's a moment to get very concentrated exposure to their work product. And that's just another way of saying at some point they're going to launch their own firm, a lot of them. And that is a moment when you can get concentrated exposure to their work product.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Out was it the person or was it the firm is incredibly important. Why is that so important? There's a bit of research I've written about, which I think is a pretty brilliant paper and it uses a large data set.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Repeat interactions. And then building this whole picture of who they are and what their work product has been, what their style is and what their advantages are. That takes a lot of time. And the bricks that build that all up are mainly supplied by people you know in common. So I just can't emphasize that enough. We've been doing this for close to 18 years and doing it in a very purposeful way. And it's sort of the data about the people that we get through all those interactions and all those common relationships that really make the rest of it possible, figure out, you have to answer key questions like, you know, was it the person or was it the firm? I've written about how sort of ironically it's harder to evaluate people from the very best firms because it's a bit more likely that the success was attributable to the firm rather than the person.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“I think you had two questions in there, so maybe I'll hit them one by one. I think the first thing you cited earlier that 95% of investing is sourcing, there's obviously some false precision in that 95%. I'm going to give you another, you know, this one will be 7525 and there's a bit of false precision. But 75%, I would say, of identifying great investor is having data about that investor as opposed to the other 25%, which is some superior ability of analysis and pattern recognition. And so this comes back to knowing lots of people in common and running a certain process that really on earth set data about the person. So the key to identifying great investor is meeting them as early as you possibly can and we have lots of ways we do that.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“That when you meet people in our orbit, they tend to be, they tend to have those characteristics, which is really great talent and really great character.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Is knowing high quality people in common. And that may sound obvious when you say it, but I actually don't hear people say it that way that often. The most important asset we have in being able to be really good at sourcing people and valuating people is when those top people walk in our office, there is an awfully good chance that we know many people in common. And why is that? Well, you know, top talent tend to gravitate to each other. people of a certain like character ethics, sense of fairness, citizenship tend to gravitate to each other. And so when you have a real appreciation for people, which I love that you read those two values and they're there, those words are there very purposefully, is to convey that, you know, this is who we are. These are our values. This is what we care about. And what you're going to find.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I think if you, the way I think about it is that this is just awfully natural. There is something we explicitly want to achieve, and there is something that younger investment managers explicitly want to achieve. And there are tremendous overlap between the two. They're very compatible. And so that's a good place to start. And then from there, you do all the work around that to maximize your probability of success. And that means focusing on people, and it's not just the people we back, but it's all the people, you know, in this large, you know, connected web. I think sometimes we call it the constellation. The people, and maybe to back up it and make it a little more tangible, when you think about what it takes to source and evaluate great managers, the number one thing.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Exposure to their work product at this moment, their careers when they're incredibly focused, incredibly motivated. They've made the decision to bet on themselves. So how can we get exposure to that work product that we think is very favorable, which will lead to these special privileged investment moments that I referred to? And at the same time, be very open and explicit that there is a quid pro quo. What we can bring in return is an opportunity to get from that early stage launch level to building something much larger. And so have their objectives and our objectives clearly in mind, clearly stated up front. And I think more than anything, I feel like that's what's worked is that we've been able to help people launching new investment firms. We've been able to help them.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Figured out is that that's a really good thing. Why not try it on a greater number of dimensions? Let's not limit ourselves to people of a certain type, but maybe there are other types. And really the big, I guess the big thing was to really focus on people who external partners who viewed themselves and identified as investors more so than operating partners, people who we would ultimately give more discretion to. And we could align I think there's really a key thing. We could align with their goals in a pretty long-term kind of way, meaning very talented people, especially those a bit earlier in their career. Maybe they just left a large investment firm, they're starting something on their own. We could align with them. We could create a partnership that took into account what they were trying to build. Our objective is get exposure to great investments.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Absolutely. These are just my ideas. These are ideas that I think we as a firm have developed and partners and colleagues have very much been a part of. So just had to hesitate at first when you use the word you and it sounded singular. But I think what we've figured out is that that Goldman experience was the kernel of an idea that could be done in a much bigger way. And what I mean by that is the Goldman External Network at the time, and maybe quite different now, but the Goldman External Network at the time followed a certain titan. It was the reference, that network was referred to as the operating partner network. The partners were referred to as operating partners. And the idea was that they were sort of boots on the ground who would find things and have local color, but there was still a lot of central control at the Goldman level. And I think what we...”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Yes, but with the wrinkle, I would say that you find it and you value it with massive people leverage. I think if you look, if you rely on your own ability to find it and value it, you're way behind what you can potentially do. If you can create aligned networks of people who may be in your organization, maybe outside your organization, and you really tap into their networks and their sourcing networks and their expertise, I guess for me, the vision of really the ultimate way to invest is to have these very aligned networks that every so often produce an opportunity that's just not fair. I can't think of any other way to say it.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“From the perspective of do I want my own money in it? And that's also part of the advice I give to younger people is when you're choosing a job, look at what people are doing. Say, do you want your own money exposed to that? That's an incredibly telling thing and an important discipline to have is to think that through. And so Goldman was that place where I first saw the situations where it felt like real privileged to be exposed to it and gosh, I'd like my own money.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“As we were in our Latin American private equity investing, but much more predictable, much safer and all the surprises made the number higher not lower. And so that was just tremendously eye-opening to me that you could have diversification, you could have collateral, you could have all the surprises working in your favor. And it was just sort of a privilege to be able to vest in something like that. As soon as I saw that, I knew, I guess, it was almost like my eyes being open to a standard that I didn't know existed. And I wanted to repeat that. It didn't have to be the same setup necessarily, but what I sort of decided for my crew was I want to invest in things where I have the sense it's a privilege to invest in it, its advantage is favorable. And gosh, I want my own money in it. And that's sort of a core belief I go back to over and over and over again of every situation I sort of”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Project some cash flows that were real guesses, discount them back at a very, very high rate, you know, let's say 35% and hope that it sort of worked out. Whereas in contrast, so I view that very much as a very high volatility sort of guessing game, whereas in contrast early on, 2002, 2003, when this market was quite good, we were buying these loan portfolios. And what you could do is just assume the worst pretty much about every single asset in that loan portfolio. And if you assume the worst, all your surprises are going to be the upside. So you'd have some assets that behave how you thought, which was pretty bad. And then you'd assets that really surprised the upside. And then as a whole, you could project your cash flows at that time to load a mid-teens rates of return. So not shooting for quite as high return.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“All different types of collateral, but a lot of commercial real estate, a lot of hard assets, aircraft, financial assets like auto loans and credit card receivables. And you don't just look at a Bloomberg screen and decide to buy 100 commercial real estate loans. You've got to go find them. You've got to go find owners, whether they're banks or securitization services or whatever. Go figure out owns them, who wants to sell them and get yourself in the process and figure out if there's some way to get an advantage in that process. And it would massively eye-opening for me because in part it was such a stark contrast with what I had been doing before. And so investing in Latin American private equity was a little bit like venture capital investing make 12 to 15 investments in a couple of years, probably two or three winners and make the whole portfolio in a lot of cases, you know, you'd sort of look at a situation.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Sure. I learned a couple key things. I'll start with the power of sourcing through people. Now, we were doing private investing, right? So our investments in order to find them, you needed teams of people to get out of the building at 85 Broad Street and go find things to buy. the more you saw the more likely you were to find some real gems. And so Goldman Special Situations had developed and continued to develop as I was there, a network of people, some of which were employed at Goldman Sachs and some were external who played this very important role of finding things. And one of the main things I was involved in early on was buying portfolios of loans, of collateralized loans.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Has been hit with, you know, I don't know, you might call it a triple or a quadruple whammy of issues that have made it difficult for people to enter nursing, to stay in nursing, you know, to want to be employed nursing and difficult for health institutions, health systems to maintain nursing staff at the numbers they want, with the morale they want. And historically, immigration has been part of the solution when this sort of imbalance surfaces in nursing. And my guess is that's true again now for nursing as well as frankly a broader set of healthcare related jobs. And, you know, that's true of lots of different sectors as well.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“An economy. And you can break that down to smaller levels. Growth is a lifeblood of a city. You know, I live in a city, New York City, that needs population growth for really to thrive as an institution, as a place to live. And that's true at the national level. If you care, which I do, you care about public finance. If you care about debt and deficits, you really ought to be pretty pro-immigration because what do you do when you worry about debt to GDP and you worry about Medicare and you worry about all these things? What you want is a large number of workers relative to people who aren't working and this country is not going to get there on birth rate. It's going to have to get there on immigration. And then you can feel that down to whatever sector you're involved with. And nursing.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, it's a great. And I don't disagree with this, would say, look, immigration is more important, very powerful, but it needs to be done in an organized way with rule of law. And I agree with that as well. But I do think that there's been a more than I'd like to see a lack of appreciation for the role of immigration. And I can think of it on two basic fronts. One, just the sheer ambition and entrepreneurial drive and influx of energy and culture and all the things that going back decades has really driven innovation in the United States, entrepreneurship, and growth. I think that's one front. And then another front has to do more with sort of, I guess, geeky demographics, which is, you know, growth over time is the lifeblood of”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“That mix or that cocktail of stuff of legal foundation, of people and natural resources and size and all these different things, culture, what created this privileged place that we occupy in the world, I think you have reasonable debates about it and not necessarily come to a satisfactory conclusion. We are there. It does seem to be persistent, but yes, I worry about it.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“But, you know, I remain a true believer in hedge funds in part because I think having true hedges and true shorts is important. That's part of what protects you from extreme events, some of which I think we're sort of imaginating, based on your question, we're imagining what could go wrong. And also through events you can't imagine. There are just things that can happen. And if you are 100% long, whether that's stocks or bonds or anything else by definition, there's nothing in your portfolio to address that. So I am tempted by your question to get a little bit political. I'm not going to do that. I do have worries at the same time, you know, the United States has proven incredibly resilient at the same time and has gone through very tough periods, periods that are so tough that on some level, despite a lot of study, it's hard to explain why exactly the United States came to this privileged position.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“I think about it all the time. We talk to our investors about it all the time. We want everybody to understand that we invest in an incredibly diverse way by almost every measure you could imagine. The one thing where we can't say that is the domicile of the businesses. We address the concern about what might happen in the United States through diversification around the investments that are in the United States. So some that will do well as the United States does well and others are domiciled here but may do very well even if the country as a whole doesn't do as well. And so we address that the best way we can, which is through that true diversification through hedges and shorts and things, it was maybe figuring a conversation we're likely to have as we progress in this session.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Curve back to the United States, and I sort of saw what was possible investing in the United States, which therefore to this day, I still believe if there's one concentrated risk I'm willing to take in my investing, it's being overweight the United States because the environment is so extraordinary. I think it's probably, you could say extraordinary across all of history, the opportunity to invest capital and invest in other people's work and ideas and have a true sharing of the fruits of that so that capital gets its share entrepreneurs, inventors, business builders, they get their share. And this is a sort of a cooperative relationship that goes on and on and fills the economy and fills the markets and just makes it a great place to be.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Latin America and make investments and deal with these risks, you know, whether it's fraud, corruption, or just difficulty operating, you should want to be compensated through cheaper valuations and faster growth rates. And unfortunately, that wasn't what we were finding. Multiples, valuation multiples were really pretty much in line with the US. And there was always a hope for greater growth. But the reality is that Latin America didn't grow. You know, at the time you could build it up in contrast to Asian countries that were growing very rapidly. Latin American countries were really growing rapidly, and they were certainly not growing in a steady way. So, you know, you'd have a crisis every five years or so. And so you weren't compensated for all these things that made investing very difficult. And so it was a massively eye-opening event for me when I transitioned my”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Families love this private equity thing. It's like debt, but you never have to pay the money back. And, you know, the notion that you would buy a minority stake in these companies and you're sort of expected to not really be heard from again and the company would be taking whatever direction the family wanted. But then those families and those companies were operating in tough environments as well where labor was always tricky hiring and firing people, finding people with the right skills, this is Jigarell into Brazil. And some of this may have changed through the years, but in those days you would have all sorts of employee sort of lawsuits and difficulties. You know, you never, of course, never want to be in court over anything. You were at the mercy in some cases to local governments and sort of corrupt practices there. And so I guess what I've used to say in summary was if you're going to go to”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Yes, and I'm going to say, unfortunately, some negative things. I'll at least start by saying Latin America remains a very important part of my life and my wife is from Mexico City. My children are dual citizens of U.S. and Mexico and still visit, visited Argentina recently. These are important places to me on a personal level, but on an investment level, we experienced in those investments, you know, I guess exactly the things you would worry about. For example, Like we did experience fraud. We experienced fairly blatant fraud where sort of financial statements said one thing and based on the financial statements, a company should be wildly profitable and yet it was somehow out of money and needed an injection of new capital, there were cases where family-owned companies, there's a little bit flip and a little bit of a joke people would make, but people used to say,”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“Not only did the sort of promise of Latin American macrobase is now really come to fruition, it sort of turned worse with the Asian crisis Russia crisis of the late 90s. But I really discovered that investing in Latin America was extremely difficult for other reasons. And it took me a while to even have context to understand how much better it was in the United States. Please tell me I can go through some of the stories that made me realize how difficult things were in Latin America.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“How you measured high teens to low 20s unemployment rate. And so it was already becoming clear that the dream and the promise maybe wasn't going to come to fruition. Not all hope had been given up, but there were tracks. And then, you know, when I left Argentina, I moved back to the United States. Well, I actually had a personal detour, which was that I believed I would move back to the United States and pursue a PhD in economics and become an economist. And it turned out I enrolled in a PhD program for all of two weeks before realizing it wasn't for me and found myself needing to go find gainful employment. And the place where I was able to do that was at a firm in a relatively new investment firm that was making private equity investments in Latin America. And I spent the next three years, which were really the first three years of my professional career investing in Latin America.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“A couple of years Mexico, I think privatized 2,000 government owned companies. And so you're talking about massive wholesale change with a new generation of leaders. And that was very exciting to me as a student. And it convinced me to want to focus on Latin America in my studies and for my senior thesis at Yale and got a Fulbright scholarship to the study in Argentina. And that enthusiasm I guess it was a little slow to wear off. Maybe it should have worn off more quickly because when I was in Argentina on my Fulbright scholarship, that's really when the so-called tequila crisis of 1994 happened. And I moved down to Buenos Aires. And while there was stability, there were some successes in that. The currency was stable. The unemployment rate there had jumped to sort of unconscionable levels. It was depending on.”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT
“That's right. I got very interested in Latin America during a time of grateful. This was early 90s negotiation of NAFTA, Mercosur, Latin America was going through a period of democratization, of opening up of economies to trade, of privatization, sort of government getting its hands out of the economy, hope for much greater efficiency. And I dove into that in my studies on the belief that Latin America was a place where policy change that really mattered was taking place. And the United States, by comparison, seemed a bit boring. Candidates seemed more similar. The key issues being discussed, one side didn't seem that different from the other. Whereas in Latin America, we were talking about huge changes in a period of”
2024-08-04 · We Study Billionaires · RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro · IDENTIFIED FROM THE TRANSCRIPT