WEBVTT - Ilana Weinstein on the War for Talent at Hedge Funds

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<v Speaker 1>This is Master's in Business with Barry Ridholds on Bloomberg Radio.

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<v Speaker 1>This week on the podcast, I have an extra special guest,

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<v Speaker 1>Alana Weinstein, returns to tell us about all the competitive

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<v Speaker 1>recruiting and superstar talent she's been working with over the

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<v Speaker 1>past couple of years. Twenty twenty two was certainly a

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<v Speaker 1>challenging year for a lot of the hedge fund industry,

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<v Speaker 1>and it really separates the winners from the also ran.

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<v Speaker 1>She is uniquely situated to see what goes on in

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<v Speaker 1>the hedge fund industry in terms of not just performance,

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<v Speaker 1>but what makes for a great PM versus an also ran.

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<v Speaker 1>There are a few people in the industry as insightful

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<v Speaker 1>and influential as she is. I could go on and on,

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<v Speaker 1>but rather than do that, let me just say my

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<v Speaker 1>conversation with IDW's Alana Weinstein.

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<v Speaker 2>Thank you, Barry, and thank you for that lovely introduction.

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<v Speaker 1>Well, well, it's good to have you back, and the

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<v Speaker 1>timing is perfect because there are so many interesting things

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<v Speaker 1>going on in the world of hedge funds. But before

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<v Speaker 1>we get there, let's delve a little bit into your background,

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<v Speaker 1>which I find kind of intriguing. You go from Goldman

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<v Speaker 1>Sachs to Harvard Business School to the Boston Consulting Group.

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<v Speaker 1>What were your early career plans? What did you want

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<v Speaker 1>to do with your life?

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<v Speaker 2>Well, when I was at Penn, I had this thought

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<v Speaker 2>that I wanted to be Barbara Walters.

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<v Speaker 1>Uh huh.

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<v Speaker 2>That was kind of where my head was. So I

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<v Speaker 2>loved how she was a trailblazer. She had fascinating interviews

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<v Speaker 2>with people. She got people to the table that no

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<v Speaker 2>one else could. She didn't take no for an answer,

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<v Speaker 2>and I just thought that was like, that was a

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<v Speaker 2>very cool, unique set of skills that she embodied and

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<v Speaker 2>was able to capitalize upon. And I didn't know. I mean,

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<v Speaker 2>I was studying nineteen century literature. My senior thesis was

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<v Speaker 2>on Darwinism and Thomas Hardy. None of this sell and

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<v Speaker 2>none of this lended itself to Goldman Sachs. I ended

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<v Speaker 2>up at Goldman really because I didn't want to go

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<v Speaker 2>to law school, because that's kind of what you do

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<v Speaker 2>with an English and Psyche major.

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<v Speaker 1>Sure, right, so.

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<v Speaker 2>I was. I also parachuted into Goldman in the middle

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<v Speaker 2>of my senior year because I made the mistake of

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<v Speaker 2>telling the guys interviewing me that I could start right away.

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<v Speaker 2>I'd done. I'd just gotten kind of blown through my

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<v Speaker 2>classes quickly. I was a little bit of a nerd

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<v Speaker 2>in college.

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<v Speaker 1>Barry, did you go the full four years or were

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<v Speaker 1>you doing double duty at Goldman?

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<v Speaker 2>I was doing double duty my senior year. Well, I

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<v Speaker 2>finished my classes really end of my junior year and

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<v Speaker 2>I started at Goldman. I took some fun classes beginning

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<v Speaker 2>of my senior year, and then I started at Goldman

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<v Speaker 2>middle of my senior year. But what that enabled me

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<v Speaker 2>to do, because I was on an off cycle, was

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<v Speaker 2>go to HS early and I was really young. At

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<v Speaker 2>business school, I was and this is the time period

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<v Speaker 2>where they wanted you to have minimum five years of

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<v Speaker 2>work experience. So I was very conscious of not coming

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<v Speaker 2>with a lot of experience, and PCG was really a

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<v Speaker 2>way to play catch up. It was like getting my

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<v Speaker 2>post MBA MBA. Not so much that I wanted to

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<v Speaker 2>be a consultant, but I wanted to learn about different

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<v Speaker 2>industries and different types of problems.

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<v Speaker 1>So what led you to the talent side of finance?

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<v Speaker 2>Well, at Goldman, you know what I realized is I

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<v Speaker 2>didn't really love finance. I could do the work. I

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<v Speaker 2>did the work well enough to get into a good

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<v Speaker 2>business school. But what really excited me was dealing with

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<v Speaker 2>and this is Goldman back in the nineties when it

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<v Speaker 2>was a private partnership and attracted the most exceptional some

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<v Speaker 2>of the most exceptional and smartest people in the world,

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<v Speaker 2>and dealing with them and working alongside them was super energizing.

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<v Speaker 2>You know. At BCG and even back to high school

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<v Speaker 2>at Stuyvesant was everyone was smart, you know, And I

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<v Speaker 2>wanted to be in a milieure where I was really

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<v Speaker 2>feeding off of and learning from just a super smart

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<v Speaker 2>group of people. And I felt the way that I

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<v Speaker 2>could best contribute was kind of a mix of my

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<v Speaker 2>experience at BCG and Goldman. BCG being really delving into

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<v Speaker 2>what makes industries and companies go the strategy and Goldman

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<v Speaker 2>very transaction driven and helping people to get from one

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<v Speaker 2>side to the next, not just giving them advice. And

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<v Speaker 2>that was the way I felt I could contribute.

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<v Speaker 1>I know, I have a natural ability to scout out

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<v Speaker 1>some of the best and brightest alpha generators in finance.

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<v Speaker 1>How does that happen?

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<v Speaker 2>I was at BCG and this is when the dot

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<v Speaker 2>com bubble was getting bigger and bigger. In my second

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<v Speaker 2>year and my entire class had left to go start

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<v Speaker 2>a tech company of some sort in California, and I

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<v Speaker 2>didn't really that wasn't my think. I wasn't turned on

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<v Speaker 2>by that. That's not I wasn't passionate about that, and

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<v Speaker 2>so I was still trying to figure out what my

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<v Speaker 2>next step was. Don't forget I was really young still,

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<v Speaker 2>I was in my mid twenties, and so I ended

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<v Speaker 2>up joining a large search firm because I just I

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<v Speaker 2>felt i'd learn more about the different types of issues

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<v Speaker 2>that were out there and how they get solved through

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<v Speaker 2>human capital, and that might give me some insight functionally

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<v Speaker 2>into what I wanted to do next. And I found

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<v Speaker 2>once I joined them that I was actually just really

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<v Speaker 2>good at what they were doing. And at the same time,

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<v Speaker 2>the dot com bubble collapsed, their mainstay financial services practice,

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<v Speaker 2>which was banking and equities, fell off a cliff, and

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<v Speaker 2>what was per collating were all the prop groups. And

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<v Speaker 2>I started doing work for some of these groups, and

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<v Speaker 2>kind of like the hedge fund industry, there were only

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<v Speaker 2>so many that were that good and really controlled, and

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<v Speaker 2>we're the you know, and we're the best and really

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<v Speaker 2>controlled that ecosystem, and they're very Clubby, and they ended

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<v Speaker 2>up recommending My business just grew exponentially from there. They

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<v Speaker 2>just they would recommend me one to the other and

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<v Speaker 2>these were these were first of their kind types of

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<v Speaker 2>products that these prop groups were focused on very complex

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<v Speaker 2>financial instruments. So we were all learning as we went

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<v Speaker 2>and just by virtue of doing really one search, it

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<v Speaker 2>made me the expert because no one else was doing it,

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<v Speaker 2>and so I built my business from there.

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<v Speaker 1>So you launched your own firm IDW in two thousand

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<v Speaker 1>and three, by the way, congratulations, that's twenty years ago.

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<v Speaker 1>So you're celebrating a big anniversary this year. What led

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<v Speaker 1>you to decide? I know, I'm going to go out

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<v Speaker 1>on my own.

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<v Speaker 2>It is a big anniversary, and it's not one I

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<v Speaker 2>take lightly. Given the average hedge fund lives three years.

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<v Speaker 2>I don't know if you're aware of that.

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<v Speaker 1>Ban very short life span, huge turnover, and it's more

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<v Speaker 1>than just the high water mark. There are a lot

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<v Speaker 1>of factors that drive that constant churn.

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<v Speaker 2>Exactly. I went out on my own because I really

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<v Speaker 2>just wanted to focus on doing the kind of work

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<v Speaker 2>that was interesting to me. I had built this business

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<v Speaker 2>within this larger firm primarily working with these high octane

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<v Speaker 2>prop groups, and I felt like I could just take

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<v Speaker 2>that with me. You know, these were they didn't really care.

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<v Speaker 2>They were entrepreneurs themselves. They didn't care about being part

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<v Speaker 2>of a big firm with hundreds of people in many offices.

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<v Speaker 2>They cared about domain expertise. And that's what I brought

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<v Speaker 2>to the table.

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<v Speaker 1>So you mentioned what a notoriously short lifespan so many

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<v Speaker 1>hedge funds have. It's also a hyper comp headtive field.

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<v Speaker 1>So staying power is something that really is of value.

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<v Speaker 1>You've been in business running your own chop for two decades.

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<v Speaker 1>What's the secret to longevity in a space that is

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<v Speaker 1>known for not having longevity.

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<v Speaker 2>Let me define what we do, because I feel like

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<v Speaker 2>a fair misconception might be that is a recruiting firm.

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<v Speaker 2>Our job is to help people find jobs. That's actually

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<v Speaker 2>not what we do. We work with the most front

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<v Speaker 2>footed hedge fund founders and talent in the industry to

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<v Speaker 2>figure out what's next and keep them in the pole position.

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<v Speaker 2>And when you think about the individuals that can meet

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<v Speaker 2>that challenge for the highest impact hedge funds in the world,

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<v Speaker 2>these are the best people out there. These are not

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<v Speaker 2>people who are typically looking, and so in order to

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<v Speaker 2>engage with them, it's not about helping them find a job.

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<v Speaker 2>It's really giving them information and perspective they don't already have.

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<v Speaker 2>So I expect my firm to be ahead on trends,

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<v Speaker 2>themes and have a point of view that these guys

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<v Speaker 2>wouldn't get if they didn't meet with us. And I

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<v Speaker 2>don't care if they ever transact, you know, I think

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<v Speaker 2>that in time, if we make a strong enough case,

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<v Speaker 2>they're smart and they'll transact and do something different if

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<v Speaker 2>it makes sense. But with every meeting we learn more

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<v Speaker 2>and more more powerful for the next person. I'll give

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<v Speaker 2>you an example. We met with someone recently who sits

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<v Speaker 2>at a fund that is having a tough time. They

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<v Speaker 2>lost four billion dollars last year, so big high watermark.

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<v Speaker 2>They're down again this year, and he was he was

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<v Speaker 2>quite happy with how he was treated by the founder.

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<v Speaker 2>He said, Ilana, you know, I've been there a while.

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<v Speaker 2>I actually think the founder was really fair with me.

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<v Speaker 2>I didn't lose myne he guaranteed me a million bucks

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<v Speaker 2>for this year and a million bucks for next year.

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<v Speaker 2>It's really helpful to have had five other meetings with

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<v Speaker 2>people who sit at analogous funds that had losses that

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<v Speaker 2>were just as big, and in fact they may have

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<v Speaker 2>contributed to those losses more and be able to tell him.

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<v Speaker 2>First off, your fund, just by my math, has a

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<v Speaker 2>two hundred and fifty million dollar management fee, so I'm

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<v Speaker 2>not sure that that's so generous on behalf of the founder.

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<v Speaker 2>And number two, it may interest you to know here

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<v Speaker 2>are four or five different funds in the same situation,

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<v Speaker 2>and what the founders did there was to guarantee their

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<v Speaker 2>people who were more responsible for the losses than you

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<v Speaker 2>four or five x you know what you've been given.

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<v Speaker 2>So that's where things start to unsettle a bit in

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<v Speaker 2>his head. And then we come up a level and

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<v Speaker 2>talk about whether he's even learning the skills that will

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<v Speaker 2>put him on his front feet to compete as things

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<v Speaker 2>evolve in this industry. And I would say it's the

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<v Speaker 2>amalgamation barrier of twenty years of intelligence of speaking to

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<v Speaker 2>the best people out there that no one can compete with.

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<v Speaker 1>So I want to focus on that because you you

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<v Speaker 1>raise some really fascinating points there when you mentioned business intelligence,

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<v Speaker 1>and really it's an astute use of the data that

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<v Speaker 1>you become familiar with that isn't it's not on the

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<v Speaker 1>Bloomberg terminal, it's not listed publicly. This is all very

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<v Speaker 1>closely held information. You may be in a unique situation

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<v Speaker 1>to see the landscape that very few people see. How

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<v Speaker 1>big of an advantage is that.

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<v Speaker 2>It's going it's everything real, So think about it. You're happy,

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<v Speaker 2>You're doing phenomenally well, or you at least you think

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<v Speaker 2>you're happy. You know, by the time we're done with you,

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<v Speaker 2>you may not be that happy. You but you are

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<v Speaker 2>doing well by anyone's metric. These are big numbers. There

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<v Speaker 2>are people were talking to where compensation was closer to

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<v Speaker 2>nine figures than eight figures. So it's really not about

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<v Speaker 2>being disenfranchised or miserable or needing to find a job.

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<v Speaker 2>They don't need to transact. Okay, this isn't like you

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<v Speaker 2>know you're sitting on the cell side and yes, you know,

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<v Speaker 2>you're on the equity sales desk and someone doesn't need

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<v Speaker 2>to transact with Goldman on the other side of the phone,

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<v Speaker 2>but they do need to transact with someone. These people

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<v Speaker 2>do not need to transact. The only reason they're coming

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<v Speaker 2>in to meet with us is because they're going to

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<v Speaker 2>learn something and there's going to be some perspective that

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<v Speaker 2>they're going to walk out with, like the example I

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<v Speaker 2>just gave you, that they didn't have before. And that

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<v Speaker 2>is a very different dynamic than what I think most

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<v Speaker 2>recruiting firms do or even really able to do.

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<v Speaker 1>So I kind of know of your work being hand

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<v Speaker 1>in glove with a lot of the largest hedge fund founders.

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<v Speaker 1>This isn't hey, I need to fill a seat. It's

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<v Speaker 1>let's create a discussion about a strategy that we either

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<v Speaker 1>want employee or are thinking about employing, and how do

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<v Speaker 1>we go up about putting this into play staffing. It

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<v Speaker 1>tell us a little bit about some of the work

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<v Speaker 1>you do. That's more than just hey, I found the

0:13:00.320 --> 0:13:03.680
<v Speaker 1>right fund manager for em distressed debt.

0:13:04.240 --> 0:13:07.680
<v Speaker 2>It's much more sophisticated, much more it's we think of it, Barry,

0:13:07.840 --> 0:13:12.720
<v Speaker 2>as we're moving a battleship forward. That's not that easy,

0:13:12.840 --> 0:13:15.319
<v Speaker 2>you know. I think you sent me this article actually

0:13:15.440 --> 0:13:18.520
<v Speaker 2>because I was on I was pulling up your name

0:13:18.559 --> 0:13:21.440
<v Speaker 2>on my text messages and it came up. There are

0:13:21.480 --> 0:13:24.040
<v Speaker 2>more hedge funds than Burger kings.

0:13:24.160 --> 0:13:26.480
<v Speaker 1>Yes, that's right nationally, Yep.

0:13:26.960 --> 0:13:29.800
<v Speaker 2>These aren't like the little Burger Kings sitting sitting out

0:13:29.840 --> 0:13:32.320
<v Speaker 2>in the middle of you know nowhere these think of

0:13:32.400 --> 0:13:35.480
<v Speaker 2>these guys that we work with as I don't know

0:13:35.559 --> 0:13:39.200
<v Speaker 2>the biggest franchise owners of you know, those fast food

0:13:39.280 --> 0:13:40.040
<v Speaker 2>chains in the space.

0:13:40.200 --> 0:13:43.200
<v Speaker 1>Well, the Wall Street Journal column that I read about

0:13:43.240 --> 0:13:46.440
<v Speaker 1>you from it was pre Pandemic twenty nineteen something like that.

0:13:46.840 --> 0:13:50.320
<v Speaker 1>You're talking to Steve Cohen a point seventy two and

0:13:50.520 --> 0:13:55.160
<v Speaker 1>Ken Griffin of Citadel and all of these other giant

0:13:55.400 --> 0:13:58.200
<v Speaker 1>hedge funds. I know you don't disclose your clients, but

0:13:58.679 --> 0:14:02.560
<v Speaker 1>the Wall Street Journal certainly mentioned those. I would imagine

0:14:02.800 --> 0:14:06.679
<v Speaker 1>that the founders of those firms have a pretty solid

0:14:06.679 --> 0:14:08.719
<v Speaker 1>grasp on where they want to go and what they

0:14:08.760 --> 0:14:11.360
<v Speaker 1>want to do. How do you get involved with them

0:14:11.480 --> 0:14:14.720
<v Speaker 1>in terms of strategy and how receptive are they to

0:14:14.840 --> 0:14:16.240
<v Speaker 1>your insight?

0:14:16.840 --> 0:14:20.000
<v Speaker 2>Sometimes, like I said, in terms of moving a battleship forward,

0:14:20.200 --> 0:14:24.240
<v Speaker 2>it's just making sure that they have the best investment

0:14:24.320 --> 0:14:28.720
<v Speaker 2>professionals for their existing strategies. Again, no mean feat, because

0:14:28.760 --> 0:14:31.720
<v Speaker 2>the bar is exceptionally high, and there are so many

0:14:31.760 --> 0:14:33.960
<v Speaker 2>things we look for and so few people that can

0:14:34.000 --> 0:14:38.400
<v Speaker 2>meet that challenge, as I said, and sometimes they come

0:14:38.440 --> 0:14:41.200
<v Speaker 2>to us with the thought of you know what, there's

0:14:41.240 --> 0:14:45.040
<v Speaker 2>an adjacent strategy we think makes sense. Let's think about

0:14:45.080 --> 0:14:47.360
<v Speaker 2>the best way to do that. Do we buy a fund,

0:14:47.560 --> 0:14:50.240
<v Speaker 2>do we identify someone who we think we can raise

0:14:50.280 --> 0:14:54.320
<v Speaker 2>capital around and we help them with that calculus. Sometimes

0:14:54.360 --> 0:14:57.720
<v Speaker 2>I'm coming to them and saying, this is something I

0:14:57.760 --> 0:14:59.720
<v Speaker 2>think you guys should look at. I just had this

0:15:00.080 --> 0:15:04.800
<v Speaker 2>with a client who runs a very large, not multi manager,

0:15:04.840 --> 0:15:07.840
<v Speaker 2>but multi strategy fund, and he and I have been

0:15:07.840 --> 0:15:10.880
<v Speaker 2>talking about how to get his fund, which is already

0:15:12.240 --> 0:15:15.400
<v Speaker 2>very big I mean very big, to the next level.

0:15:15.920 --> 0:15:20.440
<v Speaker 2>And we've talked about things like and it's open ended.

0:15:20.520 --> 0:15:23.440
<v Speaker 2>He told me his calculus he's going through, which is

0:15:23.480 --> 0:15:25.680
<v Speaker 2>how do I get from where I am to as

0:15:25.760 --> 0:15:28.400
<v Speaker 2>make sense you know, much bigger than that. And we've

0:15:28.440 --> 0:15:32.600
<v Speaker 2>talked about whether we go deeper on existing strategies, we

0:15:32.680 --> 0:15:35.720
<v Speaker 2>build new businesses, we find somebody who helps can help

0:15:35.760 --> 0:15:38.920
<v Speaker 2>him more as almost a cocio with risk management, with

0:15:38.960 --> 0:15:42.040
<v Speaker 2>the investment process. I've had a lot of conversations with

0:15:42.120 --> 0:15:43.960
<v Speaker 2>him where I've said, we need to take a step

0:15:44.000 --> 0:15:47.080
<v Speaker 2>back and think about what you really need because those

0:15:47.120 --> 0:15:49.480
<v Speaker 2>are different skill sets and they reside in different people.

0:15:49.520 --> 0:15:53.440
<v Speaker 2>But I've also come to him with ideas, what about activism,

0:15:53.800 --> 0:15:56.720
<v Speaker 2>what about you know, fill in the blank things that

0:15:56.840 --> 0:15:59.640
<v Speaker 2>he doesn't do today but may make sense and be

0:15:59.680 --> 0:16:02.320
<v Speaker 2>a ja And he's exploring all of those things.

0:16:02.680 --> 0:16:06.480
<v Speaker 1>So you're you're having these sorts of conversations with large

0:16:06.480 --> 0:16:10.479
<v Speaker 1>hedge fund founders and other experienced people in the industry.

0:16:11.280 --> 0:16:14.160
<v Speaker 1>I got to imagine that every now and then surprises

0:16:14.240 --> 0:16:17.400
<v Speaker 1>come along. What sort of things do you interact with

0:16:17.520 --> 0:16:20.120
<v Speaker 1>where you know you're rock back? Gee, I didn't see

0:16:20.120 --> 0:16:22.880
<v Speaker 1>that coming. I bet you have a ton of great stories.

0:16:23.120 --> 0:16:25.760
<v Speaker 2>I do, Barry, but I kind of feel like, you know,

0:16:26.240 --> 0:16:30.880
<v Speaker 2>can you talk for the book I which there will

0:16:30.920 --> 0:16:33.160
<v Speaker 2>be one day, maybe I'll have to be when I

0:16:33.240 --> 0:16:36.480
<v Speaker 2>retire and you know, publish under anonymous.

0:16:35.840 --> 0:16:39.280
<v Speaker 1>But people will figure out they probably will.

0:16:39.320 --> 0:16:41.360
<v Speaker 2>But anyway, we'll cross that bridge when and if we

0:16:41.440 --> 0:16:45.680
<v Speaker 2>come to it. Dealing with people, there's constantly surprises. That's

0:16:45.720 --> 0:16:48.920
<v Speaker 2>what keeps me largely on my toes. There's so many

0:16:48.960 --> 0:16:52.280
<v Speaker 2>twists and turns. You think you can prep someone within

0:16:52.280 --> 0:16:54.520
<v Speaker 2>an inch of their life, and there's every reason they

0:16:54.560 --> 0:16:58.720
<v Speaker 2>should resign and go to where we've been working toward

0:16:58.800 --> 0:17:00.960
<v Speaker 2>for the last six months, them going and they end

0:17:01.080 --> 0:17:03.760
<v Speaker 2>up staying, and then there are people who just get

0:17:03.800 --> 0:17:05.439
<v Speaker 2>out like this where I think it's going to be

0:17:05.440 --> 0:17:08.000
<v Speaker 2>a fight to the death to keep them so. But

0:17:08.240 --> 0:17:11.000
<v Speaker 2>you know, one of the in building my business one

0:17:11.040 --> 0:17:13.520
<v Speaker 2>of the most surprising things for me, and this has

0:17:13.560 --> 0:17:15.440
<v Speaker 2>nothing to do with my clients. It's just kind of

0:17:15.440 --> 0:17:18.119
<v Speaker 2>a funny thing to tell you. For a firm that

0:17:18.280 --> 0:17:22.880
<v Speaker 2>is a really unique niche in the hedge fund industry, right,

0:17:23.119 --> 0:17:25.040
<v Speaker 2>we recruit for the hedge fund industry, and we do

0:17:25.080 --> 0:17:28.240
<v Speaker 2>it at a level that I think you know is unusual.

0:17:28.640 --> 0:17:32.199
<v Speaker 2>It is so difficult to recruit for ourselves. It is

0:17:32.320 --> 0:17:34.719
<v Speaker 2>just it's so hard because part of the sort of

0:17:34.760 --> 0:17:37.160
<v Speaker 2>secret sauce that we were getting out earlier in terms

0:17:37.160 --> 0:17:40.400
<v Speaker 2>of what makes us different. For us, we need someone

0:17:40.640 --> 0:17:47.400
<v Speaker 2>who is strategic, transaction driven, really into the micro you mentioned,

0:17:47.480 --> 0:17:50.520
<v Speaker 2>like all the details and information that we amalgamate, but

0:17:50.560 --> 0:17:52.280
<v Speaker 2>then can come up a level and figure out how

0:17:52.320 --> 0:17:53.199
<v Speaker 2>to commercialize that.

0:17:53.480 --> 0:17:54.720
<v Speaker 1>Where do you find people like that?

0:17:54.840 --> 0:18:00.399
<v Speaker 2>It's so hard. We typically hire people out of the

0:18:00.440 --> 0:18:02.960
<v Speaker 2>banks with I love just a couple of years of

0:18:03.000 --> 0:18:08.040
<v Speaker 2>experience so we can mold them into and teach them more.

0:18:08.080 --> 0:18:12.800
<v Speaker 2>Experience doesn't necessarily help. There's so much that they are

0:18:12.920 --> 0:18:17.200
<v Speaker 2>only going to learn just through the exposure and the

0:18:17.240 --> 0:18:20.840
<v Speaker 2>information that they gather in being in the seat. But

0:18:20.920 --> 0:18:22.359
<v Speaker 2>it's hard, It's really hard.

0:18:22.640 --> 0:18:25.560
<v Speaker 1>So you mentioned a lot of the surprises, no shock,

0:18:25.640 --> 0:18:28.480
<v Speaker 1>it comes from the human element of it. What are

0:18:28.520 --> 0:18:31.119
<v Speaker 1>some of the things that really arched your eyebrows, what

0:18:31.160 --> 0:18:32.119
<v Speaker 1>really gave you pause?

0:18:32.520 --> 0:18:35.879
<v Speaker 2>There are so many good stories, Barry, but one that

0:18:36.680 --> 0:18:40.600
<v Speaker 2>I'll tell, which hopefully no one will be to put

0:18:40.600 --> 0:18:47.240
<v Speaker 2>off by if the protagonists self identify was early on.

0:18:47.480 --> 0:18:50.679
<v Speaker 2>It was year one or so of IDW and we

0:18:50.720 --> 0:18:54.119
<v Speaker 2>were working with a client who even back then was

0:18:54.200 --> 0:18:58.640
<v Speaker 2>a well known guy in the industry, amazing hedge fund founder,

0:18:58.760 --> 0:19:02.600
<v Speaker 2>very focused on growth excellence, and we did our first

0:19:02.640 --> 0:19:05.560
<v Speaker 2>search for him, which was for Ahead of Credit. I

0:19:05.640 --> 0:19:09.520
<v Speaker 2>really wanted to impress him, and we got a guy

0:19:09.560 --> 0:19:13.280
<v Speaker 2>to the table after a lot of trial and error, who,

0:19:13.800 --> 0:19:18.439
<v Speaker 2>as I said earlier, wasn't looking very and he was

0:19:18.480 --> 0:19:21.760
<v Speaker 2>like one of the biggest credit prop traders on the street,

0:19:21.880 --> 0:19:25.600
<v Speaker 2>phenomenal reputation. I can't remember if he sat at Bear

0:19:25.760 --> 0:19:27.679
<v Speaker 2>or Lehman, but it was one of the banks that

0:19:27.720 --> 0:19:32.280
<v Speaker 2>no longer exist and not his fault. But anyway, back then,

0:19:32.680 --> 0:19:35.600
<v Speaker 2>huge deal, no interest in coming to the table, but

0:19:35.640 --> 0:19:39.640
<v Speaker 2>I explained all the reasons why he should, and optionality

0:19:39.680 --> 0:19:42.840
<v Speaker 2>is a great thing. This is a phenomenal guy. And

0:19:43.040 --> 0:19:47.359
<v Speaker 2>then I'm thrilled get the meeting set up. Let's just

0:19:47.400 --> 0:19:49.920
<v Speaker 2>say it was, you know it was. It was after

0:19:49.960 --> 0:19:52.920
<v Speaker 2>the close. It was like four or five o'clock, and

0:19:53.359 --> 0:19:57.040
<v Speaker 2>I'm kind of like glancing at my phone waiting for

0:19:57.119 --> 0:19:59.080
<v Speaker 2>it to ring and to hear what a great meeting

0:19:59.119 --> 0:20:01.600
<v Speaker 2>this was, because this I was like everything. It was

0:20:01.640 --> 0:20:05.000
<v Speaker 2>everything I thought we wanted for this search. And the

0:20:05.040 --> 0:20:08.719
<v Speaker 2>phone rings an hour in and it's my client and

0:20:08.800 --> 0:20:12.359
<v Speaker 2>he says that can never happen again.

0:20:12.480 --> 0:20:15.360
<v Speaker 1>Oh really, uh huh?

0:20:14.320 --> 0:20:17.919
<v Speaker 2>And by and by that, you could never in a

0:20:18.000 --> 0:20:21.680
<v Speaker 2>million years, I could never guess what the next string

0:20:21.720 --> 0:20:23.840
<v Speaker 2>of sentences was going to be that came out of

0:20:23.880 --> 0:20:29.239
<v Speaker 2>his mouth, which were apparently this guy had decided it

0:20:29.280 --> 0:20:32.680
<v Speaker 2>was okay to put on a T shirt and shorts,

0:20:32.960 --> 0:20:37.719
<v Speaker 2>a pair of roller blades and skate something like thirty

0:20:37.760 --> 0:20:42.160
<v Speaker 2>blocks top speed. Arrives at the Four Seasons, skates right

0:20:42.200 --> 0:20:46.000
<v Speaker 2>in through the entrance, right up the stairs, and slides

0:20:46.119 --> 0:20:51.040
<v Speaker 2>right in for his meeting, completely dripping with sweat wheels

0:20:51.040 --> 0:20:55.520
<v Speaker 2>still turning. Luckily that my client had a sense of humor,

0:20:55.560 --> 0:20:57.080
<v Speaker 2>and we've gone on to do a lot of great

0:20:57.119 --> 0:20:59.600
<v Speaker 2>stuff together. But it was a lesson for me, Barry

0:21:00.080 --> 0:21:02.879
<v Speaker 2>that you cannot confuse intelligence with common sense.

0:21:03.040 --> 0:21:05.280
<v Speaker 1>So now, how much of that is common sense? And

0:21:05.280 --> 0:21:08.200
<v Speaker 1>how much of that is This guy really didn't want

0:21:08.200 --> 0:21:10.280
<v Speaker 1>another job, he really wasn't looking to switch.

0:21:10.800 --> 0:21:13.480
<v Speaker 2>I think it's common sense. I don't care if you

0:21:13.560 --> 0:21:14.800
<v Speaker 2>are looking to move or not.

0:21:15.359 --> 0:21:16.840
<v Speaker 1>Come on, I mean within the industry.

0:21:17.200 --> 0:21:19.320
<v Speaker 2>Within this was one of a kind. I've got a

0:21:19.359 --> 0:21:21.000
<v Speaker 2>lot of one of the kind stories. But you know,

0:21:21.040 --> 0:21:23.400
<v Speaker 2>the important thing is to learn from it. And now

0:21:23.520 --> 0:21:26.360
<v Speaker 2>now we prep people within an inch of their lives

0:21:26.440 --> 0:21:27.440
<v Speaker 2>on everything.

0:21:28.160 --> 0:21:32.880
<v Speaker 1>No rollerblading, No rollerblading. I really love the Wall Street

0:21:32.960 --> 0:21:38.360
<v Speaker 1>Journal article about you that began quote in the overwhelmingly

0:21:38.560 --> 0:21:42.000
<v Speaker 1>male world of hedge funds, a lot of Weinstein is

0:21:42.040 --> 0:21:45.600
<v Speaker 1>one of the most powerful women. But Ms Weinstein doesn't

0:21:45.640 --> 0:21:49.359
<v Speaker 1>manage money. Instead, she scouts the people who do. So.

0:21:49.359 --> 0:21:53.200
<v Speaker 1>So let's talk about that first half of that sentence,

0:21:53.640 --> 0:21:58.120
<v Speaker 1>overwhelmingly male world of hedge funds. What's it like competing

0:21:58.320 --> 0:22:00.560
<v Speaker 1>in that space?

0:22:01.000 --> 0:22:03.600
<v Speaker 2>Well, let me just say, we can't forget this is

0:22:03.640 --> 0:22:07.240
<v Speaker 2>still a young industry. Okay. It though when you compare

0:22:07.280 --> 0:22:14.560
<v Speaker 2>it to law to medicine, right, okay, so though you know, medicine, law, consulting,

0:22:15.040 --> 0:22:19.480
<v Speaker 2>those industries have now over fifty percent women. Okay. Business

0:22:19.520 --> 0:22:22.840
<v Speaker 2>school when I went, was twenty something percent. Now HBS,

0:22:22.880 --> 0:22:26.520
<v Speaker 2>I think is fifty two or fifty three percent. Banking

0:22:26.720 --> 0:22:29.440
<v Speaker 2>getting much better. See at the senior ranks, there's still

0:22:29.480 --> 0:22:30.160
<v Speaker 2>some work to do.

0:22:30.240 --> 0:22:31.760
<v Speaker 1>Finance in general getting.

0:22:31.520 --> 0:22:33.880
<v Speaker 2>Much much better. Certainly at the more junior and mid

0:22:33.920 --> 0:22:37.520
<v Speaker 2>and upper mid ranks it's roughly fifty percent women. So

0:22:38.240 --> 0:22:41.920
<v Speaker 2>relatively speaking, this is still a young industry. I will

0:22:41.920 --> 0:22:44.240
<v Speaker 2>tell you when I have these questions which I feel

0:22:44.240 --> 0:22:47.000
<v Speaker 2>are like a little bit loaded, all male, what's that like?

0:22:47.080 --> 0:22:50.639
<v Speaker 2>Blah blah blah, I have felt this is the most

0:22:50.800 --> 0:22:54.199
<v Speaker 2>meritocratic industry that I have ever been a part of.

0:22:54.280 --> 0:22:56.600
<v Speaker 2>And I've been working since I was fourteen. I've had

0:22:56.600 --> 0:22:58.879
<v Speaker 2>a lot of jobs. When I was a pen I

0:22:58.920 --> 0:23:01.040
<v Speaker 2>worked at a law from Ones, as you pointed out,

0:23:01.080 --> 0:23:03.280
<v Speaker 2>I worked at Goldman, I worked in consulting. I work

0:23:03.320 --> 0:23:06.680
<v Speaker 2>with CEOs from all sorts of different industries. The difference

0:23:06.720 --> 0:23:10.480
<v Speaker 2>here is it is pay for performance, it's mark to

0:23:10.520 --> 0:23:14.320
<v Speaker 2>market you know exactly where you stand with complete clarity

0:23:14.640 --> 0:23:17.880
<v Speaker 2>every moment of the day, and teams are small, so

0:23:17.920 --> 0:23:20.359
<v Speaker 2>the react. Even if it's a multi manager which has

0:23:20.560 --> 0:23:24.040
<v Speaker 2>you know, one hundred pms when you pull back the curtain,

0:23:24.240 --> 0:23:27.080
<v Speaker 2>the teams of those pms are small, right, and you

0:23:27.119 --> 0:23:29.520
<v Speaker 2>certainly know how your pms are doing, which ones are

0:23:29.520 --> 0:23:32.479
<v Speaker 2>the winners and which ones aren't performing that well. So

0:23:32.960 --> 0:23:36.800
<v Speaker 2>founders are very clear on who the alpha generators are

0:23:37.119 --> 0:23:39.880
<v Speaker 2>as opposed to for example, private equity where it can

0:23:39.920 --> 0:23:43.880
<v Speaker 2>take seven to ten years to monetize your investment, or

0:23:44.080 --> 0:23:46.160
<v Speaker 2>you know, an industry where there's just not that much

0:23:46.320 --> 0:23:49.439
<v Speaker 2>that much clear attribution as to who's doing what on

0:23:49.480 --> 0:23:53.160
<v Speaker 2>a very big deal team. So as a result of that,

0:23:53.640 --> 0:23:56.840
<v Speaker 2>founders don't care if it's a man or woman or

0:23:56.880 --> 0:23:59.639
<v Speaker 2>otherwise in terms of who occupies the seat. It's all

0:23:59.680 --> 0:24:02.440
<v Speaker 2>about generating alpha and when it comes to me in

0:24:02.560 --> 0:24:06.080
<v Speaker 2>my by the way, all female team, we'd love some diversity.

0:24:06.119 --> 0:24:08.520
<v Speaker 1>Oh really, that's interesting, I have no idea we'd love

0:24:08.600 --> 0:24:09.440
<v Speaker 1>some diversity.

0:24:09.680 --> 0:24:12.679
<v Speaker 2>It is all about our ability to be a source

0:24:12.800 --> 0:24:15.080
<v Speaker 2>of alpha generating talent for them.

0:24:15.440 --> 0:24:19.200
<v Speaker 1>So there is there a female perspective in the hedge

0:24:19.200 --> 0:24:24.800
<v Speaker 1>fund world, because in the academic research on investment returns,

0:24:25.160 --> 0:24:27.760
<v Speaker 1>there's a lot of studies that say, hey, men are

0:24:27.800 --> 0:24:32.159
<v Speaker 1>too risk embracing, they're too stubborn, they're over optimistic, and

0:24:32.600 --> 0:24:35.760
<v Speaker 1>all other things being equal. When they looked at a

0:24:35.760 --> 0:24:39.800
<v Speaker 1>series of female led funds versus male ed funds, the

0:24:39.880 --> 0:24:41.720
<v Speaker 1>women outperform the men.

0:24:41.960 --> 0:24:45.200
<v Speaker 2>So let me give you a little example. Back in

0:24:45.320 --> 0:24:48.040
<v Speaker 2>two thousand and nine, or maybe it was ten, if

0:24:48.080 --> 0:24:54.399
<v Speaker 2>you remember, hedge funds were largely short Lululemon. And I

0:24:54.440 --> 0:24:57.800
<v Speaker 2>met with a guy who told me that his then

0:24:57.880 --> 0:25:00.919
<v Speaker 2>girlfriend now wife, who to your point, is now very

0:25:01.000 --> 0:25:03.680
<v Speaker 2>successful in her own right. Said to him, why are

0:25:03.720 --> 0:25:06.679
<v Speaker 2>you short this stuff? And he said, well, because you

0:25:06.720 --> 0:25:09.880
<v Speaker 2>know it's for yoga, and yoga's a fat And she said,

0:25:09.880 --> 0:25:13.080
<v Speaker 2>what are you talking about. We wear this myself and

0:25:13.119 --> 0:25:17.600
<v Speaker 2>my girlfriends wear this all the time for everything. And

0:25:17.640 --> 0:25:21.360
<v Speaker 2>by the way, honey, yoga's not a fat. All right,

0:25:21.560 --> 0:25:26.560
<v Speaker 2>So back to your question, The reality is what founders

0:25:26.640 --> 0:25:32.359
<v Speaker 2>want is as much diversity of thought as possible because

0:25:32.400 --> 0:25:35.080
<v Speaker 2>there will be fewer errors in reasoning if you have

0:25:35.160 --> 0:25:38.159
<v Speaker 2>different perspectives and more thinking outside the box.

0:25:37.960 --> 0:25:40.640
<v Speaker 1>Less group think. Yes, it can only be good totally

0:25:40.760 --> 0:25:42.920
<v Speaker 1>and yet it doesn't seem that. Well.

0:25:42.960 --> 0:25:45.720
<v Speaker 2>Again, I think it's going to take time. It just will.

0:25:45.760 --> 0:25:49.600
<v Speaker 2>This is not an industry which doesn't want women. Quite

0:25:49.680 --> 0:25:52.120
<v Speaker 2>the contrary. I mean, I have been asked almost since

0:25:52.200 --> 0:25:57.440
<v Speaker 2>day one, and again I've been doing this. Love diversity,

0:25:57.520 --> 0:26:00.280
<v Speaker 2>We love, but at the end of the day, they

0:26:00.280 --> 0:26:03.520
<v Speaker 2>have a fiduciary duty to their LPs to hire the

0:26:03.520 --> 0:26:06.760
<v Speaker 2>best person. And if few women are coming into the

0:26:06.760 --> 0:26:09.639
<v Speaker 2>industry by the time we get involved, which is at

0:26:09.720 --> 0:26:12.960
<v Speaker 2>a pretty impactful level, we don't really have anyone to

0:26:13.000 --> 0:26:15.840
<v Speaker 2>pull from. So I hope over time and I think

0:26:15.880 --> 0:26:18.480
<v Speaker 2>it's improving. There are signs that it is. More women

0:26:18.640 --> 0:26:22.480
<v Speaker 2>enter the industry, they get trained to great places, and

0:26:22.520 --> 0:26:25.400
<v Speaker 2>they end up being great candidates for us to put

0:26:25.400 --> 0:26:29.760
<v Speaker 2>into to run, you know, the next big portfolio or start.

0:26:29.480 --> 0:26:32.600
<v Speaker 1>A new strategy. So in the Wall Street Journal article,

0:26:32.760 --> 0:26:35.520
<v Speaker 1>it tells of a story of you speaking at Wharton

0:26:35.960 --> 0:26:39.200
<v Speaker 1>to a group of people, a group of students. Someone

0:26:39.240 --> 0:26:42.159
<v Speaker 1>asked you why aren't there more women in hedge funds?

0:26:42.160 --> 0:26:45.160
<v Speaker 1>And I don't want to steal the thunder, but tell

0:26:45.200 --> 0:26:47.399
<v Speaker 1>the story what you asked the class and what happened.

0:26:47.480 --> 0:26:49.800
<v Speaker 2>Well, a woman asked me at the end of the class.

0:26:49.920 --> 0:26:52.919
<v Speaker 2>What are actually it was more aggressive than that barrier.

0:26:53.160 --> 0:26:55.679
<v Speaker 2>We did this whole, a whole guest lecture, and she,

0:26:55.760 --> 0:26:58.040
<v Speaker 2>of course was my last person that I called on,

0:26:58.600 --> 0:27:02.080
<v Speaker 2>and she said, what are you doing to help women

0:27:02.440 --> 0:27:05.280
<v Speaker 2>have a greater footprint in the hedge fund industry? And

0:27:05.320 --> 0:27:08.280
<v Speaker 2>I was kind of like, oh god, you know, I immediately

0:27:08.280 --> 0:27:10.159
<v Speaker 2>got a little bit defensive. But then I took a

0:27:10.200 --> 0:27:12.119
<v Speaker 2>breath and I stepped back and I looked at the

0:27:12.160 --> 0:27:16.920
<v Speaker 2>class and it was roughly fifty to fifty men women,

0:27:17.119 --> 0:27:19.560
<v Speaker 2>And I said, let me start with the guys, how

0:27:19.640 --> 0:27:22.879
<v Speaker 2>many of you are interested in working at a hedge fund?

0:27:23.200 --> 0:27:25.520
<v Speaker 2>And I would say the majority of hands went up.

0:27:25.600 --> 0:27:28.840
<v Speaker 1>I would bet more than fifty one percent eighty.

0:27:28.840 --> 0:27:30.920
<v Speaker 2>It was almost all of them. I can't write it

0:27:31.040 --> 0:27:33.639
<v Speaker 2>was the majority. It was a sea of hands. And

0:27:33.680 --> 0:27:36.399
<v Speaker 2>then I asked the women the same question, and like

0:27:36.440 --> 0:27:38.560
<v Speaker 2>two hands went up. Really And I turned to her

0:27:38.600 --> 0:27:40.080
<v Speaker 2>and I said, that's your answer.

0:27:39.880 --> 0:27:42.119
<v Speaker 1>Right, Go work on your peers. There's only so much

0:27:42.160 --> 0:27:42.480
<v Speaker 1>I can.

0:27:42.440 --> 0:27:45.480
<v Speaker 2>And there is also something too, you know, as much

0:27:45.520 --> 0:27:48.720
<v Speaker 2>as there has to be a respectful number one, there

0:27:48.760 --> 0:27:52.200
<v Speaker 2>has to be a respectful environment for everybody. Sure, men

0:27:52.320 --> 0:27:55.919
<v Speaker 2>women or otherwise. I don't think we need to be

0:27:56.000 --> 0:27:59.679
<v Speaker 2>treated like hothouse flowers. Right, So this business of like,

0:28:00.040 --> 0:28:03.240
<v Speaker 2>I mean, this is a tough industry. It's really competitive.

0:28:03.320 --> 0:28:06.879
<v Speaker 2>It's bottom line oriented. But it's about results, you know,

0:28:07.080 --> 0:28:10.760
<v Speaker 2>and and people can be kurt, they can speak in bullets.

0:28:11.280 --> 0:28:14.679
<v Speaker 1>It's just there's but we all know women on trading

0:28:14.760 --> 0:28:17.280
<v Speaker 1>desks that they're still snap you in half if you

0:28:17.320 --> 0:28:19.840
<v Speaker 1>get say the wrong thing to them. They're tough, they

0:28:20.040 --> 0:28:24.000
<v Speaker 1>toughing up that experience. To assume that a woman fund

0:28:24.000 --> 0:28:26.600
<v Speaker 1>manager or a trader is a delicate flower, I mean,

0:28:26.640 --> 0:28:30.320
<v Speaker 1>that's a very nineteenth century perspective that I can't imagine

0:28:30.320 --> 0:28:31.560
<v Speaker 1>that still exists anymore.

0:28:31.680 --> 0:28:37.159
<v Speaker 2>I don't know when people say what managers are doing

0:28:37.240 --> 0:28:41.080
<v Speaker 2>to make the environment more hospitable, what that what that means?

0:28:41.320 --> 0:28:44.240
<v Speaker 2>I don't know what that means. It is completely hospitable.

0:28:44.680 --> 0:28:48.360
<v Speaker 2>It is about people who do great analysis and can

0:28:48.400 --> 0:28:52.040
<v Speaker 2>put up great results. Everything else, you know, it's it's

0:28:52.080 --> 0:28:55.080
<v Speaker 2>the same metric and same bar for every for everyone.

0:28:55.200 --> 0:28:56.600
<v Speaker 2>It's not it's not different.

0:28:56.760 --> 0:28:59.960
<v Speaker 1>So what are the broader takeaways for any woman who

0:29:00.240 --> 0:29:02.600
<v Speaker 1>interested in working in the hedge fund field?

0:29:03.920 --> 0:29:06.200
<v Speaker 2>Well, let me take it out of hedge funds. I

0:29:06.240 --> 0:29:09.040
<v Speaker 2>think it's just let's just make it more more general.

0:29:09.120 --> 0:29:11.040
<v Speaker 2>I mean, well for hedge funds, it's the same thing

0:29:11.200 --> 0:29:13.400
<v Speaker 2>for a man as for a woman. It's it's you know,

0:29:13.480 --> 0:29:16.080
<v Speaker 2>it's getting good training, it's really being in it for

0:29:16.120 --> 0:29:19.520
<v Speaker 2>the right reasons. It's all the things we talked about earlier,

0:29:19.640 --> 0:29:22.840
<v Speaker 2>and honing your craft and improving and being front footed,

0:29:22.880 --> 0:29:25.640
<v Speaker 2>and your approach to learning and growth and pushing yourself

0:29:25.640 --> 0:29:27.960
<v Speaker 2>and reflecting on if you're not growing wide. This is

0:29:28.000 --> 0:29:30.520
<v Speaker 2>not like a specially Again to my point, there's not

0:29:30.600 --> 0:29:33.600
<v Speaker 2>a special set of things for women versus men. As

0:29:33.640 --> 0:29:37.240
<v Speaker 2>a female entrepreneur, and I you know, there are things

0:29:37.280 --> 0:29:39.160
<v Speaker 2>as a woman you do need to grapple with. And

0:29:39.480 --> 0:29:42.640
<v Speaker 2>I would say it's probably true of anyone who has

0:29:42.680 --> 0:29:46.880
<v Speaker 2>competing priorities in their life, whether it's a it's a

0:29:46.920 --> 0:29:51.520
<v Speaker 2>male or a female primary you know, caregiver for a

0:29:51.600 --> 0:29:54.480
<v Speaker 2>child or for an elderly parent, or whatever the case

0:29:54.520 --> 0:29:57.240
<v Speaker 2>may be. But I can only speak from my own perspective.

0:29:57.480 --> 0:30:00.719
<v Speaker 2>What I tell people is what I how women is,

0:30:00.760 --> 0:30:03.560
<v Speaker 2>you can't you can do everything, just not all at

0:30:03.600 --> 0:30:06.600
<v Speaker 2>the same time. Now that being said, I started my

0:30:06.720 --> 0:30:11.440
<v Speaker 2>firm bought and renovated my first apartment and got pregnant

0:30:11.520 --> 0:30:14.640
<v Speaker 2>all within the same year. But the difference was I

0:30:14.680 --> 0:30:18.520
<v Speaker 2>had domain expertise and a reputation, and I figured it out.

0:30:19.000 --> 0:30:21.080
<v Speaker 2>I think it's very difficult to break into a new

0:30:21.120 --> 0:30:24.800
<v Speaker 2>industry where there's a steep learning curve and be dealing

0:30:24.840 --> 0:30:27.640
<v Speaker 2>with other priorities at the same time, so you have

0:30:27.680 --> 0:30:30.160
<v Speaker 2>to time things in a way that makes sense. I

0:30:30.200 --> 0:30:34.120
<v Speaker 2>also think you should never apologize or feel guilty. Guilt

0:30:34.200 --> 0:30:37.520
<v Speaker 2>is a waste of time. For being a working mom.

0:30:38.520 --> 0:30:42.440
<v Speaker 2>I was not there for every drop off and pick up,

0:30:42.800 --> 0:30:45.040
<v Speaker 2>far from but I was there for my son where

0:30:45.080 --> 0:30:47.800
<v Speaker 2>it mattered, and I think it's important that as a

0:30:47.880 --> 0:30:51.200
<v Speaker 2>parent you fold your kid into your successes and your failures.

0:30:51.600 --> 0:30:54.320
<v Speaker 2>I talked to him throughout his growing up about the

0:30:54.440 --> 0:30:57.880
<v Speaker 2>challenges that I was facing, you know, the winds as

0:30:57.920 --> 0:30:59.200
<v Speaker 2>well as the misses.

0:30:59.040 --> 0:31:01.560
<v Speaker 1>The challenges you face as a woman in a male

0:31:01.640 --> 0:31:06.240
<v Speaker 1>dominated inst No again I fell or just a hyper

0:31:06.240 --> 0:31:09.440
<v Speaker 1>competitive just the challenges of building a business, you know.

0:31:09.960 --> 0:31:10.200
<v Speaker 1>You know.

0:31:10.240 --> 0:31:12.760
<v Speaker 2>Coming back to that, I think that we have been

0:31:12.800 --> 0:31:17.200
<v Speaker 2>able to provide a complementary perspective to a lot of

0:31:17.200 --> 0:31:19.920
<v Speaker 2>our clients. It's an advantage being a woman. There are

0:31:19.960 --> 0:31:22.920
<v Speaker 2>things we see that others don't and so, but just

0:31:22.960 --> 0:31:26.520
<v Speaker 2>finishing on this point, I think that your kid, you know,

0:31:26.560 --> 0:31:31.480
<v Speaker 2>your kids will really grow and learn as a result

0:31:31.520 --> 0:31:34.360
<v Speaker 2>of being exposed to everything that you do.

0:31:34.960 --> 0:31:39.520
<v Speaker 1>So, given twenty years at IDW and an all female team,

0:31:39.640 --> 0:31:43.520
<v Speaker 1>what are some of the unique perspectives that you bring

0:31:43.720 --> 0:31:46.000
<v Speaker 1>as a woman to a male dominated space.

0:31:46.120 --> 0:31:49.560
<v Speaker 2>Well, I do think being a woman will mean that

0:31:49.640 --> 0:31:52.560
<v Speaker 2>we might come at things differently and have a slightly

0:31:52.600 --> 0:31:58.080
<v Speaker 2>different perspective, which can be complementary right to somebody who

0:31:58.160 --> 0:32:02.640
<v Speaker 2>comes at things from their own lived experience, which looks different.

0:32:02.760 --> 0:32:05.719
<v Speaker 2>I'll give you a story early on which I think

0:32:05.800 --> 0:32:09.640
<v Speaker 2>speaks to that. This was maybe year one of IDW.

0:32:09.800 --> 0:32:11.520
<v Speaker 2>We were still doing a lot of work for the

0:32:11.560 --> 0:32:15.400
<v Speaker 2>prop desks, again the precursors to the hedge funds, and

0:32:15.480 --> 0:32:18.600
<v Speaker 2>we were working with one of the most aggressive cell

0:32:18.720 --> 0:32:21.880
<v Speaker 2>side firms on the street, certainly with respect to its

0:32:21.920 --> 0:32:26.560
<v Speaker 2>prop businesses, and they wanted to build their structured credit business,

0:32:26.600 --> 0:32:28.400
<v Speaker 2>and we went through a whole thing and we ended

0:32:28.480 --> 0:32:33.240
<v Speaker 2>up making an offer to a guy who ran one

0:32:33.280 --> 0:32:36.960
<v Speaker 2>of the biggest structured credit groups at a competing bank.

0:32:37.200 --> 0:32:39.560
<v Speaker 2>It was a great offer. It was a three year deal,

0:32:40.560 --> 0:32:44.760
<v Speaker 2>huge runway, great upside, and he could really build it

0:32:44.800 --> 0:32:46.800
<v Speaker 2>and take it in whatever direction he wanted. And he

0:32:46.880 --> 0:32:49.200
<v Speaker 2>was kind of fenced in where he was today, so

0:32:49.640 --> 0:32:53.520
<v Speaker 2>much more open pathway. And we went through the whole

0:32:53.560 --> 0:32:57.719
<v Speaker 2>resignation conversation. We prepped people within an inch of their

0:32:57.760 --> 0:32:59.880
<v Speaker 2>lives before they walk in and they resign. And I

0:33:00.080 --> 0:33:03.400
<v Speaker 2>told him to expect that this was going to be

0:33:03.440 --> 0:33:05.600
<v Speaker 2>his fifteen minutes of fame. He was going to go

0:33:05.680 --> 0:33:08.480
<v Speaker 2>in and they were going to put more and more

0:33:08.520 --> 0:33:11.040
<v Speaker 2>senior people at the bank in front of him and

0:33:11.360 --> 0:33:13.440
<v Speaker 2>make him feel like if he were to leave, the

0:33:13.480 --> 0:33:15.640
<v Speaker 2>bank would Koreen off a cliff, which we both know

0:33:16.000 --> 0:33:17.680
<v Speaker 2>you know is not the case. They were fine, with

0:33:17.760 --> 0:33:19.600
<v Speaker 2>all due respect. I said to him, they were fine

0:33:19.600 --> 0:33:22.560
<v Speaker 2>before you showed up, and they'll be fine after. You're great,

0:33:22.640 --> 0:33:25.680
<v Speaker 2>but it's going to be fine, And he sounded good,

0:33:25.760 --> 0:33:28.520
<v Speaker 2>he sounded solid. He knew to resign to his boss

0:33:28.560 --> 0:33:31.520
<v Speaker 2>and basically get out of there and shut down other conversations.

0:33:32.160 --> 0:33:35.200
<v Speaker 2>So I tell my client, and everyone at this bank

0:33:35.280 --> 0:33:37.320
<v Speaker 2>was involved, from the CEO on down. This was a

0:33:37.440 --> 0:33:39.840
<v Speaker 2>very important person to them, and they wanted to make

0:33:39.840 --> 0:33:42.480
<v Speaker 2>sure it got done, and I tell them I feel

0:33:42.480 --> 0:33:45.120
<v Speaker 2>really good. He sounds great, We're going to get this done.

0:33:46.240 --> 0:33:48.800
<v Speaker 2>Goes in the next day, knows to call me an

0:33:48.800 --> 0:33:52.560
<v Speaker 2>hour into resignation, which he does. He tells me Elana,

0:33:52.600 --> 0:33:56.000
<v Speaker 2>it's going well, but you know, they want me to

0:33:56.040 --> 0:33:58.280
<v Speaker 2>meet the head of Global Markets to explain my thinking.

0:33:58.640 --> 0:34:01.719
<v Speaker 2>I said, we talked about you don't need to do

0:34:01.760 --> 0:34:05.640
<v Speaker 2>this or we're not. No, no, no, I don't want

0:34:05.640 --> 0:34:07.479
<v Speaker 2>to make my boss look bad. At least I need

0:34:07.520 --> 0:34:09.879
<v Speaker 2>to explain it's not his fault. I owe them that much.

0:34:09.960 --> 0:34:12.520
<v Speaker 2>I've been here for this long. Blah blah blah. There's

0:34:12.560 --> 0:34:14.840
<v Speaker 2>nothing I can say. He's going to do it. I

0:34:14.920 --> 0:34:18.960
<v Speaker 2>reinforce the reasons this has to end. After this conversation anyway,

0:34:19.000 --> 0:34:21.160
<v Speaker 2>you can imagine where this ends up going. He's in

0:34:21.200 --> 0:34:27.240
<v Speaker 2>a conference room. That additional conversation manifests into ten additional conversations.

0:34:27.239 --> 0:34:30.480
<v Speaker 2>They're now trotting out the entire management committee of the

0:34:30.480 --> 0:34:33.040
<v Speaker 2>bank in front of him. The head of the bank's

0:34:33.080 --> 0:34:37.080
<v Speaker 2>getting involved. It's his phone is now off. My team

0:34:37.120 --> 0:34:40.200
<v Speaker 2>is calling onto the desk. We're trying to get through

0:34:40.200 --> 0:34:44.080
<v Speaker 2>to him any which way we can. It is impossible. Meanwhile,

0:34:44.640 --> 0:34:48.880
<v Speaker 2>my client on the other side is going bonkers because

0:34:48.880 --> 0:34:51.799
<v Speaker 2>we're now late into the afternoon. We can't reach him,

0:34:52.160 --> 0:34:54.840
<v Speaker 2>and they're second guessing their decision. Do we have the

0:34:54.920 --> 0:34:57.319
<v Speaker 2>right guy? Doesn't he know what he wants? Is this

0:34:57.400 --> 0:35:00.799
<v Speaker 2>a leader? Blah blah blah. Doesn't he under stand you

0:35:00.840 --> 0:35:03.120
<v Speaker 2>know this, This couldn't be clearer the reasons he should

0:35:03.160 --> 0:35:06.120
<v Speaker 2>make this decision if he's not out of their sunni Ilana,

0:35:06.200 --> 0:35:07.360
<v Speaker 2>we're pulling the offer.

0:35:07.680 --> 0:35:10.279
<v Speaker 1>Which by the way, is really not fair for a

0:35:10.280 --> 0:35:14.080
<v Speaker 1>guy who's just trying to extract himself totally gracefully.

0:35:13.560 --> 0:35:15.840
<v Speaker 2>Right, And I explained that, but this this, like we

0:35:15.920 --> 0:35:18.960
<v Speaker 2>started this process whatever it was seven am. We're now

0:35:19.480 --> 0:35:23.000
<v Speaker 2>almost into the evening, so we're beyond gracefully. He's clearly

0:35:23.040 --> 0:35:26.879
<v Speaker 2>getting bid back, and they're upset, they're embarrassed, they feel

0:35:26.920 --> 0:35:29.440
<v Speaker 2>maybe they have egg on their face, and you know,

0:35:29.480 --> 0:35:31.080
<v Speaker 2>there's a lot of positioning.

0:35:30.600 --> 0:35:31.879
<v Speaker 1>And joby good.

0:35:31.960 --> 0:35:36.000
<v Speaker 2>Also, Yeah, I think about it, and I really feel

0:35:36.000 --> 0:35:38.319
<v Speaker 2>like that movie No Way Out with Kevin Costner. You know,

0:35:38.400 --> 0:35:40.520
<v Speaker 2>I just don't even know what to do anymore, can't

0:35:40.520 --> 0:35:44.520
<v Speaker 2>get through to him. And then I remember he always

0:35:44.719 --> 0:35:49.880
<v Speaker 2>talked about his wife and she clearly as she should be,

0:35:50.040 --> 0:35:52.120
<v Speaker 2>but it was lovely. The way he always brought her

0:35:52.200 --> 0:35:54.560
<v Speaker 2>up was a big influence in his life and in

0:35:54.600 --> 0:35:57.320
<v Speaker 2>his decision making. And I realize I have his home number.

0:35:57.719 --> 0:35:59.000
<v Speaker 1>Get the wife on the phone.

0:35:59.239 --> 0:36:02.360
<v Speaker 2>So I don't remember. I don't remember any of their

0:36:02.440 --> 0:36:05.239
<v Speaker 2>names even, but I remember she was French and she

0:36:05.320 --> 0:36:08.239
<v Speaker 2>picks up the phone. So let's call her Monique and

0:36:09.080 --> 0:36:13.719
<v Speaker 2>I say hello, Hello. I don't know if you know

0:36:13.760 --> 0:36:16.840
<v Speaker 2>who I am, Monique. I'm Ilana Weinstein. And before I

0:36:16.880 --> 0:36:19.920
<v Speaker 2>can even finish, she says, I know exactly who you are.

0:36:20.400 --> 0:36:22.319
<v Speaker 2>And I say, well, you know, we have a bit

0:36:22.320 --> 0:36:27.120
<v Speaker 2>of a situation. And I explained to her that the

0:36:27.160 --> 0:36:30.120
<v Speaker 2>place her husband is resigning to go to is very upset,

0:36:30.360 --> 0:36:33.959
<v Speaker 2>and I recount all the reasons this is a phenomenal opportunity,

0:36:34.760 --> 0:36:38.360
<v Speaker 2>and I think they're going to pull the offer, and

0:36:38.680 --> 0:36:40.799
<v Speaker 2>I just you know, I can't get through to him,

0:36:41.160 --> 0:36:44.480
<v Speaker 2>and I thought you should be aware of that, given

0:36:44.880 --> 0:36:46.959
<v Speaker 2>you know, this is a decision I know you both

0:36:47.000 --> 0:36:52.759
<v Speaker 2>came to and she says, Elana, I understand, leave this

0:36:52.800 --> 0:36:55.319
<v Speaker 2>with me. Five minutes later, bury my phone rings and

0:36:55.360 --> 0:36:58.160
<v Speaker 2>he's out. Wow, So you know, I.

0:36:58.640 --> 0:37:01.759
<v Speaker 1>What did the firm he was going to have to

0:37:01.760 --> 0:37:02.400
<v Speaker 1>say about.

0:37:02.200 --> 0:37:04.760
<v Speaker 2>Oh they were thrilled, Are you kidding? But my point

0:37:04.960 --> 0:37:09.320
<v Speaker 2>is sometimes it does take you know, it does take

0:37:09.840 --> 0:37:12.680
<v Speaker 2>I guess injest it could it takes a strong woman

0:37:12.760 --> 0:37:15.720
<v Speaker 2>to sort of, you know, in this case, move the needle,

0:37:16.520 --> 0:37:19.280
<v Speaker 2>or maybe two strong women. And I'm not to say

0:37:19.400 --> 0:37:21.560
<v Speaker 2>a man. It's not to say a man wouldn't have

0:37:21.600 --> 0:37:24.200
<v Speaker 2>come up with this, but I do think there's something

0:37:24.280 --> 0:37:27.799
<v Speaker 2>sometimes to coming at it from a female perspective, which

0:37:27.800 --> 0:37:28.320
<v Speaker 2>is helpful.

0:37:28.400 --> 0:37:31.880
<v Speaker 1>Huh, to say the very least. I bet you have

0:37:32.000 --> 0:37:33.879
<v Speaker 1>tons of other stories to tell us one.

0:37:34.640 --> 0:37:37.880
<v Speaker 2>This is a more personal story, but I think just

0:37:37.960 --> 0:37:42.840
<v Speaker 2>speaks to some of the obvious challenges of being a woman.

0:37:43.160 --> 0:37:47.640
<v Speaker 2>And this was simply early days of IDW. As I

0:37:47.640 --> 0:37:50.200
<v Speaker 2>said earlier, I did a lot of things within that

0:37:50.280 --> 0:37:54.160
<v Speaker 2>first year, including getting pregnant, and we were invited to

0:37:54.320 --> 0:38:01.080
<v Speaker 2>pitch for the business of what was one of the

0:38:01.120 --> 0:38:03.960
<v Speaker 2>most exciting hedge funds at the time. It was a

0:38:04.000 --> 0:38:06.960
<v Speaker 2>spin out from so this would have been two thousand

0:38:07.200 --> 0:38:11.320
<v Speaker 2>and four spin out from a well known prop group.

0:38:11.440 --> 0:38:13.040
<v Speaker 2>To my point on doing work for a lot of

0:38:13.040 --> 0:38:16.239
<v Speaker 2>the prop groups, they had a lot of capital, and

0:38:16.280 --> 0:38:18.239
<v Speaker 2>they were on fire and they were building, and the

0:38:18.280 --> 0:38:20.920
<v Speaker 2>founder invited me to come in. So here I am Barry.

0:38:21.080 --> 0:38:24.400
<v Speaker 2>I'm eight months pregnant, and I'm looking at myself in

0:38:24.480 --> 0:38:27.040
<v Speaker 2>the mirror thinking I wouldn't give myself this work. I mean,

0:38:27.080 --> 0:38:30.000
<v Speaker 2>I look like I'm about to pop. And that's not

0:38:30.120 --> 0:38:34.839
<v Speaker 2>a negative. It's just like again, competing priorities. Right, So

0:38:35.080 --> 0:38:37.400
<v Speaker 2>this is he has a business to build and I

0:38:37.440 --> 0:38:39.959
<v Speaker 2>have a small firm. So how is this going to work?

0:38:40.120 --> 0:38:44.000
<v Speaker 2>So I do what any good entrepreneurial eight month pregnant

0:38:44.040 --> 0:38:48.600
<v Speaker 2>person would do, which is swath myself in loose black clothing.

0:38:48.880 --> 0:38:52.120
<v Speaker 2>I absolutely still look pregnant. I mean, just to contextualize this,

0:38:52.239 --> 0:38:53.640
<v Speaker 2>you know, I'm a smaller person.

0:38:54.200 --> 0:38:58.400
<v Speaker 1>I'min five foot something. Yeah, right, you look like you

0:38:58.480 --> 0:38:59.279
<v Speaker 1>must have looked like.

0:38:59.320 --> 0:39:03.879
<v Speaker 2>The like Well, it was better for me in that

0:39:04.280 --> 0:39:09.120
<v Speaker 2>the weight was relatively evenly distributed. So I could I

0:39:09.160 --> 0:39:11.240
<v Speaker 2>gained seventy pounds when I was pregnant.

0:39:11.560 --> 0:39:14.560
<v Speaker 1>I could look like doubled double thank you.

0:39:14.600 --> 0:39:18.120
<v Speaker 2>But yeah, I could look like a very heavy snake

0:39:18.160 --> 0:39:20.960
<v Speaker 2>that swallowed a small goat. So that was the that

0:39:21.040 --> 0:39:23.160
<v Speaker 2>was what I was going for in this meeting. And

0:39:24.000 --> 0:39:26.160
<v Speaker 2>because I obviously he'd know I was pregnant. But if

0:39:26.200 --> 0:39:28.880
<v Speaker 2>I was like looking three months pregnant or four months,

0:39:28.920 --> 0:39:32.440
<v Speaker 2>that's a different story. Come in. We have a great meeting.

0:39:32.560 --> 0:39:36.240
<v Speaker 2>By the way, thank god for big conference room tables,

0:39:36.280 --> 0:39:38.640
<v Speaker 2>because I slid myself. I kind of leaned back in

0:39:38.640 --> 0:39:42.080
<v Speaker 2>the chair and slid under, so he couldn't really focus on,

0:39:42.440 --> 0:39:45.439
<v Speaker 2>you know, the fact that I really, you know, looked

0:39:45.480 --> 0:39:46.360
<v Speaker 2>like I was about to pop.

0:39:46.560 --> 0:39:47.640
<v Speaker 1>Then your water breaks.

0:39:47.960 --> 0:39:51.160
<v Speaker 2>No, No, not that almost that good though, almost that good.

0:39:51.560 --> 0:39:55.080
<v Speaker 2>Great meeting. He awards us everything, Ilana, like we're seeing

0:39:55.080 --> 0:39:57.600
<v Speaker 2>eye to eye. You understand the business. There's all the

0:39:57.640 --> 0:40:00.239
<v Speaker 2>stuff we need to build. Let's get to it. And

0:40:00.520 --> 0:40:03.040
<v Speaker 2>I think to myself, Okay, we can do this. We

0:40:03.080 --> 0:40:06.880
<v Speaker 2>have a month and IGW works smart and hard and fast.

0:40:06.960 --> 0:40:09.320
<v Speaker 2>A month for us as like five months for other people,

0:40:09.560 --> 0:40:12.080
<v Speaker 2>will be will be great. By the time I give birth,

0:40:12.400 --> 0:40:15.799
<v Speaker 2>we signed the engagement letter, I'm in the hospital with

0:40:15.960 --> 0:40:21.239
<v Speaker 2>an emergency C section. Within days, he is off to

0:40:21.280 --> 0:40:23.840
<v Speaker 2>the races, like with the minute the letter signed. He

0:40:23.880 --> 0:40:25.920
<v Speaker 2>wants to know who do we have ready for him

0:40:25.920 --> 0:40:29.080
<v Speaker 2>to meet? And I'm not I'm not returning the call

0:40:29.280 --> 0:40:33.239
<v Speaker 2>right because for obvious reasons. So two days later, I

0:40:33.320 --> 0:40:37.400
<v Speaker 2>call him. He's very gruff on the phone and I said, listen,

0:40:37.600 --> 0:40:40.719
<v Speaker 2>I'm sorry for not getting back to you sooner. I'm

0:40:40.880 --> 0:40:44.360
<v Speaker 2>uber responsive, but I think I have a good excuse.

0:40:44.880 --> 0:40:47.680
<v Speaker 2>I said, well, I'm calling you from the delivery room.

0:40:47.719 --> 0:40:53.480
<v Speaker 2>Delivery for what? And I said, I just had a baby,

0:40:54.239 --> 0:40:56.440
<v Speaker 2>and there is you could hear a pin drop on

0:40:56.440 --> 0:40:59.439
<v Speaker 2>this call silence, I mean, and this isn't a guy

0:40:59.520 --> 0:41:03.200
<v Speaker 2>who gets silenced easily. And I laughed and I said, listen,

0:41:03.520 --> 0:41:06.280
<v Speaker 2>this should give you comfort the fact that I'm calling

0:41:06.280 --> 0:41:08.279
<v Speaker 2>you from the delivery room. You know, we're going to

0:41:08.360 --> 0:41:10.680
<v Speaker 2>get this done for you. Okay, come hell or high water.

0:41:10.880 --> 0:41:15.560
<v Speaker 2>So he laughed, and on we went. But it's amazing, Yeah,

0:41:15.600 --> 0:41:18.320
<v Speaker 2>I mean, you know, we have our own special, unique

0:41:18.360 --> 0:41:21.359
<v Speaker 2>set of challenges, and that's an example of one.

0:41:21.480 --> 0:41:24.799
<v Speaker 1>Huh, really really interesting. So before we get to our

0:41:24.840 --> 0:41:27.680
<v Speaker 1>favorite questions, I just wanted to ask you a couple

0:41:27.760 --> 0:41:32.320
<v Speaker 1>of things about just the state of the industry today

0:41:32.360 --> 0:41:35.160
<v Speaker 1>and some of the changes we're going through. We're seeing

0:41:35.920 --> 0:41:39.600
<v Speaker 1>the older generation begin to retire. You have Ray Dalio

0:41:39.680 --> 0:41:43.920
<v Speaker 1>stepping down at Bridgewater. You have a lot of managers

0:41:43.920 --> 0:41:47.680
<v Speaker 1>who are now in their late sixties, early seventies or beyond.

0:41:49.400 --> 0:41:52.319
<v Speaker 1>Are we approaching a generational change over here?

0:41:52.960 --> 0:41:55.640
<v Speaker 2>We are? It's early though, right, we haven't seen that much.

0:41:55.680 --> 0:42:00.800
<v Speaker 2>Baton passing Bridgewater is one. Davidson Kemp would be another.

0:42:02.080 --> 0:42:06.040
<v Speaker 2>On a smaller scale, Redwood sculptor. That one hasn't gone

0:42:06.080 --> 0:42:09.120
<v Speaker 2>too well, right, There's been horrible, very a few.

0:42:09.040 --> 0:42:10.960
<v Speaker 1>Of them that have kind of unraveled.

0:42:11.080 --> 0:42:15.560
<v Speaker 2>So it's early yet. But the key thing is that

0:42:16.000 --> 0:42:19.360
<v Speaker 2>the LPs do not see the secret sauce as residing

0:42:19.360 --> 0:42:21.840
<v Speaker 2>in the head of one person. I think, for example,

0:42:22.000 --> 0:42:25.480
<v Speaker 2>multi managers are set up well for this transition because

0:42:25.719 --> 0:42:30.080
<v Speaker 2>by its very nature, you have multiple managers managing the capital,

0:42:30.120 --> 0:42:33.600
<v Speaker 2>it's not the founder or you have to create a

0:42:33.640 --> 0:42:38.360
<v Speaker 2>real partnership or investment committee in order to have the

0:42:38.400 --> 0:42:43.920
<v Speaker 2>decision making be more a result of everyone versus one person.

0:42:44.000 --> 0:42:49.040
<v Speaker 2>Elliott just created an investment committee in twenty twenty one,

0:42:49.880 --> 0:42:53.320
<v Speaker 2>I think, precisely to get things ready for succession planning.

0:42:53.920 --> 0:42:56.560
<v Speaker 1>So I don't want to suggest the top death style

0:42:56.800 --> 0:43:00.680
<v Speaker 1>of firms are immune to this sort of success issues,

0:43:01.120 --> 0:43:03.120
<v Speaker 1>or immune to a tough year in the market like

0:43:03.160 --> 0:43:06.280
<v Speaker 1>twenty twenty two or twenty twenty three. But it certainly

0:43:06.440 --> 0:43:11.799
<v Speaker 1>sounds like the firms that have become more professional, more institutionalized,

0:43:12.280 --> 0:43:15.759
<v Speaker 1>are better positioned to withstand these sort of transitions. Is

0:43:15.760 --> 0:43:16.399
<v Speaker 1>that fair? Fair?

0:43:16.560 --> 0:43:19.160
<v Speaker 2>It is fair? But when we talk about top doest style,

0:43:19.400 --> 0:43:21.640
<v Speaker 2>let's not forget a lot of the funds I mentioned

0:43:21.840 --> 0:43:24.520
<v Speaker 2>in the beginning were top desctile funds and they are

0:43:24.560 --> 0:43:28.520
<v Speaker 2>no longer. So things can unravel very quickly. You have

0:43:28.640 --> 0:43:31.680
<v Speaker 2>to be front footed. You have to be constantly thinking

0:43:31.719 --> 0:43:36.919
<v Speaker 2>about how you can improve your process even if things

0:43:36.960 --> 0:43:41.000
<v Speaker 2>are going well, whether you're built for a different market

0:43:41.120 --> 0:43:45.000
<v Speaker 2>environment and to be able to withstand the challenges that

0:43:45.040 --> 0:43:47.680
<v Speaker 2>are going to be the result.

0:43:47.440 --> 0:43:52.719
<v Speaker 1>Of that really intriguing. So let's talk about this competition

0:43:52.840 --> 0:43:55.719
<v Speaker 1>out there for some of the best fund managers. How

0:43:55.760 --> 0:43:58.240
<v Speaker 1>aggressive is the fight for talent?

0:43:58.960 --> 0:44:00.600
<v Speaker 2>I would call it a feed frenzy.

0:44:01.120 --> 0:44:06.080
<v Speaker 1>Really, that's quite a phrase in terms of what people

0:44:06.160 --> 0:44:09.080
<v Speaker 1>are paying or just the hunger for that sort of talent.

0:44:09.640 --> 0:44:10.719
<v Speaker 1>Why are feeding from? Well?

0:44:10.760 --> 0:44:13.520
<v Speaker 2>I think I need to step back and explain where

0:44:13.520 --> 0:44:16.719
<v Speaker 2>we are today is an industry, Okay, So bear with

0:44:16.760 --> 0:44:19.399
<v Speaker 2>me as I set the stage, okay, and then we'll

0:44:19.400 --> 0:44:22.839
<v Speaker 2>talk about the action going on on this stage, so

0:44:23.880 --> 0:44:27.000
<v Speaker 2>more so today than ever before. We have the haves

0:44:27.239 --> 0:44:30.880
<v Speaker 2>and the have nots. There has never been a clearer

0:44:31.239 --> 0:44:36.919
<v Speaker 2>bifurcation between the two. In the have not category, we've

0:44:36.960 --> 0:44:41.720
<v Speaker 2>got the long short equity funds that are directional and concentrated,

0:44:42.520 --> 0:44:47.239
<v Speaker 2>which have had horrific performance. I'm not exaggerating. Tell us,

0:44:48.000 --> 0:44:48.719
<v Speaker 2>I'm gonna go there.

0:44:50.360 --> 0:44:52.359
<v Speaker 1>This is what I love about Alana. She does not

0:44:52.520 --> 0:44:53.160
<v Speaker 1>hold back.

0:44:53.320 --> 0:44:55.360
<v Speaker 2>I don't hold back. I am a truth teller.

0:44:55.560 --> 0:44:58.920
<v Speaker 1>Like it or not so long short, not well, But let's.

0:44:58.719 --> 0:45:01.040
<v Speaker 2>Talk about it because I'm not sure people really know.

0:45:01.320 --> 0:45:04.000
<v Speaker 1>If you that's a lot of funds, right.

0:45:04.080 --> 0:45:07.600
<v Speaker 2>And it's probably forty something percent of the almost fun industry.

0:45:07.920 --> 0:45:10.800
<v Speaker 2>Let me give you another statistic since you're asking about numbers.

0:45:11.000 --> 0:45:13.920
<v Speaker 2>The Financial Times did an article at the beginning of

0:45:13.960 --> 0:45:17.520
<v Speaker 2>this year and it talked about aggregate losses for twenty

0:45:18.120 --> 0:45:21.160
<v Speaker 2>twenty two in the industry. It was north of two

0:45:21.239 --> 0:45:22.520
<v Speaker 2>hundred billion of losses.

0:45:22.640 --> 0:45:24.360
<v Speaker 1>That's some real money the.

0:45:24.239 --> 0:45:28.880
<v Speaker 2>Tiger cub community, which is a relatively small number of

0:45:28.920 --> 0:45:32.160
<v Speaker 2>funds relative to all the burger kings of McDonald's out there.

0:45:32.200 --> 0:45:34.560
<v Speaker 2>As we said earlier, there are tens of thousands of

0:45:34.560 --> 0:45:38.320
<v Speaker 2>hedge funds. Do you know what percent just those funds

0:45:38.560 --> 0:45:41.920
<v Speaker 2>those descended from Tiger management, small group of funds, do

0:45:41.960 --> 0:45:44.160
<v Speaker 2>you know what percent they were of that total?

0:45:44.239 --> 0:45:45.520
<v Speaker 1>I would guess half of that total.

0:45:45.560 --> 0:45:47.319
<v Speaker 2>No, I mean that you can't say half. It was

0:45:47.400 --> 0:45:51.279
<v Speaker 2>twenty five percent a quarter more than twenty five percent, But.

0:45:51.239 --> 0:45:54.160
<v Speaker 1>That doesn't like a dozen funds that's well.

0:45:53.840 --> 0:45:55.799
<v Speaker 2>You know, maybe a little more. But that doesn't even

0:45:55.800 --> 0:45:59.799
<v Speaker 2>include funds like other notable funds that are huge and

0:45:59.840 --> 0:46:03.520
<v Speaker 2>have had huge draw downs like al Keon which is

0:46:03.520 --> 0:46:06.480
<v Speaker 2>a thirty billion dollar fund pre its losses, or Whale

0:46:06.560 --> 0:46:09.560
<v Speaker 2>Rock which was thirteen billion, or Red Mile ten billion.

0:46:09.600 --> 0:46:12.719
<v Speaker 2>I mean, when you think about all of the directional

0:46:12.760 --> 0:46:16.400
<v Speaker 2>long short equity managers, it's an enormous list. Tiger community

0:46:16.480 --> 0:46:18.960
<v Speaker 2>is only, as you know, small ish percent of that.

0:46:19.560 --> 0:46:22.399
<v Speaker 2>What we did is look at I had my team

0:46:22.440 --> 0:46:25.719
<v Speaker 2>pull any fund that was a billion or greater, which

0:46:25.760 --> 0:46:28.600
<v Speaker 2>is again no small fee to get to that level

0:46:28.600 --> 0:46:31.120
<v Speaker 2>of AUM. So these are the material players, most of

0:46:31.160 --> 0:46:34.680
<v Speaker 2>whom are many multiples of that, and we looked at

0:46:34.920 --> 0:46:40.520
<v Speaker 2>their performance over twenty one and twenty two on average bary,

0:46:40.600 --> 0:46:43.920
<v Speaker 2>these funds are down thirty to forty percent. With funds

0:46:43.960 --> 0:46:47.480
<v Speaker 2>like Tiger Global down as high as sixty percent. Tiger

0:46:47.520 --> 0:46:50.200
<v Speaker 2>Global was one hundred billion pre the losses. There was

0:46:50.239 --> 0:46:52.080
<v Speaker 2>an article that came out the other day. They're now

0:46:52.120 --> 0:46:53.399
<v Speaker 2>fifty one billion.

0:46:53.400 --> 0:46:55.400
<v Speaker 1>So fo half wow, cut in half.

0:46:55.520 --> 0:46:59.240
<v Speaker 2>So that's how much value has come out of the industry.

0:46:59.840 --> 0:47:02.640
<v Speaker 2>And what that means is you have a huge high

0:47:02.719 --> 0:47:06.280
<v Speaker 2>watermark to get out of, you have no performance fee

0:47:06.320 --> 0:47:08.960
<v Speaker 2>and no line of sight to getting to one anytime soon,

0:47:09.040 --> 0:47:11.719
<v Speaker 2>and you have aum shrinking by virtue of the losses

0:47:12.600 --> 0:47:15.880
<v Speaker 2>as well as the fact that LPs are now rightly redeeming.

0:47:16.520 --> 0:47:19.640
<v Speaker 2>That's just long short equity. Then we've got Macro right

0:47:19.680 --> 0:47:21.799
<v Speaker 2>which last year had a good year, but I feel

0:47:21.800 --> 0:47:24.080
<v Speaker 2>like macro is very spiky. You have a good year,

0:47:24.160 --> 0:47:26.920
<v Speaker 2>you have a bad year. So you've got lots of

0:47:27.160 --> 0:47:30.600
<v Speaker 2>choppiness in the macro world. And then you've got the

0:47:30.640 --> 0:47:33.200
<v Speaker 2>other side of the ledger, so lots of funds that

0:47:33.239 --> 0:47:35.600
<v Speaker 2>are having a really tough time of it. Huge percent

0:47:35.640 --> 0:47:37.160
<v Speaker 2>of the hedge fund world, and the other side of

0:47:37.160 --> 0:47:40.680
<v Speaker 2>the ledger are the multi managers. We looked at their performance,

0:47:40.719 --> 0:47:44.080
<v Speaker 2>the top multi managers over the last three years, and

0:47:44.120 --> 0:47:47.640
<v Speaker 2>you know what that is. Barry the cumulative performance there

0:47:48.080 --> 0:47:50.880
<v Speaker 2>is if your multi manager is at the low end

0:47:51.160 --> 0:47:54.520
<v Speaker 2>thirty five percent, Wow. At the high end north of

0:47:54.600 --> 0:47:57.719
<v Speaker 2>eighty eight percent, that's sit at al leading the pack.

0:47:58.040 --> 0:47:58.320
<v Speaker 1>Wow.

0:47:58.320 --> 0:48:00.640
<v Speaker 2>But any of them you're going to have done better

0:48:00.640 --> 0:48:03.440
<v Speaker 2>with than the whole cabal of funds I just mentioned.

0:48:03.880 --> 0:48:07.440
<v Speaker 2>And then you also have top multi strategy funds like

0:48:07.480 --> 0:48:10.800
<v Speaker 2>Golden Tree. There's a reason Steve Tannebaum's fund was thirty

0:48:10.840 --> 0:48:13.880
<v Speaker 2>four billion and twenty twenty it's now almost fifty billion.

0:48:14.239 --> 0:48:18.200
<v Speaker 2>He's put up great consistent returns and he's been very

0:48:18.280 --> 0:48:21.320
<v Speaker 2>commercial as to how he's grown the fund. So you

0:48:21.320 --> 0:48:24.279
<v Speaker 2>would think to yourself, doesn't talent therefore in all the

0:48:24.320 --> 0:48:28.520
<v Speaker 2>have nots want to go to the halves? And the

0:48:28.640 --> 0:48:33.359
<v Speaker 2>short answer is yeah, although it's more nuanced than that,

0:48:33.480 --> 0:48:36.240
<v Speaker 2>because people will get into it. I'm sure at some point.

0:48:36.239 --> 0:48:38.800
<v Speaker 2>They're all sorts of things that factor into why someone

0:48:39.400 --> 0:48:41.719
<v Speaker 2>may not be so quick to leave, even in an

0:48:42.239 --> 0:48:47.480
<v Speaker 2>obviously broken situation. But at least more people are coming

0:48:47.520 --> 0:48:51.719
<v Speaker 2>to the table voluntarily than ever before. But the difference is,

0:48:52.520 --> 0:48:55.719
<v Speaker 2>and the reason I call it a feeding frenzy, it's

0:48:55.800 --> 0:48:59.120
<v Speaker 2>not so much now we're getting somebody who is in

0:48:59.239 --> 0:49:01.960
<v Speaker 2>what they feel to be a winning situation to think

0:49:02.040 --> 0:49:06.640
<v Speaker 2>more broadly about their next opportunity, which is that's hard, right.

0:49:06.719 --> 0:49:09.839
<v Speaker 2>They feel very happy, they feel they're treated well, and

0:49:09.880 --> 0:49:13.840
<v Speaker 2>we have to architect something and a pathway that doesn't

0:49:13.840 --> 0:49:16.319
<v Speaker 2>exist where they're at, and maybe they'll engage in a

0:49:16.400 --> 0:49:19.920
<v Speaker 2>conversation to explore that further and eventually maybe they'll make

0:49:19.960 --> 0:49:23.520
<v Speaker 2>a move. Now people are meeting with us, and there's

0:49:23.560 --> 0:49:26.719
<v Speaker 2>a woman we met with recently who called herself and

0:49:26.760 --> 0:49:28.960
<v Speaker 2>we've been dining out on this phrase ever since, multi

0:49:29.040 --> 0:49:29.960
<v Speaker 2>manager curious.

0:49:31.000 --> 0:49:31.880
<v Speaker 1>That's very funny.

0:49:31.960 --> 0:49:34.759
<v Speaker 2>Yeah, I want so she's having. They want to have

0:49:34.800 --> 0:49:38.600
<v Speaker 2>conversations with everyone, and that makes it much more intense.

0:49:38.640 --> 0:49:43.080
<v Speaker 2>It's not just one conversation, it's like seven conversations, and

0:49:43.080 --> 0:49:45.640
<v Speaker 2>they really are relying on us to help guide them

0:49:46.080 --> 0:49:48.080
<v Speaker 2>through that and figure out what the best fit is.

0:49:48.560 --> 0:49:51.880
<v Speaker 2>Another dynamic barrier that's important to keep in mind is

0:49:51.960 --> 0:49:55.520
<v Speaker 2>because these are the has, they have grown, in some

0:49:55.800 --> 0:50:00.759
<v Speaker 2>cases at a rate which is not sustainable. Some of

0:50:00.760 --> 0:50:04.239
<v Speaker 2>these multi managers are two in three x what they

0:50:04.239 --> 0:50:08.040
<v Speaker 2>were even a few years ago. LMAR in twenty twenty

0:50:08.160 --> 0:50:12.160
<v Speaker 2>was four point six billion, Now it's eleven billion. Hudson

0:50:12.239 --> 0:50:14.480
<v Speaker 2>Bay was five and a half billion, then now it's

0:50:14.520 --> 0:50:15.560
<v Speaker 2>almost twenty billion.

0:50:15.600 --> 0:50:16.680
<v Speaker 1>Wow, that's four x.

0:50:16.920 --> 0:50:19.439
<v Speaker 2>Yes. So the reality is, and it's in a very

0:50:19.480 --> 0:50:23.040
<v Speaker 2>short period of time. Talent doesn't proliferate at that level.

0:50:23.080 --> 0:50:26.520
<v Speaker 2>So when we talk about feeding frenzy, there's also a

0:50:26.640 --> 0:50:30.680
<v Speaker 2>question as to how these funds are going to perform

0:50:30.840 --> 0:50:34.400
<v Speaker 2>if they're not being disciplined about the amount of the

0:50:34.440 --> 0:50:40.080
<v Speaker 2>capital they are taking in to meet being able to

0:50:40.440 --> 0:50:43.440
<v Speaker 2>hire good people to deploy it. You look at a

0:50:43.440 --> 0:50:47.839
<v Speaker 2>firm like Citadel, which is closed to new investors, they

0:50:47.840 --> 0:50:51.320
<v Speaker 2>could be multiples of what they are, and the best

0:50:51.400 --> 0:50:55.799
<v Speaker 2>funds are super disciplined about how they've grown. Ballyasni lost

0:50:55.840 --> 0:50:58.839
<v Speaker 2>a lot of capital in twenty eighteen, it got down

0:50:58.880 --> 0:51:02.560
<v Speaker 2>to six billion. It took five years to get back

0:51:02.640 --> 0:51:05.600
<v Speaker 2>up to peak aum, which is twenty billion now. But

0:51:05.680 --> 0:51:08.399
<v Speaker 2>they were really disciplined about how they did it. They

0:51:08.400 --> 0:51:11.480
<v Speaker 2>didn't just boom, you know, double and triple within a

0:51:11.480 --> 0:51:15.400
<v Speaker 2>few years. They built their infrastructure, risk management and hired

0:51:15.440 --> 0:51:20.319
<v Speaker 2>great pms to lead these businesses. And that it's so

0:51:20.480 --> 0:51:26.200
<v Speaker 2>important because you can have you'll dilute returns without getting

0:51:26.680 --> 0:51:31.280
<v Speaker 2>the talent piece right in keeping pace to AUM growth.

0:51:31.360 --> 0:51:34.760
<v Speaker 1>Huh, that's really interesting. So we're going to talk more

0:51:34.920 --> 0:51:37.399
<v Speaker 1>about talent and a bit, but I want to go

0:51:37.520 --> 0:51:40.280
<v Speaker 1>back to some of the things you raised. That's really

0:51:40.320 --> 0:51:44.520
<v Speaker 1>quite fascinating. So it's obvious if you're making a directional bet,

0:51:44.680 --> 0:51:48.400
<v Speaker 1>or even worse, a leverage directional bet and you're wrong,

0:51:48.960 --> 0:51:51.920
<v Speaker 1>your fund's going to suffer. But I'm kind of intrigued

0:51:52.200 --> 0:51:55.160
<v Speaker 1>by what you said about Macro. I know there's a

0:51:55.200 --> 0:51:59.080
<v Speaker 1>wide dispersion of performance in Macro, but if any year

0:51:59.360 --> 0:52:03.440
<v Speaker 1>Macro should done well, it was twenty twenty two, where

0:52:03.800 --> 0:52:06.160
<v Speaker 1>if you had the inflation side right, if you.

0:52:06.120 --> 0:52:08.120
<v Speaker 2>Had that, they did They did well in twenty two.

0:52:08.800 --> 0:52:11.160
<v Speaker 2>I think the point the point I was making is

0:52:11.600 --> 0:52:14.759
<v Speaker 2>it's been choppy in that it's like twenty two was good,

0:52:14.840 --> 0:52:17.120
<v Speaker 2>but then look at twenty one and look at twenty three.

0:52:17.280 --> 0:52:19.600
<v Speaker 1>So as that's what you mean by spikey, is that's

0:52:19.600 --> 0:52:20.840
<v Speaker 1>what I mean by spikey.

0:52:21.080 --> 0:52:23.400
<v Speaker 2>I mean an AUM, by the way, has followed that.

0:52:23.600 --> 0:52:26.640
<v Speaker 2>Revan Howard at peak was forty billion, then it drops

0:52:26.680 --> 0:52:29.359
<v Speaker 2>down to six and change in twenty eighteen, and now

0:52:29.400 --> 0:52:32.320
<v Speaker 2>it's back up again. But that's what I mean by spikey.

0:52:32.360 --> 0:52:36.320
<v Speaker 2>As opposed to an entity, whether it's a top multi

0:52:36.360 --> 0:52:39.359
<v Speaker 2>manager or a top multi strat that is able to

0:52:39.560 --> 0:52:43.640
<v Speaker 2>navigate different markets, put up consistent return stream over time,

0:52:43.760 --> 0:52:46.919
<v Speaker 2>and for the multi managers do it totally uncorrelated. That's

0:52:46.960 --> 0:52:47.359
<v Speaker 2>all out.

0:52:47.480 --> 0:52:49.840
<v Speaker 1>So that's where I was going to go. Multi multi

0:52:49.840 --> 0:52:54.480
<v Speaker 1>strategy seems to be a very attractive atro manager.

0:52:54.520 --> 0:52:55.360
<v Speaker 2>You mean multiman no.

0:52:55.480 --> 0:52:59.239
<v Speaker 1>Multi strategy, because if you're a single strategy and it's

0:52:59.320 --> 0:53:01.600
<v Speaker 1>an either a bad part of the cycle or you

0:53:01.719 --> 0:53:05.160
<v Speaker 1>just make the bet wrong. So leverage directional.

0:53:04.840 --> 0:53:09.200
<v Speaker 2>Or mar you have your hands in many different pots and.

0:53:09.520 --> 0:53:11.760
<v Speaker 1>Something should be working, and even if it's not working,

0:53:11.800 --> 0:53:16.080
<v Speaker 1>is non correlated exactly. So is it safe to say

0:53:16.120 --> 0:53:19.719
<v Speaker 1>that the top performing funds, the ones that have the

0:53:19.760 --> 0:53:23.400
<v Speaker 1>best track record of attracting talent, are going to be

0:53:23.400 --> 0:53:26.799
<v Speaker 1>the multi strat multi managers or or what is the

0:53:26.840 --> 0:53:27.640
<v Speaker 1>distinction there?

0:53:28.160 --> 0:53:31.120
<v Speaker 2>There's there's transition risk no matter what you do.

0:53:31.280 --> 0:53:34.040
<v Speaker 1>Meaning somebody just jumping from one fund to another may

0:53:34.080 --> 0:53:35.840
<v Speaker 1>not carry their performance with them.

0:53:36.360 --> 0:53:38.360
<v Speaker 2>Right and they have to learn new skills. And the

0:53:38.440 --> 0:53:44.479
<v Speaker 2>reality is people typically don't leave something. They don't leave

0:53:44.520 --> 0:53:46.799
<v Speaker 2>to go to do something similar. They leave to go

0:53:46.920 --> 0:53:50.080
<v Speaker 2>do something which is a market step up from where they.

0:53:50.000 --> 0:53:52.719
<v Speaker 1>Are in terms of size, or in terms of strategy,

0:53:52.800 --> 0:53:53.960
<v Speaker 1>or many things.

0:53:53.800 --> 0:53:57.239
<v Speaker 2>In terms of many things, in terms of autonomy, in

0:53:57.360 --> 0:54:00.760
<v Speaker 2>terms of size, in terms of wingspan, also sorts of things.

0:54:01.160 --> 0:54:04.880
<v Speaker 2>What I was referring to is the gap that exists

0:54:05.600 --> 0:54:08.080
<v Speaker 2>at the single strategy funds, where at the end of

0:54:08.120 --> 0:54:11.160
<v Speaker 2>the day, the ultimate arbiter of what happens at the

0:54:11.160 --> 0:54:15.239
<v Speaker 2>fund is the founder. So it is attractive to go

0:54:15.400 --> 0:54:18.719
<v Speaker 2>somewhere where you will where you will now be given

0:54:18.760 --> 0:54:22.239
<v Speaker 2>the ability to manage a portfolio and make decisions, or

0:54:22.280 --> 0:54:24.160
<v Speaker 2>at least be on a path to learn how to

0:54:24.239 --> 0:54:30.200
<v Speaker 2>do that, And so there's greater receptivity to making that

0:54:30.280 --> 0:54:34.560
<v Speaker 2>transition and taking on that transitional risk today because the

0:54:34.560 --> 0:54:37.680
<v Speaker 2>paradigm these people sit in is no longer working. These

0:54:37.719 --> 0:54:42.160
<v Speaker 2>funds are large, are underwater in a very extreme way.

0:54:42.239 --> 0:54:46.160
<v Speaker 1>So let's extrapolate this and talk bigger picture. What I'm

0:54:46.200 --> 0:54:52.879
<v Speaker 1>hearing from you is a specific single strategy founder led

0:54:52.960 --> 0:54:58.840
<v Speaker 1>fund entails different risks for star performers. Then does a

0:54:58.960 --> 0:55:03.440
<v Speaker 1>more institutionalized professional multi strategy fund that has the ability

0:55:03.480 --> 0:55:06.400
<v Speaker 1>to ride out ups and downs. It's not whether or

0:55:06.440 --> 0:55:10.040
<v Speaker 1>not their style is in favor of that moment, they're

0:55:10.080 --> 0:55:15.080
<v Speaker 1>approaching investing from a much more I know, holistic is

0:55:15.120 --> 0:55:18.800
<v Speaker 1>almost a dirty word, but a much more holistic approach

0:55:19.400 --> 0:55:22.560
<v Speaker 1>by making sure that they're checking more boxes off.

0:55:23.000 --> 0:55:25.600
<v Speaker 2>Let's say it like this, I think that a lot

0:55:25.640 --> 0:55:29.720
<v Speaker 2>of individuals sitting at these I'll use long short equities

0:55:29.719 --> 0:55:34.800
<v Speaker 2>as the example. Okay, single manager concentrated long short equity funds.

0:55:35.080 --> 0:55:39.480
<v Speaker 2>Those funds might have done well up until twenty twenty one,

0:55:40.200 --> 0:55:43.879
<v Speaker 2>not because their process was so good, but they were

0:55:43.880 --> 0:55:47.800
<v Speaker 2>the beneficiary of an upmarket, and you could just belong

0:55:48.600 --> 0:55:50.759
<v Speaker 2>and do fine, and you didn't have to develop a

0:55:50.760 --> 0:55:53.480
<v Speaker 2>shorting skill set. You didn't have to develop the ability

0:55:53.560 --> 0:55:57.520
<v Speaker 2>to balance factors. You could just be long growth stocks

0:55:58.120 --> 0:56:02.560
<v Speaker 2>and you base could just sort of do fine with

0:56:02.719 --> 0:56:07.760
<v Speaker 2>very lazy risk management. So in order to transition successfully

0:56:07.880 --> 0:56:10.840
<v Speaker 2>to a multi manager, which is far more disciplined in

0:56:10.920 --> 0:56:14.640
<v Speaker 2>its approach to risk, you need to now learn a

0:56:14.680 --> 0:56:17.719
<v Speaker 2>whole other set of skills which will enable you and

0:56:17.760 --> 0:56:22.160
<v Speaker 2>that should be attractive to generate consistent returns over time.

0:56:22.600 --> 0:56:24.759
<v Speaker 2>But these are not skills that you would have. These

0:56:24.760 --> 0:56:27.560
<v Speaker 2>are not muscles you would have developed up to this point.

0:56:27.680 --> 0:56:32.320
<v Speaker 2>So there is risk both sides in somebody making that transition.

0:56:32.560 --> 0:56:36.399
<v Speaker 1>So there's a risk for staying in a fund that

0:56:37.160 --> 0:56:42.000
<v Speaker 1>is singularly focused and perhaps had the wind that they're

0:56:42.040 --> 0:56:45.399
<v Speaker 1>back for the past decade and got lucky as well

0:56:45.400 --> 0:56:46.759
<v Speaker 1>as the risk in transitioning.

0:56:46.880 --> 0:56:48.839
<v Speaker 2>Is that a fair to say one hundred percent?

0:56:49.520 --> 0:56:53.640
<v Speaker 1>Really quite interesting? So let's talk a little bit about

0:56:53.760 --> 0:56:58.360
<v Speaker 1>the hunt for talent. You mentioned superstars before. How do

0:56:58.400 --> 0:57:00.399
<v Speaker 1>you identify a rising star?

0:57:01.040 --> 0:57:06.520
<v Speaker 2>Table stakes, good intellectual horsepower, work, ethic, training, and a

0:57:06.600 --> 0:57:10.960
<v Speaker 2>history of results. But I would call those things necessary

0:57:11.200 --> 0:57:14.080
<v Speaker 2>but not sufficient, because as we've just talked about, there

0:57:14.080 --> 0:57:16.200
<v Speaker 2>are a whole bunch of funds that may have had

0:57:16.240 --> 0:57:18.960
<v Speaker 2>good outcomes over a period of time, but didn't have

0:57:19.040 --> 0:57:23.280
<v Speaker 2>great process. So the other things we're really looking for

0:57:23.480 --> 0:57:29.560
<v Speaker 2>under the hood are insatiable curiosity, self awareness, a growth

0:57:29.680 --> 0:57:34.400
<v Speaker 2>mindset coupled with an intense desire to improve and learn,

0:57:34.760 --> 0:57:37.360
<v Speaker 2>and passion. And I'll give you a quick story that

0:57:37.440 --> 0:57:40.120
<v Speaker 2>I think encapsulates all of that. Real time. We just

0:57:40.200 --> 0:57:42.400
<v Speaker 2>took this guy out. He hasn't even yet started at

0:57:42.400 --> 0:57:46.640
<v Speaker 2>his new gig. So there's a person that, like I

0:57:46.640 --> 0:57:48.840
<v Speaker 2>said earlier, we are in dialogue with people for a

0:57:48.840 --> 0:57:51.320
<v Speaker 2>long time. We've been talking to him for the better

0:57:51.360 --> 0:57:56.200
<v Speaker 2>part of his ten years of investing. Well to put

0:57:56.200 --> 0:58:01.080
<v Speaker 2>a fine point on his successes, his early success, he

0:58:02.160 --> 0:58:05.240
<v Speaker 2>was made a PM. They call it something else where

0:58:05.240 --> 0:58:08.120
<v Speaker 2>he was, but basically the same thing. He was made

0:58:08.120 --> 0:58:11.880
<v Speaker 2>a PM after four years, four years of investing experience.

0:58:11.880 --> 0:58:17.280
<v Speaker 2>He was made a pmy early super early never invested before.

0:58:17.440 --> 0:58:19.920
<v Speaker 2>So after four years they gave him capital. He was

0:58:20.000 --> 0:58:24.680
<v Speaker 2>running a couple billion of gmvow complete autonomy and a

0:58:24.720 --> 0:58:26.960
<v Speaker 2>clear payout. So of course he didn't want to leave.

0:58:27.120 --> 0:58:31.120
<v Speaker 2>Like again, the differences. There has to be something structurally

0:58:31.160 --> 0:58:34.120
<v Speaker 2>inefficient in not working and broken to leave, so just

0:58:34.120 --> 0:58:36.920
<v Speaker 2>to give that up to go someplace else, we're on

0:58:36.960 --> 0:58:41.080
<v Speaker 2>the margin, some things would be better. Wasn't enough, and

0:58:41.120 --> 0:58:45.240
<v Speaker 2>we can explain why those differences are not marginal. But

0:58:45.280 --> 0:58:46.720
<v Speaker 2>at the end of the day, he had a pretty

0:58:46.720 --> 0:58:48.920
<v Speaker 2>good gig and was staying put. At the end of

0:58:48.920 --> 0:58:51.240
<v Speaker 2>twenty twenty two, he asked for a meeting. Oh and

0:58:51.280 --> 0:58:53.680
<v Speaker 2>I'll give you another he asked for me. Well, we

0:58:53.760 --> 0:58:55.880
<v Speaker 2>keep in touch, but it was now something like, now's

0:58:55.880 --> 0:58:56.760
<v Speaker 2>the time first.

0:58:56.680 --> 0:58:58.920
<v Speaker 1>You've gotten into his head enough that he's starting to

0:58:58.920 --> 0:58:59.680
<v Speaker 1>see cracks.

0:59:00.080 --> 0:59:03.840
<v Speaker 2>Well, something specific, specific happening. So four full years as

0:59:03.840 --> 0:59:07.280
<v Speaker 2>an investment professional becomes a PM. In his second full

0:59:07.320 --> 0:59:09.640
<v Speaker 2>year as a PM, he's paid seven million bucks. So

0:59:09.680 --> 0:59:13.240
<v Speaker 2>this is not too shabby. Guy's doing great. At the

0:59:13.320 --> 0:59:16.680
<v Speaker 2>end of twenty twenty two, he asks for a meeting.

0:59:17.280 --> 0:59:20.000
<v Speaker 2>We sit down and he says, I had a really

0:59:20.040 --> 0:59:22.480
<v Speaker 2>bad year, which a lot of people did in twenty two.

0:59:22.520 --> 0:59:24.919
<v Speaker 2>This is not unusual. We just talked about it, and

0:59:25.200 --> 0:59:28.160
<v Speaker 2>I said, are you under pressure? Is what's your relationship

0:59:28.240 --> 0:59:30.440
<v Speaker 2>like now with the founder? He said, there's no issue

0:59:30.440 --> 0:59:34.120
<v Speaker 2>whatsoever like we you know, no issue because a lot

0:59:34.160 --> 0:59:37.840
<v Speaker 2>of those losses came precisely or the reason for those

0:59:37.880 --> 0:59:41.200
<v Speaker 2>losses came because the founder likes us, which I knew

0:59:41.960 --> 0:59:45.919
<v Speaker 2>to be concentrated and put a lot of capital where

0:59:45.960 --> 0:59:49.920
<v Speaker 2>we where we have high conviction. So when I step

0:59:50.000 --> 0:59:52.800
<v Speaker 2>back and look at my losses for the year, they

0:59:52.800 --> 0:59:56.200
<v Speaker 2>were one hundred percent in one name. And then I

0:59:56.240 --> 0:59:59.840
<v Speaker 2>went back and looked at my history of returns and

1:00:00.040 --> 1:00:03.520
<v Speaker 2>what I found is my hit rate is exceptionally high.

1:00:03.600 --> 1:00:05.640
<v Speaker 2>I have a really high batting average, which is you

1:00:05.680 --> 1:00:08.440
<v Speaker 2>know about it, Barry, is very unusual in this industry.

1:00:09.120 --> 1:00:12.160
<v Speaker 2>So I said to him, Aha, So if you're going

1:00:12.240 --> 1:00:16.000
<v Speaker 2>to win more than lose. Why put all your eggs

1:00:16.040 --> 1:00:19.200
<v Speaker 2>in just a few baskets, you know, because the reality

1:00:19.320 --> 1:00:20.960
<v Speaker 2>is it's just not worth the risk.

1:00:20.800 --> 1:00:22.440
<v Speaker 1>Right, But that's the structure of the founder.

1:00:22.560 --> 1:00:26.720
<v Speaker 2>But that's the structure the founder wants. So what he realized,

1:00:26.800 --> 1:00:30.400
<v Speaker 2>and especially in this new market paradigm that we're in

1:00:30.840 --> 1:00:33.480
<v Speaker 2>where things are not just going in one direction and

1:00:33.520 --> 1:00:35.800
<v Speaker 2>it's much more difficult to call things and there is

1:00:35.800 --> 1:00:40.600
<v Speaker 2>a lot more market risk entering into the equation of

1:00:40.640 --> 1:00:43.600
<v Speaker 2>why things perform in the way that they do, he

1:00:43.680 --> 1:00:47.600
<v Speaker 2>realized he wants to run more diversified and he wants

1:00:47.640 --> 1:00:49.760
<v Speaker 2>to be somewhere that will teach him how to do

1:00:49.840 --> 1:00:52.479
<v Speaker 2>that better and give him the resources to be able

1:00:52.520 --> 1:00:53.760
<v Speaker 2>to do it. Because if you're going to have a

1:00:53.800 --> 1:00:55.680
<v Speaker 2>lot more names in your book, you also need a

1:00:55.680 --> 1:00:58.560
<v Speaker 2>bigger team. And what I love about this story is

1:00:58.600 --> 1:01:01.320
<v Speaker 2>it shows someone who refused to rest on his laurels.

1:01:02.120 --> 1:01:06.160
<v Speaker 1>He very self aware exactly.

1:01:05.720 --> 1:01:08.360
<v Speaker 2>He stepped back and figured out what he's best at

1:01:08.840 --> 1:01:12.439
<v Speaker 2>where he's stagnating, and put himself on a path to grow.

1:01:13.000 --> 1:01:17.240
<v Speaker 2>I kind of almost think that this is a metaphor

1:01:17.320 --> 1:01:20.800
<v Speaker 2>for the hedge fund industry, writ large. They just there

1:01:20.800 --> 1:01:24.000
<v Speaker 2>are so many funds that don't take that step back

1:01:24.040 --> 1:01:27.520
<v Speaker 2>and think about what they need to do to improve themselves.

1:01:28.000 --> 1:01:31.160
<v Speaker 2>They just kind of it's you know, like I said earlier,

1:01:31.240 --> 1:01:34.160
<v Speaker 2>it's a it's an up market. What we're doing is working,

1:01:34.320 --> 1:01:38.160
<v Speaker 2>So why rock the boat? Or I won't name the fund,

1:01:38.440 --> 1:01:40.440
<v Speaker 2>but you may guess who it is. There was a

1:01:40.440 --> 1:01:45.600
<v Speaker 2>founder who shut down who in large part think his

1:01:45.840 --> 1:01:50.600
<v Speaker 2>approach to risk management wasn't that different at thirty billion

1:01:50.640 --> 1:01:53.080
<v Speaker 2>of GMV from what it was at two billion. He

1:01:53.320 --> 1:01:56.920
<v Speaker 2>just didn't didn't scale, didn't adjust to the scale, and

1:01:57.000 --> 1:02:01.320
<v Speaker 2>didn't develop the tools necessary to see correlations in the

1:02:01.360 --> 1:02:02.800
<v Speaker 2>book that might not have been obvious.

1:02:02.960 --> 1:02:06.800
<v Speaker 1>So let me circle back to the manager you're just

1:02:06.840 --> 1:02:10.880
<v Speaker 1>referring to, who had that high degree of self awareness.

1:02:11.400 --> 1:02:16.600
<v Speaker 1>Generally speaking, how rare are stars like that or superstars

1:02:16.640 --> 1:02:19.640
<v Speaker 1>like that? It seems this guy checked all the boxes

1:02:19.720 --> 1:02:23.040
<v Speaker 1>and even in an off year, seemed to be trending

1:02:23.080 --> 1:02:24.000
<v Speaker 1>in the right direction.

1:02:23.960 --> 1:02:26.120
<v Speaker 2>Where he had no pressure from the founder. This wasn't

1:02:26.160 --> 1:02:29.640
<v Speaker 2>like he felt that he was on shaky ground, far

1:02:29.680 --> 1:02:33.280
<v Speaker 2>from very rare. I would say it's a handful of

1:02:33.320 --> 1:02:35.760
<v Speaker 2>times a year that I would call someone a superstar.

1:02:36.680 --> 1:02:40.360
<v Speaker 2>It's everything I just described, but it's also the muscle

1:02:40.440 --> 1:02:43.240
<v Speaker 2>memory of having done this for twenty years where it

1:02:43.360 --> 1:02:45.320
<v Speaker 2>just kicks in. You know, you know when you're sitting

1:02:45.400 --> 1:02:47.880
<v Speaker 2>opposite someone that embodies all of that and some of

1:02:47.880 --> 1:02:49.960
<v Speaker 2>the other things that you know, how do you know

1:02:50.000 --> 1:02:55.480
<v Speaker 2>it when you see it? I talked about intense intellectual curiosity.

1:02:56.240 --> 1:02:58.880
<v Speaker 2>One of the ways that manifests is these people are

1:02:59.040 --> 1:03:02.600
<v Speaker 2>voracious consumer of information. You ask them what they do

1:03:02.680 --> 1:03:05.400
<v Speaker 2>in their spare time, what they read, it's but it's all.

1:03:05.400 --> 1:03:07.560
<v Speaker 2>It's what they read, and it's just it's coming out

1:03:07.560 --> 1:03:10.720
<v Speaker 2>of their eyeballs. Like all of this the subject matter

1:03:10.880 --> 1:03:15.520
<v Speaker 2>that they're interested in. It also goes to passion, and

1:03:15.560 --> 1:03:20.360
<v Speaker 2>by passion I mean a real desire to just be

1:03:20.760 --> 1:03:24.080
<v Speaker 2>engaged in what they do twenty four to seven. But

1:03:24.160 --> 1:03:29.000
<v Speaker 2>I am not talking about being passionate about their investments,

1:03:29.280 --> 1:03:33.240
<v Speaker 2>because you really need to be unemotional when you're making decisions,

1:03:33.240 --> 1:03:35.720
<v Speaker 2>and that maybe goes to low ego too. It's not

1:03:35.840 --> 1:03:38.960
<v Speaker 2>about being quote right, because being right and making money

1:03:39.000 --> 1:03:41.280
<v Speaker 2>are two separate things. By the time you're right, you

1:03:41.360 --> 1:03:42.560
<v Speaker 2>might have lost your shirt.

1:03:42.800 --> 1:03:46.680
<v Speaker 1>So literally, the title of a nid Davis book being

1:03:46.800 --> 1:03:50.120
<v Speaker 1>right or making money. You're kidding at one hundred percent.

1:03:50.320 --> 1:03:54.960
<v Speaker 1>The grandfather probably the most respected technician.

1:03:55.160 --> 1:03:57.680
<v Speaker 2>Ever, so honored to be that same breath.

1:03:58.760 --> 1:04:01.240
<v Speaker 1>So tell us about some the current trends that you

1:04:01.360 --> 1:04:04.000
<v Speaker 1>see in twenty twenty three that might be a little

1:04:04.080 --> 1:04:07.440
<v Speaker 1>unique or surprising versus what we've seen over the past

1:04:07.440 --> 1:04:08.120
<v Speaker 1>couple of years.

1:04:08.280 --> 1:04:12.200
<v Speaker 2>So, in spite of everything I've said, people can still

1:04:12.240 --> 1:04:17.680
<v Speaker 2>be quite sticky. And there is this inertia that I

1:04:17.760 --> 1:04:21.880
<v Speaker 2>often see where people overweight what can go wrong in

1:04:21.960 --> 1:04:25.120
<v Speaker 2>making a move, underweight what they have to gain, and

1:04:25.160 --> 1:04:29.840
<v Speaker 2>turn a blind eye to stayin put. And given the

1:04:29.960 --> 1:04:33.720
<v Speaker 2>clarity of the situation right now, it is just mind

1:04:33.760 --> 1:04:36.320
<v Speaker 2>boggling to me that people who assess risk for a

1:04:36.360 --> 1:04:40.600
<v Speaker 2>living can still be so obtuse for lack of a

1:04:40.640 --> 1:04:44.120
<v Speaker 2>better word. And I think it goes to something that's

1:04:44.160 --> 1:04:47.960
<v Speaker 2>really important, which is you have to be intentional about

1:04:48.000 --> 1:04:53.280
<v Speaker 2>managing your career. Stayin put cannot be just the default position.

1:04:53.720 --> 1:04:57.680
<v Speaker 1>Is it just inertia? People just get comfortable and don't

1:04:57.720 --> 1:04:58.200
<v Speaker 1>want to move.

1:04:58.360 --> 1:05:02.000
<v Speaker 2>I think people get comfortable and they feel like again,

1:05:02.720 --> 1:05:06.040
<v Speaker 2>it's economic loss of version theory at work. They overweight

1:05:06.200 --> 1:05:09.720
<v Speaker 2>everything that can go wrong, and they really don't pay

1:05:09.760 --> 1:05:15.080
<v Speaker 2>attention to if they make a move, they underweight what

1:05:15.240 --> 1:05:20.120
<v Speaker 2>can go right, and they're just not focused on the

1:05:21.040 --> 1:05:26.800
<v Speaker 2>dire situation that they're in. And when you're being deliberate

1:05:26.960 --> 1:05:31.080
<v Speaker 2>about managing your career, you're asking and I'm not suggesting

1:05:31.120 --> 1:05:34.080
<v Speaker 2>people hop around for the sake of hopping around, but

1:05:34.120 --> 1:05:37.520
<v Speaker 2>you do need to ask yourself the tough questions at

1:05:37.600 --> 1:05:40.240
<v Speaker 2>various pivot points. And this isn't just true for hedge funds,

1:05:40.280 --> 1:05:43.720
<v Speaker 2>it's true for any industry. How is my fund or

1:05:43.760 --> 1:05:48.080
<v Speaker 2>firm performing? How am I evolving? Am I learning the

1:05:48.120 --> 1:05:50.880
<v Speaker 2>skills I need in order to be effective going forward?

1:05:50.960 --> 1:05:54.280
<v Speaker 2>Am I on a path to grow? Am I stagnating?

1:05:54.440 --> 1:05:57.920
<v Speaker 2>Or am I increasing my value and optionality in the market?

1:05:57.960 --> 1:06:01.400
<v Speaker 2>Am I being paid fairly? And you know to the

1:06:01.440 --> 1:06:04.800
<v Speaker 2>extent that they're not, and they're just literally sticking their

1:06:04.800 --> 1:06:08.200
<v Speaker 2>head under the covers and not thinking about these things.

1:06:08.200 --> 1:06:11.880
<v Speaker 2>They really need to ask themselves why that's the case.

1:06:12.200 --> 1:06:15.760
<v Speaker 2>It's the number one reason people flame out. They don't

1:06:15.920 --> 1:06:19.040
<v Speaker 2>keep pressing forward, don't keep improving, don't keep learning.

1:06:19.280 --> 1:06:23.480
<v Speaker 1>So that raises a really interesting question because you're suggesting

1:06:23.560 --> 1:06:27.320
<v Speaker 1>that talent should be thinking about more than just salary

1:06:27.360 --> 1:06:29.440
<v Speaker 1>and equity. There's a lot of other things they should

1:06:29.480 --> 1:06:35.600
<v Speaker 1>be looking for. When you're counseling a superstar to switch funds,

1:06:36.160 --> 1:06:39.800
<v Speaker 1>what are you telling them that they can get besides

1:06:40.040 --> 1:06:43.000
<v Speaker 1>just hey, here's money and you get some equity in

1:06:43.080 --> 1:06:45.640
<v Speaker 1>the GP. What's in it for them?

1:06:45.840 --> 1:06:48.640
<v Speaker 2>So I can just still? I think there's four main things.

1:06:48.880 --> 1:06:51.920
<v Speaker 2>One is to be made better, to learn things that

1:06:51.960 --> 1:06:54.280
<v Speaker 2>they're not learning where they're at, which, more than ever

1:06:54.360 --> 1:06:59.600
<v Speaker 2>today is important matter sure. Number two is autonomy and

1:06:59.680 --> 1:07:03.920
<v Speaker 2>even if if it's not complete, jurisdiction over the portfolio.

1:07:04.280 --> 1:07:08.400
<v Speaker 2>Increased ability to impact the results. Okay, so you people

1:07:08.440 --> 1:07:12.320
<v Speaker 2>should really want that and that sense of agency. The

1:07:12.440 --> 1:07:16.600
<v Speaker 2>second thing is clarity, not the number per se that's important,

1:07:16.960 --> 1:07:19.360
<v Speaker 2>but clarity around how we get to that.

1:07:19.280 --> 1:07:23.120
<v Speaker 1>Number, meaning it's not a crazy calculation. You have an

1:07:23.160 --> 1:07:26.600
<v Speaker 1>idea each month, each quarter, how you're personally doing that.

1:07:26.640 --> 1:07:28.320
<v Speaker 2>I'm not saying it has to be well. I mean,

1:07:28.320 --> 1:07:30.640
<v Speaker 2>if you're on a payout then yes you do. But

1:07:31.000 --> 1:07:37.320
<v Speaker 2>even in situations where you don't have a payout or

1:07:38.160 --> 1:07:42.320
<v Speaker 2>points in the fund, you have to have clarity around

1:07:42.680 --> 1:07:47.160
<v Speaker 2>why the founder makes the decisions he does. The most

1:07:47.280 --> 1:07:51.400
<v Speaker 2>frustrating thing in this industry is for people who perform

1:07:51.720 --> 1:07:55.760
<v Speaker 2>who get netted, meaning the founder takes from Peter to

1:07:55.800 --> 1:07:59.280
<v Speaker 2>pay Paul and doesn't reach into his own pocket in

1:07:59.400 --> 1:08:02.160
<v Speaker 2>order to do that. I was in the fourth thing

1:08:02.240 --> 1:08:04.840
<v Speaker 2>just before I forget is stability. I'll come back to

1:08:04.880 --> 1:08:09.760
<v Speaker 2>compensation stability or clarity around compensation stability in terms of

1:08:10.600 --> 1:08:12.560
<v Speaker 2>that you're not going to get blown out at the

1:08:12.640 --> 1:08:14.800
<v Speaker 2>slightest misstep. These are the fourth things right that are

1:08:14.840 --> 1:08:17.640
<v Speaker 2>important to people, and stability that the fund is on

1:08:18.479 --> 1:08:23.719
<v Speaker 2>solid footing, which increasingly is a more difficult thing given

1:08:23.760 --> 1:08:26.439
<v Speaker 2>how many funds look today like melting ice cubes. But

1:08:26.560 --> 1:08:30.800
<v Speaker 2>back to compensation, the founder has to be clear on

1:08:30.920 --> 1:08:33.920
<v Speaker 2>what the P and L is of the fund and

1:08:34.000 --> 1:08:37.320
<v Speaker 2>how he uses the management fee. To the extent that

1:08:37.320 --> 1:08:41.120
<v Speaker 2>there isn't a clear formula in terms of how you're paid.

1:08:41.320 --> 1:08:44.400
<v Speaker 2>People need to understand why they're getting paid what they're

1:08:44.439 --> 1:08:45.000
<v Speaker 2>getting paid.

1:08:45.360 --> 1:08:49.479
<v Speaker 1>So I'm a little confused. You're a rock star at

1:08:49.479 --> 1:08:53.360
<v Speaker 1>one fund, you get an enticing offer in another funds,

1:08:53.840 --> 1:08:56.880
<v Speaker 1>and you may not know what your comp is going

1:08:56.960 --> 1:09:00.480
<v Speaker 1>to look like, even if you're putting up really good numbers.

1:09:00.240 --> 1:09:01.480
<v Speaker 1>That's perplexing.

1:09:01.960 --> 1:09:04.800
<v Speaker 2>If you're sitting at a fund where the.

1:09:04.760 --> 1:09:07.639
<v Speaker 1>Guy across the hole is thinking the joint up, you're

1:09:07.680 --> 1:09:08.839
<v Speaker 1>not going to get your bonus.

1:09:09.200 --> 1:09:11.719
<v Speaker 2>I mean, let's just say you put up two hundred million,

1:09:11.840 --> 1:09:14.679
<v Speaker 2>the guy across the hall lost two hundred million. There's

1:09:14.720 --> 1:09:17.920
<v Speaker 2>no pass through model, so the founder is zero in

1:09:18.000 --> 1:09:20.160
<v Speaker 2>terms of a performance fee if all he has is

1:09:20.200 --> 1:09:22.519
<v Speaker 2>the two of you and he's allocated capital to you.

1:09:23.240 --> 1:09:25.880
<v Speaker 2>So is he going to reach into his own pocket

1:09:25.880 --> 1:09:28.719
<v Speaker 2>to make you whole or not? And if you don't

1:09:28.760 --> 1:09:33.040
<v Speaker 2>have a payout that he has to abide by, and

1:09:33.080 --> 1:09:36.040
<v Speaker 2>that can be really frustrating. If he doesn't actually make.

1:09:35.920 --> 1:09:37.880
<v Speaker 1>You I think that would be good for your business,

1:09:37.920 --> 1:09:39.840
<v Speaker 1>because that guy's going to be out the door. Hey,

1:09:39.880 --> 1:09:42.240
<v Speaker 1>I don't care about who else you're hiring. If I'm

1:09:42.240 --> 1:09:44.759
<v Speaker 1>putting up good numbers, I expect you to at least

1:09:45.200 --> 1:09:48.280
<v Speaker 1>have a conversation with me about all right, we're only

1:09:48.280 --> 1:09:50.360
<v Speaker 1>going to give you half of what you expected because

1:09:50.960 --> 1:09:53.760
<v Speaker 1>Bob across the hole blew up. But I mean, what

1:09:53.840 --> 1:09:54.679
<v Speaker 1>really happens to though.

1:09:54.800 --> 1:09:57.120
<v Speaker 2>Well, I mean, I will tell you twenty twenty two

1:09:57.280 --> 1:10:02.679
<v Speaker 2>is really interesting because I was pleasantly surprised by quite

1:10:02.680 --> 1:10:05.720
<v Speaker 2>a few examples of founders who did reach into their

1:10:05.720 --> 1:10:08.840
<v Speaker 2>own pocket to pay their best people, like the story

1:10:08.840 --> 1:10:10.920
<v Speaker 2>I told early on, where some of these funds with

1:10:11.080 --> 1:10:15.040
<v Speaker 2>very big holes still did substantial guarantees to retain their

1:10:15.040 --> 1:10:16.559
<v Speaker 2>top people for this year and.

1:10:16.479 --> 1:10:19.200
<v Speaker 1>For next years long term smart long term smart.

1:10:19.240 --> 1:10:21.639
<v Speaker 2>Although the you know, the problem is to the extent

1:10:22.120 --> 1:10:25.960
<v Speaker 2>those funds continue to lose aum because LPs are redeeming

1:10:26.200 --> 1:10:28.559
<v Speaker 2>or don't get and or don't get out of those

1:10:28.600 --> 1:10:32.360
<v Speaker 2>high water marks in some reasonable period of time, that's

1:10:32.400 --> 1:10:33.400
<v Speaker 2>not really sustainable.

1:10:33.520 --> 1:10:35.240
<v Speaker 1>Well, they could just dissolve and reform.

1:10:36.600 --> 1:10:40.240
<v Speaker 2>And also those those guarantees are ceilings, and really talented

1:10:40.240 --> 1:10:44.680
<v Speaker 2>people want to be able to have untapped ability to

1:10:45.080 --> 1:10:45.840
<v Speaker 2>get paid.

1:10:45.600 --> 1:10:48.080
<v Speaker 1>Clear skies above and if they do really well, they

1:10:48.120 --> 1:10:48.840
<v Speaker 1>expect to get paid.

1:10:49.120 --> 1:10:51.919
<v Speaker 2>But Barry, what you're picking up on, which is correct,

1:10:52.040 --> 1:10:55.400
<v Speaker 2>is to the extent founders don't have a pass through model,

1:10:55.560 --> 1:10:58.000
<v Speaker 2>meaning they have to. It's just everything is out of

1:10:58.040 --> 1:10:59.920
<v Speaker 2>the management fee and performance.

1:10:59.479 --> 1:11:03.400
<v Speaker 1>As opposed to segmenting four different funds, and the performance

1:11:03.400 --> 1:11:08.120
<v Speaker 1>fee goes to each of those individual silos.

1:11:08.360 --> 1:11:12.400
<v Speaker 2>Well, meaning they can pass through the expenses of the fund.

1:11:12.640 --> 1:11:15.320
<v Speaker 2>So you can pass through the expense of paying that

1:11:15.360 --> 1:11:18.200
<v Speaker 2>guy who made two hundred million. All that should matter

1:11:18.320 --> 1:11:21.960
<v Speaker 2>to LPs is your net return. So you know, a

1:11:22.000 --> 1:11:24.720
<v Speaker 2>pass through model is a higher bar because there's more

1:11:24.760 --> 1:11:27.840
<v Speaker 2>expenses at the end of the day. But these guys

1:11:27.920 --> 1:11:31.439
<v Speaker 2>who have that very coveted fee structure are able to

1:11:31.439 --> 1:11:34.720
<v Speaker 2>have that because their net returns are worthy of it.

1:11:34.800 --> 1:11:37.519
<v Speaker 2>They have a high enough net return in any event.

1:11:37.720 --> 1:11:42.000
<v Speaker 2>I do think what talent wants is a pathway where

1:11:42.080 --> 1:11:44.960
<v Speaker 2>they have more agency over what they do, and more

1:11:45.000 --> 1:11:48.120
<v Speaker 2>control and clarity around how they get paid, they get paid,

1:11:48.640 --> 1:11:51.320
<v Speaker 2>and just to be made better over times they continue

1:11:51.320 --> 1:11:51.799
<v Speaker 2>to evolve.

1:11:52.160 --> 1:11:55.360
<v Speaker 1>So let's flip the question what are the top hedge

1:11:55.360 --> 1:11:58.840
<v Speaker 1>funds looking for? It's got to be more than just

1:11:58.960 --> 1:12:02.799
<v Speaker 1>P and L. Tell us what the top funds want

1:12:03.120 --> 1:12:06.080
<v Speaker 1>when they ask you to go find me a superstar

1:12:06.200 --> 1:12:07.280
<v Speaker 1>in this space.

1:12:07.400 --> 1:12:09.920
<v Speaker 2>Coming up a level, I will tell you. I do

1:12:10.040 --> 1:12:15.559
<v Speaker 2>think funds trip themselves up sometimes in using terms like

1:12:15.720 --> 1:12:21.160
<v Speaker 2>analyst and PM and partner, because those things mean very

1:12:21.560 --> 1:12:24.439
<v Speaker 2>have very different definitions depending on who we're speaking to.

1:12:24.800 --> 1:12:27.400
<v Speaker 1>Do they matter at some of the larger hedge funds

1:12:27.880 --> 1:12:30.760
<v Speaker 1>or are people wearing multiple hats doing the same job.

1:12:31.200 --> 1:12:35.840
<v Speaker 2>What I mean is we define different Founders define those

1:12:35.880 --> 1:12:38.880
<v Speaker 2>things differently. So I'll give you an example. We did

1:12:38.920 --> 1:12:42.800
<v Speaker 2>a search about eight years ago for a well known

1:12:42.920 --> 1:12:47.120
<v Speaker 2>single manager, long short equity founder who'd been around at

1:12:47.120 --> 1:12:50.200
<v Speaker 2>that point for twenty years and had just had one

1:12:50.240 --> 1:12:53.320
<v Speaker 2>of his most senior people depart. And what he told

1:12:53.320 --> 1:12:56.960
<v Speaker 2>me he wanted was a partner. The guy was a partner.

1:12:57.000 --> 1:12:59.320
<v Speaker 2>He wanted someone who, he said, he's willing to give

1:12:59.360 --> 1:13:03.599
<v Speaker 2>this guy some stancial points and would operate really as

1:13:03.640 --> 1:13:06.880
<v Speaker 2>a PM alongside him. I want someone who's going to

1:13:06.880 --> 1:13:11.439
<v Speaker 2>be able to make decisions with me, help deploy capital,

1:13:11.720 --> 1:13:15.040
<v Speaker 2>help size, help construct the portfolio, more of a PM

1:13:15.080 --> 1:13:17.559
<v Speaker 2>than an analyst. And what I said to him is,

1:13:17.760 --> 1:13:20.719
<v Speaker 2>there's no one I can find you that has twenty

1:13:20.800 --> 1:13:22.880
<v Speaker 2>years of working with you and the way that you

1:13:22.960 --> 1:13:26.280
<v Speaker 2>evolved people, because everyone there was hired basically as a

1:13:26.320 --> 1:13:30.000
<v Speaker 2>young analyst out of Goldman and then homegrown. He saw

1:13:30.760 --> 1:13:33.880
<v Speaker 2>what people were capable of, they had wins with him

1:13:33.920 --> 1:13:36.960
<v Speaker 2>over time, and then he gave them more and more responsibility.

1:13:37.240 --> 1:13:40.400
<v Speaker 2>So to go into the market and basically find what

1:13:40.520 --> 1:13:43.519
<v Speaker 2>for him would be a stranger and put that person

1:13:43.640 --> 1:13:46.679
<v Speaker 2>in at a senior level. I knew wasn't going to work,

1:13:46.960 --> 1:13:50.160
<v Speaker 2>and in fact, what we ended up doing was putting

1:13:50.160 --> 1:13:53.439
<v Speaker 2>in It was a senior person, but it was someone

1:13:53.479 --> 1:13:58.120
<v Speaker 2>who was less experienced was really a senior analyst, and

1:13:58.160 --> 1:14:00.000
<v Speaker 2>that person was happy to have a seat at the

1:14:00.200 --> 1:14:03.320
<v Speaker 2>table and be able to feed him ideas and over

1:14:03.400 --> 1:14:07.280
<v Speaker 2>time morph into more of a PM or partner type role.

1:14:07.479 --> 1:14:11.000
<v Speaker 2>But PM means different things, even among the multi managers

1:14:11.120 --> 1:14:14.200
<v Speaker 2>who do have that, you know, where that title really

1:14:14.240 --> 1:14:17.240
<v Speaker 2>does mean they're giving somebody an allocation of capital and

1:14:17.280 --> 1:14:20.639
<v Speaker 2>that person does have autonomy. In some places a PM

1:14:21.200 --> 1:14:26.040
<v Speaker 2>is really no, it's always managing capital, but it might

1:14:26.080 --> 1:14:28.280
<v Speaker 2>be a small amount of capital. You might start with

1:14:28.320 --> 1:14:30.680
<v Speaker 2>a paper book. It's like a mini PM, you know,

1:14:30.760 --> 1:14:33.400
<v Speaker 2>or a PM with training wheels, and you might be

1:14:33.720 --> 1:14:36.720
<v Speaker 2>overseeing a very small team to start. In other places,

1:14:36.760 --> 1:14:39.800
<v Speaker 2>we want somebody who can build a scale business right

1:14:40.040 --> 1:14:44.000
<v Speaker 2>out of the gate and can manage a lot of capital.

1:14:44.120 --> 1:14:46.760
<v Speaker 2>And by the way, their definition of analysts may be

1:14:46.840 --> 1:14:50.120
<v Speaker 2>different some there are places where being an analyst almost

1:14:50.120 --> 1:14:53.720
<v Speaker 2>looks more like a PM. They are managing a significant

1:14:53.720 --> 1:14:56.680
<v Speaker 2>amount of GMV. They do have a payout on that.

1:14:58.080 --> 1:15:01.479
<v Speaker 2>Their definition of analysts may look again, it may look

1:15:01.520 --> 1:15:03.800
<v Speaker 2>more like mini pms. So we really need to dig

1:15:03.840 --> 1:15:08.160
<v Speaker 2>into these things and define what we're after. And I

1:15:08.160 --> 1:15:13.679
<v Speaker 2>would say for an analyst, that's idea, generation, creativity, independent research,

1:15:13.760 --> 1:15:17.559
<v Speaker 2>asking the right questions. For a PM, it's risk management,

1:15:17.680 --> 1:15:21.840
<v Speaker 2>portfolio construction, hedging, sizing, the ability hopefully to build and

1:15:21.880 --> 1:15:24.400
<v Speaker 2>manage a team. And where we're looking for someone to

1:15:24.400 --> 1:15:26.880
<v Speaker 2>build a strategy, that's more like a founder. It's someone

1:15:26.880 --> 1:15:29.920
<v Speaker 2>that we can raise capital around, potentially raise a fund around,

1:15:30.320 --> 1:15:33.599
<v Speaker 2>and of course attract talent and also has a sense

1:15:33.640 --> 1:15:37.680
<v Speaker 2>of what is needed with respect to technology and operations

1:15:37.680 --> 1:15:40.559
<v Speaker 2>for their strategy. So different skill sets.

1:15:40.640 --> 1:15:43.240
<v Speaker 1>I was going to say, it sounds far more complex

1:15:43.360 --> 1:15:46.679
<v Speaker 1>than I think a lot of people might assume looking

1:15:46.720 --> 1:15:50.880
<v Speaker 1>in from the outside. How important is fit? How do

1:15:50.920 --> 1:15:54.600
<v Speaker 1>you figure out, hey, this square peg is going to

1:15:54.680 --> 1:15:59.240
<v Speaker 1>fit or won't fit into that round funds? How do

1:15:59.320 --> 1:16:05.040
<v Speaker 1>you evowvaluate personalities? On top of all these really challenging

1:16:05.080 --> 1:16:07.479
<v Speaker 1>skill sets, it sounds like it's not an easy thing

1:16:07.520 --> 1:16:07.800
<v Speaker 1>to do.

1:16:08.520 --> 1:16:11.120
<v Speaker 2>There are things we do to see how closely the

1:16:11.240 --> 1:16:13.760
<v Speaker 2>candidate maps to what we will want them to do.

1:16:14.280 --> 1:16:20.720
<v Speaker 2>We do case studies, idea pitches, mock portfolios, business plans.

1:16:20.840 --> 1:16:22.840
<v Speaker 2>You know, those are all sort of the hoops we

1:16:22.920 --> 1:16:26.320
<v Speaker 2>have them jump through. But then in addition we do

1:16:26.439 --> 1:16:29.160
<v Speaker 2>soft referencing as a firm. If you think of twenty

1:16:29.240 --> 1:16:32.040
<v Speaker 2>years of meeting with the most talented people at every

1:16:32.080 --> 1:16:35.040
<v Speaker 2>Hedge fund, odds are if you're a candidate, Barry, I've

1:16:35.040 --> 1:16:37.320
<v Speaker 2>met with five other people from your fund that have

1:16:37.400 --> 1:16:40.280
<v Speaker 2>a point of view on you. Right, So we very

1:16:40.439 --> 1:16:43.960
<v Speaker 2>quickly get a three sixty on how people think, their

1:16:44.360 --> 1:16:48.320
<v Speaker 2>velocity of ideas, their response time when they spot an opportunity,

1:16:48.360 --> 1:16:51.920
<v Speaker 2>their ability to commit capital, and how they systematize their

1:16:51.960 --> 1:16:54.960
<v Speaker 2>process so it's scalable and repeatable. These are all the

1:16:55.000 --> 1:16:58.320
<v Speaker 2>things we're going to dig into in finding out about people.

1:16:59.040 --> 1:17:02.439
<v Speaker 2>And I also love it when someone comes in with

1:17:02.520 --> 1:17:05.360
<v Speaker 2>a clear sense of attribution. I don't think it's a

1:17:05.360 --> 1:17:07.439
<v Speaker 2>great sign if someone has no idea what their p

1:17:07.560 --> 1:17:09.759
<v Speaker 2>and L is. I get that often it's not tracked

1:17:10.360 --> 1:17:11.240
<v Speaker 2>at many funds.

1:17:11.400 --> 1:17:14.320
<v Speaker 1>Well really, I'm shocked to hear that. Because you not

1:17:14.439 --> 1:17:18.320
<v Speaker 1>formally tracked and could still export your book to Excel

1:17:18.400 --> 1:17:19.880
<v Speaker 1>spreadsheet and say here's where I am.

1:17:19.920 --> 1:17:22.120
<v Speaker 2>We're saying the same thing I expect people to have

1:17:22.160 --> 1:17:24.280
<v Speaker 2>done that. I expect people to have a clear sense

1:17:24.280 --> 1:17:26.880
<v Speaker 2>of attribution. To the extent that they don't, it's not

1:17:27.000 --> 1:17:29.840
<v Speaker 2>a good sign, that's what I'm saying. I would but

1:17:30.000 --> 1:17:32.960
<v Speaker 2>the best people come in I mean, honestly, some of

1:17:33.000 --> 1:17:35.880
<v Speaker 2>them come in with a huge spreadsheet. This is what

1:17:35.920 --> 1:17:39.000
<v Speaker 2>I've contributed. And by the way, here are all the

1:17:39.040 --> 1:17:41.160
<v Speaker 2>things I wanted to do that the founder didn't let

1:17:41.200 --> 1:17:42.920
<v Speaker 2>me do, and how I would have performed if they've

1:17:43.000 --> 1:17:46.000
<v Speaker 2>let me. Now I'm savvy enough after all these years

1:17:46.040 --> 1:17:48.559
<v Speaker 2>to know and that if I add it all a

1:17:48.560 --> 1:17:50.120
<v Speaker 2>little bit of a grain of salt, and if I

1:17:50.160 --> 1:17:54.519
<v Speaker 2>added up all of the returns of everyone we meet

1:17:54.680 --> 1:17:57.200
<v Speaker 2>from fund A, B or C, it would probably be

1:17:57.280 --> 1:18:00.240
<v Speaker 2>north of three hundred percent. So you know, there's that,

1:18:01.120 --> 1:18:03.639
<v Speaker 2>But I think there is still something to a sense

1:18:03.680 --> 1:18:08.200
<v Speaker 2>of ownership and directional truth. And then the final thing

1:18:08.200 --> 1:18:10.559
<v Speaker 2>I'd say to you is there's always a leap of faith.

1:18:10.800 --> 1:18:14.120
<v Speaker 2>I don't care how much work both sides do, and

1:18:14.160 --> 1:18:17.479
<v Speaker 2>we do a lot of work to have a strong

1:18:18.000 --> 1:18:21.840
<v Speaker 2>sense that the person will be successful. There's always a

1:18:21.920 --> 1:18:27.559
<v Speaker 2>leap of faith. Because we're talking about different founders, different

1:18:27.600 --> 1:18:33.520
<v Speaker 2>definitions of success and failure, different investing style, different approaches

1:18:33.520 --> 1:18:37.240
<v Speaker 2>to training and development. And I always tell the clients

1:18:37.320 --> 1:18:40.200
<v Speaker 2>I'm working with that they have to lead with war stories.

1:18:40.520 --> 1:18:43.400
<v Speaker 2>They have to lead with all the things that might

1:18:43.439 --> 1:18:46.479
<v Speaker 2>have gone wrong early on when they recruit someone, and

1:18:46.520 --> 1:18:48.720
<v Speaker 2>how they help that person to get out of a

1:18:48.760 --> 1:18:51.439
<v Speaker 2>hole and to go on and be successful, because that's

1:18:51.479 --> 1:18:54.519
<v Speaker 2>what's in the minds of people before they make a leap.

1:18:54.800 --> 1:18:57.639
<v Speaker 2>What happens when things go south? How will I be treated?

1:18:57.960 --> 1:19:01.600
<v Speaker 2>And founders really need to or whoever's doing the recruiting,

1:19:02.120 --> 1:19:05.000
<v Speaker 2>And this is again any industry, you really need to

1:19:05.120 --> 1:19:10.880
<v Speaker 2>lead with what constitutes failure losing money in and of itself, Yes,

1:19:10.960 --> 1:19:13.760
<v Speaker 2>you failed to make money, but why how did you

1:19:13.800 --> 1:19:15.360
<v Speaker 2>get yourself into that situation?

1:19:15.880 --> 1:19:16.080
<v Speaker 1>You know?

1:19:16.160 --> 1:19:19.000
<v Speaker 2>So there's sort of like good failure, which is a

1:19:19.040 --> 1:19:21.600
<v Speaker 2>learning experience, and we think we can improve you. And

1:19:21.720 --> 1:19:24.439
<v Speaker 2>let's define what is a situation where we think it

1:19:24.520 --> 1:19:27.680
<v Speaker 2>actually isn't the right fit. You need to give people clarity.

1:19:27.680 --> 1:19:32.280
<v Speaker 1>Makes sense. A good process will occasionally have a bad outcome,

1:19:32.960 --> 1:19:35.600
<v Speaker 1>and you can't just assume every good outcome is the

1:19:35.640 --> 1:19:38.040
<v Speaker 1>result of a good process. All right, so I only

1:19:38.080 --> 1:19:40.840
<v Speaker 1>have you for a few more minutes. Let's jump to

1:19:40.960 --> 1:19:44.360
<v Speaker 1>our favorite question that we ask all our guests starting

1:19:44.400 --> 1:19:46.840
<v Speaker 1>with what has been keeping you entertained over the past

1:19:46.920 --> 1:19:49.599
<v Speaker 1>couple of years. What have you been doing either when

1:19:49.600 --> 1:19:52.439
<v Speaker 1>we were locked down or just re out? And about

1:19:52.840 --> 1:19:54.160
<v Speaker 1>revenge traveling.

1:19:54.040 --> 1:19:57.240
<v Speaker 2>Revenge traveling well. I took a fantastic trip with my

1:19:57.280 --> 1:19:59.320
<v Speaker 2>son to Italy last summer.

1:19:59.439 --> 1:20:02.320
<v Speaker 1>I do reco. We were talking about that and we

1:20:02.360 --> 1:20:04.519
<v Speaker 1>didn't know what was going to happen. There was a

1:20:04.520 --> 1:20:07.479
<v Speaker 1>couple of Varians we were both talking about traveling last summer.

1:20:08.040 --> 1:20:09.000
<v Speaker 1>Where'd you go in Italy?

1:20:09.080 --> 1:20:12.880
<v Speaker 2>It's almost where didn't we go? We went everywhere. The

1:20:12.880 --> 1:20:17.120
<v Speaker 2>only places we didn't go were Pulia my pronouncing that correctly,

1:20:17.400 --> 1:20:21.680
<v Speaker 2>soft ge Pulia, and we didn't go to northern.

1:20:21.360 --> 1:20:26.120
<v Speaker 1>Italy Como and I want to check that out phenomenal.

1:20:26.280 --> 1:20:28.959
<v Speaker 1>I haven't been to Milan. I haven't been to Modina, which.

1:20:28.800 --> 1:20:34.559
<v Speaker 2>Was either, but those are that's worth hitting.

1:20:34.960 --> 1:20:38.080
<v Speaker 1>I have a friend who did this private tour where

1:20:38.160 --> 1:20:41.400
<v Speaker 1>instead of staying at hotels, you stay at people's houses

1:20:41.479 --> 1:20:44.240
<v Speaker 1>and they cooked dinner for you and it's Grandma making

1:20:44.760 --> 1:20:47.000
<v Speaker 1>the secret family recipe. And he said he came home

1:20:47.040 --> 1:20:51.160
<v Speaker 1>twenty pounds heavier. I'm sure it was amazing. Let's talk

1:20:51.200 --> 1:20:54.040
<v Speaker 1>about mentors who helped to shape your career.

1:20:54.160 --> 1:20:57.599
<v Speaker 2>It's totally my parents. Really, I had amazing parents.

1:20:58.000 --> 1:20:59.160
<v Speaker 1>What did your parents do?

1:21:00.240 --> 1:21:04.960
<v Speaker 2>My father ran a small insurance brokerage, so he was

1:21:05.000 --> 1:21:08.560
<v Speaker 2>an entrepreneur, but small, I mean he was. This is

1:21:08.600 --> 1:21:13.240
<v Speaker 2>your classic first generation immigrant story. My dad did grow

1:21:13.360 --> 1:21:17.360
<v Speaker 2>up in the States. He was born and raised in Brooklyn,

1:21:17.600 --> 1:21:21.840
<v Speaker 2>part of what we often termed the Greatest Generation, right right.

1:21:22.000 --> 1:21:24.559
<v Speaker 2>He volunteered to fight World War Two. He was an

1:21:24.600 --> 1:21:29.719
<v Speaker 2>amazingly patriotic person. He was a tailgunner for B twenty nine's.

1:21:29.840 --> 1:21:32.360
<v Speaker 2>They used to take us out. My parents used to

1:21:32.439 --> 1:21:34.519
<v Speaker 2>take us out to airfields in the middle of nowhere

1:21:34.600 --> 1:21:38.599
<v Speaker 2>to look at these old planes. Really hard working guy.

1:21:38.680 --> 1:21:41.360
<v Speaker 2>And I listened to all the issues that he would

1:21:41.400 --> 1:21:44.320
<v Speaker 2>bring home and discuss with my mom, who's an amazingly

1:21:44.400 --> 1:21:47.920
<v Speaker 2>smart woman. She can run circles around most people. And

1:21:48.520 --> 1:21:51.360
<v Speaker 2>she was kind of this CEO of our family. She

1:21:51.479 --> 1:21:54.160
<v Speaker 2>really pushed us to be our best. She helped my dad.

1:21:54.680 --> 1:21:58.520
<v Speaker 2>She came here. She was a hidden child during the Holocaust.

1:21:58.760 --> 1:22:02.759
<v Speaker 2>Oh really, it's a whole story unto itself. She came

1:22:02.880 --> 1:22:06.559
<v Speaker 2>to is then her family emigrated to Israel, and then

1:22:06.640 --> 1:22:09.240
<v Speaker 2>she came to the United States, met my father, and

1:22:09.360 --> 1:22:11.840
<v Speaker 2>they were we didn't have much growing up. They just

1:22:11.920 --> 1:22:13.640
<v Speaker 2>they did the best they could in the way of

1:22:13.680 --> 1:22:16.880
<v Speaker 2>giving us stuff. But there wasn't really a lot of

1:22:16.920 --> 1:22:19.760
<v Speaker 2>material wealth that I grew up with far from but

1:22:19.840 --> 1:22:22.840
<v Speaker 2>I had great parents who taught me the importance of

1:22:23.320 --> 1:22:26.240
<v Speaker 2>by example through my father and my mom just in

1:22:26.320 --> 1:22:31.479
<v Speaker 2>terms of her wisdom of constantly pressing forward. And you know,

1:22:31.520 --> 1:22:34.960
<v Speaker 2>there wasn't a lot of room for whining in my house.

1:22:35.320 --> 1:22:39.599
<v Speaker 2>She's you know, she was a in the Israeli Army.

1:22:39.680 --> 1:22:45.120
<v Speaker 2>She's tough, she's strong. My dad again, great wonderful man

1:22:45.200 --> 1:22:50.280
<v Speaker 2>who's a phenomenal salesperson, but worked super hard and I

1:22:50.360 --> 1:22:53.920
<v Speaker 2>admired his resilience. And it was about pushing forward and

1:22:54.000 --> 1:22:57.519
<v Speaker 2>not giving up. And that I think is that grit

1:22:57.600 --> 1:23:00.240
<v Speaker 2>and perseverance. We didn't really talk too much about that.

1:23:00.720 --> 1:23:04.120
<v Speaker 2>I actually think it's one of the most important determinants

1:23:04.160 --> 1:23:07.280
<v Speaker 2>of someone's success in life and also professionally.

1:23:07.400 --> 1:23:11.519
<v Speaker 1>Grit and perseverance good good qualities to have. Let's talk

1:23:11.560 --> 1:23:13.559
<v Speaker 1>about books. What are some of your favorites. What are

1:23:13.600 --> 1:23:14.479
<v Speaker 1>you reading right now?

1:23:14.560 --> 1:23:20.240
<v Speaker 2>Well, I love books that are about real life. Could

1:23:20.240 --> 1:23:22.840
<v Speaker 2>be a moment in time like Tom Wolf type books,

1:23:23.360 --> 1:23:27.000
<v Speaker 2>maybe the story is quote fiction but loosely based on

1:23:27.200 --> 1:23:30.799
<v Speaker 2>things that were happening then, or of course Michael Lewis,

1:23:30.840 --> 1:23:33.720
<v Speaker 2>which is you know, those are real stories told in

1:23:33.760 --> 1:23:37.320
<v Speaker 2>a highly entertaining way. The stuff I'm reading now is

1:23:37.400 --> 1:23:39.960
<v Speaker 2>courtesy of my eighteen year old son who's gotten into

1:23:40.000 --> 1:23:42.960
<v Speaker 2>the habit of buying his mom books she thinks that

1:23:43.000 --> 1:23:45.200
<v Speaker 2>he thinks she might like, and he's hit it out

1:23:45.240 --> 1:23:48.639
<v Speaker 2>of the jackpot every time. Yeah, so now thanks to Jordan,

1:23:48.720 --> 1:23:52.360
<v Speaker 2>I'm reading I think it's called Ticking Clock. It's by

1:23:52.439 --> 1:23:55.880
<v Speaker 2>Ira Rosen, who is a producer for sixty Minutes It

1:23:55.960 --> 1:23:57.960
<v Speaker 2>and he bought me that because he knows I love

1:23:58.000 --> 1:24:02.639
<v Speaker 2>the movie Wither with Russell Crowe, which was an expose,

1:24:02.800 --> 1:24:05.320
<v Speaker 2>of course on the tobacco industry, but also on the

1:24:05.360 --> 1:24:10.559
<v Speaker 2>world of journalism. And the book is fascinating. It's like

1:24:10.760 --> 1:24:12.960
<v Speaker 2>being in the newsroom. It's all the intrigue that went

1:24:12.960 --> 1:24:16.880
<v Speaker 2>on behind the scenes. It's it's just it's an amazing

1:24:16.880 --> 1:24:19.840
<v Speaker 2>and it's so funny. He's just he's like this irreverent,

1:24:20.560 --> 1:24:26.639
<v Speaker 2>nobs awesome, engaging storyteller, phenomenal. And then the other book

1:24:26.680 --> 1:24:29.320
<v Speaker 2>I'm reading that my son got for me is called

1:24:29.360 --> 1:24:31.880
<v Speaker 2>The Kings of New York, which is about really the

1:24:31.920 --> 1:24:35.559
<v Speaker 2>New York skyline and the whole real estate industry and

1:24:35.600 --> 1:24:38.960
<v Speaker 2>again told almost like a thriller in terms of how

1:24:38.960 --> 1:24:43.519
<v Speaker 2>it unfolded, who, what all the inside baseball was and

1:24:44.080 --> 1:24:47.080
<v Speaker 2>the rise and fall of a number of real estate dynasties.

1:24:47.400 --> 1:24:51.960
<v Speaker 1>Huh, really quite fascinating. Our final two questions, what sort

1:24:51.960 --> 1:24:54.519
<v Speaker 1>of advice would you give to a recent college grad

1:24:55.040 --> 1:24:58.639
<v Speaker 1>who was interested in a career in either hedge funds

1:24:59.160 --> 1:25:01.000
<v Speaker 1>or talent scaled and recruiting?

1:25:01.400 --> 1:25:04.200
<v Speaker 2>For anyone, the question is why do you want to

1:25:04.240 --> 1:25:07.400
<v Speaker 2>do that? What is it? And if the answer for

1:25:07.880 --> 1:25:10.960
<v Speaker 2>anything is because they think it's lucrative, that's not a

1:25:10.960 --> 1:25:11.479
<v Speaker 2>good answer.

1:25:12.000 --> 1:25:14.080
<v Speaker 1>So, by the way, I've heard that time and again

1:25:14.160 --> 1:25:16.400
<v Speaker 1>from people sitting in that seat. Hey, if you're in

1:25:16.479 --> 1:25:19.520
<v Speaker 1>this game for the money alone, you're going to be disappointed.

1:25:20.120 --> 1:25:22.360
<v Speaker 2>It's important to try. If you know what you want

1:25:22.400 --> 1:25:24.639
<v Speaker 2>to do, that's great. I have a candidate right now

1:25:24.680 --> 1:25:28.320
<v Speaker 2>who's been investing in biotech since he was thirteen. Really, yes,

1:25:28.479 --> 1:25:30.320
<v Speaker 2>and so he knows what he wants to do. And

1:25:30.400 --> 1:25:33.040
<v Speaker 2>I learned that because I said, what you studied in

1:25:33.080 --> 1:25:36.400
<v Speaker 2>college was really interesting. You were pre meed, which is

1:25:36.840 --> 1:25:40.000
<v Speaker 2>tough enough, and also studying business, Like, how did you

1:25:40.120 --> 1:25:42.479
<v Speaker 2>know back then? He's like, I just knew. I knew

1:25:42.520 --> 1:25:44.840
<v Speaker 2>I wasn't going to be a doctor. I was fascinated

1:25:44.920 --> 1:25:46.800
<v Speaker 2>by biotech, but I wanted to come at it from

1:25:46.800 --> 1:25:50.000
<v Speaker 2>the investing angle to the extent you don't really know.

1:25:50.479 --> 1:25:53.360
<v Speaker 2>I think it's so important to try different things, you know,

1:25:53.400 --> 1:25:56.920
<v Speaker 2>to your opening questions to me, I didn't know, and

1:25:57.160 --> 1:26:01.000
<v Speaker 2>I learned through all of my experiences what I liked,

1:26:01.120 --> 1:26:03.400
<v Speaker 2>what I was best at, and just as valuable, what

1:26:03.479 --> 1:26:05.800
<v Speaker 2>I didn't like and what I felt. You know, I

1:26:05.880 --> 1:26:08.840
<v Speaker 2>wasn't a natural app I think it's okay to go

1:26:08.920 --> 1:26:11.000
<v Speaker 2>on a bit of a journey early on, but you

1:26:11.120 --> 1:26:14.920
<v Speaker 2>have to be on that journey aggressively and meaning If

1:26:15.040 --> 1:26:18.400
<v Speaker 2>what you're doing is not something that really is singing

1:26:18.520 --> 1:26:21.040
<v Speaker 2>or speaking to you, you have to keep moving forward

1:26:21.120 --> 1:26:25.599
<v Speaker 2>till you figure it out so purposefully, purposefully you can

1:26:25.680 --> 1:26:28.000
<v Speaker 2>then lock in and really build something.

1:26:28.120 --> 1:26:31.439
<v Speaker 1>Huh, really interesting And our final question, what do you

1:26:31.479 --> 1:26:35.799
<v Speaker 1>know about the world of investing today? Hedge funds, talent

1:26:35.840 --> 1:26:39.360
<v Speaker 1>recruitment that you wish you knew? Twenty years ago when

1:26:39.360 --> 1:26:40.840
<v Speaker 1>you first launched IDW.

1:26:41.040 --> 1:26:45.520
<v Speaker 2>I'll use your word purposefully. It's really important for founders

1:26:45.600 --> 1:26:50.080
<v Speaker 2>to manage their team purposefully, meaning you have to give

1:26:50.120 --> 1:26:53.280
<v Speaker 2>people room to fail, but you also have to cut

1:26:53.920 --> 1:26:56.000
<v Speaker 2>when it makes sense. And I think a lot of

1:26:56.080 --> 1:27:00.559
<v Speaker 2>founders are afraid to do that because will it look

1:27:00.600 --> 1:27:04.559
<v Speaker 2>to LP's it's it's it's uncomfortable to have to do those,

1:27:04.960 --> 1:27:07.880
<v Speaker 2>to have to, you know, to have to manage people out,

1:27:08.120 --> 1:27:11.240
<v Speaker 2>what will it do to our culture? But a killer

1:27:11.560 --> 1:27:15.919
<v Speaker 2>culturally is to be someplace where it becomes a hotbed

1:27:16.000 --> 1:27:19.559
<v Speaker 2>for mediocrity. And so the best bed.

1:27:19.520 --> 1:27:23.640
<v Speaker 1>For mediocrity, meaning you just start accumulating.

1:27:24.040 --> 1:27:26.679
<v Speaker 2>Dead would and it becomes And I hear this time

1:27:26.720 --> 1:27:30.400
<v Speaker 2>and again where people say, you know where they haven't

1:27:30.439 --> 1:27:32.920
<v Speaker 2>really been paid that well, well, there's this kind of

1:27:32.960 --> 1:27:36.000
<v Speaker 2>smoothing effect that goes on at our firm where maybe

1:27:36.080 --> 1:27:38.920
<v Speaker 2>I'm not paid as well as I should be, but

1:27:39.000 --> 1:27:41.040
<v Speaker 2>in down, you know, when things don't go with that

1:27:41.120 --> 1:27:44.760
<v Speaker 2>well at the firm, I also am not hit as

1:27:44.840 --> 1:27:47.760
<v Speaker 2>hard perhaps as other places. And I said, can we

1:27:47.920 --> 1:27:49.760
<v Speaker 2>and I say, can we take a step back and

1:27:49.800 --> 1:27:52.320
<v Speaker 2>look at your personal P and L history For the

1:27:52.320 --> 1:27:56.080
<v Speaker 2>most part, you've been a rock star every year you've

1:27:56.120 --> 1:28:00.679
<v Speaker 2>been earth. Are you giving yourself an artificial ceiling here?

1:28:00.880 --> 1:28:03.040
<v Speaker 2>And why are you, you know, for someone who can

1:28:03.080 --> 1:28:05.880
<v Speaker 2>never put up the goods? That's a great paradigm. Why

1:28:05.960 --> 1:28:09.559
<v Speaker 2>is it for you? And so I think again, it

1:28:09.560 --> 1:28:12.200
<v Speaker 2>all comes back to being front footed as talent, but

1:28:12.320 --> 1:28:19.080
<v Speaker 2>also as an institution in managing, in managing for growth aggressively.

1:28:19.360 --> 1:28:22.040
<v Speaker 1>Alana, thank you for being so generous with your time.

1:28:22.200 --> 1:28:25.360
<v Speaker 1>We have been speaking with Alana Weinstein. She is the

1:28:25.479 --> 1:28:29.120
<v Speaker 1>founder of the IDW Group and is known as one

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<v Speaker 1>of the most powerful women in the world of hedge funds.

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<v Speaker 1>If you enjoyed this conversation, well be sure and check

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<v Speaker 1>out any of the previous five hundred or so we've

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<v Speaker 1>done over the past nine years. You can find those

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<v Speaker 1>at YouTube, iTunes, Spotify, wherever you get your favorite podcasts from.

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<v Speaker 1>Sign up for my daily reading list at ridelts dot com.

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<v Speaker 1>Follow me on Twitter for as long as Twitter is

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<v Speaker 1>here at Ridholt's follow all of the Bloomberg family of

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<v Speaker 1>pod at podcast. I would be remiss if I did

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<v Speaker 1>not thank the crack team of experts who helped put

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<v Speaker 1>this conversation together. Each week Paris Wold is my producer.

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<v Speaker 1>Somanth Danzinger is my audio engineer. Attika Valbron is my

1:29:16.360 --> 1:29:21.280
<v Speaker 1>project manager. Sean Russo is my researcher. I'm Barry Ritolts.

1:29:21.640 --> 1:29:25.480
<v Speaker 1>You've been listening to Master's in Business on Bloomberg Radio