E199: How Rahul Moodgal Raised $99 Billion by Playing the Long Game

Most people pitch performance. Rahul Moodgal built a career on pitching relationships. In this episode, I go deep with Rahul Moodgal—Head of Investor Relations at Parvus Asset Management and one of the most trusted capital raisers in the hedge fund world. Over his career, Rahul has raised $99 billion across platforms like TCI and Parvus, building decades-long relationships with LPs, endowments, and mission-driven institutions around the globe. We explore how Rahul flips traditional fundraising on its head: opening with the negatives, focusing on long-term alignment, and avoiding the sales-y traps that doom many GPs. If you're a manager trying to understand how world-class LPs think—or an allocator looking to work with truly values-aligned capital—this is the playbook.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00David Weisburd?

  Rahul, welcome to the High Invest Podcast.

• 0:03Speaker 01

  Thank you, David. A real honor to be here with you.

• 0:06David Weisburd?

  It's an honor to have you. So before we got started today, I wanted to confirm exactly how much you've raised. So you haven't quite raised $100 billion. You raised 99 billion. But I'm excited to hear the blueprint on how to raise 99 billion and I'm excited to have you on the podcast.

• 0:23Speaker 01

  Thank you. You're really kind. I don't know if it's a blueprint, but it's my way. And I think there's no right way to do it. There's just lots of different ways.

• 0:33David Weisburd?

  Tell me the story about how you raised money at the Bear Stearns Cap Intro Event in 2006.

• 0:42Speaker 01

  Okay, so at the time I worked for TCI, the Children's Investment Fund, which is founded by Chris Hawn. And I was head of investor relations and we built a platform which grew to five managers, TCI being obviously the anchor main fund on the platform. And I had the honor of working with Chris and then raising money for him and the other managers he brought to the platform and looking after all the clients. And so we had taken on an ex-fidelity fund manager who was raising a fund in the European large cap space. It's interesting, but it doesn't get you all excited, particularly in 2005, when people had too much money to put to work. So Bear Stearns invited us, trying to engage us. So I went and did two roundtables of 12 investors.

• 1:28Speaker 01

  And I sat in that first room. And I did the usual pitch about the fund, the platform, what they were doing, the rest of it. And somehow I kind of came out of my body and I could see myself talking. And I just thought, this is awful. It's so boring. It's not compelling. And everyone's asleep and I was just bored of what I was doing and saying. And I thought, I've got another chance in an hour to do this a different way. And I'd simply come up with another way of trying to make it more interesting, both for me and for the investors.

• 2:05Speaker 01

  And so I went into second session. And by the way, from that first group of 12 investors, zero people invested and had any follow up or interest. I went into the second meeting and I started off by saying, these are the reasons that people don't invest with us. And you could see people's faces going, what? What's going on here? People don't do that. They always pitch. And all of a sudden, I got people engaged because it was doing the complete opposite of what they expected me to do, number one. And number two, as I went through the negatives, those are positives for some people because it was different. It was contrarian. It was trying to fill a spot in their portfolios where other people weren't fitting.

• 2:45Speaker 01

  And people got really engaged. And at the end of that session, I had big follow up and eight of those 12 people in that room actually ended up investing with us. So I thought, wow, this is actually a very different way to do this. And it changes your initial interaction with people.

• 3:00David Weisburd?

  Extremely stark differences at the same cap intro event. Double click on why you think, starting with the negatives, had such a powerful effect on the audience.

• 3:10Speaker 01

  First thing is very obvious is that it was just different because they're all used to hearing the same old nonsense. This is my fun. This is what I do. This is how I'm different. Most of the time it's not different. And the reality is, I'll quote Anders Hall at Vanderbilt University, who says, the world doesn't need another fund. There's enough funds out there. And so when you're doing that, you have to try and engage. But I'll take it to the next level. And I think the key thing that everyone forgets about this industry. The funds come and go, the performance come and goes, it's relationships, it's all about relationships. And I think when an investor, an LP tries to meet a manager, a GP,

• 3:51Speaker 01

  yes, the stress, you know, things there, but the key thing they're trying to do is understand who this human being is. How do they deal with stress? How do they deal with bad times? And it's the same way that when you meet another human being and you want to determine if they're going to be in your universe, if they have the same values as you, if they're going to be someone you're going to have a relationship, either personally or as a friendship level, you want to know, what are they, what are the things that drive them crazy? What are the moments that they're going to lose? Shit or, you know, be unbalanced and you just want to know all of the bad stuff as soon as you can, because you want to know, am I going to make an effort? Is this going to work out? So I just kind of think people just didn't expect that. And straight away, they were able to sort of do a checklist to say, well, that's one less thing I have to worry about. That's one less thing I have to worry about. You know, we are concentrated.

• 4:33Speaker 01

  We had lockups. We had high fees. We had all the things that people wouldn't know straight away because they'll buy into the strategy. And then when they're doing the deep dive, the negatives start coming. But if you give them negatives at the beginning, but actually, in spite of all that, I'm still interested. So it's kind of like you, you, you take your clothes off and say, this is who I am. Are you interested or not? And then you go forward and, and start saying, well, this is who I am inside.

• 5:01David Weisburd?

  Intuitively, you would feel like that strategy would maybe appeal to two of the 12 investors and then you wouldn't waste any time on the other 10. And it was a win win. You'd build this deep relationship with these two, but you got eight of them to invest. So somehow this very, very specific type of strategy and this very specific segmentation appeal to a majority of investors. Why do you think that is?

• 5:25Speaker 01

  I'm not going to say it was the strategy that was different. I'm, I'm going to say it was the initiation of the relationship that was different. So, you know, when you meet people the first time, and especially when you have friendships with people that are very, very long term, you never ever forget how you met them, ever, right? It may be, oh, I met them because I spilled a drink on them in the bar, or I met them at a party. They had no one to speak to, I had to. And so we just started speaking. You always remember those things. And so for all of those people, and I speak to many of those people still now, they always say, I never forget when I first met you and you did that pitch to me. It was just so different. They were just a bit shocked that someone

• 6:07Speaker 01

  had gone into a room doing that, because it's always about being the cheerleader for the manager you're working with. You're still the cheerleader, but what you're doing is saying, this is what's under the bonnet, first of all. Everyone's showing you the beautiful car, but not showing you what's under the bonnet straight away. But I went the opposite way and saying, this is what's under the bonnet. And then you can see how that makes up the car.

• 6:28David Weisburd?

  I think in general, that's a very underrated aspect of fundraising is the anchor on how you first meet the person. In my world, I like to be introduced by a highly credible mutual party, which forever anchors you as this person introduced you to him versus just kind of off, off the cuff, or maybe even you listen to someone's presentation, you come in with a lower status and you're forever anchored as an audience member. These things could play a big role in how the relationship plays out.

• 6:59Speaker 01

  200% agree. And David, it plays into, in my mind, so many people who do what I do are focused on that transaction. This is not what it's about. The fact is, a number of those investors I've worked with now across different managers, they've moved shop and I've worked with different managers and they always remember how we first met. They don't even remember the investment, they remember the relationship, right? Because people transcend organizations. This is not about executing. This is about, am I going to be able to pick up the phone and call David in 20 years' time? Yes, because I didn't pitch him, I wasn't aggressive about selling him something and it didn't matter to me where they invested.

• 7:42Speaker 01

  What mattered to me is that we built a relationship where we mutually respect each other's space and time and we call each other and talk about things. And that's, I think, the big thing that everyone misses when they do what I do. They always focus on the short term. I care about, is that person who I sat in the room with in 2006 going to take my call if I call them tomorrow 20 years later? That's the difference. And when you have those relationships, they always remember how you met them and the fact you've worked with them through different guises, good times, bad times, and you've just communicated and stayed in touch. And I think that's the key thing about it.

• 8:17David Weisburd?

  Over time, have you also learned who you want to invest into over 20 years or who you want to take money from?

• 8:22Speaker 01

  Don't want to work with everybody. I think I've, I've, it's kind of like a human being's evolution and maturity. When you don't know any better, you want to work with everyone. But I think over time, I'm not really arsey about many things, but I am really picky on the quality of capital that I work with because it's about long-term relationships and it's about people understanding. What you do versus what they want and how you fit into each other's universes. I'll happily speak to people that I wouldn't work with. But I'm really thinking about who I have as clients because there's just got to be that

• 9:07Speaker 01

  understanding of what you do versus what fits what they do. And a lot of times there isn't a fit, but to me it doesn't matter. So I've I've spent a lot of time trying to nurture relationships with the best organizations. And I split investors into asset owners and asset allocators. Now, there are good asset allocator investors, but I tend to focus on asset owners. And what I mean by that are the people who are the fiduciaries for that capital itself or that the principles of that capital. And so you're dealing with the people who are making the final decisions. And part of this stems from having a few bad experiences, whereas if you work with

• 9:48Speaker 01

  gatekeepers, asset allocators, you never know what's going on on the other end. So I want to know who are the underlying investors who are giving us capital? Because then I can understand what their time horizon is, what are the parameters they invested, what the things they look for, number one. Number two, when you work with asset allocators, a lot of the time they're protecting their business first and then thinking about investing second. And I'll give you an example, you know, one of the firms I worked at, we had a huge firm as a client that had $20 billion and they had $70 million with us. And they phoned me up and saying, we want to give you guys much more capital so we can be 200, 250 million out of our 20 billion with you.

• 10:33Speaker 01

  It's like, great, we're closed, but there will come a point where we'll call you and there'll be opportunities. Two weeks later, they called me saying, we need to redeem. I say, sorry, we spoke to you two weeks ago and you wanted to add, you know, a hundred and eighty million to us when the opportunities came and now you want to redeem it. What's going on? They never ever told us the story, but through two or three connections, I found out that they had a huge corporate pension plan that was their biggest client decided to pull the money. And rather than being transparent about it and telling us, look, we're interested, but things have changed. And longer term, we still want to get there. We don't want to get there. They just went cold turkey on us.

• 11:13Speaker 01

  And my PM, I'd never seen him get angry, not the one I work with now, but one I'd worked with previously. Just got, just went mad and said, you guys had promised me you were long term, you were committed and all this stuff. And we said we'd work with you, but you weren't transparent about it. And so those people were interested in protecting their business and we just didn't know what was going on underneath. Cause we never knew who the clients were that had money from them and that they'd given money to us. And so that's why I always worry where there's intermediaries. Now, that's not all always true. There are good allocators, but it's just one of those things where I'm much more hesitant. Because they've, they've got two angles to, they've got to keep these people happy that give them the money.

• 11:51Speaker 01

  And then they've got to allocate that money versus me just dealing, you know, A to B directly, the, rather than A via B to C. So that's, that's kind of how I think about it. So I do really care about the quality of capital. I don't care about the size of the capital. If it's five bucks or five hundred or whatever, I care about the quality. That's just so important to me.

• 12:11David Weisburd?

  A lot of people, when they reach a certain level of success, they see being able to pick their clients as in many ways, the ultimate luxury, being able to deal with who you want to deal with. Is there also a cold, hard rationalist approach to why you want to build relationships with certain types of people? Or is it more of a quality of life aspect?

• 12:33Speaker 01

  It's not quality of life. I certainly want to continue loving what I do. I'm, I'm honored to love what I do in terms of the day to day, the people I work with and the investors I get to work with. It's great. I want to interact with people who are smart, thoughtful, who challenge me, who I learn from, I get to interact with. And who I can help. And I particularly love mission driven organizations who are doing incredible work where I can help them meet other equally driven mission based people or people who are working the same missions as them.

• 13:06Speaker 01

  Help them find investment ideas, bring them together, allow them to share the things they're worried about, the concerns they have about things in the portfolio in the world in terms of government policy, whatever it may be. Those are things that I get real energy from. Bidding to people together is what I just love. I love people and I love seeing them interact, share ideas, compound knowledge, you know, I've stolen that one liner from Ted Sidis, but that's literally what we both love doing and that that's I just get such a pleasure from doing that. When I was a kid, I wanted to be a diplomat and I think I get to do that in this world of finance. That's really what I love doing.

• 13:44David Weisburd?

  I've been really thinking about this concept. There's no real term in the market for it. I call it LP capture. And where an otherwise good manager could be captured so much by his LPs and the feedback from his LPs that could actually affect a strategy. The relationship between GPs and LPs can be bidirectional and the opposite is true, too. You might have the Yale endowment or a very high profile endowment. That's coming to you in the depths of a bear market where there's blood on the streets and saying, we want to, we want to back you. Here's $200 million to go out and buy these damaged assets. You could actually get propelled by your LPs as well. But I think

• 14:22David Weisburd?

  not enough is talked about how LPs could actually improve the performance of the GPs, not just GPs improving LP returns.

• 14:32Speaker 01

  Absolutely agree with that. And I think

• 14:37Speaker 01

  it's this, this, it's such a complex thing to talk about this because I think when people start out.

• 14:47Speaker 01

  A lot of people are what I call refugees. When you build your own firm, you're a refugee. And when you're a refugee, you leave for a better life where you're in control. Right? There's either something you didn't like at your previous firm, or you didn't, you stopped fitting in, or what you're doing didn't work anymore, whatever it may be. But you leave for a better life where you're in control. The thing is, a lot of the people who leave for a better life to be in control have no idea how to build a business. Because they've usually worked at a shop where everything has been done for them. Right? They have a HR person, they have a COO, they have someone who does the fundraising, they have someone who does the reporting, they don't need to get involved in anything. But when they leave, all of a sudden, they're very exposed and they need to know how everything is done. And so I think one of the things that I've seen smart people do is to create

• 15:32Speaker 01

  an LP advisory committee or an LP advisory board, an LPAC, whatever it may be, where they get one or more smart investors who are working with them to be kind of a bench of safe people that they can talk to about things they're thinking about with their organisation. We're thinking about A, B and C, or we're not sure how to think about fees, or we're going to hire, whatever it may be. But they're a group of people who are fully supportive. And I think this plays into one of the things that I really say to people today more than ever is when you're investing time in building a business, the LPs, obviously they're interested in your strategy,

• 16:15Speaker 01

  but they want to know more what you're trying to build. Because if you make an investment and it goes wrong, fine, you'll lose money. But if you build a firm and you build it the wrong way, you're gonna, you're dead. So it's not about strategy, it's about structure. So what are you trying to build there? What's the culture? What's the structure of your fees, of your fund, of your team, of your incentives? And if you get that right and do it properly, you'll build a great organisation, which then means you'll flourish and then you'll keep your investors forever. Because people initially start out by having a fund, but does that fund become an asset manager? So these are all the kind of things I think people spend a lot of time doing. So I always say to people, get one page.

• 16:57Speaker 01

  Do a timeline. We're 2025 now. By 2030, where do you want to be? Think about three things: assets, infrastructure, people. As your assets grow, how many more people do you need to hire? What infrastructure do you need to build? And what's your capacity on terms of assets under management? What's your breakeven? How much you think you can manage without hurting yourself? And you just need to spend time thinking about this. Because when a manager opens, a lot of time they're just open and they're like, I can't raise any money. I'm like, yes, because as far as the investors can see, you're open forever. You don't have a capacity limit on what you're trying to do. There's something niche you're not trying to capture. You're just open. When you're just open, you're never going to be a priority to investors. So think about all of these things.

• 17:43Speaker 01

  Think about what you're trying to do, what you're trying to capture, what you're trying to solve for. Again, in the words of Anders, the world doesn't need another fund. So I think to that point, it's always about thinking about the organisation and then the LPs helping the GPs generate institutional alpha, you know, GP alpha. Helping them to think about team incentives, team structures. You know, we talk to our clients regularly about things like this. We're very open with them, you know. We hire someone, it doesn't work out, we'll tell them why it doesn't work out and be honest with them. And then also ask them their opinions about things they've seen. They've been doing this a lot longer than we have. They've invested managers for a lot longer than we've been around.

• 18:27Speaker 01

  What are the things that have worked in terms of evolution, team build out, culture, retaining talent, all those sorts of things? So there's nothing wrong in asking. And I think when you ask, people feel really honoured and humbled to be asked. They really feel like you really care about their opinion and it really matters. And of course, they've got immense experience. So I think it's a great thing that enough is not done on that side to capture that. In terms of asking your LPs for feedback? Asking your LPs for feedback, asking them for thoughts on an organisation, on culture, on structure, on incentives, on retention, all of those things. I don't think enough is done on that. And it doesn't have to be everyone, it's just, you know, one or two.

• 19:10Speaker 01

  I've had a number of friends who've been in situations and they've called me, they said, they're going to, we're struggling in A, B and C. We don't know what to do. I'm like, which investors are you closest to? They said, well, these three. I'm like, pick up the phone and call them. They're like, really? I'm like, yeah. And in each of those situations, those investors have been so empathetic to them, but have really appreciated them being called on, you know, taken over the wall and them explaining what's going on. And they'll be like, okay, thank you for telling us. This is what we think. And this is how we think you should communicate it as well. Because when you're on the other side of that, it really matters. The communication is so important because you don't want to lose

• 19:52Speaker 01

  control of the messaging of something. Because a rumor mill can start if it gets into the wrong hands, right?

• 19:58David Weisburd?

  When I interviewed John Merrill, he worked closely with David Swenson. One of the things that you said about him, who kind of popularized this Yale endowment model, is that he was a great ecosystem player. He knew how to get the right economics for Yale. He knew how to get the right economics for the GP, and he knew how to get the right economics for the co-investors. He knew how to build ecosystems in sustainable ways. Is this a trait that you see around the top LPs? Or do the, some of the top LPs have very sharp elbows? And talk to me about kind of the, the pros and cons on those approaches.

• 20:28Speaker 01

  There may never ever be anyone like David Swenson. I was lucky to work with him across two managers. His ability to sniff out talent, and it, it's about finding those human beings that were just special. For 10 years plus, I had dinner with David, our team had dinner with David. It was incredible. And he'd say the same thing to me every year. We just want to find smart people that do something consistently that allows us to sleep at night. It's that simple. It wasn't about, oh, let's look at their historical track record. But historical track records tell you nothing. It's like, what is special about these people? Do they

• 21:10Speaker 01

  have integrity? Are they good for disterries of the capital of the Yale University? And that, that was something special. When he built the Yale model, it was at a time. You know, doing privates in the eighties and nineties, that most people were not touching that. He was a revolutionary. He implemented that model and it worked incredibly well. And look, there are, there are investors who have sharp elbows. But one thing that I would say, and I say it to a number of investors that I hold close to, is that I think a lot of these guys should spend a lot of time effectively pitching their organisations to

• 21:52Speaker 01

  GPs about why their capital is the best around. What's their mission? What do they do with that money? What happens to the returns that are generated by the GP? What do they, what impact does it have on the community, on the world, whatever it may be? And so a lot of times, particularly for capacity constrained managers, which are often the best managers in the world, there are show purpose because people are fighting to get in to these guys. So I almost think those guys need to be as much flag bearers for their organisations as the GPs are for their organisations. This is all about alignment more than anything. And even when you think about what I do, I think the most important, the number one factor is this, is finding alignment between

• 22:36Speaker 01

  your IR, your marketer, your fundraiser, whatever you want to call them, and the principle. You need to have that alignment. It's so important. You know, if you don't have that alignment, then the, the IR person that always running too fast or too slow, it just needs, you need to sit down and say, what is the plan here? What organisation are you trying to build? Are you in a rush? Do you want the best quality capital? What, what is it that you're trying to achieve? And you need to have that alignment. That's the number one thing that you need to find when, when you work with someone. And, you know, I remember when I moved over from TSI to work for Parvus and we had a terrible 2008. And I said to Eduardo, it will take us five years to build this firm back, but I'm in. And he said, I

• 23:19Speaker 01

  trust in you. However long it takes, let's just get the best investors, which what we did, we took five years, we got the best investors and we closed and it was perfect. And that alignment was there. He understood that I was going to focus on the best quality capital, that it was going to take time. And this is not about performance. The, the big thing that people get wrong, how many people, you've met them, I've met them, hey, my returns are amazing, but I can't raise money. If you focus on trying to raise money because your performance is good, you know what? When it's not good, those people are going to go away because they're investing me for the wrong reason. It's about alignment of philosophy and process. That's what it's about.

• 23:57David Weisburd?

  There's multiple layers of alignment here. One is making sure that everybody within your organization is thinking like a principal. And the best way to do that is to make them as principal, have them have equity in the fund or even on the underlying manager. And there's alignment with the LPs. How do you build that alignment and double click on that?

• 24:19Speaker 01

  The initial starting point in terms of the team is right. What is it that we're trying to achieve? Does everyone buy into that mission? And does everyone have the willingness to participate in this culture of what this organization is? That's literally how you start. Now, sometimes you carry that culture away. You only have a team lift out, they come with a culture. Sometimes you have a new culture that starts out and sometimes you have to brainwash young people and bring them in and saying, this is how we do things. So there's no kind of one size fits all. It's kind of case by case, it happens. And sometimes cultures evolve. You know, things change, organizations grow, they compress, they change, they become dynamic, they become multi-product shops.

• 25:04Speaker 01

  So I don't think there's one kind of size fits all for that. But with GPs and LPs, it's about spending the time at the beginning, which most people who sit in my seat do not spend. They go in and they pitch. They don't spend time understanding who those organizations are, what they're trying to do, what they're focused on, what their concerns are, how they think about volatility, fees, structure, liquidity, all that sort of stuff, right? Someone recently said to me, and I love it, Alex Chung at Common Spirit Health, who deserves a shout out, said to me, this is really become about, is this a jigsaw puzzle or is this a treasure hunt?

• 25:48Speaker 01

  And if you think David Spencer really was a jigsaw puzzle, right? Where David had a model portfolio of things that he was trying to achieve, right? We're going to have a bit of timber, a bit of international equities, a bit of domestic equities, some privates, venture, whatever. And he had a structure of what he was trying to achieve. And then your asset allocation moved based on what that jigsaw puzzle was going to be. There were going to be some pieces that were bigger sometimes, some that were smaller other times. And then you've got Seth Alexander, who's an Yale alum and obviously was on the team, took a different strategy and said, let's just go and find the best money managers in the world. I don't care what asset class they're in. I don't care what strategy they're in. Let's just go and find the best people, the new talent on the street and go and back these people.

• 26:30Speaker 01

  And that is really about, you know, a treasure hunt, about finding that talent. So it's very different. Now, they both can achieve the same things, but they're doing it in very different ways. And I think more and more people have transitioned from the jigsaw to the treasure hunt. Now, the jigsaw is still there with a lot of organizations. But over time, people are saying, well, how can we be more dynamic? How can we build capital efficient? How can we take advantage of opportunities that come? How can we be more tactical? There's lots of different ways that people think about things now. And the market's changed, it's completely changed, right? So you have to think about how you become more dynamic as the market changes and as the world changes, as the opportunities arise.

• 27:12David Weisburd?

  And when you look at the very elite LPs in the world, many of them which are LPs in your fund, do they tend to be today more like jigsaw or treasure hunt LPs?

• 27:24Speaker 01

  I'll say hybrid. They kind of have their base of what they're doing. And the rest of it is kind of dynamic. So, you know, visually, I guess you, you almost think about a building where you have temporary kind of marquees that come in different parts and are added on and taken away as and when the opportunities come.

• 27:50David Weisburd?

  Last time we chatted, you said something that surprised me a bit. You said that the longer it takes for someone to invest into you, the longer they will stay with you. What did you mean by that?

• 28:03Speaker 01

  There's two aspects to it. The first aspect would be 20 years ago, there was so much money in the market. A lot of it was not high quality and people were just allocating it as and when they could and as and where they could. And a number of investors said to me, I wanted to get into the tier one managers and I couldn't. And so I gave the money to tier two and tier three managers. They were just interested in allocating, getting that exposure. Post GFC, it's changed and there's a real process now in terms of people investing capital, where people are being much more thoughtful about what they're doing, how they're doing it, who they're doing with.

• 28:43Speaker 01

  It's almost like they've gone from saying, actually, I don't, I don't, I'm not interested in just what the performance number is. I want to understand what the quality of that performance is. Where is it coming from? How much of it is leverage? How much is driven by one or two stocks versus a diversified portfolio? So people are much more thoughtful about it. And subsequently, it takes longer and longer for people to do things and allocate capital to managers. But I think post 2018, 19, 20, it's gotten even worse. Because a lot of investors have a lot of issues going on in their portfolio, especially with COVID.

• 29:22Speaker 01

  There were interest rates, inflation, China, illiquidity, venture privates not paying out. And people all of a sudden thought, my goodness, they've got a load of things on. And then recently, obviously with things like the endowment tax and everything, everything was just put on pause. And I think what you've got to understand, it's not that people are not interested in doing work on you, are not interested in investing you, the priorities just change and they have so much more to deal with now. And then governance issues and things like DEI, ESG came into the agenda and people having to do with all of those things as well. And so I always akin it, again, back to human relationships is when you meet someone, you know, if you're meeting your partner, your life partner, and the longer it takes for you to get to know them and build up,

• 30:07Speaker 01

  you really, really know them. If you take a long time before you commit and marry them versus meeting them in five minutes and then marrying them five minutes later, you don't really know that person. So when people take their time, I appreciate that they're trying to understand that if we go into their portfolio, what they expect for us to do for their portfolio. Where are we going to be additive and really, really just understand what our role is and how we're going to perform in certain market conditions. What is it that we're really trying to solve for? And I always say to people, it's like eating a sandwich. If you eat the whole thing at once, you'll be sick. But if you take bites of it, you can taste it. And so if people keep taking bites over a long period of time and getting to know us and tasting what we're like, then really they get to know us.

• 30:52Speaker 01

  And I think that for me, I, I, I love it. And it's just about stepping in and it's appreciating and respecting the fact that investors have a process. But the reality is they spent 95% of their time doing research and only 5% investing. So they need to do comparatives. They need to see how we're going to fit in. They're going to need to know who our peers are. They're going to understand what the opportunity set is. There's all these things to think about, right? As well as their daily jobs in terms of, especially like I say, a management team, reporting to a board, thinking about governance, team structures, hiring, letting go, firing other managers, all this sort of stuff's going on. There's so much going on. The problem is, is most people who sit in my seat think that the only thing that the LPs care about is them as, as the manager that they want to put in front of them.

• 31:38Speaker 01

  You know, we're one tiny bit of sand in this whole, you know, beach full of multiple billion grains of sand. It's just a tiny thing. And to try and be the one that gets someone's attention is always hard. And to get that attention just takes time. And I think that's the thing. It's about duration. It's not about execution. And that duration just shows respect and it shows that you appreciate someone's process. But it also shows that you understand they've got a lot going on. And back to the point I made at the beginning, if you focus on duration, those people are going to take your calls. If you email them every five minutes, go, you're going to invest in my fund, you're going to invest in my fund. They're not going to answer your messages.

• 32:20David Weisburd?

  How do you reconcile this duration or this long termism with check size? I know you said you're fine if it's five bucks, five million dollars, but that almost by definition is not scalable. How do you make small check size work?

• 32:34Speaker 01

  My mentor taught me this and said, never underestimate the small investor. And I remember back at my first firm, we run a three million dollar check from the University of Virginia, who at the time were investing via common fund into our EFA strategies. And two years later, University of Virginia gave us 400 million direct. Right? And that really was testimony to thinking like that and being long term. That sometimes the smallest guys become the biggest guys. When I joined TCI, I'd worked for a fund of funds where I looked after all the international institutional clients. And one of the clients I had was Tim Masak on the government Singapore's investment entities.

• 33:17Speaker 01

  And we ran a portfolio of 50 million for them and 2 million of that was invested in TCI at the time. And when I left working for that fund of funds to join TCI, they messaged me and said, we want to be your first client that you've been on board. And they were the first client I bought to TCI and they gave us 50 million. And I just said to the head of alternatives, I said, how come you're giving us 50 million? You've got to, she said, we use that portfolio as a means to screen ideas for the best ideas out there. So that 2 million went and became 50 million. Again, it was testimony to say, think about these things being long term. People move around, things change. I just care about the quality of relationships. Yes, it's a lot of, it can be a lot of relationships.

• 34:01Speaker 01

  I don't have many of those small investors, but I don't really care because they're as good to me as the big ones. Because the missions they work. And the work they do is incredible. And when you can be part of that and contribute to that and have relationships with those amazing people. That's all that matters. It really does. And I mean it sincerely. I don't, I don't, you know, some of the biggest allocators in the world, some of the biggest pools of capital in the world are a nightmare to deal with. So there's no correlation between quality of allocator or LP and size of asset.

• 34:35David Weisburd?

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• 35:20Speaker 01

  Right, there's none.

• 35:21David Weisburd?

  You mentioned mission multiple times. For somebody that's raised 99 billion, that might be paradoxical. But I think one of the things, even the hardcore capitalists, what they come around to this idea is in order to wake up every morning and to come in with full energy, you really do need a bigger why than just making money. And a lot of times you could borrow that why from the LPs from the mission. I know a lot of Sequoia partners talk about this, how focused they are on the end impact that they have. It sounds kind of like virtue signaling or like a bumper sticker, but there are true believers that truly come in every day and work either for the GP or for the LPs directly. And are so focused on the mission that it does make them more and better investors.

• 36:03David Weisburd?

  It makes them take that incremental call. It makes them take the incremental business trips. So I think it is something that's highly underrated in asset management.

• 36:12Speaker 01

  Massively underrated. And I know when I take my PM to see the work that one of our endowments does, and we do a campus tour and we go and see all the things that they're doing with the money we're making and the money we're managing, it just is the number one, the most humbling experience ever. But number two, it just, it, it just re-energizes you and are like, wow, if we make these guys money, look at what they can do. And we're lucky enough to have some amazing private family offices that work with us who do incredible philanthropy work and they also share what they do with the gains they make from their

• 36:53Speaker 01

  managers. It's just incredible. It's incredible. These guys are just, they're literally, the work they're doing is just groundbreaking, life-saving, world-changing. It's, it's amazing. And to be able to be in a situation where you can work in finance, but have an impact on the world at the same time, it's, it's, it's a dream, right? I studied development at university. And so I really care about this stuff. It's a really important thing for me. I sit on a number of charity boards. So this is the stuff that's real. The reality is that everyone wants to make money and have a good life and do things. But there comes a point where you're like, okay, wha- what are you working for? To have more stuff?

• 37:37Speaker 01

  What does it mean? It doesn't bring you happiness, right? There's only so many cars you can drive, so many houses you can stay in and whatever. The reality is if you can do something in the world that either improves people's lives or gives people who don't have a voice a voice, or you can save some historical artifacts, or whatever it may be, the mission may be, it's incredible because those people are using their wealth and their position and their platform for good. And that for me is sharing values with the world and showing people this is a mission and we all have a responsibility to some point to contribute, right? So this is a way to contribute as well. It's that Ikigai thing which I live my life by, right? You know, what does the world need? What do you love doing? What can you

• 38:18Speaker 01

  get paid for? You know, it's just bringing all of that together. And it's, it's great.

• 38:24David Weisburd?

  I want to really lock in in this concept that you're talking about, which is if you pitch just performance to an LP, the moment that performance goes away, they'll redeem. What more is there to pitch than performance? Maybe you could distill the non-performance aspects that you're trying to align with LPs around.

• 38:46Speaker 01

  I always use this example with investors. I'll say, if you've got two managers that come to you and pitch you the same strategy, and one analyzes 30% a year, it gives you no access to the manager, no portfolio transparency, doesn't really report on what they're doing. Whereas the manager analyzes 15% a year, is fully transparent about what's in the portfolio, gives you full access to the team, and will come and meet you, which one you're going to invest with. Very few of them, not all of them, but very few of them will say the first one. Because what you've got to understand, and Seth Alexander is the one who taught me this more than anyone, is when you work for an organization like he does, he has

• 39:30Speaker 01

  a fiduciary responsibility to that organization, and to a committee, and to a board, who he has to explain what he's doing to. And when you sit in my seat, you don't always see that. You just see the person that's in front of you, and you're like, are they going to give me money or not? But it's much more complex than that. Because ultimately, it's not that person's capital. They're allocating that capital on behalf of an organization, and that comes a lot of layers of complexity. And so I think when you're doing this, you've really got to understand all of that there. And that, for me, is a really, really important thing, which is why I spend time getting to know all these people and really, really understanding that. And so I think those people really want to find the partners who understand.

• 40:16Speaker 01

  What they're trying to do and what they're trying to achieve. And if you're able to explain to them when you've made money, when you've lost money, they're able to then report that back. But if you're constantly performing and all of a sudden you stop performing, they don't understand why you're not performing and you're not opening up to them. I think you're less likely to raise capital. Now, I'm not saying that's true in all cases because clearly there are many organizations or platforms that are not transparent and that continue to raise capital. But when you have a quality relationship between a manager and an investor, you achieve that through transparency and you achieve that through an alignment of values, philosophy and process. If it's a transactional relationship where it's all about, you've made me money, oh no, you haven't made me money. Then I just don't think it's sustainable long term.

• 41:01Speaker 01

  Because it's almost comes about what have you done for me lately? Every single manager in the world, doesn't matter how good they are, is going to have a tough time at some point. Right? And so I always try and spend time with people trying to explain to them, do you understand what we do from a philosophical process? And what our process is and how we find things and how we're different and why we're doing. And sometimes it's going to work and sometimes it's not going to work. So for example, now my main manager I work with, we invest in European equities. And everyone's bullish on European equities. And we've just said to them, listen, we're not buying into this bull market on European equities.

• 41:41Speaker 01

  We think it's overstated and we're going to underperform this rally that's happening right now because we're not going to own those sectors. And if you want to capture that rally and that momentum, these are the people who you should invest with. Don't invest with us because we're not going to perform in this market. And we're just being honest about it because our philosophy and process doesn't align with that. And it goes back to the point as well about when people invest with us. We always say to them, do not allocate full capital to us now because at some point we're going to underperform. But there's going to be a market correction and that's when you should add to us. So this is about finding a partnership. It's a spirit of a partnership. It's not about us and them and an allocator versus a manager. It's not transactional. It's about how can we work together for 20 years? How can we be transparent with each other?

• 42:25Speaker 01

  You know, and really, really help you achieve what you're trying to achieve and you allow us to do what we're doing. It's that's a very different approach to having a marriage which is focused around.

• 42:37Speaker 01

  If you want performance, which is wealth versus one where the two people really respect each other and understand what they're bidding to the table. I probably meet three to five new managers a week and they're like, Rooh, look at my performance, it's amazing and I can't raise money. I'm like, okay, let's, let's, let's look at your performance, let's look at your track record, let's look at your presentation, let's look about how you pitch and whatever. It's, it's obvious pretty soon into five or 10 minutes into speaking to them, why they're not raising money.

• 43:07Speaker 01

  It's a matter of the performance is good, it's just not about that.

• 43:09David Weisburd?

  And their inability to approach it like a doctor, find out what the LP is suffering from, find out what they're concerned about, find out whether it even aligns with them. You want to be qualifying them as well.

• 43:20Speaker 01

  I love that analogy of a doctor that, that gave us, incredible. And I think that's definitely an aspect of it as well, but this is a personal relationship, right? Where you have to understand if the person who's investing with you respects you, trusts you, appreciates you, um, and knows that if something goes wrong. This is not about when things go right, this is about when things go wrong. When things go wrong, are you going to be available? Are you going to be transparent? Are you going to tell them what's going on? That's what this is about. When a manager goes like that, it's fine because no one cares. But when it goes like that, everyone's going to be, what's going on? Is everyone still there? Is the team structure still the same?

• 44:05Speaker 01

  Are they doing something different? And it, it, it's about that. It's not about when things are going right, it's about when things are going wrong. And you don't want to have the people who, when it starts goes like that, they run away. What you want to do is when it's going like that, the people who understand what's going on, add more money to you because they understand that you know what you're doing, but it's a short-term dislocation, either in the market or in the sector or in the stocks that you're buying. And you know what you're doing because if you've been transparent, then no one's got anything to hide. They know what the intrinsic value is because the market went down because of COVID or Ukraine or Brexit, whatever it may be. If you look around and you look at some of the biggest asset managers in the biggest funds in the world, they're not necessarily the best performing funds. They're the people who do stuff consistently, they're the people who are most transparent,

• 44:49Speaker 01

  they're the people who are doing something different. It's not always the best performing funds. It's not.

• 44:55David Weisburd?

  It's kind of like this product market fit, which is what does the LP want? So you think the LP wants performance, performance, performance, but the LP wants transparency, predictability. They want to not look dumb in front of their own constituents. They also want performance, of course. Sometimes they want to deploy large checks. Sometimes their problem is they have too much money and they want to concentrate it on a certain amount of managers, which is a big part of this podcast is to give people the context for how LPs are thinking to kind of bridge the gap between GPLPs. But it's important to understand what is your product? What business are you in?

• 45:34Speaker 01

  Hundred percent. And I think it's so important to understand that, which is kind of spending the time with the investor at the beginning is just, and it doesn't matter if they don't invest with you. For me, I always say to people, listen, we would love to work with you, but even if we don't end up working together, I would love to stay in touch and just chat down. And look, sometimes people come back, they're like, do you know what? We've looked at the landscape. We actually think you guys are doing something a bit different. Can we talk? You know, I've recently had a group that I would have loved to have worked with when I first met them eight, nine years ago. And I just met the CIO for a drink and she said, look, we really, really want to do some work on you guys. We should

• 46:19Speaker 01

  have done it before. I just had too much going on. The reality is if I had mistreated her, not respected her, been transactional about it, she never would have called me now, eight years later and said, can we have a conversation? We've stayed in touch. I've connected to people. We've spoken about different things. The mission work they do is incredible. I'm very interested in it personally. So she always shares stuff with me about the stuff they're doing, invites me to talks and stuff like that. You just don't have that if you're focused on, all right, they they're not interested in investing me by next person. You don't maintain a relationship because you know what? You're not getting anything short term. This is the thing that people forget and I I will tell you, I will, I will name them, your Timko.

• 47:00Speaker 01

  And I worked, I knew Kathy Iberg, who was there for a long time, um, my whole career. And but it took fifteen years for them to invest. They invested actually in two managers that I recommended to them in the space of a month. And Kathy jokingly said to me, it only took fifteen years before I said, didn't matter. The key thing is that you would meet me, I would meet you, we'd talk about things and that's what mattered. And it's just, people just don't get that. But the key thing I'll say is it comes from an alignment with your manager. So your manager, your principal, your G P needs to be aligned with the person who's fronting their organization.

• 47:41Speaker 01

  And when you have that, then you can build things the right way if they're aligned with how you want to build them.

• 47:46David Weisburd?

  A bit of a paradox, but I found that if you pursue this long, this extreme long termism, which is what you're talking about, this fifteen year timeline. You actually end up closing LPs and getting them to invest sooner, even if that's not the, the, the purpose. Have you found that as well, that paradoxically, when you try to be transactional? It could take many decades, many years, if ever. And if if you're relational, it actually happens much quicker than you had initially anticipated.

• 48:16Speaker 01

  Totally, totally. I think people, I joke about it with investors. And I have to say, sometimes they forward me emails from other managers and they're like, I told this guy no five times and he's still sending me stuff. He's still adding me to the mailing list. I never ever add anyone to a mailing list unless they ask for one.

• 48:39Speaker 01

  You've got to understand, and I'll quantify this, that there was a small foundation in New York that I worked with. It was 1.2 billion at the time. And the person who was our key relationship at the time, he invested in a manager I worked with in Singapore. I called him to speak about something and his voicemail said, thank you for calling. I'm sorry if I don't come back to you, but due to the volume of calls I receive, I'm unable to call everyone back. And I said to him, can you just do me a favor? I'm just curious as to how many people called you last time? Do you have a log? He goes, yeah, I actually have a log of all that stuff. And it's a 1.2 billion dollar foundation.

• 49:19Speaker 01

  And he came back to me two weeks later and said, you know what, I've counted all the people that called me. What do you think the number is? I said, I have no idea. He said, go and throw me a number. And I think I said two to 300. He said, 936 firms called me last year, separate firms. And that doesn't include the people that are we're invested with or the people we're doing work on. And that's just for a 1.2 billion dollar foundation. So I kind of thought to myself, how on earth is he able to cope with what the volume of emails received? But also to focus on doing what he's trying to do. And if one of those managers contacts him every five minutes, you know what? It's easy to just to ignore them rather than to try and get their attention.

• 50:02Speaker 01

  So, and I have other CIOs that I'm very close to show me their inbox and say, look, I've got 100,000 unread emails, 200,000 unread emails, because they're just constantly bombarded by people sending this up, trying to get their attention. None of those people spend the time getting to know the organization and who they are, how they invest, what they're looking for. This is not about you selling something. It's about the people on the other end trying to see if what you do is a fit for what they're trying to do. And that it's just finding that synergy there. It's not about selling. It's just not about selling. Time and time again, I've never hit anyone in my life, but if someone says to me, you're a marketer, you're a seller, so I get so angry, just I want to hit someone because that's just not what it's about. It's not about selling, it's just not that.

• 50:47Speaker 01

  And so all those people who constantly send emails saying, are you going to invest with us? Who constantly send their reports, send their stuff like that. You know what? Pick up the phone and understand who you're sending that to and really what they're trying to achieve. But most of the time, they're going to ignore you.

• 51:03David Weisburd?

  I wonder if there's some evolutionary psychology principle here where people can almost literally not keep an organization in their head, they keep people in their head. So you say that you're building a relationship with them, you Rahul. In many ways, maybe our brains are not wired in a way to even build relationships with organizations. It almost has to be to the person.

• 51:24Speaker 01

  A hundred percent, a hundred percent. The firm I've worked with the longest in my career is the Hewlett Foundation since 1998. Twenty seven years I've worked with them and they've invested in 11 managers that have either worked with, recommended, represented in some way. That's a personal relationship that the first time I met Anna Marshall, the current CIO, she fired the firm I worked at. But the reality is it didn't matter because I respected and understood why she fired us. And the fact is about maintaining a relationship. And then I went to TCI and she called and she invested with that. You know, it's, and she's done that several times since. And I understand from her perspective, we have a relationship where she will call me and say, look, this is what we're looking for now. Do you have any ideas?

• 52:10Speaker 01

  Or we've met these three guys, what do you think? That's not about the institution or who I work, that's the personal relationship, right? And over these couple of decades, I've got to know her and understand who she is and what she does. And there's times she'll call me about a manager, I'm like, listen, the returns are great. You will not like that guy. It's that guy's not your guy, you know? That's not the guy who's going to be transparent, open with you, able to give you access to his team. Where all the stuff that I know that she cares about. So it is a one on one, it is a personal relationship. I don't care what anyone says. You know, yes, you can have great relationships between organizations, but those organizations effectively

• 52:54Speaker 01

  build those relations based on interactions between individuals, right? Those institutions are not speaking to each other. It's people that are speaking to each other that represent those organizations.

• 53:03David Weisburd?

  You spoke about this 1.2 billion dollar foundation that had 900 plus calls in a year, not even from managers they were looking for or in their portfolio, but but other other managers soliciting. There's so much noise when it comes to LP's voicemails and inbox. How do you break through? Everyone's trying to reach an LP. No one could get through and you're having these 15 year relationships. What are you specifically doing differently?

• 53:30Speaker 01

  I'm always trying to be helpful is the first thing. It's not about me, it's about them. What are they doing? What are they solving for? They're looking at a space, a strategy, an asset class. How can I help them? They're a new CIO, what they're trying to achieve. I'll give you some great examples. During COVID, six female investors that I know very well, all were calling me about the same things. They'd all become new CIOs of different organizations. And I thought to myself, listen, I'm helping these guys, but actually they should all speak to each other because they've all got the same issues.

• 54:08Speaker 01

  And I connected them and I'm so proud to say that that group of six CIOs is now over 30 female CIOs from the UK, from Europe, from the US, from Canada. It's incredible and they all meet every call and they talk about, and it's just trying to add value to these guys. It's institutional alpha. It's not about the portfolio or it's not about the managers. How can I help these people come together? Similarly, when there's people who are looking at a certain asset class or certain space, I have people messaging me last week, I'm coming to London. I want to look at credit managers. Who'd you recommend? And I gave them a list of 30 managers to come and meet. So that's, I think, why people will take my call, not because of the manager I work with,

• 54:52Speaker 01

  not because of me, but because I can help them. And I think that's the value add. I'm not looking for anything in return. All I'm looking for is ability to call them in 20 years' time. If something interesting comes up in front of me that I think they'll like, or there's someone who I think they should meet. And that's really what it's about, right? A lot of people do what I call wheelbarrowing. They come on, hey, David, do you wanna buy this? No, do you wanna buy this? No, do you wanna buy this? And there's gonna come a point where you're like, don't bring your wheelbarrow, because I'm not interested. No one ever says, hey, David, what do you want in the wheelbarrow? Right? If I'm just trying to show you stuff to try and guess what you might like or not, you're not gonna, you're not gonna buy in anything that's in my wheelbarrow. But if you say, oh, can you bring an orange wheelbarrow next time with brown vegetables in it?

• 55:37Speaker 01

  I'm gonna do that. And then say, oh, by the way, there's these green ones as well. Maybe you should try them or have a look at them and see as well. Rather than just bringing any random wheelbarrow around to you. So I just kind of trying to listen to people, who they are, how they think, what they want, what their issues are with their institution, where they look, where they have holes for things they're trying to solve for. It's a lot of work and it's hard work, but I love it because I always get to speak to the people that I wanna speak to. And you just can't do that by just dropping people. Are you gonna invest in this fund? Here's our latest report. Oh, we were up last month here. Who cares? It's one month. It doesn't tell you anything about the track record whatsoever, right?

• 56:19Speaker 01

  People don't, smart investors don't buy short-term performance, right? Again, back to David Swensen's point, it's about consistency. Are you able to consistently do something? Even sometimes when you're wrong, but you just do what you do. So there's some element of predictability when you go into someone's portfolio that you are solving for something that they're looking for, that it's gonna be consistent. When we build friendships, we build human relationships. We have consistency as a key thing that we're looking for. Consistency of relationship, of values, you know, of, of interactions, whatever it may be. And we have expectations, right? There's some friends we deal more consistent, more regularly with, some we deal less regularly with, but there's a consistency.

• 57:02Speaker 01

  And I think that's, again, back to a point I said, this is all about human relationships, right? It's, it's not about performance. It's just, I think people just forget that time and time again. Yeah, these relationships transcend organizations, they last decades. You know, we have investors that have invested with us two, three, four, even one, five times across different organizations. That isn't about. Me, it's about, it's about the relationships between the human beings. It's not about offer. It's about the relationships between people. And that's they, they know what to expect from us and that's a consistency thing. So I just think it's, you know, important.

• 57:45David Weisburd?

  So tell me about Parvus Asset Management, where you've been for almost 20 years.

• 57:48Speaker 01

  Parvus is a European equity house. We manage about 11 and a half billion euros. Most people don't know us. We sit on the TCI platform with what we're really trying to do is invest in companies that are growing through some sort of transition change or have been impacted by news, short-term news, that people either don't have the time or the time horizon to do the work to understand what's really going on. That's really what we're looking for. So we invest in a very concentrated manner on the long-term strategy, 10 to 15 names.

• 58:30Speaker 01

  On the long-short strategy, 10 to 15 longs and 25 to 30 shorts. And what ends up happening, because time arbitrage is our edge, is that we end up being very contrarian. So we go in when everyone else is leaving. 2012, big euro crisis, we bought financial institutions in Europe. 2015, Yu Jingping clamps down and Gibson and corruption, we buy luxury names. 2018, everyone thinks Jules is going to take over the world, we buy British American Tobacco. So we do the opposite of what everyone else is doing. And our clients have afforded us long-term capital. And I work with, you know, the most incredible partners in the world. This is just amazing. It's I wake up every day and pinch myself and I'm humbled.

• 59:15Speaker 01

  And even though we have, you know, quite a large asset base, now we have about 70 clients, it's not big. And just really, really high-quality people who support us and we have great relationships with. I have an incredible team. There's only eight of us in the whole organization and then we outsource everything to TCI. But our mission is to be below the radar, not people not to find us, because most people don't know who we are. And I like that.

• 59:44David Weisburd?

  And you have this contrarian approach where you're buying when stocks are down, then you hold until the narrative catches up to the intrinsic value.

• 59:57Speaker 01

  We look over a minimum three years. One names has been the portfolio for 17 years. It's been 90 from a 2% to 25% position. But yes, we, we look at, we look at free cash flow over a market cycle. It's really what we're looking for. So minimum three years. I think the headline should be, would we invest in these companies if the market closed for five years tomorrow? That's really what we're trying to, trying to look for. So yeah, we have very strong relationships with management. We won't invest in companies unless we know the management, have a relationship with them, understand their alignment, their ability to allocate capital, and just really get under the bonnet in terms of all the organizations

• 1:00:41Speaker 01

  we meet with. And I'll say this proudly, as everyone goes more digital, we go more analogs and we do more trade shows, we do more consumer surveys, we meet competitors, suppliers, we go to more conferences, you know, we've been in the field, in the companies that we're working with, going to factories, going on ships, doing all that sort of stuff. So we really, we're not buying stocks, we're investing in businesses and holding them for the long term.

• 1:01:09David Weisburd?

  There's a famous saying, the market could stay irrational longer than, than you could stay liquid. Even if there is intrinsic value in the company, how do you make sure that you're able to hold that name for, for the three year minimum period?

• 1:01:22Speaker 01

  We keep on turning the stones and doing the work and making sure that there's nothing we're missing. We analyze the regulatory frameworks, you know, a great, great position we had for a long time, Unicredit.

• 1:01:38Speaker 01

  We held it for eight years. We made seven times our money. But for the first two years, it didn't work. It just didn't work. But we knew that the transition in management, the new CEO, his vision, his ability, his understanding of the business, his relationship with the regulator was going to get him to where he wants to go. It's just going to take time. So anything we do, it's not for today. It's thinking three years out. We're investing for tomorrow. Literally, that's what we're doing. It's not about now. What, what, when you think about markets, what are markets doing? They're pricing tomorrow. That's literally what they're doing. And that's how we think about investing. We think markets are inefficient. But I think trying to understand where is the value going to be in three years' time?

• 1:02:22Speaker 01

  So sometimes you buy businesses and they're volatile. It looks like we're crazy. And look, we don't always get things right for sure. But we will do enough work where we really sort of understand, here's a really good opportunity here. We're looking for thirty five percent IRRs over a three-year period as our hurdle to get into the portfolio. You're going to end up to ten percent of the free float of a company. So we don't buy the momentum, for example, right now in European defence names and in financials. It's just not what we do. It's not who we are. We're looking for the, the contrarian, the under-researched, the under-loved, the misunderstood names.

• 1:03:00David Weisburd?

  And you mentioned you short twenty five to thirty names at any given time. How do you choose the stocks to short?

• 1:03:07Speaker 01

  It's been an evolution. Shorting was not something we were good at, but we gave at the time who the person who was our youngest analyst in two thousand seventeen. So take this short book and spend time on it and see what you come up with. And he spent eighteen months, twenty four months analyzing what we'd done. Tried to do it again, then understood it wasn't working and then sort of really went back to drawing board and sort of figured it out. So we look at fakes, fads, frauds, over promotional, highly marketed, over levered, and companies particularly benefit from short term momentum. So a lot of names, for example, were saved by COVID, were able

• 1:03:49Speaker 01

  to go online. But the reality is that's sustainable post COVID. So made a lot of money in that period. And that's really what we look for. So again, some of those names that we short, people would be like, how can you short that name? But people are buying the hype and the short termism of those names and don't really understand the long term value that's going on behind that. So we never meet management there because management tends to be over promotional. So we look underneath those businesses and really spend time understanding what we're what we're trying to do. We want a minimum of 50% downside when we're looking at these things. And again, we can be wrong for a long time, but we won't have now more than 3% any one name. We'll just cover them as they get to 3% automatically.

• 1:04:32David Weisburd?

  Ron Biscardi, on our interview, when we talked about you, talked about your famous email list. What does somebody need to do to get on your email list?

• 1:04:42Speaker 01

  So the email list is it's really for our clients. That's my primary focus because I always want to be helpful to them. So I receive so much research from everywhere all the time. So I go through it and pick the best bits of research that I believe will be helpful to them. And then I have a very small list of other people who I have very strong relationships with, who we mutually help each other, who's all gonna I'm on the advisory board for iConnections. And so obviously, I've helped Ron since the beginning. And it's really important to me that I help them and they're successful. And so them

• 1:05:27Speaker 01

  understanding all the things that I'm seeing and that clients are interested in is really important. So I share that with the entire iConnections team. And then there's a few other groups I share with managers I work with, stuff like that. It's it's hard to get on my list. But, you know, David, I would add you to my list.

• 1:05:45David Weisburd?

  Well, I'm honored. I know this is kind of antithetical to your ethos. You like the in-person meetings, but this list seems to be a useful tool for you to scale your value add to a small group of people. What are some other technologies or processes that you do in order to gain leverage on your time when it comes to relationships?

• 1:06:05Speaker 01

  I don't use technology to gain leverage on my time. I do the opposite because the problem is, is everyone's using technology to do that. And I want to be the guy who does the opposite of what everyone else is doing. So as everyone goes more digital, I go more analog. The number of people that say to me is like, why do you go to the US every month? Why do you spend? It's like, because that's the way that I maintain relationships. I get in front of people. I spend time with them. I understand what's going on with them. I will have a drink with them. If they've got some stuff going on at work that they can't talk about at work, I will meet them outside work and all the rest of it. So you don't get that from going on a Zoom. You don't get that from having a call phone conversation. You get that face to face. You know, the real connection with human beings is when

• 1:06:50Speaker 01

  both sides are vulnerable. And when both sides are vulnerable, you become available. And when you're available, people let their barriers down. And you can only do that when you're talking face to face with people. During COVID, I had to do that during over Zoom. It's the only way to do it. But a lot of relationships I made during COVID have turned out to be very good personal relationships, one on one. But I still think the face to face is just unparalleled, which is why for as long as I can travel, I will just travel and meet investors. It's just so important to get in front of people. They appreciate you making the time, especially when it's places that are difficult to get to. And

• 1:07:33Speaker 01

  just seeing someone face to face is just incredible. I remember the first business trip I made after COVID was iConnections' first conference in Miami post-COVID. And David, I travel so much, I forgot how to pack. I can do three weeks' travel on the carry-on, but all of a sudden I was going away for four days and I packed this gigantic bag because I just thought, what do I normally do? And I just threw it in.

• 1:07:58Speaker 01

  That aside, but when I started sitting down with people, my mother, that's my watch, it's like three o'clock in the morning. Because once we got talking, because it was all about how was COVID on you, how did it affect you, how did it affect work, how about your kids? And just people didn't stop talking and you, people just really missed that personal connection, that one to one time that they just didn't have over COVID. And so I think it's become even more important because it's easy to have the lazy way out and do Zoom. Zoom's a great filter for investors to sort of see who they're going to spend time with, I think.

• 1:08:34Speaker 01

  But I just, I think for me, I'm never ever going to replace that face to face human interaction. Because you just make connections that you can't make using technology.

• 1:08:46David Weisburd?

  I think it even works to the extreme. My former colleague, Max Stadler, who spent seven years at Goldman, he taught me this, to me, which was crazy idea of flying for one meeting, three thousand miles. So you fly to LA for one meeting and obviously you could build an itinerary around that. But just how important that face to face was that you would actually get on a plane and, and fly for that long was very novel to me. But ended up something that I integrate into, into my business every day.

• 1:09:13Speaker 01

  I'd completely agree with that. And I, in two thousand and six, I flew to Australia for a day and came out with a billion dollars. So I know sometimes you have to do those things, but I did it. I left here Friday, landed Sunday, meetings Monday, flew back Tuesday. But it was, you know, huge.

• 1:09:31David Weisburd?

  Well, on that note, this did not disappoint. This is true masterclass on being inside the mind of somebody that has raised such an enormous amount of money. And somebody that has done in a way that actually builds these lifelong relationships. A lot of people think there's, there's conflict between sale, quote unquote, sales and relationships. And I know you don't like to be called a salesperson. Internalize the relationship, internalize the value that they're bringing to their client to such a degree that the sale kind of happens by itself. So it's been absolutely an honor to spend time with you and I thank you for jumping on the podcast.

• 1:10:08Speaker 01

  David, honestly, it's such a pleasure to spend time with you and thank you for including me in amazing work that you do. I'm really, I'm really humbled. Thank you.

• 1:10:18David Weisburd?

  Thank you, Rahul. Thanks for listening to my conversation. If you enjoyed this episode, please share with a friend. This helps us grow, also provides the very best feedback when we review the episode's analytics. Thank you for your support.