Speaker 1the multi-strategy firms over time have more and more employee money and less and less available to investors. People have been giving back capital on that. And I said, this is an opportunity to create from first principles, a multi-strategy from scratch, which even the market leaders not necessarily did. They evolved to that over time and they did a great job, but create one from scratch. The second big trend in the world is the financialization of everything. Everything's becoming a tradable asset. The amount of people that are in the middle of that, whether it's the crop shops, the multi-strategy firms, the banks, there's not that many intermediaries for this thing. So I said, here's an opportunity I have to start one from scratch. I'm still young enough. Obviously there's gigantic barriers to entry in this business, but I felt like Millennium was in a great place, extremely talented people. And so I said, this is a time when I can get off and do it on my own.
Speaker 2I'm Ted Seides, and this is Capital. My guest on today's show is Bobby Jane, the CEO and CIO of Jane Global, a global multi-strategy hedge fund he launched last year that manages about $6 billion with over 350 employees. Bobby's storied Wall Street career includes spending seven years as the co-CIO of Millennium and 20 at Credit Suisse in a range of leadership roles spanning proprietary trading, derivatives, and assets. Our conversation traces Bobby's path from growing up as the son of immigrants in Queens to the trading floors of O'Connor and Credit Suisse, all of which shaped his thoughtful, framework-driven perspectives on markets. We explore the evolution of prop trading and the migration of risk-taking from banks to hedge funds, proprietary trading firms, and private credit. We then discuss Bobby's ambitious launch, including the principles guiding its design, scale, and diversification out of the gate, talent strategy, risk management, portfolio construction, and the many trade-offs that create the different cultures and complexions of multi-manager hedge funds. We close with Bobby's application of financial innovation to helping others. Before we get going, Capital Allocators seems to reach a sufficiently large audience to create all kinds of serendipity. Here's my 16-year-old son, Eric, to share an example.
Speaker 3I was hanging out with my friend, and his dad was super mad at us for being so loud. He told us we should quiet down and learn something. He then asked me, do you listen to any podcasts? And I said no, but I probably should, given who my dad is. He then goes, here's one. The guy asked a lot of really cool, important questions. The podcast he was holding on his phone? None other than Capital Allocators. I sighed in annoyance because this has happened before, and I asked for his phone and started playing the Ben Hunt episode from June 2024. If you don't remember, that's the last time I did the spread the word. The sound of my voice made his jaw fall completely to the floor. Even after showing off to my friend's dad, I'm still not going to listen to this podcast. But you definitely should. Apparently all the rich, smart dads are doing it. If you want to be rich, you should too. If you already are rich, don't worry. Tell your poor friends about this podcast. They're going to get a lot out of it. Thank you so much for spreading the word.
Speaker 2Missed filing, incorrect source, or context that gets lost somewhere in the retrieval chain aren't edge cases. They're how decisions go wrong. AlphaSense is the AI platform built specifically for this. They own the content, over 500 million curated documents from broker research and expert transcripts to filings and earnings calls. And they own the retrieval layer on top of it. That means every answer can link back to an example. And that's what we're doing. We're doing it. We're doing it. We're doing it. We're doing it. We're doing it. We're doing it. We're doing it. We're doing it. We're doing it. We're doing it. We're doing it. We're doing it. We're doing it. We're doing it. We're doing it. We're doing it. Verifiable source. Because the answer is only as good as what's underneath it. And with AlphaSense, you know exactly what that is. See it for yourself. Try a free trial at alpha-sense.com slash capital. That's alpha-sense.com with a hyphen in the middle slash capital. Capital Allocators is also brought to you by Morningstar. In a sea of data, you need to know what you can trust. Morningstar's data, analytics, and research helps bring clarity across public and private markets, connecting independent research and data into the tools and AI platforms you use every day. So insights are easier to spot and act on. Morningstar. Nothing in your way. Visit morningstar.com slash capital. Game on to learn more. Capital Allocators is also brought to you by Juniper Square, the operations partner trusted by the leading private market GPs. One theme that keeps coming up on the show is GPs that build the strongest and most durable relationships with LPs are the ones that have both strong returns and strong operations. AI raises the stakes on operations, and having Juniper Square as your operations partner helps ensure your data security. Data is organized, accurate, and accessible so you can unlock operational alpha. That's why thousands of GPs trust Juniper Square. Learn more at junipersquare.com slash capital allocators. Please enjoy my conversation with Bobby Jane. Bobby, thanks so much for joining me. Ted, great to see you. Why don't you take me all the way back to your upbringing?
Speaker 1I grew up in Queens. My parents were immigrants. My dad was an engineer and a builder. My mom was an accountant. Very excited to be in America. He was in the first wave of immigrants from Asia after the 65 Immigration Act. He gave us American names. He said, we're going to be completely integrated. I didn't meet another Indian family until I was 16. He said, in America, you have to learn golf, tennis, and skiing. In my neighborhood, I was the only kid that did that. It was just me and my brother. I went to high school in Manhattan. I commuted an hour and 20 minutes each day. I went to Cornell. I majored in political science, government, and then I went out to Wall Street.
Speaker 2What were the most important things you learned from your parents?
Speaker 1My dad was very conservative. We weren't a borrowing family. I didn't borrow a penny in my life until I was 50 years old. And interest rates got to two and a quarter, and I said, I have to. My dad used to say, an Indian kid captains a chess team. Who cares? You have to be captain of the sports teams. You have to be president of your fraternity. That's what I was. That's what I did. Queens was all about, do what you're going to say, say what you're going to do. Queens logic, we used to call it. My mom was hyper-intellectually curious. She read a book a week. I got my love of reading from my mom. I lived in a working-class neighborhood. I learned how to integrate with a lot of other people, how to blend in, and that all carried on going forward for a long time.
Speaker 2What brought your interest in finance when you were in school?
Speaker 1I wouldn't have heard of Goldman Sachs until I was 21, but Hunter High School had a program where you only had to take two classes as a senior. So I worked at a stock brokerage firm in 1987. I was there for the crash. I learned what money management was, reading the tape, going through the quotrons, going through the annual reports. I wouldn't have said I was particularly interested in finance. I was a numbers guy growing up. I majored in political science in college, but when I got to be a senior, I joined the campus recruited. Now people are like, hey, my dream is to be an investment banker, but that wasn't the world back then. What you saw was that the highest-end kids were going into finance, and there was two choices. You could go down the banking route, or you can go down the trading route. I remember I went to a recruiting dinner. At 2.30 in the morning, they went back to work. And I said, wow. Then the O'Connor guy showed up. O'Connor was one of the original trading shops, the predecessors to the prop shops. Susquehanna and O'Connor were the two back then. The interview question was, what's 49 times 28? And I say 1372. They say, Mets play the Yankees in the World Series. What are the chances Mets win four? I say, one out of 16, they say you're hired. So that's how I got into trading. Once you first got on the trading floor, what did you find? The trading floor back then was the actual American Stock Exchange, where options traded. I ended up on the floor, and the first thing is, you see what an actual trade is. You're standing there on the floor. You're buying something, and the person who's selling it to you is right across the way there. It makes you think, I have to figure out why I bought this, and this person wants to sell it, and why I'm right and they're wrong. It gets you into the core of what a trade is. It went with me for a long time, because I realized trading is not a video game. There's actual buyers and sellers. That was the first thing I learned. The second thing I learned was, at O'Connor, the core of the business was index options trade rich. People want to buy index options for protection. Single stock options trade cheap, because people long stocks, and they sell call options against those stocks to earn a yield. There was a core architecture of the business. There was a core architecture of the business that had an edge built into it, and your job was to harvest that edge. I picked up the harvesting nature of the business, is figure out how you can provide a service, how you can provide, in this case, liquidity to two different pools of capital. There's money if you can cross two different streams. in this case, single stock options and index options. There's two different types of investors. There's money in those seams. The third thing I learned was I thought the trading floor was going to die in about a minute. I said, I can't believe this is the most efficient way to trade things. I made a point to get off the trading floor as soon as I can. Turns out the trading floors lasted for a long, long time after that. And so what I realized is that things can last a lot longer than you think they can. I learned the fundamentals of trading. O'Connor was a brilliant place to work. There were a lot of clever people. A lot of people went on to do a lot of different things. O'Connor was a good place to have formative years.
Speaker 2Where did you go when you left the trading floor?
Speaker 1I ended up going to Credit Suisse Financial Products in 1996. That was the hot derivatives place at the time. For a derivatives trader, that was the ideal place to work. It was a joint venture, part of Credit Suisse versus Boston. I joined the index arbitrage desk. Now you'd call it the equity basis trade, maybe Delta One. Because most banks, the proprietary guy was the end of the desk of that relative group. We had one group with a special forces group, effectively. The job was to trade S&P futures versus the underlying 500 stocks. Credit Suisse Financial Products was a clever place. The guy before me made $10 million in P&L, making 40, 50 grand a day. My first year, we made $50 million in P&L. We were treating every index art basket as an option. First, we were buying 500 stocks versus futures. Then I said, why don't we buy 50 stocks versus futures? Then instead of stocks versus futures, why not stocks versus stocks? Then if we're doing it in the US, why don't we do it in Europe and Asia? Within a short amount of time, it became a several hundred million dollar business. The first three arbitrages were take technologists and pay them like traders, which people weren't doing then. Staffing yourself from the IT department and the quant research departments, not necessarily the MBA classes. The second was collecting and storing data and doing things with it and cleaning it. The third is expanding the definition of data. We were doing natural language processing back in the late 90s. We were taking in the news feeds and trading things off of it. Those prop desks, especially at Credit Suisse, that's where things were happening back then. It was much bigger than the hedge fund business, especially in the arbitrage and the harvesting side until the financial crisis. At what
Speaker 2point in time did you start thinking about incorporating the fundamentals into what sounds like a structural arbitrage desk?
Speaker 1In 2003, 2004, we combined all the proprietary trading groups into one group called Global Proprietary Trading. After Alan Howard had just started Brevin Howard, there was a catalyst point where you could have spun out the hedge fund. Then I didn't. I stayed and I ran this global proprietary business. What was happening in 04, 05 is the first time you had to start dealing with crowdedness. Some of these banks were, risk arb desk. We risked that arb desk. Citadel was convert arb desk. Some guys were fixed income arb desk. Suddenly, the arb started to get crowded. The questions were, could you take the fundamental equities business and turn it into an arb business? That's what we started to do. Overlay the statistical arbitrage risk management systems, where you were doing factor hedging and all that type of stuff, and try to overlay that into the fundamental equities business. That was the root of it in the industry, that happened in about 04, 05. I would say it got industrialized much later, probably 14, 15, 16, that time onwards.
Speaker 2What was the breadth of what you were doing leading into the financial crisis?
Speaker 1We were doing all the things I'm doing now. In fixed income, you had commodity strategies, credit strategies, and rates of macro strategies. In equities, you had arbitrage equities, you had fundamental equities, and you had quantitative equities. Those were the six business. We always had a big business in Asia because at a bank, you could leverage the entire architecture of having an Asia office. You have lots of different taxonomies. You have market-making strategies or market-taking strategies. You want to balance across those things because the market-making strategies tend to be reversion-ish and the market-taking strategies tend to be momentum-y. You have momentum versus reversion, which is a slightly different context. You have fundamental versus arbitrage, or I call them artists versus harvesters. The harvesting business is a beautiful business, but they tend to be correlated. You need a balance of all these businesses. It got you to abstract the problem rather than just fixed income equities as you run one of these multi-strategy firms. That's actually pretty important.
Speaker 2How did the financial crisis change the nature of all the activity that you were doing?
Speaker 1It changed the nature of your strategies. We went to decimalization in the early 2000s. Before that, you were market-making. Now, after decimalization, when the spreads were narrow, you'd be able to do a lot of other things. You'd be able to do a lot of other things. It became market-taking. You had to take into account hedging more, and risk management became a much more prominent part of your risk model than it had been before. The big impact of the financial crisis was that regulators, shareholders were uncomfortable with these kind of activities residing in the banks. There's two clear industries that have moved from the banks to the private sector. One is the private credit industry is effectively taking what the banks are doing and doing that off asset manager balance sheets. One is the market-making industry, taking what's done at the banks and doing it in the prop shop industry. What the multi-strategy hedge funds are doing is the prop desk activities, taking effectively the liquid businesses inside the banks and bringing them into the hedge fund world. That was a giant activity. When you think about the amount of capital in the banks that was there and the amount of capital that needs to be replaced with the scale of these markets, that was a giant activity. You have the prop shops, the multi-strategy hedge funds, and the private credit firms. That has moved off the banks' balance sheets. The banks are still doing some of those things, but they're doing so much more. This relationship has become more symbiotic and probably better for the financial
Speaker 2system. What happened from there until you decided to leave?
Speaker 1That Volcker Rule, which was announced in 2010 or so, didn't get implemented until 2015. That was a fundamental change in the banking sector. We tried to do it within the rules of the bank. We realized it wasn't going to work. 2012, I moved to run Credit Suisse Asset Management, which was a $400 billion asset management. The main goal was to move all the proprietary businesses into the asset management business, which we started to do in 2012. There were two things we were doing. One is bring over a lot of the proprietary trading businesses. Some of those businesses are some of the largest hedge funds in the world right now. The second thing was to see if you could change the nature of the banking. What happened in the markets is risk-taking used to be done off of the bank's balance sheet, which is not that great because you're borrowing short and you're lending long. What we were trying to do, which has happened now, and it's the advent of private credit, is a lot of that lending off of an asset management balance sheet. We started doing that at Credit Suisse. People remember we gave the employees a lot of what was considered back then the toxic assets, but they were not toxic assets. They were undermarked assets. The question is, can you do things on an asset management balance sheet with pension funds, people that have longer duration assets, people that will take less duration, maybe have a lower cost of capital because they have less leverage built into it? That was what the move at Credit Suisse asset management. Some of the firms have taken it one step further now, moving to work off of insurance company balance sheets. That was a great time. But the Volcker Rule kicked in in July 15th. It became difficult to do what we were talking about on a bank's balance sheet. That's when I started thinking about, after 20 years of Credit Suisse in a variety of roles, running the prop desk for that whole 20 years, co-running the securities division and running CSAM, I started looking to potentially do something else.
Speaker 2Along that period of time, particularly after the GFC, you had the growth of the multi-PM model. Would love you to take a step back and describe what you see that model is and why it's been so successful.
Speaker 1The first thing is, there's a fundamental engineering that happens in a multi-strategy context. Let's say you have a strategy that has one sharp ratio, and you're a single manager hedge fund. You want to make a 10% net return. Let's say you have to make a 13% gross return. You have to run all else be equal, a 13 vol to make a 13% gross return. There's more math than that, but let's just say, simply speaking, in a multi-strategy firm, if you have enough diversification, you can run, as most of these multi-managers have done, a five-vol. To make a 10% net return. If you can run a five-vol to make a 10% net return, that's a different proposition. Why can you do that? Because of diversification, because of netting. If you have a business and you add one more portfolio, let's say a stat-R portfolio, there's a 50/50 chance you're a long apple already. There's a 50/50 chance they're going to be short apple already. Now, you don't have to hold capital against that apple. Whereas if you were two separate hedge funds, you'd hold capital against being long apple, and you'd have capital against being short apple. This is complicated, and there's more degrees of freedom on this topic. Fundamentally, there's a capital efficiency that comes out of a properly diversified multi-strategy. Secondly, there's a purchasing power topic. You're more relevant to the investors if you're one place, because you can use this common intellectual property of risk management across more different things. The model itself worked. What's interesting about the model is these firms are very different. Even the market leaders, some of these firms are. These firms are talent acquirers. Some are talent developers. Some are based on autonomy, and some are based on collaboration. Some, the production metric is a business. We have a commodities business, and some is the PM. Some take care of the losses, make sure you focus on the losses, and the gains will take care of themselves. And some are, let's focus on offense, and the losses will wash their way out if we make enough. These are fundamental different things. Then you have actual diversification. A big difference in these models is a core satellite. A lot of these firms are effectively core satellites. It was a great PM that started a business, then learned that they could raise more money, and they started diversifying. But at the end of the day, the whole ecosystem is a lead actor and supporting actors. It's difficult to transcend that and to have all lead actors. And there's a difference there. Supporting actors are different than lead actors in a variety of ways. The multi-managed industry was the probe desks. It's not that different, the culture shock of moving from CS, to Millennium, it was not that high at all of the same thing. A lot of it was the same people as there was a transfer of people from the prop desks to the multi-strategy industry.
Speaker 2As you were coming out of CS, why did you end up going to Millennium?
Speaker 1There was two basic choices. One was go work at an existing hedge fund or go spin out the existing prop business. I had known Izzy for a long time. I had a tremendous amount of respect for what Millennium was, and I thought I could be relevant there. And so Izzy called me and said, "I think 20 years is enough." I think 20 years is enough. I think 20 years is plenty. So I joined Izzy and it was an incredible room, incredible people, incredible business. One of the things that my dad said to me was, "You really don't know anything until you've done it for 20 years." That always gave me a little bit of insecurity as there's more knowledge to know. I had been doing it for 23 years at the time. For the opportunity to go into a business like that, to sit next to one of the legends of the industry was an opportunity that someone like me wouldn't pass up.
Speaker 2What did you see when you got there?
Speaker 1I thought it was an incredible platform. What I thought of was try to turn this platform into an operating system, to build up the IP in the center of it, to further diversify, to further industrialize the investment processes. I thought what you learn in the banks, for better or worse, is how to industrialize things, how to manage people, how to manage processes, how to build IP. That's what you're trained to do. You have a shareholder that's paying a multiple on your earnings to build IP. Perhaps superimposing that with incredible discipline on risk management. One of the things that you also learn in the banking sector is we're heavily marked the market. Millennium was one notch further, marked a minute. Why did we lose money last minute? Let's see if we could do something better about that. I learned that real discipline. I also learned the diversity of ways of making money. Millennium at the time certainly was very PM focused, and you could see people took the same problem from different vantage points, and that is another form of diversity.
Speaker 220 plus years at CS, a bunch of years of Millennium, how do you decide that it's then time for you to start on your own?
Speaker 1After 30 years, even my dad would say I was ready to do this. There were so many inflection points of when I could have started a hedge fund. I was always worried maybe the world doesn't need another hedge fund. One of the things that I do separately from my day job is I sat on the board of numerous investment committees, including two Ivy League, Harvard and Cornell. What you see is that these investment committees are designed to be 60, 65% equity beta is their main risk. The second risk is a liquidity risk. They're taking illiquid assets. They've replaced some of the equity area with private equity beta, growth equity. 35% is not equities. Not equities is supposed to be uncorrelated to the equities. People would have more in equities, but they can't afford the drawdown capability of the equities. So that not equities used to be bonds. They invented whole businesses around this. This parity and all this. And then now what you start realizing is that the bond market anti-correlation to equities may not persist forever. Everyone's trying to figure out other ways of doing that. If you think of the investment universe as a giant $150 trillion, 35, 40% of that's $50, $60 trillion you need of diversifying assets. The multi-strategy industry is one of those. There are other ones. You could do infrastructure and real estate, but that's illiquid. So your liquidity budget may have been taken up. And so you have. Private credit, but that's pretty illiquid. You have the uncorrelated hedge fund industry, including quant, macro, multi-strategy, maybe a trillion and a half dollars. A lot of that is closed to new investors. So the investment vehicles available in any of those specters, especially the multi-strategy industry, not that much. The biggest trend in our business is the privatization of alpha. Where the alpha is residing on the prop shops, as well as the multi-strategy firms, the multi-strategy. Firms over time have more and more employee money and less and less available to investors. People have been giving back capital on it. They evolved to that over time. They did a great job, but create one from scratch. The amount of people that are in the middle of that. Whether it's the prop shops. The multi-strategy firms, the banks. There's not that many intermediaries for this thing.
Speaker 2One of the characteristics of the multi-strategy shops is they all have scale and it's made it difficult to enter that space. How did you think about what you needed just to get going on day one so that you could compete with the larger players?
Speaker 1One of the things my dad said is take the pain up front. What makes this thing relevant, whatever one wants is another viable, competitive, first-year hedge fund designed as such. The hard part is the normal stuff. You have to put together a leadership team. Thankfully, I've been doing this for 30 years. So I knew those people already. The. Second is you have to hire a bunch of people to build this with you. Most people in the infrastructure side of the world are playing for a beat. They're coming into an existing thing and they're saying, Hey, go figure out how to go to the cloud from data centers. Go stack on this thing, go tack on this thing, but build your architecture problems from the beginning attracted a lot of people. Then you have to attract a bunch of risk takers to say, I see the lane you're picking. I want to be the first one in a hedge fund because everyone that's ever been in a hedge fund knows. The people get there first, do better than the people that get there later. Then you have to go put together an investor base and investor base that understands what you're trying to do has been in this industry before and sees the prize at the end of the tunnel. The biggest barrier to entry is people say, well, there's a chicken and an egg. You have to put together the scale. When it comes first, the investors are the putting to the scale. Actually, there's no chicken and egg. It's just a chicken. You have to build it off your own balance sheet. And then the money comes in. That's a barrier to entry that. You have to get through. I was prepared for that. I've been doing this exact thing in my mind for 30 years. For the first many years as what's now called a PM. Back then, you just call it a trader. For the last many years as a leader and a designer of these businesses, we got the launch in about a year, which was a reasonable time to build something from scratch, especially with the advent of AI. You didn't have to hire as many programmers. The build versus buy decisions were better. A lot of that data stuff I was talking about. You could buy a lot of that now. In the end, it was a good time to start.
Speaker 2You mentioned that all of these multi-strategy hedge funds have their own different flavors of how they do things. After seeing so much of this over a couple of decades, what first principles were you bringing to develop a chain?
Speaker 1First of all, this core satellite thing bothers me. And it was something that to the extent a firm is seen as a fixed income firm or an equities firm or a quant firm, it's difficult to shed that label. It's difficult to shed that label. When you're attracting people into the satellite, someone said it to me once, well, you haven't done this thing in 10,000 days. It can't be that important to you. People know it. You attract better people if you get it at the beginning. One way to do it is hire a bunch of PMs and put in a manager later to run that business. It's a lot easier to build it from the beginning that way. It's part of your core thing. You have a seven-legged stool at the beginning. That's a different topic than I have a one-legged stool and I've added a second layer of stool. When that thing doesn't go right. Your own investors, your own people say, why are you doing that then? Whether that thing's not going well, whether your thing's not going well, people say, why don't you get out of the non-core thing? The core satellite thing is the first thing. Second thing is the world has confused a couple of things. The view of a PM in this industry is they want autonomy. Especially the people in the next generations don't necessarily want autonomy. They want autonomy of compensation, but they don't necessarily want autonomy of lifestyle. So they want to say, if I make money, I should get paid on what I do. And if I don't make money. I don't want to get paid on what I do. That's a normal thing, but they do appreciate that the concept of five people sitting in a room with a few Bloombergs and a few phones, not that easy. You want people around you, you want IP, you want a business that you're tapping into. You want an operating system you're tapping into. Some of the hedge funds do that and some of the hedge funds don't. The beauty of this industry is that there's successful hedge funds in every side of this, but you pick a link. Third thing is where I felt. Yeah. you had a few great talent developers where 80% percent of the people coming out of college. You're putting them in through your training program. You're teaching them how to do the business. And then you have some great talent acquirers. A lot of the businesses that grew up in the last 10 years were talent acquirers. Talent acquirer is expensive business, and it's a business that lends itself very well to the market leader. They have the most resource. What was missing, which is what the prop test was, was the talent accelerator, the talent transformer. You're taking the market maker on the desk. You're taking the guy from quant research. You're taking the equity research analysts, and you're turning them into PMs. That's the core competency of what you're doing. You're also doing the talent creation, and you're also doing some talent acquisition, but you created a core competency in that. I want to be a business of the 35-year-old killer, the person that has all the tools, but they need people in their corner. You can call that mentorship. You can call that guidance. You call that risk managing. That was a very important part of what I thought to do. Of course, I just started a firm. I had to acquire. But my real business proposition is talent acceleration, taking good people and making them great. I break up the world into killers, then steady producers. You need steady producers. If you had all killers, they'd start killing each other. Options on killers and options on steady producers. I want a balance of the killers, the options on killers, and the steady producers. Then fourth is I wanted to create something which was diversified at the beginning. The whole system wants you to create sequentially. They say, Bobby, why don't you start in one area? Start a billion and a half dollar fundamental equities business or quant equities. When that works, go do the next thing. Normal. The problem is now you started that first thing. You built everything for that. You've built your risk system for that. You've hired your lawyers for that. You've built your trading system for that. Now you want to do the next thing, which is quant or fixed income. A, you haven't done that in four years. B, you have the core satellite problem. C, your system isn't built that way. I said, I want to build it properly. Fine. A little harder at the beginning, clearly, but- Over time, that pays huge dividends. I'm thinking about these decisions we made. Thank God we have one common risk system and we have one common architecture. Fifth, I picked a lane on the risk management. This industry broadly pays all these firms. When the PM's there, they're getting paid 20% round numbers. Some people pay deferred. Some people have clawbacks. Some people have sharp ratio thresholds, but round numbers, that's the industry that we're in. Why are you paying people even that much? You're paying them for a sharp ratio and you're paying them to manage money in a stop-loss context. The stop-loss context is harder. If you're losing money in something, it's easier. If you could buy more, you buy more, you buy more. If you have to cut when you're losing money, that's hard to game and that's why people get paid 20%. I've tried to focus on risk management as a core. This is what this is, a risk management business, focus on controlling the losses and let the profits take care of themselves, but you have to pick a lane on that.
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Speaker 1There's two topics. So one, is how you make money. There's three core ways of making money. One is the world is somehow giving you money. The world is saying, we want you to provide a service and we're going to pay somebody to provide that service. If the government wants to issue $2 trillion of debt, somebody has to buy that debt. When people want to use portable alpha type strategies, they want to buy futures instead of the bonds. Fine. They're going to pay up for those futures. There's an opportunity there. You can provide liquidity. People love index funds. Okay, but somebody has to keep those index funds in line. Same with the dispersion transactions. Sometimes you can get paid for a service, even in fundamental equities. If you conceptualize it that way, somebody has to price these equities. Someone has to price them in the long run. Someone has to price them in the short run. The index funds are relying on that pricing service to happen. And so there are some services that we provide. The second is there are clever people. There are people that are experienced, that have done it, that understand it. The third is a bunch of IP. If you said to someone, go try to buy and sell equity, it's very difficult unless you put them into a structure where you say, here's how we do research. Here's the corporate access that we have. Here's the research model that we have. Here's the factor model that we run into. Then at least you give them some framework to make decisions. It's more than just the people. The biggest thing is that there are a lot of people that realize this multi-strategy model has moved towards the autonomy section, autonomy of compensation, autonomy of action. That's something that attracted people. I have a reputation for developing people, me and some of the other people that we've hired here to run these businesses. The third is it's a big thing. People that get here first, to the extent that along that option, many people would like to work at Microsoft and Google and Apple, and many people want to work at Stripe. People want to work at the startup. That's a pretty attractive concept. There was a big talent war in 2017 to 2022. Interest rates were zero. The whole multi-manager industry was tiny in 2016, 17, when Millennium and Citadel were really the two big ones that were managing third-party capital. Then these smaller firms got big. There was a talent war then. Now you have to pay competitively. You have to pay people a reward if they make the money. But the friction costs, not as crazy as it was back then. We were able to attract a lot of people. There's seven of us that are running the investment side of the business, the CIOs of the businesses. A good 30%, 40% of them, either I or one of them knew already. That created a ballast. Another topic is a lot of people like this business structure. The PM structure, one of the things is, as you raise more capital, you're going to have more people doing the same thing you're doing. I do say to people, it's not like you get a veto on anyone. I might still hire another person doing that same thing, but you're going to vote. It's going to be done consciously. We're going to say, how is this helping the people there? How is it helping the investor? How is it helping the return of the firm? If you're in a business where having multiple people touching the street, like in a dealer-driven market, it gets confusing to the investor. It's hard to actually do the interview process. All the risk-takers here, I met myself. We don't have a giant business development department. There's two or three dedicated people in business development. Then it's me and the CIOs that are doing the business development. If you weren't in the trenches for years, it's very hard to do. People know it right from the beginning. Your conversation changes from, let's talk about this trade. I think it's a markets-driven culture. It's not a hiring-driven culture.
Speaker 2How did you go about interviewing and assessing talent to tease out who you think is top tier from maybe somebody who's just good?
Speaker 1It's had a recognition. I probably interviewed 200 people a year for 28 years. One is getting a feel for it. Two is, there's a word that gets thrown around a bit, but I'm going to use it here as alignment. What I try to figure out every day is, do I feel aligned with the people that work here, the risk-takers? Do I feel like they're aligned with the interests of the investor? Inherent in these businesses is the trader has an option that if it goes well, they get some percentage of that. If it goes poorly, you're left with the bet. Do I feel aligned? A lot of people, they talk about risk in the first couple of minutes. They're thinking about risk. Some are hedging to be polite. That's a different thing. Some people, when they lost money, they start using the passive tense. When they talk about making money, they use the active tense. When they start talking about the winning trades, they talk about how clever they were. When they talk about losing trades, they talk about the unwind. What about the wind? That, you can get a how they think about the people that work for them. Are these tools for me, or are these people that have their own goals and ambitions, and how you're using them, how you're developing them? This process is more self-selecting than you would think. If people get a feel for what you're trying to accomplish, what they want, what's going to happen more and more is people are going to find their way to where they want to be. It's going to become a talent development industry. Whether it's talent development, talent acceleration, the people are going to start molding people into the way that they think of the world, and those worlds will be different. Some firms, not in the multi-manager world, but in the multi-strategy firm, they want one global optimization at the top of the house. We want Hunter Gathers Alpha, and then we rent at the risk on top of the house. You could do that. You just can't do that and pay people unnetted compensation. Some people might move more towards that way and try to change their comp models and say, okay, I'm going to do clawbacks and do this. As this industry matures, it's not that old an industry. You had a couple of players that have been doing it for a long, long time, and then at actual scale, 10 years.
Speaker 2So once you have the structure built and you've brought in these initial people, I'd love to dive into. to the investment model, what are the strategies you chose to participate in?
Speaker 1Broadly speaking, in the equity side, there's fundamental, quantitative, and arbitrage. Arbitrage could be options. It could be what's called delta one or index rebalancing. It could be convertible bonds. It could be merger or ARB or other types of event-driven trading. In the fixed income type strategies, rates of macro is one, credit is one, and commodities is a different one. There's a seventh business in the way we created the taxonomy, which was Asia, because I'm sick of people trying to run Asia from seven in the morning when they're busy or seven at night when they're tired. I said, Asia is going to be a more finessed market with the very Korea, China, onshore, offshore China, Japan, India, Southeast Asia. You have a lot more going on in Asia, trying to do that from the US through the US news filter was a difficult thing to do. So those are the seven businesses. I would view it as we have a common, risk approach, which is focus on the tails and figure out how to mitigate the tails, but different investment approaches. There are CIOs for each of those businesses. I'm one of them. I'm for the equity arbitrage. And each one of them has a slightly different philosophy as to what the alpha engine is for that.
Speaker 2What are some of the design elements of collaboration across the teams?
Speaker 1I would say there's three models. There's discouraged collaboration for whatever reason, because A, you're attracting people that don't want to collaborate. B, there's something structural that you don't want collaboration. Maybe it's correlation or something like that. One is enforced collaboration. You want to put an idea into the model. You have to come into the auditorium and explain it to everyone else. And one is encouraged collaboration. I'm in the encouraged collaboration model. If you ask me, how does it happen? What happens in these hedge funds, better or worse, is that the culture of the firm reflects their founder. I'm a pretty collaborative guy. My instinct is when someone says, I'm going to do this, I'm going to do that. I'm going to do that. If someone needs something, I say, why don't you talk to these people? That becomes a cultural thing and people realize that's the accepted topic of the day. It's more a cultural topic than a structural topic. Everyone absorbs information differently. Some of the groups have daily calls, weekly calls. I never build information that way. I'm more of a absorbing information through reading. We're not a heavy call place. But having said that, for the first 18 months of the firm, we did a weekly call every Monday morning for 25 minutes. Where all the call was, was 1 p.m. got up in front of the whole firm, talked about what they do. Then someone from a staff role talks about what they do. After 18 months of that, I think it sets a tone of that type of collaboration.
Speaker 2Let's ask about the capital allocation process, both starting with you at the top, the individual CIOs down to the PMs.
Speaker 1First thing is you have these different businesses. Ideally, you don't get overweight one versus the other. So you try to keep it within some tolerances or ranges. Within that, you're competing with a Sharpe ratio. You're trying to find strategies that have a sufficient Sharpe ratio that clears your cost of capital. If somebody wants more capital, your instinct is to give it to them as long as they're within the relative Sharpe ratio threshold. You're not too overweighted. You can assess what the tails are. But the capital allocation model is a lot more static than you'd think. If you look at most of these multi-manager firms, it doesn't change all that much over a period. In certain market environments, you're moving capital to one place or another. But that's not the case. You're moving capital to one place or another. It's not the dynamic. It's not like every day we're saying, let's pull it from this person and move it to that person. We've been in a capital deployment phase for the last 18 months. We raised billions of dollars. We called the capital over a year. It took us about 15 to 18 months to deploy the capital. Now you have a little bit of scarcity
Speaker 2of capital. I'd love to dive into the fundamental equities business. In particular, how do you view both the risk and the capital allocation, both for your team and then in a world where there are a lot of other fundamental equity businesses like this?
Speaker 1There are some fundamental questions in the equities business. There's a concept of, are you factor ignored? No one's really doing that anymore. Are you factor aware? Are you factor obsessed? I'm generally skeptical of models, especially empirical models. I'm more in the factor aware than factor obsessed model. The empirical models are taking a bunch of historic prices and then creating a model that's more of a factor aware and creating some relationship about it. The one Amazon is worth 0.2 Microsoft and 0.3. You need a bit of humility around the models. That's one question around that. The second question you have to ask yourself is, what are you thinking about crowdedness and how you measure crowdedness, how you're dealing with it? The third question is, do you consider an industry bet, an alpha bet or a factor bet? Those are different dimensions of these risks. We've tried to say, we're going to run it in a somewhat integrated risk fashion with some logic also as to how many people in each sector, how they interact. It's as much an art as a
Speaker 2science. How have you thought about cutting off the tails? A lot of the multi-PM pod shops, there's certain drawdown and they're out. What's your game theory around that?
Speaker 1There's the premortem and there's the mortem. You try to do your best to figure out what the risk is. 95% of what we do or more is liquid. The vast majority of what we do is exchange traded markets. At least you have a chance to get out generally in exchange traded markets. You do the premortem and you say, hopefully I've constructed a portfolio that is robust to many of the things that are thrown against me. Generally speaking in these models, you make more money in a high vol environment, but you lose money in the move from a low vol environment to a high vol environment. As you've extended risk capital to the market, and now the cost of risk capital has gone up, you're going to lose on mark to market on your current risk capital. The second thing is the mortem. When it's happening, you have to move your feet. Does that get crowded? Do you get everyone crushed to the hills at once? There's some of that. The markets have gotten so big relative to the growth in this multi-strategy industry. The industry's put on tens of trillions of dollars of market cap in the last few years. The multi-strategy has grown by a hundred billion, 150 billion. The second thing is the capital structures in this industry have gotten better. People have five-year lockups, three-year lockups, four-year lockups. It's not like everyone has to sell because they're going to lose their assets. The third thing is there are a lot of different risk management approaches. They make a decision. If things are liquidating, I'm going to buy more. If I think they're liquidating because the fundamental model has changed, I'm only then going to sell. Most people have been rewarded for buying on dips. I don't look at it that way. I view it as the reason you're cutting risk in a time of stress is it might get worse. You're trying to hedge. The bad news is you're locking in a bunch of losses and you're paying a bunch of transaction costs. The good news is when things settle down, when the VIX goes from 50 back to 30 or 20 or whatever, you now are clean. You're not nursing a bunch of positions. You have the ability to trade on offense. How do you get yourself on offense is the name of the game. If you can think back, here's an opportunity. The firms that did that in 2020 and thought that way did a lot better than the firms that were holding on because they're holding on. The thing went from 100 to 80. They're waiting for that 80 thing to go back to 100. You're buying something at 50 that someone else had to sell. You sold it at 90, fine. You locked in a loss, but you're buying something else that wasn't even on your pad, that someone needs liquidity. These are mark-to-minute firms. You'd run the premortem and you run the mortem. It's not formulaic. This is what hedge funding is. You have to be ready to deal with it.
Speaker 2What's the culture around the behavioral aspect, the psychology for your portfolio managers inside
Speaker 1your shop? When you start a new firm, that's one of the things you don't really know. In the interview process, you tend to get people that are a little less optimist. If they were more optimistic and more growth minds, that they would have gone to a place where they could just be long. We emphasize risk management. We got a little lucky in that a financial crisis happened in March and April of 2020. We got a little lucky in that a financial crisis happened in March and So I got to experience it of how much did I feel like I was pushing people and how much did I feel like people were reacting? And it turns out, at least in that environment, I didn't have to do much. People got it. Harder to push people to take risks. What is hedge funding? Hedge funding is taking a bunch of information, turning it into data, taking that data and forming convictions on that data, then taking those convictions and doing things in the marketplace. When you have less data, especially in the first 18 months, it's hard to form those convictions. You don't have enough data on your own systems of efficacy, on your own risk modeling, on your own PMs. They feel the same way. They don't have data on how you're going to react at a tough time. So that data building gets better every day. In the beginning, it's harder to push people to take risk than it is to stop people taking risk. As we've gotten more and more data, we feel like we're getting onto offense, but that's a process. That's real. It's not like a philosophical thing. It's like, as you get more data, as you get more badges, you get more experience, that all gets better. And it gets better every day. And the teams get more comfortable with each other every day. And I feel that palpably. And so that becomes a culture of risk management.
Speaker 2How do you think about competing on compensation?
Speaker 1If you tried to run this model on a different compensation model, meaning you have to rely on how everyone else in the firm, people that you haven't even met are doing, it'd be hard to do that you did the talent creation side, unless you said, I'm going to hire everyone from scratch, a lot of the people that come into this industry are coming from places like that, where for whatever reason, they think they're producing more than the median of that group. The world has constructed these portfolio managers as unitary, one-track mind people. I'm just looking at my compensation. People want to get paid competitively. They want to get paid fairly. They want to get paid transparently. Once you're paying them fairly, competitively, and transparently, then the margin there has a lot more math going into it. The optimization functions are more complex. Fine, I can get paid a little more, but I got to sit out of the market for a period of time. In that period of time, is the strategy going to change? Is my market going to change? I got to put together a new team. Do I like coming to work? Do I feel like people are in my corner? Do I feel like what's the probability of success? Do I feel like the way I trade? I think that's the biggest one, is the way I actually interact with the market in Simpatico with the way these people think about that. That's a big topic. You should be able to get that right 90% of the time when people are coming in. It's a complex optimization function, but it's generally about fit more than about compensation. Once you're in the transparent, fair, competitive, and the basic point is you said what you were going to do and you did what you were going to say. Once you do that, you're in a good starting point.
Speaker 2As you take a step back and look at all the structural ways that you've been able to make money in the past and are trying to do it today, what opportunities are you most excited about?
Speaker 1What are you looking for? You're looking for areas that there's not necessarily enough capital to provide for the service the market wants, areas that you can find cheap volatility. Sometimes you're trying to find areas where you're willing to take complexity risk to get into some market. Banks trying to figure out how to get partners in hedging some of the risks that they're left with that either take up a lot of regulatory capital or take up a lot of regulatory capital. Or are not necessarily capital efficient for other reasons. It's called strategic risk transfer. We've set up a business to do that. Asia has some of that. In the complexity side, you're setting up a business in India. Not that easy, but once you do it, you could probably get access to some things. If you took it at a business level, a more concrete level, the fundamental equities business, I started trading indexes in the mid-90s. The S&P was at 500. About 5% of a company was indexed. Now, round numbers, I'm making up a number, 25% of a company's index, and the S&P is up 14x. That's 70 times bigger. The fundamental equities, someone's picking stocks in a structured way, doing the work. Given the size of the market, it's a pretty good business right now. There's really opportunity in the liquid credit markets. A lot of people have moved into the liquid credit markets. The private credit business has been the biggest growing business in the world in the last few years. That leaves some opportunities, and there's a lot of opportunity in the liquid credit markets. And then also what we call arbitrage. There's some money in the seams of different types of investors and different types of arenas. The biggest theme is in three or four years, apparently, I read our industry until last year hadn't grown that much in terms of assets, especially the multi-strategy. I think it actually was flat. In that time, the government's issued another $15 trillion of debt. The equity markets grew by $30 trillion. The markets have gotten really big. Companies are starting to go public again. The regulatory environment is starting to get balanced. Now you're getting regulatory competition. Different exchanges are starting to set a list here that's good for the markets, at least in the short run.
Speaker 2These models often bring with them a question of an existential risk. A lot of leverage. Leverage can cause problems. How do you think about the broader contagion risks of this model?
Speaker 1The contagion risk is what we lose sleep about every time. Is everyone going to start heading out of markets now? Maybe the next one is going to be the one that's going to start heading out of markets. Maybe the next one is going to be way worse. But you've had a couple of interesting events in the last five years, six years. COVID was a real event. Ukraine was a real event. GameStop was a real event. SVB was a real event. Let's say the data got good in 2005. You have at least 20 years of good data to give you some sense of how these businesses have done in that period. Obviously, the next one could be worse. Now we spend our lives trying to understand this. What are the only ways you can deal with is actual diversification. Some of these strategies are actually diversified. Again, the amount of dimensions that you could start diversifying, you have some strategies that are going to make money in times of stress. You have lots of different various tail hedges on. The market tends to be clever and tends to find a way to find the hedges that you didn't put on. Are you taking some crowdedness risk? There's some of that in there. When I'm in the market, I felt it crowded in various times. I felt it more crowded in 2010 to 2019. The markets were smaller, but vol was low. And so what happens when vol is low is some people accept a lower return, and some people lever up to make the returns equal. People like me, we accept a lower return. We communicate that because the thing that we're most worried about is the asymmetry vol. 10-day vol in February of 2020 was 7. 10-day vol two weeks later was 118. If you're not managing that risk, you can lose a lot of money. The second thing is the asymmetry of liquidity, especially in dealer-driven markets. People that grew up in the equity markets are used to exchange-traded markets. You go into fixed-income markets, suddenly the liquidity disappears very quickly when things go wrong. You can manage it by portfolio construction. You can manage it by the premortems. And then you've got to deal with it. And it is a risk that is embedded in this business. How do we deal with it? We deal with it with those concepts, portfolio construction, premortem, postmortem, tail hedges, and really culturally, making people say, that's what we're doing here. What people are doing in this business, they're giving us their money. They're not giving us their gambling money. They're giving us their alternative to fixed-income money. We have to protect against that. When things go wrong, they want to look over this part of their portfolio, and it looks okay. The good news is, when it goes wrong, generally, that next period is a very good period. Despite however anyone did in March of 20, or in the last quarter of 08, 09, and April to December of 20, were by far the two greatest times in this market. You have to survive that previous period. And that's what we spend so much time doing.
Speaker 2When you go from a larger platform, the prop desk, a millennium, to a smaller business, what are the things that, as you look out over the next couple of years, as you develop scale, that you can add in to what you're doing that you might not be able to do today because you're smaller?
Speaker 1I don't think there's much. One of the leaders in the industry said to me when I was starting, you're going to underestimate the benefits of starting from scratch. He said, how often I want to throw the whole thing out. It's not just legacy systems. It's legacy architecture, legacy people, legacy processes, legacy mindsets. We've got to build everything instead of buy everything. We got lucky that AI became native to this place. We didn't have to hire hundreds of technology people and fire hundreds of technology people. The biggest thing that would change as we scale is you're going to see the operating leverage start kicking in because we think we can get to two, three times the size without having to hire that many more people. If we had more scale, would I start doing a couple of things that I say a little more speculative? You have some firms that view themselves as manufacturers and some firms that view themselves as packagers. I'm packing the alpha and we're hiring places. You hear them talk about their BD departments. We view ourselves as a manufacturer and the first iteration of it, we're not doing a lot of speculative things. Let's figure out if AI can do this or that or the other thing. The model itself was innovative by launching it all at once, by launching comprehensively, by building it that way. The challenge in this business is balancing patience and excitement. I live my life in seconds and minutes and hours and days and things take months and quarters and years. The metrics at the beginning of this, you have to get yourself into the model of, am I getting better every day? Did I put together this thing? Do I believe in my system? Do I believe in my people? That's the metrics. Then eventually, the gross returns turn into net returns and that's the evolution of this
Speaker 2business. You mentioned earlier being on the boards of the investment committees of Harvard and Cornell. Would love to ask what you've learned from sitting in those seats.
Speaker 1As you get into these large organizations, there are two different ways of thinking. Some people are like risk managers. Let's diversify. And some people are concentration. Let's figure out where things are going to go and let's go there. It's no different than Republicans and Democrats or two different religions. That's a core topic to talk about. The second topic is people that have a strong interest in investing. They think about, what are your core competencies and what are your competitive advantages and how do you build businesses around that? That's what you're taught as an operator of a business. Investors think in different ways and that's a great thing. Taking the best of both of those people is something that these endowment boards have been good at. Sitting on these endowment boards gets you into the mind of how investors think. Part of my job is figuring out how to make money in a risk control way. Part of it is, especially in these past years, to represent the investors. To say, I say every meeting I'm in, there's me, there's whoever I'm talking to, and there's an investor sitting there. Having been put in that investor situation in various different forms there have given me a firsthand look at how an investor thinks about things. These firms, not just the multi-manager firms, but all these asset managers, an investor is taking a leap of faith. They're trusting that you're going to do what you said you were going to do with that. That's a big responsibility and it's something that I've learned firsthand. Of sitting on these investment committee boards.
Speaker 2So Bobby, somehow in addition to having built all this over the last couple of years, years. You also have, for a long time, run your family's charitable giving. And we'd love to hear a little bit about how you approach philanthropy.
Speaker 1In 2014, we started something called the Jane Family Institute, trying to take financial concepts and bring them into the philanthropy world. Also, to try to take either left-wing or right-wing ideas and put them in the opposite language. The original project we started on was trying to turn the student loan market into a student equity market via income sharing agreements. Some people don't like it because it seems kind of icky. What if I took 100% of your income for 100 years? That seems icky. So there's a branding element, there's a framing element. On the left, people think, well, college should be free. And so why should I even do that? There was a whole bunch of things. We did it with thousands and thousands of students. They're still running those programs. We did a lot of the guaranteed income pilots around the world. Generally, people hate the concept of universal basic income. It feels something for nothing. People like earned income tax credits. People like child tax credits. There's a framing element to it. If I hadn't started the hedge fund, I would have run with it. I've done nothing on is I was heavily involved in the charter school movement earlier in my life. I wanted to start charter prisons, basically private not-for-profit prisons. Charter, the right-wing likes charter. Left-wing people like rehabilitation. And chances are that charter prisons, the people that get involved in that will want rehabilitation as part of it. The right-wing people like rehabilitation. The left-wing We had about 20 people in this organization. It's been 11 years. They're pretty autonomous by now.
Speaker 2What are you excited about for the next couple of years?
Speaker 1It's the first time in my life I want to hit fast forward. I'm a cherish every minute guy, but everything I've done in my life, process led to outcomes. Now the process is there. We're doing all the things that I thought we'd do, everything we said we were going to do. I see the alpha there. I see the value add to the investors. I see the value add to the market. I see the value add to the people here. I'm enjoying what I'm doing. I'm passionate about it.
Speaker 2All right, Bobby, I want to make sure I get a chance to ask you a couple of fun closing questions. Before we get to the closing questions, I want to tell you about one of our strategic investments. We've made a few, and each are working on a product or service we think will be valuable to our community. One is Ascension Data. Ascension provides workflow software for compensation that allows you to track, plan, and take care of your team. We're excited for you to check out how they can help solve the sticky payments that you've made to your team at Ascension Data. There's a link in the show notes so you can learn more. And here are those closing questions. What is your favorite hobby or activity outside of work and family?
Speaker 1I'm a gigantic reader. I got it from my mom. I'm reading a lot of literature, a lot of philosophy. That's how I understand the markets. I view the markets as a complex system. I view myself as a student of complex systems. The most complex systems are actually systems with human interactions. The best place to learn about that to me is literature and philosophy. So I spent a gigantic amount of time on that.
Speaker 2What was your first paid job and what did you learn from it?
Speaker 1In Queens, I did everything from a ball boy to a caddy, polling for NBC News to a paper route. That was just what you did back then. But working at the stockbroker was a really interesting entryway, especially during the crash. I'll never forget those days. People's actual money being lost. It gave me a flavor for, this isn't abstract. This is a real thing. Someone said to me, there's nothing casual about managing other people's money. I said, no. I have that deeply embedded in my thinking. And I wouldn't say it's my first paid job. It was my first steady job. And that stuck with me.
Speaker 2What's the best advice you've ever received?
Speaker 1I had a boss at Credit Suisse who died in 2010 called Paul Colello. And he was my mentor and he was the president of the firm. And he ran all the divisions I was part of. We had to do some layoffs. And he said, by the way, you should get a thank you note from all those people. Meaning, do it with dignity and respect. And treat people with dignity and respect at every turn. I got to say that, you know, not that I've got it. I've gotten that right every time. But when you start a firm, after being in the market 30 years, you have a whole record of things. And I like to say, I was doing favors for people for 30 years. Now I'm asking for favors for the next couple of years. Everyone delivered on it. It takes a village to raise one of these firms. And that village came in and I was able to take that advice in for a long time and treat people with dignity and respect. And that's the advice that I think of every day.
Speaker 2Bobby, last one. What life lesson have you learned that you wish you knew a lot earlier in life?
Speaker 1When I think of life lesson, my parents taught us from the age of 5 to 20, focus on education. 20 to 35, focus on career. 35 to 50, focus on family. 50 to 65, on service. 65 to 80, on philanthropy. 80 to 95, on spiritualism. That's the stages. Obviously, you're not going to follow those timeframes. I knew that ahead of time. I haven't listened. I extended the career thing a little longer. I've tried to do service with some charitable activities and time and resource contribution. It's always an important part of my life. I have three teenagers. That demands some time. It's a good thing for people to think of the stage of their life. Do I wish I knew that earlier? I didn't know that earlier, but I didn't really think about it until you get older.
Speaker 2Bobby, thanks so much for taking the time. Ted, it's great talking to you. Always. Thanks for listening to the show. If you like what you heard, hop on our website at CapitalAllocators.com where you can access past shows, join our mailing list, and sign up for premium content. Have a good one and see you next time.
Speaker 4All opinions expressed by Ted and podcast guests are solely their own opinions and do not reflect the opinion of capital allocators or their firms. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of capital allocators or podcast guests may maintain positions and securities discussed on this podcast.
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