Investing in the Private Market

Today’s conversation is with Henry Ellenbogen and Anouk Dey from Durable Capital Partners. Henry founded Durable in 2019 and serves as Managing Partner and Chief Investment Officer. Before that, he was a Vice President of T. Rowe Price, T. Rowe Price Group Chief Investment Officer for U.S. Equity Growth, the lead Portfolio Manager for the U.S. Small-Cap Growth Equity Strategy, and the Portfolio Manager for the New Horizons Fund. Anouk is a Partner of Durable who joined the firm at its inception in 2019. Before joining Durable, she was also a Vice President of T. Rowe Price Group, where she was an investment analyst in the U.S. Equity Division, focusing on small-cap growth stocks. Anouk also co-teaches the Compounders Independent Study at Columbia Business School.

My students have heard me say many times that the future of investing must be one that combines exposure to private and public markets and that is flexible in its valuation approach and ideas, and that embraces disruption. That type of investing requires partners that are willing to commit capital for the long haul while being able to withstand the volatility of the market. That’s where Durable Capital Partners stands out.

On this episode, Henry, Anouk, and I discuss how Henry developed his investment philosophy, how a liberal arts background gives you an advantage in the investment industry, Henry and Anouk’s lessons from their time at T. Rowe Price, Durable’s commitment to long-term relationships with the companies they invest in, their unique approach to knowledge acquisition, and so much more!

Key Topics:

• How Henry started his career in investing after exploring different fields (3:41)
• The beginnings of Henry’s investment philosophy (6:04)
• Major lessons from Henry’s study of the history of technology (8:53)
• The benefits of a liberal arts background (9:41)
• Why crisis is the true test of an investor (11:00)
• The stroke of luck that took Anouk from ski racing to studying international relations (12:38)
• How Anouk got the opportunity to spend her first year as an investor studying compounders (14:44)
• Henry’s early role as an analyst at T. Rowe Price (18:18)
• The move from traditional media analyst to managing the T. Rowe Price New Horizons Fund (19:59)
• What you can learn from studying media companies in the early 2000s (21:00)
• Why Henry started looking at private companies as investment opportunities (23:37)
• Creating a systematic approach to investing in private companies (25:38)
• The foundation for building a network of companies with unique access (26:51)
• Advantages for public security analysts over venture capitalists in the private market (29:06)
• What Durable wants to be known for (30:07)
• How Durable’s perspective on relationships and long-term commitment are in alignment with entrepreneurs (31:18)
• Durable’s approach to knowledge acquisition (34:01)
• Looking at Shopify as a company that has gone from Act 1 and 2 to a potential Act 3 (37:05)
• Durable’s approach to analyzing and supporting company leaders (41:24)
• Managing the risk of human capital (45:25)
• The importance of honoring your commitments and managing capital successfully during a crisis (47:46)
• Eliminating the false dichotomies in the investment industry (51:59)
• How you can reduce your learning trajectory around compounders (55:19)
• The advantage of working in collaborative teams at Durable (57:26)
• Idea sourcing as world-class fundamental investors (1:00:01)
• Understanding the good to great thesis (1:01:22)
• The value of deeply human investing (1:04:15)
• Building on the human skillset (1:06:13)
• How passive investing is affecting market volatility (1:08:30)
• And much more!

Mentioned in this Episode:

• Durable Capital Partners

Thanks for Listening!

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