The Bottom-Up and the Macro Forces in Financials

Derek Pilecki stops by The Business Brew to discuss Financials.  Derek is a Financials specialist with a track record that speaks for itself.  See https://gatorcapital.com/ for more information. 

Derek currently manages a long/short financials strategy, long-only financials strategy, and various other individual portfolios. He has managed a private fund for 11 years. He also launched one mutual fund and took over management of another mutual fund.

From 2002 through 2008, Derek was a member of the Goldman Sachs Asset Management (GSAM) Growth Equity Team (Co-Chair of the Investment Committee for the Growth Team and a Portfolio Manager).

Prior to GSAM, Derek was an Analyst at Clover Capital Management in Rochester, NY and Burridge Growth Partners in Chicago, IL. He covered the Financials sector at both firms. Before entering graduate school, Derek worked at Fannie Mae providing interest rate risk analysis for the company’s mortgage investment portfolio.

Derek holds an MBA with honors in Finance and Accounting from the University of Chicago and a BA in Economics from Duke University. He is also a CFA® charterholder.

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Detailed Show Notes:

3:38 – Derek’s background

6:54: - How Derek defines Financials

7:12 – Thoughts about Silicon Valley Bank

13:08 – Was it rational for regulators to ignore mark to market losses?

21:03 – What is going on with office and how big of a deal is this going to be?

25:08 – Is there an opportunity in regional banks?

29:45 – Mortgage REIT preferreds

33:15 – How much of a Financials analyst’s job is focusing on the consumer and macro?

36:35 – A discussion about First Republic’s failure

41:45 – Thinking about constructing a long/short portfolio within a sector

44:45 – Why Genworth, why now?

50:55 – Puerto Rican banks and the potential for regional oligopolies

54:10 – How building a business can impact investment outcomes

57:30 – Why does Derek run a mutual fund today?

1:05:10 – How to think about Banking as a Service and have traditional banks given up too much contact with the customer?

1:09:35 – Outlook for alt managers