Freddie Lait: Fund Manager Sold His House to Start £1 Billion Fund | The Risk That Paid Off | #21
Algy's Investment Podcast
Market Risks: Leverage, Concentration, Valuation
Freddie warns overvaluation and concentration are the greatest risks, not necessarily hedge fund leverage alone.
In this episode, I sit down with Freddie Lait, founder of Latitude Investment Management, who went from studying mathematics at Oxford to working at Goldman Sachs and Rothschild, before taking the ultimate leap - selling his house to start his own fund management business in 2016.Today, Freddie manages a £1 billion portfolio with a disciplined, long-term investment philosophy that has generated exceptional returns. In this conversation, we dive deep into:Key Topics Covered:
- Why Freddie sold his house to start his fund (and the financial risk involved)
- The investment philosophy behind Latitude's success
- How to construct a portfolio for long-term wealth creation
- Why earnings growth and dividends matter more than valuation multiples
- The 6.5% free cash flow yield strategy explained
- How 75% of his portfolio is positioned for inflation
- Portfolio management vs. stock analysis - which matters more?
- Why patience is the rarest commodity in investing
- The 10-year rule for judging fund managers
- Building a team of exceptional analysts
- Managing a concentrated portfolio of 24 global stocks
- The difference between investing before and after COVID
- His 30-year vision for the fund
About Freddie Lait:Freddie is the founder and CIO of Latitude Investment Management, launched in 2016. With 16 years of fund management experience, including roles at Goldman Sachs Asset Management and Rothschild, Freddie has built a reputation for disciplined, long-term value creation. His fund focuses on global equities with strong earnings growth, solid free cash flow, and inflation-resistant characteristics.00:00 - Introduction to Freddie Lait02:00 - When Did Fund Management Become Your Career?04:51 - What Is Financial Modeling?06:22 - The Scary Decision to Start Your Own Fund10:01 - Investment Philosophy Behind Latitude Investment Management13:45 - Why Patience Is a Rare Commodity in Investing18:30 - Finding High-Quality Companies with Strong Returns23:15 - The Importance of Free Cash Flow in Stock Selection28:40 - Portfolio Construction: Concentration vs. Diversification33:20 - Managing Risk in a 24-Stock Portfolio38:50 - Sector Preferences and What to Avoid42:30 - Understanding Free Cash Flow Yield (6.5% Strategy)47:15 - Inflation Protection: 75% of Portfolio Positively Linked52:40 - Technology Adoption and Portfolio Transformation56:20 - Google and the Magnificent Seven Discussion1:01:30 - The 80/20 Rule in Portfolio Management1:04:45 - Building and Leading an Investment Team1:09:20 - Personal Weaknesses: Being Too Logical1:12:50 - The 10,000 Hour Rule and 16 Years of Experience1:16:40 - What Time Period Should Fund Managers Be Judged Over?1:21:30 - Current Fund Size: £1 Billion and Growing1:24:15 - Managing Cash Inflows Operationally1:26:45 - Final Thoughts and Closing RemarksSubscribe for more conversations with successful investors, entrepreneurs, and product leaders!#investing #fundmanagement #portfoliomanagement #stocks #finance #stockmarket #wealth #wealthbuilding
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