Contrarian timing and the thermostat approach

What if managing your own capital and not outsourcing it is the highest-return investment decision you can make? In this episode, I talk with Alex Tonelli, Co-Founder of Endurance, about what changes when entrepreneurs manage their own money with the same first-principles thinking they use to build companies. Alex explains how Endurance evolved from a startup holding company into a highly structured family investment office, why principal-driven capital behaves differently than institutional capital, and how disciplined portfolio construction, vintage diversification, and contrarian thinking create durable long-term returns. We also explore why institutions systematically underperform their opportunity set — and how to avoid the behavioral traps that cause it.

Highlights:

• Why Endurance was built as a product-market-fit response, not a plan
• How founders turned company building into an investing engine
• Why partners investing their own money changes every decision
• Endowment-style portfolio design with entrepreneur-level risk tolerance
• The “thermostat” approach to adjusting allocations
• Why vintage discipline beats market timing
• Why big brand funds often disappoint over time
• IRR vs. MoIC and why compounding wins
• The free lunch of diversification applied to illiquid assets
• How information flow itself becomes a form of alpha

Guest Bio:

Alex Tonelli is a Co-Founder of Endurance, a private investment office created by a group of serial entrepreneurs to build companies and manage their own capital using first-principles thinking. Before Endurance, Alex co-founded a series of successful enterprises, most notably including Funding Circle, which became the world’s largest small-business lending marketplace and went public in 2018. As Managing Partner at Endurance, he focuses his investment work on portfolio construction, manager selection, and building scalable internal investment infrastructure designed to optimize for long-term compounding rather than institutional constraints.

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LinkedIn: https://www.linkedin.com/in/n-alex-tonelli-54b2a42/

Questions or topics you want us to discuss on How I Invest? Email us at david@weisburdcapital.com.

Disclaimer:

This podcast is for informational purposes only and does not constitute investment, financial, legal, or tax advice. Nothing in this episode should be interpreted as an offer to buy or sell any securities or to participate in any investment strategy. All opinions expressed by the host and guests are their own and do not represent the views of Weisburd Capital. Participants may hold positions or have financial interests in the companies, funds, or investments discussed. Any references to specific investments are for illustrative purposes only. Investing involves risk, including the potential loss of capital. Past performance is not indicative of future results, and any forward-looking statements are subject to risks and uncertainties. Any third-party data or opinions have not been independently verified. Listeners should conduct their own research and consult their own advisors before making any investment decisions.

(0:00) Introduction (0:47) Success story of Funding Circle and Collective Medical (1:19) Building the investment office and decision to start investing together (2:01) Overview of Endurance's structure and activities (2:22) Principles behind creating the family office (3:38) Problem-solving: products vs. process/people (4:44) Portfolio construction, internal processes, and decision-making dynamics (6:02) Asset allocation, investment strategy, and market timing (8:52) Valuation dynamics and contrarian views in various market conditions (10:49) Comparison of IRR vs. MOIC in investment decisions (13:15) Expected returns and comparison with institutional endowments (15:45) Principal-agent issues and behavioral factors in decision-making (17:40) Diversification strategy and targeting high-risk assets (18:35) The virtue of illiquidity and reflection on investment strategy mistakes (21:14) David Weisburd on growth and economies of scale in investment brands (26:06) Alex Tonelli on changing investment principles and proactive capital conversations (28:18) David Weisburd on LP check sizes and maximizing returns (32:15) Understanding alpha, portfolio construction, and committee-based challenges (35:05) Balancing external influence with investment integrity (37:12) Influences from legendary investors and evolving strategy (38:19) Investment philosophy contradictions and information diet (39:56) Negative alpha, impact of negative information, and curated sources (41:12) Timeless advice for new investors and biggest COVID-19 investment mistake (43:07) Closing remarks