Exploring non-obvious ideas and going off the beaten path can lead to valuable innovations and opportunities.
The secondary market in alternatives requires constant innovation and creating bespoke solutions to stay ahead of the competition.
Deep dives
The value of going off the beaten path
Ian Charles emphasizes the importance of exploring non-obvious ideas and going off the beaten path. He believes that being alone in exploring areas that others haven't trampled over can lead to valuable innovations and opportunities. He shares examples from his career, such as starting Cogen Partners despite skepticism, and emphasizes the importance of curiosity and courage in pursuing unique ideas.
Innovation in the secondary market
Ian discusses the evolution of the secondary market and its role in providing liquidity and growing AUM in alternatives. He highlights the rise of continuation trades and the need for creative solutions beyond the traditional market processes. Ian emphasizes the importance of finding unmet needs and constraints within the market and creating bespoke solutions that provide unique value to counter parties. He emphasizes the need for constant innovation and pattern recognition to stay ahead of the competition.
The process of innovation and staying ahead
Ian explains the process of driving innovation and harvesting repeatable alpha in the alternative investment landscape. He stresses the importance of constantly generating new intellectual property and solutions that address new opportunities and constraints. Ian emphasizes the need to build a strong team and provide them with the tools and data necessary to drive new insights and engagements. He also discusses the importance of scalability and building a reputation as a firm that specializes in innovative, hard-to-repeat bespoke investments.
On the previous episode of Dry Powder, Ian Charles, managing partner at Arctos Sports Partners, took us inside his approach to sports investing. It was a master class in sector specialization and value creation that you don’t want to miss, but Ian has always tended to go after nonobvious opportunities.
“I grew up in a small town in Alaska,” he says. “One of the things that you always heard as a kid was if you go out on the frozen lake, make sure you’re not around too many of your friends. It’s actually safer to be all alone.”
Today on the show, I ask Ian how he helped bring about a series of innovations in the secondaries market at Arctos, which launched a new strategy this week expanding into broader private markets. We’ll reflect on the creative transaction structures that have made secondaries more accessible and efficient.
I've also started a series of weekly posts on LinkedIn, which you can follow here.
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