We Study Billionaires - The Investor’s Podcast Network

RWH048: Betting Billions On Outlier Talent w/ Adam Shapiro

Aug 4, 2024

02:03:35

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In this engaging discussion, Adam Shapiro, Managing Partner at East Rock Capital, shares insights from overseeing billions for ultra-wealthy families. He reveals why he's exited emerging markets and highlights the dual nature of investing in the U.S.—both promising and perilous. Adam explains his approach to identifying exceptional fund managers, favoring smaller, driven teams. He stresses the importance of constructing a powerful network and advocates for eliminating unnecessary 'filler' in both investments and life, all while emphasizing the critical rule of maintaining liquidity.

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Quick takeaways

Adam Shapiro emphasizes the importance of selecting younger, smaller fund managers who demonstrate exceptional skills and dedication for superior investment outcomes.

He articulates skepticism towards traditional index funds and ETFs, advocating for alternative investments such as hedge funds and private equity for greater returns.

Shapiro highlights the critical role of personal networks in identifying emerging investment opportunities and fostering collaborative success in the financial sector.

He expresses the need for a supportive immigration policy, arguing that a diverse workforce is essential for maintaining America's economic competitiveness.

Deep dives

Insights from a Unique Investment Perspective

Adam Shapiro, a skilled investor and managing partner of East Rock Capital, provides a rare insight into the world of family offices and private investments. His firm manages around $4 billion in assets for ultra-wealthy families, emphasizing a specialized approach to selecting impressive fund managers at a pivotal point in their careers. Shapiro highlights the significant potential for smaller funds to outperform their larger counterparts by being more nimble and making concentrated, high-impact investments. Such expertise allows him to navigate an exclusive financial realm, focusing on generating superior returns through thorough research and strategic partnerships.

Great Talent Attracts Great Talent

01:18

Age Is Just a Number in Investment Success

01:35

Quality Over Quantity: Strive for Focused Portfolios

00:50

Intro

2min

Navigating Investment Challenges in Latin America and Beyond

24min

Strategic Networking and Innovation in Investment

7min

The Power of Human Connection in Investment

3min

Identifying Exceptional Investors

23min

Identifying Success: The Qualities of Great Investors

4min

Understanding Outlier Talent in Investing and Entrepreneurship

4min

Evaluating Talent Beyond Metrics

11min

Navigating Investment Diversification

34min

10.

The Power of Subtraction in Investing and Life

7min

In this episode, William Green chats with Adam Shapiro, Managing Partner at East Rock Capital. Adam oversees billions on behalf of eight vastly rich families, allocating their assets to everything from hedge funds to private equity. Here, he explains how to build & safeguard wealth over the long term; how he identifies the best fund managers; why he’s wary of index funds & ETFs; & how to thrive by building a powerful network & removing excess “filler” from your portfolio & your life.

IN THIS EPISODE YOU’LL LEARN:

00:00 - Intro

07:29 - Why Adam Shapiro stopped investing in emerging markets.

11:26 - Why the U.S. is a great—but potentially perilous—place to invest.

25:31 - What he learned at Goldman Sachs about intelligent investing.

32:02 - How he identifies fund managers who are likely to outperform.

40:01 - Why he favors small funds run by young & hungry investors.

45:56 - What human qualities lead to investment success.

51:53 - How Adam built an investing edge through networking.

1:13:21 - Why Adam is wary of index funds & ETFs.

1:20:05 - How David Swensen’s Yale Endowment Model can be updated.

1:21:31 - Why his #1 financial rule is “never, ever run out of liquidity.”

1:24:20 - How to reduce your risk & ensure survival in extreme conditions.

1:32:22 - Why firms like Millennium & Citadel may be riskier than they seem.

1:43:16 - How to improve your portfolio & life by subtracting excess “filler.”

Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.

BOOKS AND RESOURCES

Adam Shapiro’s investment firm, EastRock Capital.
Harvard Business School’s case study of EastRock Capital.
Adam Shapiro’s articles in his LinkedIn newsletter.
Check out Institutional Investor’s article on why early life-cycle funds outperform.
Seth Stephens-Davidowitz’s book, “Don’t Trust Your Gut.”
David Swensen’s book, “Pioneering Portfolio Management.”
Roger Lowenstein’s book, “When Genius Failed.”
William Green’s book, “Richer, Wiser, Happier” – read the reviews of this book.
Follow William Green on X.
Check out all the books mentioned and discussed in our podcast episodes here.
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