Invest Like the Best with Patrick O'Shaughnessy

Ali Hamed - Building an Investment Firm - [Invest Like the Best, EP.362]

Feb 27, 2024

01:29:09

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Ali Hamed shares insights on building a $2.5 billion investment firm, finding alpha in unique places, YouTube catalogs, creative real estate opportunities, venture investing benefits, lessons from firm building, working with Michael Ovitz, and the importance of people development in asset management.

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Quick takeaways

Strategic risk management crucial in venture capital firms to avoid speculative bets.

Platform governance stability is vital for successful investments in platform economies.

Real estate market growth opportunities require innovative approaches to overcome challenges.

Adaptability and flexibility key in the investment world to thrive amidst changing market conditions.

Deep dives

Investing Firm Growth Strategy

Investing firms face a crucial decision as they grow, aiming to balance the size of deals with their current and future scale. The approach of sizing deals to the firm they aim to become while only holding positions in line with their current size offers a risk-managed strategy. This strategy involves taking positions equal to the firm's target size, while only holding in line with their actual size, thus allowing a controlled approach to scaling and managing capital.

Philosophy and Strategies in the Investing World

03:50

Key Functions in Investment Management Firms and Capital Raising Strategies

01:47

Attributes of Evaluating Managers for Capital Allocation

01:27

Balancing Risk in Venture Capital Investments

01:18

Introduction

2min

Evolution and Strategies of CoVenture: A Unique Investing Approach

30min

Exploring Uninvested Territories in Platform Economies and Governance

2min

Building a Successful Asset Management Firm

23min

Analyzing the Dynamics of Private Credit and Risk Evaluation

5min

The Importance of People Development in Asset Management

23min

Work Ethic, Personal Motivation, and Ambition in Investing

6min

My guest today is Ali Hamed. Ali was first on Invest Like the Best six years ago. He was 26 at the time and four years into building his investing firm, CoVenture. Both then and now, Ali is an example of what’s possible when you think creatively. Six years later, CoVenture now manages two-and-a-half billion dollars, and Ali continues to find alpha in esoteric places.

We talk about YouTube catalogs, creative opportunities in real estate, and how venture investing helps them get better at credit. We also talk about his lessons from building an investment firm and what it’s been like to work with Michael Ovitz. Please enjoy this great conversation with Ali Hamed.

Listen to Ali host a Business Breakdowns on Spotter

Listen to Founders Podcast

For the full show notes, transcript, and links to mentioned content, check out the episode page here.

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This episode is brought to you by Tegus, the only investment research platform built for fundamental investors. Whether you’re trying to get up to speed on a new market or keep tabs on a portfolio company, Tegus is the end-to-end investment research platform you need. With Tegus, you can quickly understand a company's business model, drivers, benchmarks, and management quality. To monitor an entire market, download our pre-built financial models — or update your own with the latest data using Tegus’ new Excel Add-In. Tegus gives you all of this and more, all bundled into a single software license. Find out why 95% of the top 20 global private equity firms are Tegus customers. Learn more and get your free trial at tegus.com/patrick.

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Invest Like the Best is a property of Colossus, LLC. For more episodes of Invest Like the Best, visit joincolossus.com/episodes.

Past guests include Tobi Lutke, Kevin Systrom, Mike Krieger, John Collison, Kat Cole, Marc Andreessen, Matthew Ball, Bill Gurley, Anu Hariharan, Ben Thompson, and many more.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes:

(00:00:00) Welcome to Invest Like the Best

(00:03:11) First Question - The Journey of Building an Investment Firm

(00:15:08) The Influence of Time and Scale on Asset Classes

(00:22:39) The Power and Potential of YouTube's Asset Class

(00:27:33) The Future of Real Estate and Housing Supply

(00:30:15) The Challenges of Investing in Platform Economies

(00:36:44) The Pitfalls of Capital Formation in Asset Management

(00:45:17) The Evolution of Venture Portfolio

(00:51:14) The Approach to AI and Other Emerging Technologies

(00:54:42) The Mispricing in Private Credit

(00:58:46) Building the People Side of the Business

(01:04:21) The Challenges and Opportunities in Valuation

(01:19:40) The Impact of Michael Ovitz on CoVenture

(01:23:11) The Kindest Thing Anyone Has Ever Done For Him

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