Dan Roller, Founder and CIO of Maran Capital, discusses investing in buy-and-build compounders in public markets. Topics include: formation of Maran Capital, choosing hunting ground and creating structural advantages, researching and choosing companies to invest in, buy-and-build basics and examples, potential risks, value vs. growth debate, investing in SPACs, thesis drift and mental models.
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volunteer_activism ADVICE
Choose Your Hunting Ground Wisely
Choose a market niche with structural advantages like small size and single decision-making.
Align partners with your long-term investment horizon to allow opportunistic, patient investing.
volunteer_activism ADVICE
Focus with Concentration and Flexibility
Concentrate investments in about 10 core positions holding 90% capital for focused risk-reward.
Maintain flexibility to be opportunistic with smaller positions and avoid rigid rules.
insights INSIGHT
Investing Is Like Ironman Training
Knowledge and endurance build progressively like training for an Ironman.
Investing skill compounds similarly by gradually building frameworks and mental models over time.
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“What you need to do, I think, is constantly update your thesis as you go, which can allow for longer holding periods, because things do change. And at the same time, I go into investments with a multi-year horizon—but my thesis might be disproven fairly quickly.” – Dan Roller
We explore investing in buy-and-build compounders in public markets. We’re joined by Dan Roller, Founder and CIO of Maran Capital.
Chapters
(00:00:00) – Introduction
(00:01:50) – MOI Global and Dan’s start in the investment world
(00:11:20) – The formation of Maran Capital
(00:14:59) – Choosing your hunting ground and creating structural advantages
(00:21:21) – Researching and choosing companies to invest in
(00:28:27) – How building investment knowledge is like training for the Ironman
(00:32:17) – Examples and basics of buy-and-build companies
(00:41:04) – How buy-and-build can go wrong
(00:51:40) – The value vs. growth debate
(00:54:57) – Investing in SPACs
(00:58:06) – Thesis drift and mental models
(01:02:21) – Resources for learning about investing
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Search and down a transcript and find links to related books, interviews, lectures, and more: outlieracademy.com/21.
About Maran Capital
Dan Roller is Founder and CIO of Maran Capital Management, a boutique, values-driven investment manager that I've been following intently for the last few years. I love the way that Dan sees the world, and I never miss reading one of his investor letters. In this episode, we go deep on how becoming a better investor is similar to training for an Ironman competition, why Dan focuses on what he calls buy and build companies and some of his favorite historic and recent examples there, his approach to investing in special situations and what defines a good or bad opportunity.
I get his thoughts on SPACs and why he sees some interesting opportunities in the world today. Dan is a remarkable investor. Before he founded Maran Capital management in 2015, he worked as an analyst for over a decade at firms like Credit Suisse First Boston, Impala Asset Management, Avesta Capital Advisors, and Scopus Asset Management.
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