Capital Allocators – Inside the Institutional Investment Industry

Adam Karr – Extreme Alignment at Orbis (EP.338)

Sep 14, 2023

Adam Karr, President and Portfolio Manager at Orbis, dives into their unique business practices of alignment, including a fee structure with rebates and a permanent ownership model. They also discuss Orbis' investment approach featuring thirty-five analyst shadow portfolios to bring data and independent thinking to portfolio construction.

58:52

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Episode guests

Adam Karr

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Episode notes

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Quick takeaways

Orbis promotes alignment with clients through unique business practices, such as a fee structure with rebates during underperformance.

Orbis encourages long-term thinking and independent decision-making with their privately owned, perpetuity charitable foundation ownership structure.

Orbis emphasizes the importance of culture and people, creating an environment that attracts and retains independent-minded individuals.

Deep dives

Orbis' Business Practices and Alignment

Orbis, a global equity manager, focuses on creating alignment through unique business practices. They have a fee structure with rebates and a permanent ownership model. This encourages alignment with clients by offering refunds during underperformance. The alignment also extends to the firm's ownership structure, as they are privately owned by a perpetuity charitable foundation. These business practices promote long-term thinking and the ability to make independent contrarian decisions.

Introduction

4min

Early Interest in Investing and Entry into DLJ

8min

Alignment and Fee Structure

5min

Alignment and Ownership Structure

8min

Effective Communication and Collaboration in a Geographically Dispersed Analyst Team

2min

Investment Philosophy, Research Process, and Portfolio Structure at Orbis

5min

The Target Allocation and Decision-Making Process

21min

Passion for Investing and Developing People, Love for Live Entertainment, Investment Mistake, and Influential Figures

6min

Today's sponsored insight is with Adam Karr, the President and Portfolio Manager at Orbis, a $35 billion global equity manager founded in 1989 by legendary Fidelity alum Allan Gray. Orbis blends unique business practices with a long-term intrinsic value investment model designed to invest differently.

Our conversation dives into Orbis’ business practices intended to create alignment, including a fee structure with rebates and a permanent ownership model. We then go through the investment approach that features thirty-five analyst shadow portfolios to bring data and independent thinking to portfolio construction. Orbis’ model has rich lessons for managers and allocators alike.

For full show notes, visit the episode webpage here.

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