Capital Allocators – Inside the Institutional Investment Industry Andy Lee – Empty Rooms: Investing in Tax Assets at Parallaxes Capital (Capital Allocators, EP.305)
Mar 30, 2023
Andy Lee, Founder and CIO of Parallaxes Capital, shares his fascinating journey from archaeology to the finance world, uncovering the niche market of Tax Receivable Agreements (TRAs). He discusses how TRAs allow investors to leverage tax assets, their historical roots, and the unique challenges they present. Andy elaborates on the complexities of investing in tax assets and the role mentorship played in shaping his career. His insights on strategic contracts reveal a hidden gem in the investment realm, especially important amid rising IPOs and SPACs.
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Early Start
- Andy Lee went to college at 15, initially aiming for archaeology but switched to finance due to family pressure.
- He pursued a master's in accounting with a tax focus, leading him to a career in M&A at Citi.
RA at 17
- Andy Lee's experience as a 17-year-old resident advisor involved confiscating alcohol from older students during a campus tradition.
- This humorous situation arose from his early college entry.
TRA Basics
- A Tax Receivable Agreement (TRA) is a contract between a public company and pre-IPO holders, refunding cash tax savings.
- Public equity investors often undervalue tax assets, creating this niche opportunity.