Anne-Sophie d'Andlau, co-founder of an activist investment firm, discusses engaging management for better performance and governance. They talk about the dynamic area of activism, Europe's suitability for activist investors, successful campaigns like Euro-Dissness, the importance of engaging with management teams, players in activism, risk and liquidity management, challenges faced by activism in Europe, and the potential impact of ESG on activism.

One of our goals with this podcast is to get to know new markets, new situations, and new investors who bring dynamism to all markets. A great example of this is the new generation of activist investors in Europe. Students of mine have heard me say for some time that Europe has been ripe for activism. I believe that with structural changes in European capital markets, combined with the state of global markets, a new wave of activism is happening and will be quite transformative. My guests today, Florian Schuhbauer and Klaus Roehrig of Active Ownership Corporation (AOC), are one of the most exciting names in the current European activist scene. They have been making headlines with groundbreaking campaigns and change they are bringing to European Capital Markets. AOC has built a remarkable record over the last five years, beating the Europe ex UK Small Cap benchmark by a factor of almost three since inception. AOC is an independent, partner-managed investment company acquiring significant minority stakes in publicly listed, undervalued small- and mid-size companies in German-speaking countries and Scandinavia. AOC follows an active ownership approach and fosters value creation through operational, strategic, and structural improvements. Florian Schuhbauer is a founding partner of AOC and has more than 20 years of relevant experience. Prior to establishing AOC, Florian was a Partner at Triton Partners where he built up the Public Equity practice. Klaus Roehrig is also a founding partner of AOC and has more than 20 years of relevant investing experience. Before founding AOC, he was at Elliott Associates, responsible for the funds’ investments in the German-speaking countries. On this episode, Florian, Klaus, and I discuss their early careers and the unusual paths they took before founding AOC, the mentorship they received along the way, the key pillars of their investment strategy, AOC’s holistic, team approach to their companies, how they manage liquidity differently from other firms, and so much more! Key Topics: Florian’s early career in banking (3:46) Learning experiences from Florian’s SaaS startup (4:24) How Florian found himself in a 9 to 5 position he didn’t want (5:45) Why Florian made the move to private equity (7:17) Applying a private equity value creation model to public equity (8:32) Klaus’ early interest in business and business builders (10:14) The accidental advertising agency (11:03) How Klaus became interested in investment banking (12:44) Why Klaus developed a focus on risk early in his career (14:25) Klaus’ move to the hedge fund industry (16:08) Mentorship from great investors at Elliott Management Corporation (18:26) Florian and Klaus’ decision to start AOC (20:42) The two pillars of AOC’s investment strategy (22:10) Using an activist approach as a tactic rather than their strategy (23:44) The huge agency issue caused by a lack of active owners (25:33) How an underdeveloped shareholder culture created opportunities for AOC (27:18) Working with management teams for investment ideas (30:23) Idea sourcing from AOC’s library of investment cases (32:01) The types of companies AOC considers for investing (33:12) Building a broad knowledge base as a generalist (34:54) Why AOC values a team approach with their companies (37:34) Union and employee representation on the board (39:34) AOC’s holistic approach to their investments (42:27) How AOC became interested in STADA (43:37) Why board seats were crucial for AOC’s strategy for STADA (48:13) The proxy fight that erupted from a broken contract with STADA (50:04) Internal issues between STRADA’s board members (51:24) Bringing the supervisory board and shareholders into alignment (53:31) Starting from scratch with STADA’s board (55:41) Breaking new ground as dissident shareholders in Germany (57:17) Taking STADA private within 18 months (1:00:39) AOC’s unique approach to liquidity (1:03:45) Managing liquidity on the asset side (1:07:50) Time arbitrage opportunities with locked-up capital (1:08:30) Florian’s perspective on the next five years for AOC (1:11:23) Klaus’ view on the next five years for AOC (1:14:58) Opportunities for activism in Europe (1:16:29) And much more!   Mentioned in this Episode: Active Ownership Corporation Value Investing with Legends | Jan Hummel – The Rare Advantage of Real-World Experience   Thanks for Listening! Be sure to subscribe on Apple, Google, Spotify, or wherever you get your podcasts. And feel free to drop us a line at valueinvesting@gsb.columbia.edu.   Follow the Heilbrunn Center on social media on Instagram, LinkedIn, and more!

The value investing in legends class is one of the highlights of the Heilbrunn year. It’s filled with special moments, including the annual visit from our guest today, Elizabeth Lilly. Beth embodies the principles and practices of value investing like very few people do. She makes investing look easy and her lecture always captures the pure essence of value investing. Elizabeth Lilly is Chief Investment Officer and Executive Vice President for The Pohlad Companies, LLC where she oversees the public and private investments for the Pohlad family. Beth began her career with Goldman Sachs in 1985 and shortly after moved to Greenwich, Connecticut to work as an analyst in Fund American Companies in 1988. In 1997, she co-founded Woodland Partners in Minneapolis which focused on investing in small capitalization equities. In 2002, Woodland Partners was acquired by GAMCO Investors where she went on to serve as a Senior Vice President and Portfolio Manager of the $1.4 billion Teton Westwood Mighty Mites Fund and as a member of the value portfolio management team. In 2017, Beth founded Crocus Hill Partners to focus on investments in small and micro capitalization equities but a year later she left to join the investment arm of the Pohlad family in an opportunity that was impossible to pass on. Beth is a graduate of Hobart/William Smith College and a dear friend of the Heilbrunn Center.  On this episode, Elizabeth and I discuss how her passion for investing was ignited from in childhood, the many value investing legends she has had the opportunity to learn from during her career, how she founded her firm before ultimately landing her dream job at Pohland Companies, her approaches to idea sourcing and risk management, and so much more!   Key Topics: How Beth’s mother and grandparents shaped her passion for investing (3:29) Why Beth attributes her research job at Goldman to pure luck (5:21) Leaving Goldman Sachs (7:58) The legendary Bob Rose (9:40) The first turning point in Beth’s career (11:16) Beth’s phenomenal experience at Fund American (12:54) Talking investing with Warren Buffett (14:22) The fundamentals of investing (16:12) Why Beth has a notebook on her at all times (17:38) The key elements of a good value investing firm (19:03) Beth’s focus on small-cap stocks (20:29) Beth’s introduction to Mario Gabelli (21:06) How a value trap is created (22:44) Why the management team is the best protection from a value trap (23:21) Getting comfortable with the artistic side of investing (25:33) Preparing to ask insightful questions (27:23) Talking to management as a shareholder (29:37) The benefit of constructive activism (31:51) Crocs as a case study of a compounder (33:19) Beth’s approach to valuation (35:06) Sourcing ideas with curiosity (36:28) Building up a valuable database (38:04) The seamless transition after being acquired by GAMCO (39:10) How Beth’s career at GAMCO increased her interest in the microcap space (40:35) Beth’s experience managing the Teton Westwood Mighty Mites Fund (42:01) Founding Crocus Hill partners in 2017 (44:47) Beth’s connection to the Pohlad family (45:56) Taking the dream job at Pohlad (47:29) The similarities between investing in public and private markets (49:25) Why Beth is eager to pass on the training she received (52:22) How the pandemic has shifted Beth’s thinking on businesses (53:54) Applying value investing principles to non-traditional value companies (56:27) And much more!   Mentioned in this Episode: Pohlad Investment Management, LLC Benjamin Graham’s Book | The Intelligent Investor Howard Marks’ Memo | Something of Value   Thanks for Listening! Be sure to subscribe on Apple, Google, Spotify, or wherever you get your podcasts. And feel free to drop us a line at valueinvesting@gsb.columbia.edu. Follow the Heilbrunn Center on social media on Instagram, LinkedIn, and more!

Any sound investment strategy must include both a tactical and a structural component. The tactical side requires close attention to the firm’s financials and prospects, while the structural side puts that analysis in the specific context of the industry as well as the economy at large. Our guest, Anna Nikolayevsky, is here today to share her approach and how her investment strategy has evolved.   Anna Nikolayevsky is the founder and Chief Investment Officer of Axel Capital Management, a fundamentally driven long/short firm investing in equities across a variety of sectors and geographies. Before founding Axel Capital in 2002, Anna was an analyst at Zweig-DiMenna Associates and Goldman Sachs Asset Management. Anna holds a BS from NYU, an MBA from Columbia Business School, and has also received multiple accolades for her investment work, including being the recipient of the Investors Choice Awards for Emerging Fund of 2015. She is a wonderful friend of the Centre and I'm incredibly thankful for all she does here for us at the Business School.   On this episode, Anna and I discuss how her humble childhood ultimately impacted her career choice, starting in the world of trading as a freshman, her rich learning opportunities early in her career, what it was like to start her firm in the early 2000s, why she decided to depart from the traditional hedge fund model, her thoughts on the future of value investing, and so much more!   Key Topics: How Anna’s childhood influenced her career (3:08) Anna’s transformative experience at Stuyvesant High School (5:17) Anna’s start in the world of trading (6:43) Why Anna decided to apply to Columbia Business School (8:14) Insights from working for Mario Gabelli (9:09) Establishing a foundation of independent thought (11:07) Learning opportunities as an analyst at Goldman Sachs (12:32) Why Anna made the move to a hedge fund (15:16) The starting point for Axel Capital Management (16:29) Axel Capital’s post-bubble success (18:38) Rethinking the traditional hedge fund model (19:48) The issues Anna identified in the housing market leading up to the global economic crisis (21:33) Finding an alternative to the housing market (23:33) How to think about your search strategy (25:19) Timing and risk management of shorts (26:47) Anna’s approach to risk management (27:56) Thinking about fiscal policy and portfolio construction (29:12) Axel Capital’s portfolio positioning during the ups and downs of the market since 2018 (30:57) The wider effect of highly available capital (33:01) How the pandemic has impacted Axel Capital’s portfolio structure (34:30) Planning your approach to structural shocks (36:45) Why Anna is comfortable with a relatively concentrated portfolio (38:46) Axel Capital’s approach to industry analysis (40:09) Decentralization away from Wall Street (41:31) The democratization of trading (43:03) My thoughts on the long-term impact of the increase in retail investors (44:03) And much more!     Thanks for Listening! Be sure to subscribe on Apple, Google, Spotify, or wherever you get your podcasts. And feel free to drop us a line at valueinvesting@gsb.columbia.edu. Follow the Heilbrunn Center on social media on Instagram, LinkedIn, and more!

Over the last few years, the opportunities for global value investing have improved significantly. Yields are incredibly low across the board, putting pressure on improving operational performance to generate returns. In such an environment, Europe is fertile ground for the value investor. With room for operational improvement in many sectors and a robust institutional environment, it’s an ideal market to deploy your activist dollar. When I decided to bring this topic to the show, I couldn’t think of anyone better than David Marcus to have a thorough conversation. David Marcus is Co-Founder, Chief Executive Officer, and Chief Investment Officer of Evermore Global Advisors, LLC, which he co-founded in 2009, and is also portfolio manager of the Evermore Global Value Fund. Beginning his career in 1988 at Mutual Series Fund, David was mentored by renowned value investor Michael Price and rose to manage the Mutual European Fund and co-manage the Mutual Shares and Mutual Discovery Funds, representing over $14 billion in assets. In 2000, he founded Marcstone Capital Management, LP, a long-short Europe-focused equity manager, largely funded by Swedish financier Jan Stenbeck. After Mr. Stenbeck passed away in 2002, David closed Marcstone, co-founded a family office for the Stenbeck family, and advised on the restructuring of several public and private companies the family controlled. David graduated from Northeastern University in 1988 with a B.S. in Business Administration and a concentration in Finance. On this episode, David and I discuss his structured approach to learning that he’s been committed to since starting his career, his comprehensive approach to investment analysis, why he believes there are huge opportunities in the European markets, how many people are taking the wrong approach when assessing investments in Europe, and so much more!   Key Topics: How David always knew investing would be in his future (3:51) David’s internship experience during the 1987 stock market crash (5:18) Getting a shot at a trading desk within a month of working with Michael F. Price (7:37) How David’s learned what makes a good analyst (9:24) Pivoting into European investing (11:11) Learning from the Swedish financial crisis of the early 90s (13:14) Looking beyond the CEO to the main shareholder (15:41) Leveraging your existing knowledge in new areas (16:45) When David became the head of Europe across portfolios at Franklin Mutual (19:46) David’s decision to start Marcstone Capital Management (23:36) Transitioning from stock picker to operator (26:32) Taking a private equity approach to public companies (29:43) The birth of Evermore Global Advisors (30:20) The advantage of being a generalist and a specialist (33:27) Why you must build your network (34:42) Deepening your operational understanding by engaging management (36:11) Mischaracterization of the European market (39:25) Game-changing opportunities in the European Union (EU) (41:19) What key areas David looks at in investments (42:53) The fundamental lack of knowledge about European institutions (45:37) Long-term thinking and European evolution (49:36) Understanding the local rules (51:58) Why you need to figure out peoples’ motivations (52:27) The opportunity behind deconglomeration in Europe (55:20) Good managers as an important competitive advantage (57:17) Taking advantage of room for operational improvement (59:10) Assessing the right time for the right people (1:01:04) The confluence of value and growth in Europe (1:02:22) Misconceptions about value and growth (1:05:33) Finding growth opportunities at value prices (1:06:39) Screening with numbers instead of words (1:07:55) The benefits of quarterly offsites (1:09:24) Getting clear on the reason behind investor activism (1:11:41) David’s approach to risk management (1:14:14) Why David’s view on leverage has changed (1:16:29) Checking and testing your thesis continuously (1:17:55) And much more!  Mentioned in this Episode: Evermore Global Advisors Value Investing with Legends Podcast | Leveraging Fundamentals to Remain Relevant with David Samra David Marcus’ Whitepaper | Europe: Lonely and Lumpy, Yet Extremely Compelling European Union Website Thanks for Listening! Be sure to subscribe on Apple, Google, Spotify, or wherever you get your podcasts. And feel free to drop us a line at valueinvesting@gsb.columbia.edu. Follow the Heilbrunn Center on social media on Instagram, LinkedIn, and more!

Many of the guests that I've had on this program are people I've known for years. We approached those conversations as an opportunity to explain together to the audience their methods, philosophies, and approach. Today’s conversation with Samantha Greenberg is a bit different. Samantha is someone I’ve looked forward to meeting for some time now as she would come up constantly in conversations with other investors and I’m happy to get to know her alongside you. Samantha Greenberg is Portfolio Manager of Technology, Media & Telecom investing at Ashler Capital, a Citadel company. Before joining Ashler Capital, Samantha was Chief Investment Officer of Margate Capital Management which she founded in 2016, a partner and TMT/consumer sector head at Paulson & Co. Inc., and a vice president in the Special Situations Group of Goldman Sachs. Samantha received her MBA from Stanford University's Graduate School of Business and graduated from the Wharton School at the University of Pennsylvania with a BS in Economics. On this episode, Samantha and I discuss how she developed an interest in the investment industry, why asset management is a particularly good field for women, how her experiences at Goldman and Paulson shaped her investment philosophy, her catalyst-driven approach, why resources are critical to scaling, the benefits of extensive data modeling, and so much more!   Key Topics: Samantha’s early discovery and passion for the markets (3:26) How Samantha’s interest in investing continued throughout her school years (4:28) The experience that drove Samantha’s passion for entrepreneurship (5:52) How Samantha’s experience as an internet and media analyst shaped her passion for tech (7:58) Formative experiences from successive market crises in Samantha’s early career (9:24) Learning true process diligence (11:52) Critical lessons about catalysts from John Paulson (14:19) Samantha’s experiences at Goldman Sachs and Paulson & Co. in the late 2000s (15:59) Why asset management is a great industry for women, despite the current demographics (19:26) Comcast as a powerful example of asymmetry from Samantha’s time at Paulson (22:55) The importance of steady-state valuations (26:28) The decision to start Margate Capital (27:58) Margate Capital’s investment philosophy (29:47) Samantha’s perspective on idea generation (32:07) How access to resources acts as a major barrier to entry for hedge funds (33:27) Understanding the rationale behind mispricing (35:58) Why a catalytic event is crucial for Samantha (37:24) Making decisions about portfolio sizing (38:19) Hedging market exposure (40:25) Shock testing your portfolio (43:20) A case study on value-unlocking catalysts with the Madison Square Garden Company (45:12) The leisure industry is one to watch for the future (50:46) Why Samantha left Margate Capital for Ashler Capital (52:24) How regulatory risk impacts the future of investments in the technology industry (55:47) The current tech trends Samantha is keeping an eye on (58:48) And much more!  Mentioned in this Episode: Ashler Capital Value Investing with Legends | Season 4, Episode 2 - Richard Lawrence - Investing in Superior Businesses  Thanks for Listening! Be sure to subscribe on Apple, Google, Spotify, or wherever you get your podcasts. And feel free to drop us a line at valueinvesting@gsb.columbia.edu. Follow the Heilbrunn Center on social media on Instagram, LinkedIn, and more!

There are several great investors out there who are effectively offering free lessons through their positions, letters, and interviews. What’s surprising is that while many people listen to them, hardly anyone puts those lessons into practice. Today’s guest, Mohnish Pabrai, is not one to miss such opportunities and he attributes much of his success to his hunger to learn, improve, and adjust. Mohnish is an author and the Founder and CEO of Pabrai Investment Fund, which he started in 1999 at the peak of the tech bubble. In 1983 he moved to the United States from India, to study computer engineering at South Carolina's Clemson University. After working in research and development, Mohnish launched his own successful IT consulting firm, TransTech, in 1991. One of the most original investors out there, Mohnish arrived relatively late in his professional career to the world of investing but he has made such an impact ever since. Through Pabrai Investments, Mohnish has built one of those records that is the stuff of legends. On this episode, Mohnish and I discuss how his early years alongside his entrepreneurial father have shaped him as an investor, why he decided to make the switch to a career in investing, how he was introduced to the world of value investing through the works of Peter Lynch, his growth as an investor since starting Pabrai Investments as a hobby investor, how you can use cloning to your advantage, and so much more!   Key Topics: The meaning behind the title of Mohnish’s book “The Dhandho Investor” (3:02) What Mohnish learned from his father’s entrepreneurial ventures (4:20) Mohnish’s invaluable hands-on business experience as a teenager (8:05) How an engineering background offers an advantage as an investor (10:40) Mohnish’s decision to remain in the US after university (11:51) The importance of looking at the big picture (13:03) Moving from computer engineering to international marketing (14:36) How Mohnish’s father changed the path of his career (15:41) Why Mohnish decided to start his own company (18:17) The early days of TransTech (20:14) An introduction to Peter Lynch and Warren Buffet (22:22) Testing out the Buffet approach to investing (23:48) Transitioning into asset management (27:35) The 1999 start of Pabrai Funds as a hobby (30:04) Starting out as a traditional value investor (32:46) Our aversion to cloning (34:17) The significant competitive advantage you can gain by cloning (36:24) Understanding the patterns of different investors (39:10) Mohnish’s approach to idea selection (40:51) Reaching clarity before making investment decisions (44:10) Examining Fiat Chrysler as a case study for Mohnish’s investment process (47:31) How Mohnish utilizes guardrails (50:59) A value investor’s approach to risk management (52:46) Finding 50 cent dollar bills (54:29) Focusing on compounders (56:55) What we can learn from NICE Holdings (59:37) What you need to know about “spawning” (1:01:43) Why investors need to think like entrepreneurs (1:05:06) Why this is an interesting time for value investing (1:07:23) How Mohnish thinks about the future of value investing (1:09:41) And much more!   Mentioned in this Episode: Mohnish Pabrai’s Books: Mosaic: Perspectives on Investing The Dhandho Investor: The Low-Risk Value Method to High Returns Peter Lynch’s Book | One Up On Wall Street: How To Use What You Already Know To Make Money In The Market Young Presidents' Organization (YPO) Tom Peters’ Book | In Search of Excellence: Lessons from America's Best-Run Companies   Thanks for Listening! Be sure to subscribe on Apple, Google, Spotify, or wherever you get your podcasts. And feel free to drop us a line at valueinvesting@gsb.columbia.edu. Follow the Heilbrunn Center on social media on Instagram, LinkedIn, and more!

Modern value investing emphasizes investing in resilient franchises and letting the compounding do the work for you. Today’s guest, Jan Hummel, is a fantastic expositor of this subject and a friend of the Center who has been part of many of our events over the years. In 2007, Jan launched the Paradigm Capital Value Fund with Bruce Greenwald, the founder of the Heilbrunn Center and Columbia Business School alumnus, Mario Gabelli. Paradigm’s investment philosophy is built around a focus on mispriced securities in the small- and mid-cap space within Europe, deep fundamental research, a concentrated portfolio, and hedging of the portfolio through non-equity investments and derivatives. I've often mentioned that I think the opportunities in Europe for value investors are enormous and with Paradigm’s focus on making investments within the European Union, Jan is the perfect person to explore this topic with us. On this episode, Jan and I discuss the advantages of real-world experience, combined with deep fundamental research and tenacity. We talk about how Jan’s early years in Sweden have shaped his whole life, what it was like to make the move from financial economics to business school, making the transition from 15 years of turnaround recovery to running a fund, the key traits of a great analyst and an entrepreneur, and so much more!   Key Topics: How Jan’s childhood in Sweden has colored his life (2:37) Jan’s unconventional experience buying shares at 16 (4:06) Studying financial economics at the Stockholm School of Economics and Stanford (6:26) The first steps of Jan’s finance career as a Junior Analyst (7:33) How Jan went from studying under Bruce Greenwald at Harvard to working together (9:16) How business school broadened Jan’s experience (9:56) Jan’s unorthodox path in asset management (12:07) Why Jan became interested in turnaround restructuring (13:08) How Jan’s 15 years of business experience has helped him as an investor (14:29) The Swedish banking crisis of the early 90s (16:24) Competitive dynamics of the 80s and 90s (18:03) The powerful combination of deep knowledge and a favorable market environment (19:19) Events that led to the launch of Paradigm Capital (20:44) The experience of founding a fund right before the 2008 economic crisis (23:09) Creating an information edge through research (24:37) Advantages of a having concentrated portfolio (26:22) Paradigm’s layered approach to sizing positions in their portfolio (29:05) Why Paradigm is country-agnostic when it comes to portfolio construction (30:57) How Paradigm hedges currencies as part of their risk management (31:50) Navigating the tricky waters of figuring out when to exit a position (35:48) What I like about Paradigm’s flexible approach to engaging with management (38:55) Why data is always foundation for identifying potential investments (39:59) What Jan is looking for in companies’ return on capital employed (41:05) Why Jan believes we’ll see an increase in passive investing in Europe in the future (45:32) Opportunities for value investors in Europe (47:04) Building strategy around the improvement of operational practices (48:51) What makes a great analyst (51:32) The tenacity of an entrepreneur (53:01) And much more!  Mentioned in this Episode: Value Investing with Legends Podcast | Season 4 Episode 4: The Multi-Faceted Future of Value Investing with Henry Ellenbogen and Anouk Dey Thanks for Listening! Be sure to subscribe on Apple, Google, Spotify, or wherever you get your podcasts. And feel free to drop us a line at valueinvesting@gsb.columbia.edu. Follow the Heilbrunn Center on social media on Instagram, LinkedIn, and more!

The most successful investors combine a profound analytical understanding of financial markets and the economy at large with the ability to act on those ideas. My guest today has these two attributes in spades. Today’s conversation is with Howard Marks, the Co-Founder and Co-Chairman of Oaktree Capital Management, which is one of the largest credit investors in the world and certainly the largest investor in distressed securities. Howard started his career at Citicorp as an equity research analyst and then Director of Research, Vice President, and Senior Portfolio Manager overseeing convertible and high yield debt. After leaving Citicorp, he moved to The TCW Group, where once again, he was responsible for investments in distressed debt, high yield bonds, and convertible securities. In 1995 he and another group of partners from TCW founded Oaktree, where he remains today. Howard is known for his penetrating mind and his memos are a must-read for any serious student of the market and I can’t think of anyone better than him to discuss the many complexities of markets and the economy of today.  On this episode, Howard and I discuss how he ended up in the high yields space, why running research at Citicorp was a low point in his career, the concept of “efficientization”, why Graham and Dodd called bond investing a negative art, why complexity and early adoption are your friends, the dominant challenge for investors today, Howard’s prolific writing, and so much more!   Key Topics: Howard’s early life from working adding machines in an accounting office to studying finance at university (3:30) How Howard ended up working at Citicorp for his first job out of school (5:39) Why running research at Citicorp was an extremely unsatisfactory role for Howard (7:25) Howard’s involuntary transition from analyst into the high yield space (9:01) The big difference between the market being efficient and being right (11:37) The concept of “efficientization” (13:14) Two main causes of mistakes in the market? (14:04) Howard’s holy grail in investing (15:12) Why Howard doesn’t use macro forecasting in his decision making (17:24) The dawn of the high yield bond era (18:55) Different approaches to the analysis of equities versus high yield bonds (20:07) Why Graham and Dodd called bond investing a negative art (21:03) Howard’s early days at The TCW Group (23:18) Complexity and early adoption as an investor’s friends (24:53) Why you must work at a firm that is in alignment with your investment philosophy (28:05) Howard’s love for writing (31:49) Using memos to shape the company culture (33:30) Why you should analyze your winners (34:47) The “I know” school versus the “I don’t know” school (36:01) The dominant challenge for investors today (38:46) What Howard thinks is behind consistently low yields (42:13) What surprises me about the politics of populism and financial markets (46:43) The rise of populism as a response to the shifting beliefs of the working class (48:16) And much more!   Mentioned in this Episode: Oaktree Capital Management Memos from Howard Marks Howard Marks’ Book | The Most Important Thing Illuminated: Uncommon Sense for the Thoughtful Investor Benjamin Graham & David Dodd’s Book | Security Analysis Howard Marks’ Memos: Us and Them Coming into Focus Mysterious Economic Reality Political Reality Political Reality Meets Economic Reality   Thanks for Listening! Be sure to subscribe on Apple, Google, Spotify, or wherever you get your podcasts. And feel free to drop us a line at valueinvesting@gsb.columbia.edu. Follow the Heilbrunn Center on social media on Instagram, LinkedIn, and more!

Today’s conversation is with Henry Ellenbogen and Anouk Dey from Durable Capital Partners. Henry founded Durable in 2019 and serves as Managing Partner and Chief Investment Officer. Before that, he was a Vice President of T. Rowe Price, T. Rowe Price Group Chief Investment Officer for U.S. Equity Growth, the lead Portfolio Manager for the U.S. Small-Cap Growth Equity Strategy, and the Portfolio Manager for the New Horizons Fund. Anouk is a Partner of Durable who joined the firm at its inception in 2019. Before joining Durable, she was also a Vice President of T. Rowe Price Group, where she was an investment analyst in the U.S. Equity Division, focusing on small-cap growth stocks. Anouk also co-teaches the Compounders Independent Study at Columbia Business School. My students have heard me say many times that the future of investing must be one that combines exposure to private and public markets and that is flexible in its valuation approach and ideas, and that embraces disruption. That type of investing requires partners that are willing to commit capital for the long haul while being able to withstand the volatility of the market. That’s where Durable Capital Partners stands out. On this episode, Henry, Anouk, and I discuss how Henry developed his investment philosophy, how a liberal arts background gives you an advantage in the investment industry, Henry and Anouk’s lessons from their time at T. Rowe Price, Durable’s commitment to long-term relationships with the companies they invest in, their unique approach to knowledge acquisition, and so much more!   Key Topics: How Henry started his career in investing after exploring different fields (3:41) The beginnings of Henry’s investment philosophy (6:04) Major lessons from Henry’s study of the history of technology (8:53) The benefits of a liberal arts background (9:41) Why crisis is the true test of an investor (11:00) The stroke of luck that took Anouk from ski racing to studying international relations (12:38) How Anouk got the opportunity to spend her first year as an investor studying compounders (14:44) Henry’s early role as an analyst at T. Rowe Price (18:18) The move from traditional media analyst to managing the T. Rowe Price New Horizons Fund (19:59) What you can learn from studying media companies in the early 2000s (21:00) Why Henry started looking at private companies as investment opportunities (23:37) Creating a systematic approach to investing in private companies (25:38) The foundation for building a network of companies with unique access (26:51) Advantages for public security analysts over venture capitalists in the private market (29:06) What Durable wants to be known for (30:07) How Durable’s perspective on relationships and long-term commitment are in alignment with entrepreneurs (31:18) Durable’s approach to knowledge acquisition (34:01) Looking at Shopify as a company that has gone from Act 1 and 2 to a potential Act 3 (37:05) Durable’s approach to analyzing and supporting company leaders (41:24) Managing the risk of human capital (45:25) The importance of honoring your commitments and managing capital successfully during a crisis (47:46) Eliminating the false dichotomies in the investment industry (51:59) How you can reduce your learning trajectory around compounders (55:19) The advantage of working in collaborative teams at Durable (57:26) Idea sourcing as world-class fundamental investors (1:00:01) Understanding the good to great thesis (1:01:22) The value of deeply human investing (1:04:15) Building on the human skillset (1:06:13) How passive investing is affecting market volatility (1:08:30) And much more!   Mentioned in this Episode: Durable Capital Partners   Thanks for Listening! Be sure to subscribe on Apple, Google, Spotify, or wherever you get your podcasts. And feel free to drop us a line at valueinvesting@gsb.columbia.edu. Follow the Heilbrunn Center on social media on Instagram, LinkedIn, and more!