Soo Chuen Tan, President of Discerene Group LP, discusses the psychological and philosophical aspects of value investing. He emphasizes on being greedy when others are fearful, viewing risk as permanent capital impairment, and requiring a margin of safety. Tan also talks about understanding cultural values and norms in business and shares reflections on operating in 'thick' versus 'thin' cultures.

Paolo Mortarotti is founder and Chief Investment Officer of Tower House Partners—a fundamental equity, long/short manager in London. Part of Paolo’s success as an investor lies in his ability to identify companies that have promising futures, but are overlooked by the market. He then applies what he calls a “peaceful activist” approach: (1) gain the confidence of a company’s management, (2) have an open and frank discussion about what they're trying to achieve, and (3) help the company imagine a greater future and move toward it together.  When it comes to transparency, Paolo may be an outlier. Most managers prefer an aura of mystery—not Paolo. In a field often shrouded in secrecy, Paolo believes that when companies and investors are upfront with stakeholders about their processes, everybody benefits. Paolo graduated summa cum laude in Economics from Bocconi University in 1999. He then started his career at Cazenove on the European research team (which has nurtured several of the current London-based equity managers). Paolo continued his development as an analyst at Theorema before graduating to the portfolio manager seat at UBS O’Connor, and then back at Theorema. All the while, Paolo focused solely on the sectors that Tower House now specializes: healthcare, TMT, consumer and business services. Prior to establishing Tower House, Paolo spent a few years as a managing director at C&C Group, a FTSE 250 consumer goods company, where he helped hone his “think like a business owner” philosophy through a better understanding of what really goes on behind the corporate façade.

Jennifer Heller is President and Chief Investment Officer at Brandywine Group Advisors, advising on $10bn of capital for a small group of families with multi-generational time horizons. This means she is in the field of balancing portfolio objectives and beneficiary interests. Conversations around this have become especially crucial during the COVID-19 crisis, as she shares. Listen to hear some of the guidance Jennifer gives her families about how to stay smart during these unique market circumstances. Central to Jennifer’s success is finding a steady supply of best-in-class managers. When working with limited transparency, this part of the job is difficult for any allocator. In this episode, Jennifer shares her insights on how to screen for manager alignment using the quantitative and qualitative tools at her disposal. She also shares how she knows it could be time to part ways with a manager. The Brandywine pools and family portfolios span multiple asset classes and investment styles, a challenge that Jennifer finds absolutely invigorating. As a liberal arts major in college, Jennifer has always carried a natural curiosity for multiple topics. At one point during the interview, she suggests that having so many interests can be distracting at times—however, this knowledge breadth and approach to learning is actually the very force that helps her succeed. It’s this valuable attribute that inspired the title of the episode, “Investing Renaissance.” Before Brandywine, Jennifer worked at both Alfred P. Sloan Foundation and Stanford University’s endowment. Early in her career, she also spent six months in India working for a microfinance NGO. Jennifer holds an MBA from Stanford University.

By observing what hedge funds are holding in aggregate, one can potentially isolate themes that produce outsized returns. A best ideas strategy involves the creation of an index or basket of stocks based on hedge fund ownership. However, depending on how you approach the ownership data, outcomes vary drastically. To create an effective best ideas strategy, special care must be given to: (1) data integrity, (2) filer identity, and (3) construction mechanism. In this minisode, Aishwarya Damodharan, Shraman Ghosh, and Nathan Innis of Novus discuss the interworkings of the Novus 4C Indices, and how the Novus Conviction Index has fared in the times of Coronavirus. WORKS MENTIONED: 13F Research with Barclays– https://indices.barclays/file.app?action=shared&path=qis/insights/qis-insights-13f-alpha.pdf Consensus vs. Conviction­– https://www.novus.com/blog/which-factor-is-truly-a-best-idea Barclays Partnership­– https://www.novus.com/barclays-public-data-partnership Conviction Index during the Coronavirus– https://www.novus.com/blog/hedge-fund-best-ideas-during-covid-19 SPECIAL NOTICE: On July 10, 2020, the Securities and Exchange Commission proposed to significantly raise the AUM threshold for funds required to file quarterly 13F disclosures. The new AUM threshold would become $3.5 billion, effectively excluding 90% of current filers. Aside from shrinking the dataset with which best ideas strategies are curated, we anticipate this change would have many negative consequences for the investment community and markets. Read our analysis of the proposal here: https://www.novus.com/blog/dont-mess-with-13fs Please consider adding your voice during the 60-day public feedback period by emailing the SEC at rule-comments@sec.gov with subject line “File Number S7-08-20”; or by submitting a comment on the SEC’s website https://www.sec.gov/rules/proposed.shtml “

Fahmi Quadir ascended to fame in 2015 when she played a pivotal role among investors shorting Valeant Pharmaceuticals. She appeared on Netflix's Dirty Money series in 2018, discussing her successful short position against the company. At the time, Fahmi was an analyst at Krensavage Asset Management. Her concentrated, aggressive short book of fraudulent healthcare and biotechnology companies that she developed at Krensavage propelled her towards launching her own short-only fund in 2017. She was 27 years old. Safkhet Capital, where Fahmi is founder and CIO, is a concentrated, short-only fund focused on identifying and exposing fraudulent companies and companies with misleading business practices. Safkhet achieves this via diligent investigative research, unblinking defiance in the face of opposition, and a strong propensity for moral justice. Fahmi's penchant for sniffing out and acting against fraud has even earned her the nickname, "the assassin." And as she describes in this episode, "It's not uncommon for me to be in a room with executives and then they start sweating—even if I'm not saying anything." She attributes much of her drive to her upbringing, and the sacrifice her parents made for her in moving to the US from Bangladesh. Born and raised on Long Island, Fahmi Quadir graduated in mathematics and biology from Harvey Mudd College in Claremont, California. Her rigorous STEM background and love of mathematics has shaped her approach to the world and markets.

Josh Jacobson is Partner and COO of the Equity Division at Cheyne Capital Management, a London-based alternative investment manager. He is also the classic successful player-turned-coach story. The concept of coaching has always been a core tenet throughout Josh's career. Why? Investing is a performance activity. And as Josh points out, all of the world's very best performers who are at the top of their game, across any category, have a coach. Josh Jacobson started his career at Salomon Brothers in New York, where he conducted macroeconomic research within the emerging markets team. He joined Cheyne in 2002, where he managed one of the firm’s equity long-short portfolios without a single down year during his eight years as a portfolio manager (including during the 2008 financial crisis). He left for Trafalgar Capital in 2009, and then returned to Cheyne in 2015, where he now spends much of his time passing on his hard-earned wisdom to portfolio managers. In this episode, Josh shares what he learned from his time studying with Ari Kiev, and relates the uncomfortable realities that he faced while scrutinizing his own performance. Andrea and Josh also discuss the most common mental traps that investors fall prey to, as well as the top advice Josh gives when he is coaching portfolio managers.

Chris Dale is the founder, CIO, and portfolio manager at Kintbury Capital. Chris attended Cambridge to study math, but eventually earned his degree in philosophy. After school, Chris worked at S.G. Warburg in corporate finance. He eventually migrated to Warburg's equity division, where Chris cultivated his passion for markets and investing. Next, he moved to Millennium Capital Partners, at the time a $2.5 billion dollar fund. After nine years at Millennium running a market-neutral strategy, Chris started his own fund, Kintbury, motivated by his fascination for European equities. In this episode, we hear about Chris’s perception of market bubbles, as well as the valuable role that both math and philosophy played in shaping his approach to markets. Chris shares his personal metrics for determining when to sell, and also explains his ideology around tracking performance on a long-term basis. "The challenge is always asking yourself, if it wasn't in the portfolio, would you be putting it in today?" —Chris Dale Chris values inquisitiveness, which has served him well throughout his career. It turns out that math, philosophy, and investing all have the following in common: to succeed, you must truly understand and dissect your assumptions.

[Revised] Dan Waters is co-managing partner at Northern Trace, a commodity hedge fund. During his long career on Wall Street, Dan ascended to co-lead FrontPoint (along with Mike Kelly) in 2006. Shortly after, FrontPoint grew to be one of the world’s largest hedge funds, and was ultimately acquired by Morgan Stanley. Managing a portfolio is challenging. Investing at a large scale adds yet another complexity: managing talent. Like a portfolio, talent requires active management. Losers must be moved out, and winners must be scaled up. The difference is, of course, you’re making these decisions about people, not just securities, and that raises the emotional stakes. Dan insists that emotions are very important—you can't neglect them—but certain emotions can cloud judgement. Dan Waters is an exemplar of steady leadership (including during difficult periods), and he’s become adept at balancing his emotions so they don’t obscure his view of a situation. Dan’s thoughts on leadership are universally insightful, no matter your role or focus. He tells us the three simple questions he asks every prospective manager (24:18), and he discusses tactics for inviting people to improve (20:40). In this episode, Dan also provides us with a succinct thesis for leadership, “The best leadership comes from just doing what you're expecting of others yourself”(11:30).

While working for McKinsey & Company, Jennifer Oppold developed a passion for discovering what makes companies tick. At the same time, she grew frustrated at not being able to ever stay with a problem long enough to see it through, as consultants are required to quickly move on from one assignment to the next. With a newly discovered professional calling very clear in her mind, Jennifer left McKinsey to enter a dual J.D./M.B.A. program at Harvard. While there, she spent a summer with Select Equity, a firm investing in small- and mid-cap companies with a value tilt. It was love at first sight. At Select Equity, Jennifer started working with George Loening, the firm’s founder, who would become her most influential mentor. Under George, Jennifer learned the art of shorting, as well as how to wait for the “value moment.” About two years ago, Jennifer launched her own firm, Alpine Peaks, where Select Equity’s legacy of intellectual honestly and personal mentorship lives on—now with Jennifer’s touch. Hearing Jennifer’s story, we get to witness firsthand how the power of intellectual honesty creates an investment edge. Key to her success, she says, is diligence in writing down her assumptions. Anyone can talk about intellectual honesty, but Jennifer lives and breathes it. Those who seek to make a career on the buy side (and truly, investors of all stripes) can learn much from Jennifer Oppold’s journey.

Judson Reis is president and founder of Sire Management. Over half a century ago, Jud started at Morgan Stanley in New York. While there, he played a leading role in the largest takeover in American history of the time: Dupont’s acquisition of Conoco. Later, Jud was fortunate enough to become friendly with and invest with Julian Robertson. He’s also invested with Stan Druckenmiller and other legends. By investing in hedge funds and being forced to endure multi-year lock-ups, Jud learned that talented managers, given enough time, will sort things out and generate outsized returns. If you feel discouraged about declining returns, consensus trades, excessive diversification, and other gloomy statements of this kind, you’ll find this conversation a healthy boost of contrarian confidence. Outsized returns are still out there. And the talented managers generating them exist too. You simply have to know where and how to look. And you have to be willing to take the right risks. To measure whether you are taking the right kinds of risk in your portfolio, and to perform in-depth research on managers, check out novus.com.