The Value of Perceived Complexity in Investment Products | 1min snip from Invest Like the Best with Patrick O'Shaughnessy

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Erik Serrano - Investing in Investment Firms - [Invest Like the Best, EP.358]

Invest Like the Best with Patrick O'Shaughnessy

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The Value of Perceived Complexity in Investment Products

The investing world values more than just returns; investors are not only buying returns but something else. This highlights that a strategy as a product is more than a series of returns. There is a premium on hard work or complexity, even though the most powerful strategy may be something that seems simple, requiring simple inputs and edges.

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My guest today is Erik Serrano. Erik is the CEO of Stable Asset Management, which he started 14 years ago in his early 20s and has scaled to over $3 billion in AUM. Unusually, Stable’s strategy focuses on other investing firms. They look to back the Blackstone's of tomorrow and provide those founders with capital and support so their time is spent doing what they do best, which is typically investing. We discuss the commonalities among promising founders in this sector, how Stable serves as a full resource to their companies, and some harsh truths learned from building an investing business. Please enjoy my conversation with Erik Serrano.

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For the full show notes, transcript, and links to mentioned content, check out the episode page here.

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Invest Like the Best is a property of Colossus, LLC. For more episodes of Invest Like the Best, visit joincolossus.com/episodes.

Past guests include Tobi Lutke, Kevin Systrom, Mike Krieger, John Collison, Kat Cole, Marc Andreessen, Matthew Ball, Bill Gurley, Anu Hariharan, Ben Thompson, and many more.

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Show Notes

(00:03:33) - (First question) Exploring the allure of investing in investment firms

(00:08:20) - Discussing the scarcity of investors in investment firms

(00:18:20) - Strategies for generating returns for investors

(00:22:50) - Analyzing risk/return dynamics in portfolios

(00:26:26) - Unveiling surprising insights from Project Legends

(00:29:56) - Characterizing the ideal General Partner (GP)

(00:37:23) - Identifying red flags in GPs' practices

(00:44:10) - Viewing investment strategies as marketable products

(00:52:52) - Delving into the emotional aspects of investing

(01:01:57) - Tracing the lifecycle of an investment firm

(01:13:04) - Offering guidance to aspiring young investors