Successful Investors – Détails, épisodes et analyse

Kirk Sims is an opportunity builder. With a career shaped by seizing the right moments at the right time, Kirk works every day to create valuable opportunities for emerging managers. His multifaceted background cultivated guiding principles that spearhead his current investment approach. With the goal of leaving the industry better than he found it, Kirk works diligently to embark some of his hard-earned wisdom on the next generation of investment professionals.

Kirk now heads the Emerging Manager Program at the Teacher Retirement System (TRS) of Texas, an initiative that focuses on building relationships with outperforming managers at the beginning of their life cycle. Sourcing top talent involves crossing paths with numerous up-and-coming managers. Kirk takes this opportunity to offer advice and mentorship—including to managers that are not currently positioned for an investment. Through supporting these managers in their early stages, Kirk is able to help the next generation navigate this industry, all while ensuring the retirement of Texas’ beloved teachers.

“You're finding talent early, you build that talent, you build that relationship, and those relationships are valuable for years. No matter how big that manager is, they remember that their early capital came from you.”

In this episode we discuss:

• Guiding emerging managers
• Shaping the next generation
• Why execution supersedes intention

Kirk was raised in a small town in Georgia but eventually moved to the nation’s capital of Washington D.C. to complete a Bachelor of Business Administration at Howard University. Kirk then earned an MBA from the Columbia University Graduate School of Business. Prior to TRS of Texas, Kirk oversaw a manager of manager’s retirement platform as well as an open architecture investment platform at Prudential Retirement. He was also responsible for the Emerging Manager Program at Teacher Retirement System of Illinois.

Resources:

• Teacher Retirement System of Texas | 2024 Emerging Manager Conference
• Teacher Retirement System of Texas | Emerging Manager Program

Listen to Other Successful Investors:

• Katherine Molnar (Fairfax County PORS) | Diversification 101
• Charmel Maynard (University of Miami) | Paying It Forward
• Aoifinn Devitt (Moneta Group) | Finding Clarity

Chapter Summaries:

[00:02:21]

A Business-Oriented Education

[00:04:40]

Starting at Brinson Partners

[00:11:46]

A Multifaceted Background

[00:16:05]

TRS of Illinois

[00:21:48]

Emerging Manager Program

[00:24:55]

TRS of Texas

[00:29:00]

A Day in the Life of Kirk Sims

[00:37:41]

Tips for Emerging Managers

[00:39:32]

Emerging Manager Conference

[00:42:10]

The Value of Mentorship

Disclaimer: This podcast is not investment advice, and should not be relied upon as a basis for investment decisions. All content in this podcast reflects the opinions and views of the speakers. This podcast is for informational purposes only, without representation as to accuracy or completeness. The guest(s) on this episode did not have a client relationship with SEI Novus at the time of recording.

Intellectual curiosity is a guiding principle for Katherine Molnar, CIO at Fairfax County Police Officers Retirement System (PORS). Katherine began investing as a teenager with the money she earned from summer jobs. She regularly questioned the critical elements of investing and often explored deep technical details in search of an answer. Eagerness for knowledge is a through line in Katherine’s career, motivating her to find innovative methods to strengthen portfolios.

Prior to working at Fairfax County PORS, Katherine spent a decade at AIG Investments (later Pinebridge Investments) where she became deeply acquainted with hedge funds and how they respond to various environments. This experience made for a seamless transition into her role at Fairfax County PORS, where the team was developing all-weather portfolios. Largely dependent on risk parity, this all-weather approach seeks to balance risks between numerous factors and maintain adequate performance regardless of the current state of economic growth and inflation.

“So whether that is expansion, contraction, trough or peak, we try to have a portfolio where something is always working.”

In this episode we discuss:

• Risk parity and building all-weather portfolios
• Intellectual curiosity
• The power of liquidity

After graduating from the University of North Carolina-Chapel Hill with a Bachelor of Science in Business Administration/Finance, Katherine spent two years in Frankfurt, Germany where she worked as an intern for J.P. Morgan. Katherine continued to expand her global perspective in Warsaw, Poland and London, England. In the former, she helped launch the first retail mutual fund in the polish market; in the latter, she worked as Vice President, Senior Research Analyst for AIG. She then transitioned to her current position of Chief Investment Officer at Fairfax County Police Officers Retirement System. 

Resources:

• Top Traders Unplugged | 7 Allocator Series: Learnings from Fairfax County ft. Katherine Molnar and Andrew Spellar

Listen to Other Successful Investors:

• Charmel Maynard (University of Miami) | Paying It Forward
• Aoiffin Devitt (Moneta Group) | Finding Clarity
• Ari Bergmann (Penso Advisors) | The Edge in Hedges

Chapter Summaries:

[00:03:00]

An Early Start to Investing

[00:04:00]

Studying at UNC

[00:09:02]

Hedge Funds at AIG

[00:14:11]

Liquidity and Financial Crises

[00:27:28]

Risk Parity and All-Weather Portfolios

[00:40:38]

Relationships with Managers

[00:48:30]

Transitioning to Fairfax County PORS

[00:58:39]

Intellectual Curiosity

Disclaimer: This podcast is not investment advice, and should not be relied upon as a basis for investment decisions. All content in this podcast reflects the opinions and views of the speakers. This podcast is for informational purposes only, without representation as to accuracy or completeness. The guest(s) on this episode did not have a client relationship with SEI Novus at the time of recording.

With Tanzanian heritage, a UK education, and a deep interest in emerging markets, Karim Jetha founded Longdean Capital. Karim’s early career focus on MENA, and his experience living in the region, informs his current investing strategy. Longdean has the operational infrastructure to invest primarily in companies solely listed on local exchanges, which Karim believes gives them access to the best opportunities.

In addition to its focus on frontier and emerging markets, Longdean invests with a bias towards companies with a positive social impact, such as Leejam Sports. Recognizing the increasing participation of females in the workforce facilitated by changing social norms, this chain of fitness centers opened up the first set of female gyms in Saudi Arabia.

Karim’s deep understanding of the nuances in the MENA market inform his appreciation for the diversity and quality of businesses within the region. He shares, “In order to make outsized long-term returns, you have to think differently.” Though this contrarian way of thinking may not appeal to all, Karim values remaining true to your own convictions and trusting that the right investors will follow.

Karim Jetha is founder and Chief Investment Officer at Longdean Capital. Before founding Longdean Capital in 2018, Karim spent nine years at Blakeney Management, where he was Partner, Portfolio Manager, and Head of MENA Coverage. Prior to Blakeney, Karim was an Associate at Goldman Sachs in the Investment Banking Division with stints in London and Dubai. Karim has an MA from the University of Cambridge where he read Economics.

In 1999, Val Zlatev stumbled across a group of traders while attending a physics conference in Chicago. Enamored by the energy in the room, Val decided to abandon his boredom in physics and enter the exciting world of finance. This career pivot provided Val with exposure to valuable mentors and experiences, enabling him to further refine his philosophies for both investing and life.

Among his favorite insights, is an early mentor’s advice, “Simplicity always trumps complexity.” This wisdom continues to impact Val’s investment decisions today. As Senior Founding Partner and CIO at Analog Century, Val focuses on playing to his strengths, acknowledging the certainty of uncertainty, and cultivating the best possible performance from his team.

No matter the outcome, Val chooses to focus on lessons learned. Speaking of a fund that closed, Val shares, “First and foremost, the learning was find a way to unwind. Don't allow stress of the job to burn you out. PMing is not a sprint. It's a marathon. And burning out doesn't help anybody.”

Val Zlatev holds a PhD in Physics from the University of Pennsylvania; his thesis focused on the early moments following the Big Bang. Val’s professional experience includes McKinsey & Company, MSD Capital, and Kingdon Capital. Prior to Analog Century, Val served as Partner at Quentec Asset Management.

When a terrible accident left Joe Peta in a wheelchair and out of work for several months, he took the opportunity to contemplate his 15-year trading career. Exploring the overlap between asset management, sports betting, and the analytic revolution taking place in sports (primarily in baseball) led Joe to write TRADING BASES: HOW A WALL STREET TRADER MADE A FORTUNE BETTING ON BASEBALL.

Both baseball and finance are data-rich, yet Joe observed the finance industry’s use of data paled in comparison to baseball’s cutting-edge implementations. Reducing noise and isolating players in performance metrics provided a framework for baseball that quickly traveled to other sports; Joe carries this exact framework over to finance and portfolio managers, identifying three key metrics for predicting investor success.

After the publication of his book, Joe served as managing director at Novus. Most recently, he worked for one of largest multi-manager long/short equity firms in the industry, creating a multi-factor framework which entirely explains PM alpha in terms of skills exhibited, not factor attribution.

Speaking about his book, Joe shares, “[It] really does ask a very serious question that underlies all of the stories, which is why is the industry of baseball—which is worth a fraction of the finance industry—why is baseball so much better at using their data to evaluate performers [and] compensate their highly talented individuals than finance?”

Joe Peta has enjoyed a 25-year career on Wall Street, having spent the first 15 years as both a buy-side and sell-side equities trader; this included a 12-year stint at Lehman Brothers as head of biotech trading in New York before moving to San Francisco to run the trading desk at a Lehman-sponsored long/short equity hedge fund. Joe holds an MBA from Stanford University and a BS in accounting from Virginia Tech. His book, TRADING BASES, received substantial critical acclaim and was a best-seller in a number of categories; during 2013 TRADING BASES was named a Top 10 Business book by Amazon.com, a Top 10 Sports book by Publisher’s Weekly, and a Top 10 Non-Fiction book by Fortune.

“TRADING BASES is available at https://www.amazon.com/Trading-Bases-Fortune-Betting-Baseball/dp/0451415175.”

15 years ago, Patricia Lizarraga started noticing that women outperform as both CEOs and investors. The reason is simple: due to various institutional barriers, women have a more difficult time rising to the highest executive ranks in both financial institutions and non-financial corporations. This observation evolved into an investment thesis that Patricia calls “The Female Factor.”

According to Patricia’s thesis, when a woman can overcome these well-documented additional barriers and rise to the highest executive ranks, by default, she must possess additional leadership and performance characteristics versus the average executives who did not face the same barriers. Today, the vast majority of senior executives across all industries are men—and thus, a unique investment opportunity arises when one considers the consistent track record of female outperformance.

Patricia Lizarraga is the founder and managing partner of Hypatia Capital, an asset management firm focused on sponsoring female CEOs and investors. Hypatia is built on Patricia’s passion for finance, as well as her mission of supporting fellow women in leadership roles. Most recently, her team has focused on building a hedge fund index that isolates women-lead firm outperformance. (The Novus study mentioned in this episode about women-led fund outperformance can be found here https://www.novus.com/blog/celebrating-women-led-funds.)

“It is difficult to isolate performance in something like a private equity transaction because it's both the investor and the CEO, as well as their respective teams that create the value,” Patricia explains, “[With] hedge funds, it’s a different story because there's one decision maker who has final responsibility for pulling the trigger. So, when we started looking at hedge funds, where you have this ability to isolate decision making, that's where we felt we could really isolate the female factor.”

Patricia Lizarraga was born and raised in Peru. She attended Yale University and went on to receive an MBA from Harvard Business School. She began her career as a merchant banker at Allen & Company and Donaldson, Lufkin & Jenrette. In addition to Hypatia Capital, Patricia serves on the board, and chairs the Audit Committee of Credicorp, Ltd., and Banco de Credito del Peru, the largest financial conglomerate in Peru.

A fascination with marketplaces and a knack for math is what pushed a young Paul Britton to explore the world of derivatives. However, it was his talent at chess that impressed a senior trader at his first interview with the London International Financial Futures Exchange. Paul was awarded the job, and while at LIFFE he discovered options—a type of derivative that would eventually become his specialty.

Paul Britton is the founder and CEO of Capstone, a $9 billion global alternative investment management firm that specializes in derivative-based strategies. The core of Paul and his team’s strategy is a deep understanding of volatility. While most investors would be wary of options and the surrounding complexities, Paul uses this complexity as an advantage to spread exposure across all asset types.

In this episode, Paul talks about the evolution of his derivative-based strategy, as well as Capstone’s origin. Adapting to a changing marketplace and constantly evaluating investment strategy is what Paul says has brought much of the firm’s success.

“I hope in five years’ time, I look back and critique the way I'm doing business today,” Paul explains, “That, to me, is the exciting part because Capstone is such an innovative place to work. We're always challenging the ways that we are thinking about investing, risk managing, [and] about the efficiencies in our processes.”

Many investors have previously viewed volatility as merely a defensive mechanism during times when the market was becoming more volatile. The emergence of volatility as an asset class is something more recent, as investors like Paul make a strong case that you can actually build a complete portfolio using only volatility and derivatives contracts.

Before founding Capstone, Paul began his career with Saratoga Limited, trading options on the London International Financial Futures and Options Exchange (LIFFE), and co-founded Mako Global Derivatives in 1999. Paul received a B.A. degree in European Business Finance from London Metropolitan University. Paul currently serves on the Boards of the US Soccer Foundation, The Tate America’s Foundation, and Friends Seminary School in New York City.

A book recommendation during undergrad was all it took for Patrick Quinn to uncover his aptitude for investing. As a biochemistry major, Patrick had to then take an unconventional road into the investing world—it was a road that would introduce Patrick to key mentors who were invaluable in helping him on his path as an investor, ultimately starting his own fund.

Patrick Quinn is the founder and CIO of Quinn Opportunity Partners LLC, an investment advisor with approximately $650 million AUM. Patrick started Quinn Opportunity Partners in 2011 after he discovered an enormous investment opportunity while working as an analyst at Perry Capital. He used this idea to raise capital from his first investors, and his fund was born.

In this episode, Patrick tells the story of how shorting Tesla became a pivotal mistake that led him to his current contrarian investment strategy. Central to this approach is the ability to not be biased towards investment ideas due to external pressure, but to instead let price volatility in the market work to his advantage.

“I realized how having these conversations with prospective investors was actually biasing me toward looking for an idea,” Patrick explains about his Tesla short, “instead of just letting the idea hit me over the head and letting the price volatility of the market be our advantage. It was me turning over stones and trying to say, 'that's the one, right now I've found something that everyone was missing.’”

Lately we've observed an environment where investors "want it all," and managers often overspecialize to the point that they lose their edge trying to deliver something unique. Given these pressures, watered-down results should not be surprising.

On the other hand, Patrick is an unapologetic generalist. He deliberately keeps himself open to every good opportunity, which has resulted in 29% net annualized return since his fund's 2011 inception.

Prior to launching Quinn Opportunity Partners, Patrick was an analyst in the risk arbitrage group of Perry Capital, with approximately $1 billion allocated to the strategy. Patrick graduated from the University of Kansas with a B.S. degree in Biochemistry.

As the son of Iranian immigrants who were forced to relocate during the 1980 Iran-Iraq conflict, Cameron Khajavi is no stranger to building things from scratch. His father, an accomplished engineer in Tehran, started mowing lawns in Houston, Texas in order to provide for a young family. His example provided Cameron the motivation and inspiration to later start his own fund, named with his parents’ initials.

Cameron is the founder and CIO of MIK Capital, a long/short hedge fund specialized in consumer businesses. His introduction to the financial world came while accompanying his mother to their local Fidelity branch, where he was introduced to the idea of mutual funds. This idea drove him to move away from the family tradition of medicine to pursue a career in finance.

MIK’s investing strategy includes a focus on team dynamics, probabilistic thinking, and looking past current market perceptions to see the underlying potential of a security. In this episode, Cameron discusses market fads and the market’s tendency to overvalue companies based on fads.

“It's not uncommon now to have a SaaS business trading at 30, 35 times sales.” Cameron explains, “If the company can continue to grow at 35% for the next X number of years, then potentially that is justified, but there's not a lot of base cases that you can point to historically that suggest that's a common occurrence. And that's kind of what you need just to justify the current stock price.”

Cameron Khajavi was born in Boston, grew up in Houston, Texas, and attended Duke University. Cameron also received an MBA from the Wharton School at the University of Pennsylvania. He began his career as a consumer-focused M&A analyst in the investment banking division of Lazard. Prior to launching MIK, Cameron worked at Citadel Global equities from 2007 to 2014.

Starting his own investment firm at a younger age than most, William Heard learned the importance of listening while carving his own path in the equity investing space.

William Heard is the founder, CEO, and CIO of Heard Capital. His investing approach is propelled by the skills he obtained through his upbringing in Milwaukee, WI and his experiences in finance—such as actively listening, always having a plan for what can go wrong with an investment before initiating a position, and analyzing a management team’s “Say-to-Do” Ratio.

In this episode, William explains why investors should never dilute their best ideas. William also explains how focusing on debates, rather than screens, leads Heard Capital to its investment ideas, and discusses the firm’s dedicated process to help remove confirmation bias and see through the fog.

“I know that every day is going to be different,” says William, “Our investment process begins with listening and making sense of your environment, knowing what's real and what's not, and then supporting the decisions made with a unit-based fact pattern.”

William Heard earned his degree in Finance and Real Estate from Marquette University’s College of Business Administration, where he founded the University’s Applied Investment Management Program. William currently serves on the Leadership Council for a Better Chicago, the City Year Chicago Board of Directors, and actively participates in OneGoal: a local organization dedicated to creating opportunities for today’s youth and low-income population.