15 Comments

If you still love the game go for it. Each moment is unique, each person is unique. Plenty have made it back after a break, Pierre Andurand, Peter Thiel, Dick Kramlich. The dirty secret of fund management is that 70% of active funds failed over 10-years and fund that weren't captured by the Prequin reports were backfilled in after they were successful. So there was always a huge selection bias and survivorship bias in the statistics that allocators were using... basically there's a huge chance for an allocator to lose money on a fund regardless of if the manager has retired and come back or not.

Also, during the big financial crisis of 2008 several previously top fund managers who were retired raised billions to buy up distressed assets. They didn't launch new funds but called up family offices they had as investors and said "look there's the opportunity of a lifetime here, invest" and ran the funds like Special Situation SPVs.

Lastly, you have one big advantage over any of the "younger" (post 2008) fund managers. They have never seen markets with rising interest rates, bankruptcies, political movements, or 10-years of flat multiples and sideways markets. I'm not predicting any of that, but it wouldn't surprise me.

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Key is to get your organisational structure right would be my view, and onboard only the clients you want.

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George Noble with NOPE.

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Hi Russell,

Side-tracking here. Do you have any thoughts about the relative performance of Japanese & Chinese equities - with the Nikkei/Topix being in a clear bull market vs the Hang Seng & CSI300 being in a clear bear market.

It seems that the Japanese have adopted reflationary policies (pro-capital) while the Chinese are the opposite. This divergence is interesting!

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As by going more social via this letter/substack and X, there is an implicit reaching out to a wider audience as in retail 🙋🏽‍♂️, thus I ask the question would you consider the RCETF path?

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It’s fascinating to hear your thought process around this Russell. Thanks for sharing and please continue to share your thinking!

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Buffett closed his partnership in the late 60's and waited until inflation killed the market in 73/74 before he came back in. If you believe CPI inflation is going to turn higher, arguably Western World bonds, high P/E equities (or alternatively currencies if central banks peg rates and adopt yield curve control) have more downside. We are definitely moving into a more state controlled environment so reading politicians /geopolitics and their motives will become more important.

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You know the two key things for me are Fund Size and Strategy.

How big do you have to be in order to be relevant and profitable factoring in risk, compliance, investor relations and the actual research / execution.

On purpose, what I have learnt (and grateful for that) from reading your research is that you need to run a multi strategy approach. The Net Short or Naked Short position might be compelling, but I’m not sure it generates higher beta or alpha without some VAR shock or Black Swan event.

Just my thoughts - stick to what you know but adapt to the changing market.

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Follow your heart. You’ve been around for long enough to know the answer. Question is more what am I bringing to the game this time and how do I leverage it.

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