Bobby Jain – Multi-Strategy Hedge Fund First Principles at Jain Global (EP.487)

Summary

• Multi-Manager Model: Deep dive into engineering, diversification, and capital efficiency advantages of multi-strategy hedge funds, including design choices around autonomy, collaboration, and compensation.
• Financialization Trend: Emphasis on the financialization of everything, with more assets becoming tradable and a limited number of intermediaries (prop shops, multi-strats, banks) facilitating this shift.
• Banks to Alternatives: Extensive discussion of risk migration from banks to hedge funds, prop shops, and private credit, enabled by regulation (e.g., Volcker Rule) and better-aligned balance sheets.
• Asia Focus: Strong case for a dedicated Asia platform (China, Japan, India, SE Asia) due to market nuance and complexity premiums not well captured from U.S.-centric operations.
• Equities Opportunity: Fundamental equities remain attractive as indexing’s scale creates mispricings and demand for active price discovery, complemented by equity arbitrage and dispersion opportunities.
• Risk Management: Culture centered on premortem/mortem analysis, tail hedging, and liquidity-aware construction to survive volatility spikes and pivot to offense post-stress.
• Market Structure Insights: Noted “privatization of alpha” and limited investor capacity in leading platforms, motivating a purpose-built, diversified multi-strategy built from scratch.
• Companies/Tickers: No specific public companies were pitched; examples like Apple, Amazon, and Microsoft were used illustratively without investment recommendations.

Transcript

The multi strategy firms over time have more and more employee money and less and less available to investors. People have been giving back capital and all that. And I said this is an opportunity to create from first principles a multistrategy from scratch which even the market leaders not necessarily did. They evolved to that over time and they did a great job. But create one from scratch. The second big trend in the world is the financialization of everything. Everything's becoming a tradable asset. the amount of people that are in the middle of that. Whether it's the prop shops, the multi strategy firms, the banks, there's not that many intermediaries for this thing. So, I said, here's an opportunity I have to start one from scratch. I'm still young enough. Obviously, there's gigantic barriers to entry in this business, but I felt like Millennium was in a great place, the extremely talented people, and so I said, "This is a time when I can get off and do it on my own. [music] I'm Ted Sides and this is Capital Allocators. [music] My guest on today's show is Bobby Jane, the CEO and CIO of Jane Global, a global multistrategy hedge fund he launched last year that manages about $6 billion with over 350 employees. Bobby's [music] storied Wall Street career includes spending seven years as the co-CIO of Millennium and 20 at Credit Swiss in a range of leadership roles spanning proprietary trading, derivatives, and asset management. Our conversation traces Bobby's path from growing up as the son of immigrants in Queens to the trading floors of Okconor and Credit Swiss, all of which shaped his thoughtful framework-driven perspectives on markets. >> [music] >> We explore the evolution of prop trading and the migration of risk-taking from banks to hedge funds, proprietary trading firms, and private credit. [music] We then discussed Bobby's ambitious launch, including the principles guiding its design, scale, and diversification out of the gate, talent strategy, risk management, portfolio construction, and the many trade-offs that create the different cultures and complexions of multi-manager hedge funds. [music] We close with Bobby's application of financial innovation to helping others. [music] Before we get going, capital allocators seems to reach a sufficiently large audience to create all kinds of serendipity. Here's my 16-year-old son, Eric, to share an example. I was hanging out with my friend, and his dad was super mad at us for being so loud. He told us we should quiet down and learn something. He then asked me, "Do you listen to any podcasts?" and I said no, but I probably should given who my dad is. He then goes, "Here's one." The guy asked a lot of really cool important questions. The podcast he was holding on his phone, none other than Capital Allocators. I sighed an annoyance because this has happened before. And I asked for his phone and started playing the Ben Hunt episode from June 2024. If you don't remember, that's the last time I did the spread the word. The sound of my voice made his jaw fall completely to the floor. Even after showing off to my friend's dad, I'm still not going to listen to this podcast, but you definitely should. Apparently, all the rich smart dads are doing it. If you want to be rich, you should, too. If you already are rich, don't worry. Tell your [music] poor friends about this podcast. They're going to get a lot out of it. Thank you so much for spreading the word. >> Capital Allocators is brought to you by Alphasense. AlphaSense connects and accelerates every element of your research process, and I'm excited they chose to be our lead sponsor this year. One of the hardest parts of investing is seeing what's shifting before everyone else does. For decades, only the largest hedge funds could afford extensive channel research programs to spot inflection points before earnings and stay ahead of consensus. But channel checks are no longer the luxury they once were. They've become table stakes. And that's where AlphaSense comes in. AlphaSense is redefining channel research. AlphaSense channel checks deliver a continuously refreshed view of demand, pricing, and competitive dynamics, powered by interviews with operators across the value chain. Thousands of consistent channel conversations every month help investors spot inflection points weeks before they show up in earnings or consensus estimates. And the best part, these proprietary channel checks integrate directly into AlphaSense's research platform, which is trusted by 75% of the world's top hedge funds with access to over 500 million premium sources. From company filings and broker research to news, trade journals, and more than 240,000 expert call transcripts. That context turns raw signal into conviction. The first to see wins. The rest follow. Check it out for yourself at alphahensense.com/cap. Capital allocators is also brought to you by Morning Star. What if data wasn't just a bunch of raw numbers, but a clear and decisive language to help connect investment strategies with long-term investor needs in a constantly evolving market landscape. Morning Star created that language bringing order and utility to insight rich data so you can prepare for your next opportunity no matter the asset class or market. Visit wheredateaks.com to see what Morning Star data can do for you. Please enjoy my conversation with Bobby Jane. >> Bobby, thanks so [music] much for joining me. >> Ted, great to see you. Why don't you take me all the way back to your upbringing? >> I grew up in Queens. My parents were immigrants. My dad was an engineer and a builder. My mom was an accountant. Very excited to be in America. He was in the first wave of immigrants from Asia after the 65 immigration act. He gave us American names. He said, "We're going to be completely integrated." I didn't meet another Indian family till I was 16. He said, "In America, you have to learn golf, tennis, and skiing in my neighborhood." I was the only kid that did that. It was just me and my brother. I went to high school in Manhattan. I commuted an hour and 20 minutes each day from Queens. I went to Cornell. I majored in political science government. And then I went on to Wall Street. >> What were the most important things you learned from your parents? >> My dad was very conservative. We weren't a borrowing family. I didn't borrow a penny in my life till I was 50 years old and interest rates got to two and a quarter and I said, "I have to." My dad used to say an Indian kid captain of the chess team. Who cares? You have to be captain of the sports teams. You have to be president of your fraternity. That's what I was. That's what I did. Queens was all about do what you're going to say, say what you're going to do. Queens logic, we used to call it. My mom was hyper intellectually curious. She read a book a week. I got my love for reading from my mom. I lived in a workingass neighborhood. I learned how to integrate with a lot of other people, how to blend in, and that all carried on going forward for a long time. What brought your interest in finance when you're in school? >> I wouldn't have heard of Goldman Sachs till I was 21, but Hunter High School had a program where you only had to take two classes as a senior. So, I worked at a stock brokerage firm in 1987. I was there for the crash. I learned what money management was. Reading the tape, going through the quotrons, going through the annual reports. I wouldn't have said I was particularly interested in finance. I was a numbers guy growing up. I majored in political science in college, but when I got to be a senior, I joined the campus recruiting. Now, people are like, "Hey, my dream is to be an investment banker." But that wasn't the world back then. What you saw was that the highest end kids were going into finance. And there was two choices. You could go down the banking route or you can go down the trading route. I remember I went to a recruiting dinner at 2:30 in the morning. They went back to work. And I said, "Wow." Then the Okconor guy showed up. Okconor was one of the original trading shops, the predecessors to the prop shops. Susan and Okconor were the two back then. The interview question was what 49* 28 and I said 1372. They say Mets play the Yankees in the World Series. What are the chances the Mets win four? I say one out of 16. They say you're higher. So that's how I got into trading. >> Once you first got on the trading floor, what did you find? >> The trading floor back then was the actual American Stock Exchange where options traded. I ended up on the floor and the first thing is you see what an actual trade is. You're standing there on the floor. You're buying something and the person who's selling to you is right across the way there. It makes you think, I have to figure out why I bought this and this person wants to sell it and why I'm right and they're wrong. That gets you into the core of what a trade is. It went with me for a long time because I realized trading is not a video game. There's actual buyers and sellers. That was the first thing I learned. The second thing I learned was at Okconor, the core of the business was index options trade rich. People want to buy index options for protection and single stock options trade cheap because people long stocks and they sell call options against those stocks to earn a yield. There was a core architecture of the business that had an edge built into it and your job was to harvest that edge. I picked up the harvesting nature of the business is figure out how you can provide a service how you can provide in this case liquidity to two different pools of capital there's money if you can cross two different streams in this case single stock options and index options there's two different types of investors there's money in those seams the third thing I learned was I thought the trading floor was going to die in about a minute I said I can't believe this is the most efficient way to trade things I made a point to get off the trading floor as soon as I And turns out the trading floors lasted for a long long time after that. And so what I realized is that things can last a lot longer than you think they can. I learned the fundamentals of trading. Okconor was a brilliant place to work. There were a lot of clever people. A lot of people went on to do a lot of different things. Okconor was a good place to have formative views. >> Where did you go when you left the trading floor? >> I ended up going to Credit Squeeze Financial Products in 1996. That was the hot derivatives place at the time for a derivatives trader. That was the ideal place to work. It was a joint venture part of credit suites first Boston. I joined the index arbitrage desk. Now you'd call it the equity basis trade maybe delta 1 because most banks the proprietary guide was the end of the desk of that relative group. We had one group with a special forces group effectively. The job was to trade S&P futures versus the underlying 500 stocks. Credit Financial products was a clever place. The guy before me made $10 million in P&L, making 40 50 grand a day. My first year, we made $50 million of P&L. We were treating every index R basket as an option. First, we were buying 500 stocks versus futures. Then I said, why don't we buy 50 stocks versus futures? Then instead of stocks versus futures, why not stocks versus stocks? Then if we're doing it in the US, why don't we do it in Europe and Asia? Within a short amount of time, it became a several hundred million dollar business. The first three arbitrageages were take technologists and pay them like traders which people weren't doing then. So staffing yourself from the IT department and the quant research departments not necessarily the MBA classes. The second was collecting and storing data and doing things with it and cleaning it. The third is expanding the definition of data. We were doing natural language processing back in the late 90s. We were taking in the news speeds and trading things off of it. those prop desks, especially at credit suite, that's where things were happening back then. It was much bigger than the hedge fund business, especially on the arbitrage and the harvesting side until the financial crisis. >> At what point in time did you start thinking about incorporating fundamentals into what sounds like a structural arbitrage desk? >> In 2003 4, we combined all the proprietary trading groups into one group called Global Proprietary Trading. after Alan Howard had just started Brevin Howard. There was a catalyst point where you could have spun out the hedge fund back then. I didn't. I stayed and I ran this global proprietary business. What was happening in 0405 is the first time you had to start dealing with crowdedness. Some of these banks were risk ares we were a stat arbes citel was convert arb desk. Some guys were fixed income arb desk and suddenly the arbs started to get crowded. The questions were, could you take the fundamental equities business and turn it into an ARB business? That's what we started to do. Overlay the statistical arbitrage, risk management systems where you were doing factor hedging and all that type of stuff and try to overlay that into the fundamental equities business. And that was the root of it in the industry. That happened in about 0405. I would say it got industrialized much later probably 14 15 16 that time onwards >> what was the breadth of what you were doing leading into the financial crisis >> we were doing all the things I'm doing now in fixed income you had commodity strategies credit strategies and rates of macro strategies and in equities you had arbitrage equities you had fundamental equities and you had quantitative equities and those were the six businesses we always had a big business in Asia Because at a bank you could leverage the entire architecture of having an Asia office. You have lots of different taxonomies. You have market making strategies or market taking strategies. And you want to balance across those things because the market making strategies tend to be reversionish and the market taking strategies tend to be momentumy. You have momentum versus reversion which is a slightly different context. You have fundamental versus arbitrage or I call them artists versus harvesters. The harvesting business is a beautiful business, but they tend to be correlated. So, you need a balance of all these businesses and it got you to abstract the problem rather than just fixing equities as you run one of these multi- strategy firms. That's actually pretty important. >> How did the financial crisis change the nature of all the activity that you were doing? >> It changed the nature of your strategies. We went to decimalization in the early 2000s. Before that, you were market making. Now after decimalizations when the spreads were narrow you became market taking you had to take into account hedging more and risk management became much more prominent part of your risk model than it had been before. The big impact of the financial crisis was that regulators shareholders were uncomfortable with these kind of activities residing in the banks. There's two clear industries that have moved from the banks to the private sector. One is the private credit industry is effectively taking what the banks are doing and doing that off asset manager Allen sheeps. One is the market making industry taking what's done at the banks and doing it in the prop shop industry. What the multistrategy hedge funds are doing is the prop desk activities taking effectively the liquid businesses inside the banks and bringing them into the hedge fund world. That was a giant activity. You think about the amount of capital in the banks that were there and the amount of capital that needs to be replaced with the scale of these markets. So you have the prop shops, the multi strategy hedge funds and the private credit firms that has moved off the bank's balance sheets. The banks are still doing some of those things, but they're doing so much more. This relationship become more symbiotic and probably better for the financial system. What happened from there until you decided to leave >> that vulkar rule which was announced in 2010 or so didn't get implemented till 2015 and that was a fundamental change in the banking sector people like me we tried to do it within the rules of the bank we realized it wasn't going to work so 2012 I moved to run credit asset management which was a $400 billion asset management but the main goal was to move all the proprietary businesses into the asset management business which we started to do in 2012. There was two things we were doing. One is bring over a lot of the proprietary trading businesses. Some of those businesses are some of the largest hedge funds in the world right now. The second thing was to see if you could change the nature of the banking. What happened in the markets is risk takingaking used to be done off of bank's balance sheet which is not that great because you're borrowing short and you're lending long. What we were trying to do which has happened now and it's the advent of private credit is a lot of that lending off of an asset management balance sheet. We started doing that at credit sues people remember we gave the employees a lot of what was considered back then the toxic assets but they were not toxic assets they were undermarked assets. The question is, can you do things on an asset management balance sheet with pension funds, people that have longer duration assets, people that will take less duration, maybe have a lower cost of capital because they have less leverage built into it. That was what the move at credit asset management. Some of the firms have taken it one step further now moving to work off of insurance company balance sheets and that was a great time, but the bulk rule kicked in in July 15th. it became difficult to do what we were talking about on a bank's balance sheet. That's when I started thinking about after 20 years of credit SW in a variety of roles running the prop test for that whole 20 years co-running the securities division and running CSAM I started looking to potentially do something else >> along that period of time particularly after the GFC you had the growth of the multiPM model would love you to take a step back and describe what you see that model is and why it's been so successful >> the first thing is there's a fundamental engineering that happens in a multi- strategy context. Let's say you have a strategy that one sharp ratio and you're a single manager hedge fund. You want to make a 10% net return. Let's say you have to make a 13% gross return. You have to run all else be equal a 13va to make a 13% gross return. There's more math than that, but let's just say simply speaking, in a multi- strategy firm, if you have enough diversification, you can run, as most of these multi-managers have done, a five vault to make a 10% net return. If you can run a five vault to make a 10% net return, that's a different proposition. Why can you do that? Because of diversification, because of netting. If you have a business and you add one more portfolio, let's say it's that art portfolio, there's a 50/50 chance you're long Apple already, there's a 50-50 chance they're going to be short Apple already. Now, you don't have to hold capital against that Apple. Whereas, if you were two separate hedge funds, you'd hold capital against being long Apple and you have capital against getting short Apple. This is complicated. There's more degrees of freedom on this topic. Fundamentally, there's a capital efficiency that comes out of a properly diversified multi-shite. Secondly, there's a purchasing power topic. You're more relevant to the investors as you're one place because you can use this common intellectual property of risk management across more different things. The model itself works. What's interesting about the model is these firms do very different. Even the market leaders, some of these firms are talent acquirers, some are talent developers, some are based on autonomy and some are based on collaboration. Some the production metric is a business. We have a commodities business and some is the PM. Some take care of the losses. Make sure you focus on the losses and the gains will take care of themselves and some are let's focus on offense and the losses will wash their way out if we make enough. These are fundamental different things. Then you have actual diversification. A big difference in these models is a core satellite. A lot of these firms are effectively core satellite. It was a great PM that started a business that learned that they could raise more money and they started diversifying. But at the end of the day, the whole ecosystem is a lead actor and supporting actors. It's difficult to transcend that and to have all lead actors and there's a difference there. Supporting actors are different than lead actors in a variety of ways. The multi-managed industry was the prop desks. It's not that different. The culture shock of moving from CS to Millennium was not that high at all. of the same thing. A lot of it was the same people as there was a transfer of people from the prop desks to the multi strategy industry. >> As you were coming out of CS, why did you end up going to Millennium? >> There was two basic choices. One was go work at an existing hedge fund or go spin out the existing prop business. I known Izzy for a long time. I had a tremendous amount of respect for what Millennium was and I thought I could be relevant there. And so Izzy called me and said, "I think 20 years is plenty." So I joined Izzy and it was an incredible run, incredible people, incredible business. One of the things that my dad said to me was, "You really don't know anything until you've done it for 20 years." That always gave me a little bit of insecurity is there's more knowledge to know. I had been doing it for 23 years at the time where the opportunity to go into a business like that to sit next to one of the legends of the industry was an opportunity that someone like me wouldn't pass up. >> What did you see when you got there? I thought it was an incredible platform. What I thought of was try to turn this platform into an operating system to build up the IP in the center of it to further diversify to further industrialize the investment processes. I thought what you learn in the banks for better or worse is how to industrialize things, how to manage people, how to manage processes, how to build IP. That's what you're trained to do. You have a shareholder that's paying a multiple on your earnings to build IP and perhaps superimposing that with incredible discipline on risk management. One of the things that you also learn in the banking sector is we're heavily marked to market. Millennia was one notch further marked a minute. Why did we lose money last minute? Let's see if we could do something better about that. I learned that real discipline. I also learned the diversity of ways of making money. Millennium at the time certainly was very PM focused and you could see people took the same problem from different vantage points and that is another form of diversification. 20 plus years at CS, bunch of years at Millennium. How do you decide that it's then time for you to start on your own? >> After 30 years, even my dad would say I was ready to do this. [laughter] There was so many inflection points of when I could have started a hedge fund. I was always worried maybe the world doesn't need another hedge fund. One of the things that I do separately from my day job is I've sat on the board of numerous investment committees including two Ivy League, Harvard and Cornell. What you see is that these investment committees are designed to be 60 65% equity beta is their main risk. The second risk is a liquidity risk. They're taking illlquid assets. They've replaced some of the equity with private equity beta or growth equity. 35% is not equities. Not equities is supposed to be uncorrelated to the equities. People would have more in equities, but they can't afford the draw down capability of the equities. So that not equities used to be bonds. They invented whole businesses around this risk parity and all this and then now what you start realizing is that the bond market anti-correlation equities may not persist forever. Everyone's trying to figure out other ways of doing that. If you think of the investment universe as a giant $150 trillion 354% of that's 5060 trillion you need of diversifying assets. The multistrategy industry is one of those. There other ones you could do infrastructure and real estate but that's illquid. So your liquidity budget may have been taken up and so you have private credit but that's pretty illquid. You have the uncorrelated hedge fund industry including quant macro multi strategy maybe a trillion half dollars a lot of that is closed to new investors. So the investment vehicles available in any of those spectrums especially the multi strategy industry not that much. The biggest trend in our business is the privatization of alpha where the alpha is residing on the prop shops as well as the multi strategy firms. The multi strategy firms over time have more and more employee money and less and less available to investors. People have been giving back capital and that and I said this is an opportunity to create from first principles a multistrategy from scratch which even the market leaders not necessarily did. They evolved to that over time and they did a great job. but create one from scratch. The second big trend in the world is the financialization of everything. Everything's becoming a tradable asset. The amount of people that are in the middle of that, whether it's the prop shops, the multi strategy firms, the banks, there's not that many intermediaries for this thing. So, I said, here's an opportunity I have to start one from scratch. I'm still young enough. Obviously, there's gigantic barriers to entry in this business, but I felt like Millennium was in a great place, extremely talented people. So I said this is a time when I can get off and do it on my own. >> One of the characteristics of the multi strategy shops is they all have scale and it's made it difficult to enter that space. How did you think about what you needed just to get going on day one so that you could compete with the larger players? >> One of the things my dad said is take the pain up front. What makes this thing relevant what everyone wants is another viable competitive firstear hedge fund designed as such. The hard part is the normal stuff. You have to put together a leadership team. Thankfully I've been doing this for 30 years. So I knew those people already. The second is you have to hire a bunch of people to build this with you. Most people in the infrastructure side of the world are playing for a B. They're coming into an existing thing and they're saying, "Hey, go figure out how to go to the cloud from data centers. Go stack on this thing. Go tack on this thing." But build your architecture properly from the beginning attracted a lot of people. Then you have to attract a bunch of risk takers to say, "I see the lane you're picking. I want to be the first one in a hedge fund because everyone that's ever been in a hedge fund knows that the people get there first do better than the people that get there later." Then you have to go put together an investor base. an investor base that understands what you're trying to do, has been in this industry before and sees the prize at the end of the tunnel. The biggest barrier to entry is people say, "Well, there's a chicken and egg. You have to put together the scale. What comes first? The investors or the putting together the scale?" Actually, there's no chicken and egg. It's just a chicken. You have to build it all off your own balance sheet and then the money comes in. That's a bar entry that you have to get through. I was prepared for all that. I have been doing this exact thing in my mind for 30 years. For the first many years as what's now called a PM back then you just call it a trader. For the last many years as a leader and a designer of these businesses, we got to launch in about a year, which was a reasonable time to build something from scratch. Especially with the advent of AI, you didn't have to hire as many programmers. The build versus buy decisions were better. A lot of that data stuff I was talking about, you could buy a lot of that now. In the end, it was a good time to start. >> You mentioned that all of these multi strategy hedge funds have their own different flavors of how they do things. After seeing so much of this over a couple of decades, what first principles were you bringing to develop a chain? First of all, this core satellite thing bothers me and it was something that to the extent a firm is seen as a fixed income firm or an equities firm or a quant firm, it's difficult to shed that label when you're attracting people into the satellite. Someone said it to me once, well, you haven't done this thing in 10,000 days. It can't be that important to you. People know it. You attract better people if you get it at the beginning. One way to do it is hire a bunch of PMs and put in a manager later to run that business. It's a lot easier to build it from the beginning that way. It's part of your core thing. You have a seven-legged stool at the beginning. That's a different topic than I have a one-legged stool and I've added a second layer of stool. When that thing doesn't go right, your own investors, your own people say, "Why are you doing that thing?" Whether that thing's not going well, whether your thing's not going well, people say, "Why don't you get out of the non-core thing?" The core satellite thing is the first thing. Second thing is the world has confused a couple of things. The view of a PM in this industry is they want autonomy. Especially the people in the next generations don't necessarily want autonomy. They want autonomy of compensation, but they don't necessarily want autonomy of lifestyle. So they want to say if I make money, I should get paid on what I do. And if I don't make money, I don't want to get paid on what I do. That's a normal thing. But they do appreciate that the concept of five people sitting in a room with a few Bloombergs and a few phones. Not that easy. You want people around you. You want IP. You want a business that you're tapping into. You want an operating system you're tapping into. Some of the hedge funds do that and some of the hedge funds don't. The beauty of this industry is that there's successful hedge funds in every side of this, but you pick a lane. Third thing is where I felt you had a few great talent developers where 80% of the people coming out of college, you're putting them in through your training program, you're teaching them how to do the business. And then you have some great talent acquirers. A lot of the businesses that grew up in the last 10 years were talent acquirers. Talent acquirer is expensive business and it's a business that lends itself very well to the market leader. They have the most resource. What was missing, which is what the prop test was, was there was a talent accelerator, the talent transformer. You're taking the market maker on the desk. You're taking the guy from quant research. You're taking the equity research analyst and you're turning them into PMs. That's the core competency of what you're doing. You're also doing the talent creation and you're also doing some talent acquisition, but you created a core competency in that. I want to be a business of the 35-year-old killer. The person that has all the tools, but they need people in their corner. You can call that mentorship. You can call that guidance. You can call that coaching. You can call that risk managing. That was a very important part of what I thought to do. Of course, I just started a firm. I had to acquire talent. But my real business proposition is talent acceleration and taking good people and making them great. I break up the world into killers, then steady producers. You need steady producers. If you had all killers, they'd start killing each other. Options on killers and options on steady producers. And I want a balance of the killers, the options on killers and the steady producers. And then fourth is I wanted to create something which was diversified at the beginning. The whole system wants you to create sequentially. They say Bobby why don't you start in one area. Start a billion and a half dollar fundamental equities business or quant equities. When that works, go do the next thing normal. The problem is now you started that first thing. You built everything for that. You've built your risk system for that. You've hired your lawyers for that. You've built your trading systems for that. Now you want to do the next thing which is quant or fixed income. A, you haven't done that in four years. B, you have the core satellite problem. And C, your system isn't built that way. I said, I want to build it properly. Fine. a little harder at the beginning clearly, but over time that pays huge dividends. I'm thinking about these decisions we made. Thank God we have one common risk system and we have one common architecture. Fifth, I picked a lane on the risk manager. This industry broadly pays all these firms when the PM's there, they're getting paid 20%. Round numbers, some people pay deferred, some people have clawbacks, some people have sharp ratio thresholds, but round numbers, that's the industry that we're in. Why are you paying people even that much? You're paying them for a sharp ratio and you're paying them to manage money in a stop-loss context. The stop-loss context is harder. If you're losing money on something, it's easier. If you could buy more, you buy more, you buy more. If you have to cut when you're losing money, that's harder game. And that's why people get paid 20%. I've tried to focus on risk management, the core, this is what this is, a riskmanagement business. Focus on controlling the losses and let the profits take care of themselves. But you have to pick a lane on that. We're going to take a quick break in the action to tell you about Ridgeline. Imagine starting your day with reconciliation already done. No spreadsheets, no breaks to chase, no duct tape holding systems together. Ridgeline is the first frontto back system of record built for investment managers. One platform, one real-time data set, embedded AI. Investment firms are replacing a patchwork of isolated and dated order management systems, accounting systems, reporting add-ons, and client tools with this fundamentally new operating model. Automating complex workflows, scaling personalized client experiences, and unlocking the full value of AI. If this is the year your firm is ready to modernize operations and harness AI, you can learn more at ridgelineapps.com. And now back to the show. It feels like in all of these places there's a certain number of portfolio managers that are able to generate alpha the sharp ratio that you want. How did you go through the process of attracting talent to Jane? >> There's two topics. So one is how you make money. There's three core ways of making money. One is a the world is somehow giving you money. The world is saying we want you to provide a service and we're going to pay somebody to provide that service. If the government wants to issue $2 trillion of debt, somebody has to buy that debt. When people want to use portable alpha type strategies, they want to buy futures instead of the bonds. Fine, they're going to pay up for those futures. There's an opportunity there. You can provide liquidity. People love index funds. Okay? But somebody has to keep those index funds in line. Same with the dispersion trade assets. Sometimes you can get paid for a service. Even in fundamental equities, if you conceptualize it that way, somebody has to price these equities. Someone has to price them in the long run. Someone has to price them in the short run. The index funds are relying on that pricing service to happen. And so there are some service that's being provided. The second is they're clever people. There are people that are experienced that have done it that understand it. The third is a bunch of IP. If you said to someone, go try to buy and sell equity, it's very difficult unless you put them into a structure where you say, here's how we do research. Here's the corporate access that we have. Here's the research model that we have. Here's the factor model that we run into. Then at least you give them some framework to make decisions. It's more than just the people. The biggest thing is that there are a lot of people that realize this multistration model has moved towards the autonomy section. Autonomy of compensation, autonomy of action. That's something that attracted people. I have a reputation for developing people me and some of the other people that we've hired here to run these businesses. The third is it's a big thing people that get here first to the extent along that option. Many people would like to work at Microsoft and Google and Apple and many people want to work at Stripe. People want to work at the startup. It's actually a pretty attractive concept. There was a big talent war in 2017 to 2022. Interest rates were zero. The whole multi-management industry was tiny in 201617 when Millennium and Citadel were really the two big ones that were managing third party capital. Then these smaller firms got big. There was a talent war then. Now you have to pay competitively. You have to pay people a reward if they make the money. But the friction costs not as crazy as it was back then. We were able to attract a lot of people. There's seven of us that are running the investment side of the business, the CIOS of the businesses. good 30 40% of them either I or one of them knew already that created a ballast another topic is a lot of people like this business structure the PM structure one of the things is as you raise more capital you're going to have more people doing the same thing you're doing I do say to people it's not like you get a veto on anyone I might still hire another person doing that same thing but you get a vote and it's going to be done consciously and we're going to say how is this helping the people there how is it helping the investor and how is it aggregate return of the firm If you're in a business where having multiple people touching the street, like in a dealerdriven market, it gets confusing to the street. Having that thought of ahead of time is something that's attractive to people. It's hard to actually do the interview process. All the risk takers here, I meant myself. We don't have a giant business development department. There's two or three dedicated people in business development. Then it's me and the CIOS that are doing the business development. If you weren't in the trenches for years, it's very hard to do. People know it right from the beginning. your conversation changes from let's talk about this trade. I think it's a marketsdriven culture. It's not a hiring driven culture. >> How did you go about interviewing and assessing talent to tease out who you think is top tier from maybe somebody who's just good? >> It's a pattern recognition. I probably interviewed 200 people a year for 28 years. One is getting a feel for it. Two is there's a word that gets thrown around a bit, but I'm going to use it here is alignment. What I try to figure out every day is do I feel aligned with the people that work here, the risk takers. Do I feel like they're aligned with the interest of the investor? Inherent in these businesses is the trader has an option that if it goes well, they get some percentage of that. If it goes poorly, you're left with the bank. Do I feel a line? A lot of people, they talk about risk in the first couple of minutes. They're thinking about risk. And some they're hedging to be polite. That's a different thing. Some people when they lost money, they start using the passive tense. So when they talk about making money, they use the active tense. When they start talking about the winning trades, they talk about clever they were. When they talk about losing trades, they talk about the unwind. Okay. What about the wind? That you can get a pretty good feel. You start thinking about how they think about the people that work for them. Are these tools for me or these people that have their own goals and ambitions and how you're using them? How you're developing them? This process is more self- selecting than you would think. And people get a feel for what you're trying to accomplish, what they want. What's going to happen more and more is people are going to find their way to where they want to be. It's going to become a talent development industry. Whether it's talent development, talent acceleration, the people going to start molding people into the way that they think of the world. And those worlds will be different. Some firms, not in the multi-manager world, but in the multi strategy firm, they run one global optimization at the top of the house. Everyone hunter gathers alpha and then we run it risk on top of the house. You could do that. You just can't do that and pay people unnetted compensation. Some people might move more towards that way and try to change their comp models and say, "Okay, I'm going to do clawbacks and do this." As this industry matures, it's not that old an industry. You got a couple of players that have been doing it for a long, long time. And then at actual scale, 10 years. >> So once you have the structure built and you've brought in these initial people, I'd love to dive into the investment model, what are the strategies you chose to participate in? Broadly speaking in the equity side there's fundamental, quantitative and arbitrage. Arbitrage could be options. It could be what's called delta 1 or index rebalancing. It could be convertible bonds. Could be merger ARB or other types of event driven trading. In the fixed income type strategies, rates of macro is one, credit is one, and commodities is a different one. There's a seventh business in the way we created the taxonomy which was Asia. because I'm sick of people trying to run Asia from seven in the morning when they're busy or seven at night when they're tired. I said Asia is going to be a more finessed market with a very Korea, China, onshore, offshore China, Japan, India, Southeast Asia. You have a lot more going on in Asia. Trying to do that from the US through the US news filter was a difficult thing to do. So those are seven businesses. I would view it as we have a common risk approach which is focus on the tales and figure out how to mitigate the tails. but different investment approaches. There are CIOS for each of those businesses. I'm one of them. I'm for the equity arbitrage and each one of them has a slightly different philosophy as to what the alpha engine is for that. >> What are some of the design elements of collaboration across the teams? >> I would say there's three models. There's discourage collaboration for whatever reason because a you're attracting people that don't want to collaborate. B there's something structural that you don't want collaboration. Maybe it's correlation or something like that. One is enforced collaboration. If you want to put an idea into the model, you have to come into the auditorium and explain it to everyone else. And one is encourage collaboration. I'm in the encourage collaboration model. If you ask me how does it happen? What happens in these hedge funds, better or worse, is that the culture of the firm reflects their founder. I'm a pretty collaborative guy. My instinct is when someone needs something, I say, "Why don't you talk to these people?" That becomes a cultural thing. people realize that's the accepted topic of the day. It's more a cultural topic than a structural topic. Everyone absorbs information differently. Some of the groups have daily calls, weekly calls. I never absorbed information that way. I'm more of a absorbing information through reading. We're not a heavy call place. Having said that, for the first 18 months of the firm, we did a weekly call every Monday morning for 25 minutes where all the call was was 1:00 p.m. got up in front of the whole firm, talked about what they do, then someone from a staff role talks about what they do. After 18 months of that, I think it sets a tone of that type of collaboration. I'd >> have to ask about the capital allocation process, both starting with you at the top, the individual CIOS down to the PMs. First thing is you have these different businesses. Ideally, you don't get overweight one versus the other. So, you try to keep it within some tolerances or ranges. Within that, you're competing with a sharp ratio. You're trying to find strategies that have a sufficient sharp ratio that clears your cost of capital. If somebody wants more capital, your instinct is to give it to them as long as they're within the relative sharp ratio threshold. You're not too overweighted. You can assess what the tales are. But the capital allocation model is a lot more static than you'd think. If you look at most of these multi-management firms, it doesn't change all that much over a period of in certain market environments. You're moving capital to one place or another, but that's not the dynamic. It's not like every day we're saying, "Let's pull it from this person, move it to that person." We've been in a capital deployment phase for the last 18 months. We raised billions of dollars. We call the capital over a year. Took us about 15 to 18 months to deploy the capital. Now you have a little bit of scarcity of capital. >> I'd love to dive into the fundamental equities business in particular. How do you view both the risk and the capital allocation both for your team and then in a world where there are a lot of other fundamental equity businesses like this. >> There are some fundamental questions in the equities business. There's a concept of are you factor ignored? No one's really doing that anymore. Are you factor aware? Are you factor obsessed? I'm generally skeptical of models, especially empirical models. So I'm more in the factor aware than factor obsessed model. The empirical models are taking a bunch of historic prices and then creating some relationships about it. The one Amazon is worth2 Microsoft and.3 you need a bit of humility around the models. That's one question around that. The second question you have to ask yourself is what are you thinking about crowdedness and how you measuring crowdedness, how you dealing with it. The third question is do you consider an industry bet an alpha bet or a factor bet? Those are different dimensions of these risk. We've tried to say we're going to run it in a somewhat integrated risk fashion with some logic also as to how many people in each sector, how they interact. It's as much an art as a science. How have you thought about cutting off the tails? A lot of the multipm pod shops, there's certain draw down and they're out. What's your game theory around that? >> There's the premortem and there's the mortm. So, you try to do your best to figure out what the premortem [clears throat] you've constructed a portfolio. Broadly, 95% of what we do or more is liquid. The vast majority of what we do is exchange traded markets. So at least you have a chance to get out generally in exchange traded markets. If you do the premortem and you say hopefully I've constructed a portfolio that is robust to many of the things that are thrown against it. Generally speaking in these models you make more money in a high volume environment but you lose money in the move from a lowvall environment to a high ball environment. As you've extended risk capital to the market and now the cost of risk capital's gone up you're going to lose on mark to market on your current risk capital. The second thing is the mortm. when it's happening, you have to move your feet of. So, does that get crowded? Do you get everyone's rush to the hills at once? There's some of that. The markets have gotten so big relative to the growth in this multi strategy industry. The industry's put on tens of trillions of dollars of market cap in the last few years. The multi strategy has grown by 100 billion, 150 billion. The second thing is the capital structures in this industry have gotten infinitely better. People have fiveyear lockups, threeear lockups, four year lockups. So it's not like everyone has to sell because they're going to lose their assets. The third thing is there are a lot of different riskmanagement approaches. They make a decision. If things are liquidating, I'm going to buy more. And if I think they're liquidating because the fundamental model has changed, I'm only then going to sell. Most people have been rewarded for buying on dips. Now, I don't look at it that way. Everyone looks at it dip. That's the beauty of the markets. I view it as the reason you're cutting risk in a time of stress is it might get worse. So, you're trying to hedge. The bad news is you're locking in a bunch of losses and you're paying a bunch of transaction costs. The good news is when things settle down, when the ball the VIX goes from 50 back to 30 or 20 or whatever, you now are clean. You're not nursing a bunch of positions. You have the ability to trade on offense. And so, how do you get yourself on offense is the name of the game. If you can think that way and say, "Here's an opportunity." And the firms that did that in 2020 and thought that way did a lot better than the firms that were holding on because they're holding on. The thing went from 100 to 80. They're waiting for that 80 thing to go back to 100. You're buying something at 50 that someone else had to sell. You sold it at 90 fine. You locked in a loss, but you're buying something else that wasn't even on your pad that someone needs liquidity. These are markto- minute firms. You'd run the premortem and you run the mortm. It's not formula 8. This is what hedge funding is. You have to be ready to do it. >> What's the culture around the behavioral aspect, the psychology for your portfolio managers inside your shop >> when you start a new firm? That's one of the things you don't really know in the interview process. You tend to get people that are a little less optimist. If they were more optimistic and more growth mindset, they would have gone to a place where they could just be long. We emphasize risk management and so people get that. We got a little lucky in that the financial crisis happened in March and April of 2025 with the liberation day and all that. So I got to experience it of how much did I feel like I was pushing people and how much did I feel like people were reacting and it turns out at least in that environment I didn't have to do much. People got it harder to push people to take risk. What is hedge funding? Hedge funding is taking a bunch of information, turning it into data. Taking that data and forming convictions on that data, then taking those convictions and doing things in the marketplace. When you have less data, especially in the first 18 months, it's hard to form those convictions. You don't have enough data on your own systems of efficacy, on your own risk modeling, on your own PMS. They feel the same way. They don't have data on how you're going to react at a tough time. So that data building gets better every day. In the beginning, it's harder to push people to take risk than it is to stop people from taking risk. As we've got more and more data, we feel like we're getting onto offense. But that's a process that's real. It's not like a philosophical thing. It's like as you get more data, as you get more at bats, as you get more experience, that all gets better and it gets better every day and the teams get more comfortable with each other every day. And I feel that palpably. And so that becomes a culture of risk management. How do you think about competing on compensation? >> If you tried to run this model on a different compensation model, meaning you have to rely on how everyone else in the firm, people that you haven't even met are doing, it'd be hard to do that unless you did the talent creation side. Unless you said, I'm going to hire everyone from scratch. A lot of the people that come into this industry are coming from places like that where for whatever reason they think they're producing more than the median of that group. The world has constructed these portfolio managers as unitary onetrack mind people. I'm just looking at my compensation. People want to get paid competitively. They want to get paid fairly. They want to get paid transparently. Once you're paying them fairly competitively and transparently, then the margin there has a lot more math going into it. The optimization functions are more complex. Fine, I can get paid a little more, but I got to sit out of the market for a period of time. In that period of time, is the strategy going to change? Is my market going to change? I got to put together a new team. Do I like coming to work? Do I feel like people are in my corner? Do I feel like what's the probability of success? Do I feel like the way I trade? I think that's the biggest one is the way I actually interact with the market in sympatico with the way these people think about that and that's a big topic. You should be able to get that right 90% of the time when people coming in. It's a complex optimization function but it's generally about fit more than about conversation once you're in the transparent fair competitive and the basic point is you said what you were going to do and you did what you were going to say. Once you do that, you're in a good starting point. >> As you take a step back and look at all the structural ways that you've been able to make money in the past and are trying to do it today, what opportunities are you most excited about? >> What are you looking for? You're looking for areas that there's not necessarily enough capital to provide the service the market wants. Areas that you can find cheap volatility. And sometimes you're trying to find areas where you're willing to take complexity risk to take to get into some market. banks trying to figure out how to get partners in hedging some of the risks that they're left with that either take up a lot of regulatory capital or are not necessarily capital efficient for other reasons. It's called strategic risk transfer. We've set up a business to do that. Asia has some of that in the complexity side. You're setting up a business in India. Not that easy. Once you do it, you could probably get access to some things. If you took it at a business level, a more concrete level, the fundamental equities business, I started trading indexes in the mid 90s. The S&P was at 500, about 5% of a company was indexed. Now, round numbers, I'm making up a number, 25% of a company's index, and the S&P is up 14x. So, that's 70 times bigger. So the fundamental equity someone's picking stocks in a structured way doing the work given the size of the market pretty good business right now there's really opportunity the liquid credit markets a lot of people have moved into the illquid credit markets the private credit business has been the biggest growing business in the world in the last few years that leaves some opportunities in the credit markets and then also what we call arbitrage there's some money in the seams of different types of investors in different types of arenas is the biggest theme is in three or four years apparently I read our industry until last year hadn't grown that much in terms of assets especially the multi strategy I think it actually was flat in that time government's issued another $15 trillion in debt the equity markets grew by $30 trillion the markets have gotten really big companies are starting to go public again some of the regulatory environment is starting to get balanced now you're getting regulatory competition different exchanges are starting to say list here that's good for the markets at least in the short run. >> These models often bring with them a question of an existential risk. A lot of leverage. Leverage can cause problems. How do you think about the broader contagion risks of this model? >> The contagion risk is what we lose sleep about every time. Is everyone going to start heading out of markets? Now, maybe the next one's going to be way worse, but you've had a couple of interesting events in the last 5 years, six years. CO was real event. Ukraine was a real event. GameStop was a real event. SVB was a real event. Let's say the data got good in 2005. So you have at least 20 years of good data to give you some sense of how these businesses have done in that period. Obviously the next would be worse. Now we spend our lives trying to understand this. What are the only ways you can deal with is actual diversification. And some of these strategies are actually diversified. Again market make the amount of dimensions that you could start diversifying. You have some strategies that are going to make money in times of stress. You have lots of different various tail hedges on the market tends to be clever and tends to find a way to find the hedges that you didn't put on. Are you taking some crowdedness risk? There's some of that in there. When I'm in the market, I felt it crowded in various times. I felt it more crowded in 2010 to 2019. The markets were smaller, but V was low. And so what happens when VA is low is some people accept a lower return and some people lever up to make the returns equal. People like me, we accept a lower return. We communicate that because the thing that we're most worried about is the asymmetry vault. 10day V in February of 2020 was 7 10day V 2 weeks later was 118. If you're not managing that risk, you can lose a lot of money. The second thing is the asymmetry of liquidity especially in dealerdriven markets. People that grew up in the equity markets are used to exchange traded markets. You go into fixed income markets. Suddenly liquidity disappears very quickly when things go wrong. You can manage it by portfolio construction. You can manage it by the premortems and then you got to deal with it. And it is a risk that is embedded in this business. How do we deal with it? We deal with with those concepts. portfolio construction, premortem, postmortem, tail hedges, and really culturally making people say that's what we're doing here. What people are doing in this business, they're giving us their money. They're not giving us their gambling money. They're giving us their alternative to fixed income money. We have to protect against that. When things go wrong, they want to look over this part of their portfolio and it looks okay. The good news is when it goes wrong, generally that next period is a very good period. Despite however anyone did in March of 20 or in the last quarter of08, 09 and April to December of 20 were by far the two greatest times in this market. You have to survive that previous period. And that's what we spend so much time doing. When you go from a larger platform, the prop desk, a millennium, to a smaller business, what are the things that as you look out over the next couple years, as you develop scale that you can add in to what you're doing that you might not be able to do today because you're smaller. >> I don't think there's much. One of the leaders in the industry said to me when I was starting, you're going to underestimate the benefits in starting from scratch. He said, so often I want to throw the whole thing out. It's not just legacy systems. It's legacy architecture, legacy people, legacy processes, legacy mindsets. We got to build everything instead of buy everything. We got lucky that AI became native to this place. We didn't have to hire hundreds of technology people, hire hundreds of technology people. The biggest thing that would change as we scale is you're going to see the operating leverage start kicking in because we think we can get to two, three times the size without having to hire that many more people. If we had more scale, would I start doing a couple of things that I say a little more speculative? You have some firms that view themselves as manufacturers and some firms that view themselves as packagers like I'm packing the alpha and we're hiring places. You hear them talk about the beauty departments. We view ourselves as a manufacturer. In the first iteration of it, we're not doing a lot of speculative things. Let's figure out if AI can do this or that or the other thing. The model itself was innovative by launching it all at once, by launching comprehensively, by building it that way. The challenge in this business is balancing patience and excitement. I live my life in seconds and minutes and hours and days and things take months and quarters and years. The metrics at the beginning of this, you have to get yourself into the model of am I getting better every day? Did I put together this thing? Do I believe in my system? Do I believe in my people? That's the metrics. And then eventually the gross returns turn into net returns and that's the evolution of this business. >> You mentioned earlier being on the boards of the investment committees of Harvard and Cornell. Would love to ask what you've learned from sitting in those seats. >> As you get into these large organizations, there are two different ways of thinking. Some people are like risk managers. Let's diversify. And some people are concentration. Let's figure out where things are going to go and let's go there. It's no different than Republicans and Democrats are two different religions. That's a core topic to talk about. The second topic is people that have been operators of businesses. I consider myself an operator of business. They think about what are your core competencies and what are your competitive advantages and how do you build businesses around that? That's what you're taught as an operator of business. Investors think in different ways and that's a great thing. Taking the best of both of those people is something that these endowment board have been good at. Sitting on these endowment boards gets you into the mind of how investors think. Part of my job is figuring out how to make money in a risk control way. Part of it is especially in these passroughs to represent the investors to say I say every meeting I'm in there's me there's whoever I'm talking to and there's an investor sitting there. Having been put in that investor situation in various different forms there have given me a firsthand look at how an investor thinks about things. these firms, not just the multi-manager firms, but all these asset managers and investors taking a leap of faith. They're trusting that you're going to do what you said you were going to do with that. That's a big responsibility and it's something that I've learned firsthand of sitting on these investment committee boards. So Bobby, somehow in addition to having built all this over the last couple years, you also have for a long time run your family's charitable giving and would love to hear a little bit about how you approach philanthropy. In 2014, we started something called the Jane family institute trying to take financial concepts and bring them into the philanthropy world. Also to try to take either leftwing or right-wing ideas and put them in the opposite language. The original project we started on was trying to turn the student loan market into a student equity market via income sharing agreements. Some people don't like it because it seems kind of icky. What if I took 100% of your income for 100 years? That seems icky. So, there's a branding element. There's a framing element on the left. People think, well, college should be free and so why should I even do that? There was a whole bunch of things. We did it with thousands and thousands of students. They're they're still running those programs. We did a lot of the guaranteed income pilots around the world. Generally, people hate the concept of universal basic income. It feels something for nothing. People like earned income tax credits. People like child tax credits. There's a framing element to it. If I hadn't started the hedge fund, I would have run with that. I've done nothing on is I was heavily involved in the charter school movement earlier in my life. I wanted to start charter prisons. Basically, private not for-p profofit prisons. Charter. The right-wing likes charter, leftwing people like rehabilitation. And chances are the charter prisons, the people that get involved in that will want rehabilitation as part of it. We had about 20 people in this organization. It's been 11 years. They're pretty autonomous by now. >> What are you excited about for the next couple years? >> It's the first time in my life. I want to hit fast forward. I'm a cherish every minute guy, but everything I've done in my life, process led to outcomes. Now the process is there. We're doing all the things that I thought we'd do. Everything we said we were going to do. I see the alpha there. I see the value add to the investors. I see the value add to the markets. I see the value add to the people here. I'm enjoying what I'm doing. I'm passionate about it. >> All right, Bobby. I want to make sure I get a chance to ask you a couple fun closing questions. Before we get to the closing questions, I want to tell you about one of our strategic investments. We've made a few and each are working on a product or service we think will be valuable to our community. One is Ascension Data. Ascension provides workflow software for compensation that allows you to track, plan, and take care of your team. We're excited for you to check out how they can help solve the sticky painoint of compensation. There's a link in the show notes so you can learn more. And here are those closing questions. What is your favorite hobby or activity outside of work and family? >> I'm a gigantic reader. I got it from my mom. I'm reading a lot of literature, a lot of philosophy. That's how I understand the markets. I view the markets as a complex system. I view myself as a student of complex systems. The most complex systems are actually systems with human interactions. The best place to learn about that to me is literature and philosophy. So, I spent a gigantic amount of time on that. >> What was your first paid job and what did you learn from it? In Queens, I did everything from a ball boy to a caddy holding for NBC News to a paper out. That was just what you did back then. But working at the stock broker was a really interesting entryway, especially during the crash. I'll never forget those days. People's actual money being lost gave me a flavor for this isn't abstract. This is a real thing. Someone said to me, there's nothing casual about managing other people's money. I have that deeply embedded in my thinking. And I wouldn't say it's my first paid job. was my first steady job and that stuck with me. >> What's the best advice you've ever received? >> I had a boss at Curtis Swiss who died in 2010 called Paul Kello and he was my mentor and he was the president of the firm and he ran all the divisions I was part of. We had to do some layoffs and he said by the way you should get a thank you note from all those people meaning do it with dignity and respect and treat people with dignity and respect at every turn. I got to say that, you know, not that I've gotten that right every time, but when you start a firm after being in the market 30 years, you have a whole record of things. And I like to say I was doing favors for people for 30 years. Now I'm asking for favors for the next couple of years. Everyone delivered on it. It takes a village to raise one of these firms. And that village came in and I was able to take that advice in for a long time and treat people with dignity, respect, and that's the advice that I think of every day. >> Bobby, last one. What life lesson have you learned that you wish you knew a lot earlier in life? >> When I think of life lesson, my parents taught us from the age of 5 to 20, focus on education, 20 to 35, focus on career, 35 to 50, focus on family, 50 to 65 on service, 65 to 80 on philanthropy, 80 to 95 on spiritualism. That's the stages. Obviously, you're not going to follow those time frames. I knew that ahead of time. I haven't. Listen, I extended [laughter] the career thing a little longer. I've tried to do service with some charitable activities and time and resource contribution. Family is the important part of my life. I have three teenagers that demands some time. It's a good thing for people to think of the stage of the life. Do I wish I knew that earlier? I did knew that earlier, but I didn't really think about it till you get older. >> Bobby, thanks [music] so much for taking the time. >> Ted, it's great talking to you always. Thanks for listening to the show. If you like what you heard, hop on our website at capitalallocators.com where you can access past shows, join our mailing list, and sign up for premium content. [music] Have a good one and see you next time. All opinions expressed by TED and podcast guests are solely their own opinions and do not reflect the opinion of capital allocators or their firms. This podcast is forformational purposes only and should not be relied upon as a basis for investment decisions. Clients of capital allocators or podcast guests may maintain positions in securities discussed on this podcast.