Thank you Kyle for writing something I often think about - the need for good mentorship within and outside of investment firms - but cannot crystallize as well as you did!
My experience has been with the buy side investing (traditional stocks/binds/currencies markets) with mutual funds, institutional accounts and our own hedge fund companies. I am surprised to read about the trust problems in VC firms and sometimes the brutal-ness amongst colleagues, which I experienced in hedge fund companies, though not in ours. Our performance got validated everyday and even every minute because everything is marked to market - no one can hide behind performances.
So mentorship and teamwork under open leadership is a big and probably most essential thing in a successful investment firm even though we have too many star (and egoistic) managers who think they can do it alone and perform consistently (they confuse alpha with luck!) If all senior people in the industry understand the value of mentorship, the industry will be kinder, more productive, and truly build wealth for our customers!
Interestingly enough lone wolves often don’t survive long. Even if their pack disbands, they usually will join others, and along with them, their experience for the benefit of the group. There was a pack in Yellowstone that due to its unusually large size had to learn to take down massive bison. Before its leader died, wolves primarily consumed smaller elk, but once the pack disbanded, these wolves formed smaller packs or joined others where they shared their knowledge of how to take down much larger animals and now many packs in the park can take down bison too, significantly shifting their collective diets and hunting patterns. Even wolves realize the benefit of passing on their knowledge for their collective success!
Well said. It’s interesting that the traditional model of GPs keeping a meaningful stake in the partnership after retirement should incentive firm building yet some of the best firms for apprenticeship historically have passed down the partnership to the next generation.
Thank you Kyle for writing something I often think about - the need for good mentorship within and outside of investment firms - but cannot crystallize as well as you did!
My experience has been with the buy side investing (traditional stocks/binds/currencies markets) with mutual funds, institutional accounts and our own hedge fund companies. I am surprised to read about the trust problems in VC firms and sometimes the brutal-ness amongst colleagues, which I experienced in hedge fund companies, though not in ours. Our performance got validated everyday and even every minute because everything is marked to market - no one can hide behind performances.
So mentorship and teamwork under open leadership is a big and probably most essential thing in a successful investment firm even though we have too many star (and egoistic) managers who think they can do it alone and perform consistently (they confuse alpha with luck!) If all senior people in the industry understand the value of mentorship, the industry will be kinder, more productive, and truly build wealth for our customers!
Thanks for your writing!
Insightful, thanks for sharing this. Nice to read something thought provoking and which challenges current (default) views.
Interestingly enough lone wolves often don’t survive long. Even if their pack disbands, they usually will join others, and along with them, their experience for the benefit of the group. There was a pack in Yellowstone that due to its unusually large size had to learn to take down massive bison. Before its leader died, wolves primarily consumed smaller elk, but once the pack disbanded, these wolves formed smaller packs or joined others where they shared their knowledge of how to take down much larger animals and now many packs in the park can take down bison too, significantly shifting their collective diets and hunting patterns. Even wolves realize the benefit of passing on their knowledge for their collective success!
Well said. It’s interesting that the traditional model of GPs keeping a meaningful stake in the partnership after retirement should incentive firm building yet some of the best firms for apprenticeship historically have passed down the partnership to the next generation.