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Invest Like the Best with Patrick O'Shaughnessy
Ryan Caldbeck – Quant in Private Markets - [Invest Like the Best, EP.110]
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Show Notes
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My guest this week is Ryan Caldbeck, a private equity investor who wants to bring quantitative rigor to the private markets. Ryan is the CEO of Circle Up, which uses a system it calls Helio to identify attractive investments in early stage consumer brands.
While I am of course a fan of quantitative investing, I also know from experience how much harder private markets are than public markets when it comes to the transactions themselves. We discuss this and many other potential roadblocks to bringing models to private markets.
Using many individual companies as examples, Ryan explains some of the major predictive factors they’ve uncovered in their research. We also discuss which parts of the private markets might be infiltrated by quant processes first, and which may never be.
I expect many more to go on a journey similar to Ryan’s in the years to come. They serve as an interesting example for ambitious investors out there.
Please enjoy our conversation.
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
Follow Patrick on Twitter at @patrick_oshag
Show Notes
(First Question) – Formation of Helio
– How they handle the relationship building needed to make investments in private markets
– Why consumer and retail are interesting spaces to apply their quantitative approach in private markets
– Searching for new relevant data
– How do they stay ahead of the commoditization of uniqueness
– Pattern Recognition and Machine Learning
– Sam Hinkie Podcast Episode
– Dominant predictive factors in this world
– Which is more important, relative value or rate of change
– What does the data say about online sales vs offline (being in a store)
– Variable that consumer investors think matters but it doesn’t
– Valuing companies and accounting for mispricing’s
– Michael Recce Podcast Episode
– Goes through the process using Liquid Ivy as an example
– Most interesting sub-categories
– Future for this model
– Albert Wenger Podcast Episode
– Other categories outside consumer and retail interest Ryan
– Biggest challenges for CircleUp as a business
– Handicapping their earnings expectations
– Take on the VC/PE landscape
– The types of models that are most interesting to the team
– Quantitative elements of brand that are most interesting
– Most unique brand and distribution strategy he’s come across
– Who has influenced Ryan the most
– His personal values
– More people who had an influence on Ryan
– The Innovator's Dilemma: The Revolutionary Book That Will Change the Way You Do Business
– Thoughts on goal setting at the company
– Unchangeable factors that shape their long-term vision
– Most interesting individual conversation as part of this journey
– If he could only keep one dataset, what would he keep
– kindest thing anyone has done for Ryan
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on twitter at @patrick_oshag
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