[REPLAY] - Brett Barth – Asset Allocation for Families (Capital Allocators, EP.03)

Summary

[REPLAY] Brett Barth – Asset Allocation for Families (Capital Allocators, EP.03) Summary

Podcast Information:

• Title: Capital Allocators – Inside the Institutional Investment Industry
• Host: Ted Seides
• Guest: Brett Barth, Founder, Managing Partner, and Director of Investment Research at BBR Partners
• Release Date: February 24, 2025

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Introduction

In this episode of Capital Allocators, host Ted Seides welcomes Brett Barth, a seasoned asset management expert who oversees BBR Partners, managing over $12.5 billion for 125 families through its multifamily office structure. The conversation delves into Brett’s personal experiences raising twins, his professional journey, and the intricate asset allocation strategies employed by BBR Partners.

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Personal Insights: Raising Twins

The discussion begins with a heartfelt conversation about Brett’s experience raising twin boys, mirrored by Ted’s own experience with twin children. Brett shares the unique challenges and joys of parenting twins, emphasizing the importance of treating each child as an individual despite their similarities.

Notable Quote:

“They are each individuals and they each deserve their due.”
— Brett Barth [08:00]

Brett highlights the benefits of having built-in playmates for his sons and the synergies that come with shared activities like attending sports events and taking tennis lessons together.

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Professional Journey: From Goldman Sachs to BBR Partners

Early Career and Education

Brett recounts his early passion for investing, sparked by a bar mitzvah gift of Genentech shares and inspired by Peter Lynch’s One Up on Wall Street. He pursued this passion academically and professionally, attending Wharton and securing a position at Goldman Sachs in the early '90s.

Experience at Goldman Sachs

At Goldman Sachs, Brett worked in Equity Capital Markets (ECM), handling a mix of convertible bonds and IPOs. His tenure included a significant period in Hong Kong during the mid-90s, a time he describes as the "Wild West" for Asian markets.

Notable Quote:

“From Korea to India to New Zealand and Australia, lots of cultures met lots of people.”
— Brett Barth [12:13]

Brett reflects on the stark differences in market sophistication between regions during his time in Hong Kong and how globalization has since advanced these markets.

Transition to BBR Partners

The catalyst for Brett’s transition from Goldman Sachs to founding BBR Partners was his collaboration with fellow managing partner Evan, who sought to establish an independent asset allocation firm. Despite initial market downturns around the early 2000s, Brett and his team persevered, focusing on an asset allocation approach that emphasized alternative investments.

Notable Quote:

“Luck sometimes is tied with timing.”
— Brett Barth [19:52]

This persistence paid off as regulatory changes and a shift towards alternative strategies aligned with BBR’s methodology, allowing them to capitalize on inefficiencies and deliver differentiated returns.

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Investment Philosophy and Asset Allocation

Core Tenets

BBR Partners operates on several foundational beliefs:

1. Asset Allocation is Crucial: Emphasizing the significance of asset allocation over individual asset selection.
2. Mean Reversion: Advocating for buying dips and selling rallies with a long-term focus.
3. Avoiding Market Timing: Maintaining strategic targets without attempting frequent market adjustments.
4. Total Return Investing: Prioritizing overall portfolio growth rather than income generation alone.

Notable Quote:

“Asset allocation is critically important. It's the old Brinson study of it doesn't matter nearly as much what stock you own as do you own stocks versus bonds.”
— Brett Barth [23:44]

Active vs. Passive Allocation

Brett explains BBR’s nuanced approach to active and passive investing, advocating for a core-satellite strategy. In efficient markets, BBR prefers passive investments, whereas in niche or inefficient markets, active management is employed to exploit unique opportunities.

Notable Quote:

“We take a core satellite approach where you want to be passive in the most efficient markets and active in niche managers where there's a lot of inefficiencies.”
— Brett Barth [28:00]

Strategy Buckets

BBR categorizes investment strategies into two main buckets:

• Higher Risk, Higher Returning: Includes various equity strategies, both active and passive.
• Stable Returning, Lower Risk: Primarily bonds and fixed-income instruments.

Overall, approximately 65% of their portfolio is allocated to higher-risk strategies, a modestly lower proportion compared to typical high-net-worth portfolios.

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Manager Selection and Due Diligence

Extensive Manager Research

BBR Partners boasts a rigorous manager selection process, involving a dedicated team that meets over 2,000 managers annually. This extensive outreach ensures comprehensive due diligence and the identification of high-potential managers across diverse strategies.

Notable Quote:

“We meet as a team every two weeks just to talk about who people have met, what we're working on.”
— Brett Barth [35:28]

Quality and Consistency

Brett underscores the importance of quality people and consistent processes in manager selection. They employ multiple layers of vetting, including independent references and cross-functional evaluations, to ensure manager reliability and alignment with BBR’s investment philosophy.

Notable Quote:

“If they can't all be positive, we can't make an investment where one of those is 50% at best.”
— Brett Barth [39:07]

Investment Committee Decisions

Decisions on manager selection are made by an investment committee comprised of nine senior members. A supermajority of seven votes is required for approval, with a chief compliance officer holding a unilateral veto to maintain high standards.

Notable Quote:

“It's a high bar to get something.”
— Brett Barth [42:25]

This structured decision-making process ensures that only thoroughly vetted and unanimously supported investments are incorporated into the portfolio.

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Current Opportunities and Concerns

Emerging Investment Areas

BBR Partners is currently exploring esoteric and off-the-run investment opportunities that offer higher returns and are less crowded. Notable areas include:

• Music Royalties: Combining yield investments with growth potential by actively managing and promoting intellectual property assets.
• Non-Traditional Assets: Such as international trade settlements and certain real estate niches that have fallen out of favor with traditional hedge funds.

Notable Quote:

“We're finding that in all kinds of different asset classes that are really interesting today just because there's not a natural home for them.”
— Brett Barth [51:05]

Market Concerns

Brett expresses concern over the unwinding of post-global financial crisis dynamics, particularly the assumption of perpetually low-interest rates and the reliance on central bank interventions. He anticipates challenges as interest rates rise, potentially leading to significant market shifts and increased risks.

Notable Quote:

“I think as that changes, it's probably a buying opportunity.”
— Brett Barth [54:02]

He warns that a shift to higher interest rates could alter investment landscapes, making strategies reliant on low rates less viable.

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Closing Reflections

In the final segment, Ted poses personal questions to Brett, revealing his interests outside of work, such as playing flight simulators with his sons, and his reflections on time management both professionally and personally.

Notable Quote:

“How you spend your time is really important and that time is the most fleeting of all assets.”
— Brett Barth [57:45]

Brett emphasizes the value of time and the importance of investing it in meaningful and productive activities, both in business and in personal life.

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Conclusion

This episode provides a comprehensive look into Brett Barth’s approach to asset allocation for families, highlighting the significance of robust asset allocation strategies, meticulous manager selection, and adaptability to evolving market conditions. Brett’s insights offer valuable lessons for financial advisors, institutional managers, and high-net-worth individuals seeking to optimize their investment processes.

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Visit CapitalAllocators.com to join the community and learn more about implementing premier investment strategies.

Transcript

[Brett Barth]

Capital Allocators is brought to you by.

[Ted Seides]

My friends at WCM Investment Management. To outperform the markets, you have to do something differently from others. In my 30 something years investing in managers, there may be no one I've come across who does that as clearly and as well as wcm. I've seen it up close. As an investor in their international growth strategy for the last five years, WCM is a global equity investment manager majority owned by its employees. They believe that being based on the west coast, away from the influence of Wall street groupthink provides them with the freedom to live out their investment team's core values, think different and get better as advocates of integrating culture research into the investment process and advancing wide moat investing. With the concept of moat trajectory, WCM has delivered differentiated returns while building concentrated portfolios designed to stand out from the crowd. WCM is committed to defying the status qu by dismantling outdated practices, believing in the extraordinary capabilities of its people and fostering optimism to inspire each individual to become the best version of themselves. To learn more about WCM, visit their [e-mail] and tune into this slot on the show to hear more about WCM all year long.

This testimonial is being provided by Ted Seides and Capital Allocators who have been compensated a flat fee by wcm. This payment was made in connection with Capital Allocators testimonial and production of podcasts and is not depend on the success or level of business generated. The opinions expressed are solely those of Capital Allocators and may not reflect the opinions of others. Investing involves risk, including the possible loss of principle. Past performance is not indicative of future results. Please visit wcminvest.com for WCM's ADB and further information.

[Michael Lefell]

Capital Allocators is also brought to you by Ten east. An investment platform for sophisticated investors to access private markets. Ten east brings benefits of having your own family office without the cost and headaches of doing so. Founded and led by Michael Lefell, former Deputy Executive Managing Member of Davidson Kempner, Michael and his investment team offer members the opportunity to co invest. By offering at their discretion, Michael and his team source diligence and commit material personal capital to each investment. The opportunities shared on the Tenneys platform offer exposure to private credit, real estate, niche venture and private equity and other idiosyncratic investments that typically aren't available through traditional channels. The principles have over a decade track record of investing in these types of exposures across more than 350 transactions post investment. The Tennys team conducts ongoing monitoring and reporting, just as you'd expect from an institutional investment organization. I've known Michael for about a decade and after becoming impressed by the quality of Teneast offerings, its research process and high quality investment team, I became an advisor to the organization and an investor in multiple offerings. You can learn more and join me as a member at 10 East CO. That's the number.

[Ted Seides]

10 East CO.

Hello, I'm Ted Seides and this is Capital Allocators. This show is an open exploration of the people and process behind capital allocation. Through conversations with leaders in the money game, we learn how these holders are the keys to kingdom allocate their time and their capital. You can keep up to date by visiting www.capitalallocatorspodcast.com.

Ted Seides is the managing director of Hiddenbrook Investments, LLC. All opinions expressed by Ted and podcast guests are solely their own opinions and do not reflect the opinion of Hidden Brook Investments. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of Hidden Book Investments may maintain positions in securities or managers discussed on this podcast.

My guest today is Brett Barth, a founder, Managing Partner and Director of Investment Research of BBR Partners. BBR manages north of $12.5 billion on behalf of 125 families in its multifamily office. In this episode we start talking about raising twins, a family issue near and dear to both of our hearts. From there we learn about how Brett came to form bbr. We spend a lot of time going into depth on his firm's asset allocation process and on the decision making process of manager selection. Along the way we touch on inefficiencies in Asia in the early days and in music royalties.

Today.

Brett offers nuggets of practical substance for allocators of all types, from financial advisors to large institutional managers. I hope you enjoy the show.

If you do, please subscrib, subscribe to.

The podcast and maybe even write a review on itunes. You'll help others discover it and I.

Thank you for that.

Please welcome my friend Brett Barth.

Brett, welcome to the show.

[Brett Barth]

Thanks. Thanks for having me Ted.

[Ted Seides]

I'm always curious. None of us in our crib sat around saying, I can't wait until I can be a capital allocator of other people's money. How'd you first get interested in all this work?

[Brett Barth]

Great question. I actually have to give credit to my fellow managing partner Evan for having the light bulb. It was completely his idea. I just thought it was a great idea and Wanted to be part of it from the very beginning.

[Ted Seides]

So let's circle back. Evan and you were at Goldman together?

[Brett Barth]

We were. We actually were even fraternity brothers in college before.

[Ted Seides]

Okay, we're going back. Remind me where you grew up.

[Brett Barth]

I grew up in Northern Virginia.

[Ted Seides]

And siblings?

[Brett Barth]

I have a twin sister.

[Ted Seides]

And where does she live now? As far away from as possible?

[Brett Barth]

No, she and I are very close, but she lives in Chicago with her husband and family.

[Ted Seides]

Okay, and you have twin boys who are just about 12. I have a boy and girl twins who are 11. What do you remember growing up as a twin that you carried with you as a father of twins that you.

[Brett Barth]

Need to treat them separately? My name's obviously Brett. My twin sister's name's Betsy. We got the nickname Bretzy very early, and it always bothered me.

[Ted Seides]

Hold on one second. And your boys names are what, Brian and Benny? Yeah.

Okay.

[Brett Barth]

I think the B's, similar names. The B's are not a problem. I think it's. Even with two boys, you really want to be treated as your own person. And they're each individuals and they each deserve their due.

[Ted Seides]

Yeah, I saw that with my twins, boy and girl. So there's some obvious differences. But as they're growing up, you have this tendency to not have to compare them as much to other kids and where they are at their stage of development, especially firstborns. There's sort of a natural parent tendency because you have two that are so wildly different. How have you figured out what their passions are and how to steer them? Particularly with two boys where it's not so clear that it should be or isn't the same thing. And yet for you guys as parents, it's awfully difficult.

[Brett Barth]

Great question. They have similar passions into a little bit different. They both are passionate about sports more as spectators and fans than as athletes because they take after their old man. And so it's really easy. I mean, they love going to Yankees games and football games and Rangers games, and they're happy to do that together. I would say that there's a little bit of us of. Well, if one's taking tennis lessons, they're both taking tennis lessons. Because there's a lot of synergy to them having tennis lessons at the same time of us maybe not letting it completely flourish that way. But, you know, one's given up piano and one still enjoys it, and so you gotta do it.

[Ted Seides]

What advice would you give a new parent of twins?

[Brett Barth]

There are a lot of synergies and you should take advantage of them. Not only are they the synergies, at least for us. Same schools, play nights, same night at school, all that good stuff. But you also have a built in playmate, which is really awesome as well. My kids, they would argue, they're not friends, they're brothers. I'm like, isn't it great that your brother's your best friend? And my guys very rarely fight. They're like, he's not my friend, he's my brother. I'm like, they'll play catch together in the yard.

[Ted Seides]

Yeah, I'll throw one in there for you. That a friend of mine who had two sets of twins told me, which is. My twins have no idea which one is older than the other.

[Brett Barth]

Mine don't either. Actually, I think I got that idea from you.

[Ted Seides]

You may have.

[Brett Barth]

Yeah. I think actually you're the one who told me. I'm four minutes older than my sister and I harass her to this day. And even my niece and nephew were highlighting that to her again when I saw her over the weekend.

[Ted Seides]

There's this sort of pump your chest thing.

[Brett Barth]

My kids don't know and they are dying to know, and I won't. We had that working for a while. My kids are over it and they're like, we know you know and we know you're just not telling us. And honesty's best policy. Yes, I know and I'm not telling you.

[Ted Seides]

So how'd you end up at Penn?

[Brett Barth]

I ended up at Penn because all I ever wanted to do was go work on Wall Street. I don't think I had capital Allocator and I wanted to be in a city and Wharton was one of, if not the best undergraduate business school and that's where I wanted to be and applied early.

[Ted Seides]

Were you one of these bar mitzvah kids?

[Brett Barth]

Absolutely. I was a stock market junkie in my early teens. I actually got as a bar mitzvah gift a few shares of Genentech back in the early 80s. One of the first biotech companies from my dad, who's a doctor, a friend of his. I had no idea what it was, but. But that stock was a skyrocket from my bar mitzvah to college and paid for a lot of spring breaks. So I got my early bug from Genentech. I also read Peter Lynch's one up on Wall street and he recommended that you invest in what you know.

[Ted Seides]

So Genentech for you.

[Brett Barth]

Well, Genentech was a gift. I decided to then buy one other stock. I learned that winners can outpace your losers. So Genentech as a 10 bagger was great. The other stock I bought, which was actually my decision, was Freddy Fuddruckers Enterprises, which was a hamburger place I love. It only took about 2. I bought the stock for it to go bankrupt. So I learned that they're both winners and losers, but you can only lose 100%. But you can make a lot more than that.

[Ted Seides]

Yeah, I remember that franchise. So was there one out by you in Virginia?

[Brett Barth]

There was one right near me.

[Ted Seides]

It was. It was like Mother Fuddruckers Burger or something like that.

[Brett Barth]

They were of all different sizes. Great fixings, bar. If you saw my physique, you'd understand my appreciation for hamburgers.

[Ted Seides]

Sadly, that was the only thing I remember about that franchise. And it went bankrupt. It did go bankrupt. Okay, so those were the stocks. You got the bug. Wharton obviously is a hub for that. And then from there to Goldman, you got it.

[Brett Barth]

So I wanted to go work on Wall Street. Back in the early 90s, Goldman Sachs was the place to be and had a really interesting opportunity to go there on the sell side.

[Ted Seides]

And was that straight up recruiting at Wharton?

[Brett Barth]

100%.

[Ted Seides]

And where did you start in the bank?

[Brett Barth]

I started in a group called Equity Capital Markets, which is a joint venture between investment banking and equity sales and trading that worked on equity new issues, convertible bond issues, anything equity linked.

[Ted Seides]

And you guys remind me, I know it was early 90s 93. Okay, so coming out of the recession then, pretty interesting time to be in that seat. And you stayed at Goldman for how long? Almost seven years, mostly in ecm.

[Brett Barth]

I was an ECM in New York for a few years doing a combination of things, working on both convertible new issues as well as a number of different IPOs, particularly for a lot of the early private equity deals that were going public. The Nabiscos of the world. In 96, I moved to Hong Kong and worked on Asian new issues and did that for several years and then came back to New York, moved fully to the sell side and worked covering convert arb and merger arb hedge funds in the equities division in the late 90s.

[Ted Seides]

The mid 90s in Hong Kong, I know is the Wild West. What was that experience like? What did you take from that?

[Brett Barth]

Well, there are a couple things, both personal and professionally. I would say professionally, it was a great opportunity at a big firm like Goldman Sachs. The firm, the office in Hong Kong was much smaller. There were a handful of us covering. We didn't cover Japan, but from Hong Kong, from Korea to India to New Zealand and Australia. Lots of cultures met lots of people. I think I went to weddings in nine different countries from friends I met. So really neat negotiating with companies in different parts of the world. But mostly we were proselytizing, which is the US Capital markets are big and deep. You should list your company in the us you should hire a US investment bank. And they that investment bank should be us. And then when we were lucky enough to convince a company of that to.

[Ted Seides]

Work on that transaction, we think about a lot about where are markets efficient and inefficient. How different back then was what you saw in either the way the companies were run, how sophisticated they were about thinking about financing in Hong Kong versus what you'd seen in the U.S. i.

[Brett Barth]

Think there was a very, very big difference back then. When you went country to country, there were places like Thailand and India where the companies were mostly family run. The families were very wealthy, the individuals were very well educated, often in the US or in Europe and at places like Wharton. And so you go into the meetings, you'd speak English, you'd use lingo right out of business school and they totally got it. Now they may or may not have been friendly to minority shareholders. They might or may not have been good investments. But it wasn't a meeting that was materially different than a meeting you'd have in the United States. In the same vein, you'd be in mainland China talking to a state owned enterprise and there'd be no English. You'd have to explain what an equity offering was to the management team. I mean it was the total end of the spectrum. So it really depended country by country.

[Ted Seides]

You now travel a fair amount to Asia. It's 20 years later. And what does that perspective of, if you were there much earlier on, how does the level of sophistication today look compared to last year?

[Brett Barth]

I think it is light years ahead. They have, if not fully caught up, come very, very close. The management teams are sophisticated, the investors are sophisticated, the pools of capital are deep. There were lots of things you just couldn't do because there were no buyers of them. Every time you did a transaction, it was the first time you'd list a company in Hong Kong and New York at the same time. And no one had done that before before. Or you'd offer a convertible bond that was convertible into, you know, locals or ADRs and no one had ever done that before. That just, that's not an issue anymore. Everything has become fully around and the regulations have caught up. There were a lot of regulatory issues where, you know, things adrs Couldn't be fungible. You had issues with foreign owners of domestic stocks. Many of those restrictions are either much lighter or have been removed at this point as well.

[Ted Seides]

And so Goldman then shifts you back to New York, you're back to doing presumably somewhat similar things to what you had. And Evan shows up one day. Evan, if I recall was on the private client.

[Brett Barth]

He was in the asset management business actually at Goldman, initially working to convince Goldman's private clients that they should be buying Goldman's asset management products. He'd actually left a couple years earlier to go to a firm called Global Asset Management. Global Asset Management was originally the Rothschild single family office that in the, I believe early 80s, you might correct me, they started taking other families. And GAM was very sophisticated for the time. They called themselves Global because they didn't invest in just their home European markets, which in the 70s was really sophisticated. They started using third party managers and hedge funds, not just their own in house products. So he started working with wealthy US families saying there's a better way you can use third party managers or sophisticated things you can do with your money. And by the way, there's this high touch European private banking model that you can be part of as well. And so he led that business here in the US in the late 90s.

[Ted Seides]

So he calls one day and says and why you?

[Brett Barth]

You know, we were very good friends. We, I had been in his wedding, I wasn't married yet, but he ultimately was my wedding. And we talked about a lot of different things. And I had had this background at Goldman where I'd gotten to know some private equity firms, I had gotten to know the hedge funds, I'd gotten to know emerging markets investors. And so it was really interest, a sell side perspective. I had seen a lot of different types of buy side activity and he wanted to start this business. I had spent seven years at Goldman. Goldman had just gone public. I would say of all the things I was good at at Goldman, politics was not one of them. And as you got more senior, who was responsible for what arguing about your compensation became a bigger part of the job. As I said, the firm had gone public and the culture had changed. And it was also late 1999 when people were starting Internet companies and doing all kinds of entrepreneurial things. That's not me. I was always a finance and investment guy. But from his perspective, he knew about my frustration given our personal relationship. He knew, he thought this was an interesting business opportunity. The way he explained it, I thought it was a really interesting opportunity. He thought I Could be useful as an asset allocator manager, selection perspective, given my background. And I just thought, hey, it'd be really neat to have a job where you worked with sophisticated wealthy families where you could invest in anything. You didn't have to have a commercial relationship. And we could source, you know, the smartest managers in the U.S. in Asia, doing all kinds of different strategies. That seems like a really interesting opportunity as a career, not only a business opportunity.

[Ted Seides]

Yeah. And so when you, when you thought about it at the time, in the subsequent years, there was clearly a pushback on Wall street and said the competitive, say, private client business has all kinds of conflicts of interest. As Evan did need to sell the Goldman products, was that a conscious part of your initial pitch or was it more, hey, there's a need and you guys have the skill set. Let's go at it and see what happens.

[Brett Barth]

Like all business plans, we got more lucky than good. That was always part of our plan. We want to be independent. We had a third part started who has since retired. The other B in bbr, Art Black, who was in the private client group at Goldman. And he covered a lot of the large single family offices in New York. And he was really convinced that in addition to the GAM model, the single family office was the way to go if you could set one up, because you could be really sophisticated, you could be independent, you weren't trying to buy whatever product he had to sell. And so we took kind of his best ideas of what is a single family office look like and Evan's best ideas of GAM's model. When we put BBR together, being as close to a single family office as you could get for a family that wasn't wealthy enough or interested enough in creating their own single family office was always the model. Both of them had built their businesses over the course of the 90s because people were getting rich selling their businesses. Whether it was roll ups, private equity, IPOs, people didn't tend to fire their wealth manager. They just, you had new wealth and the business, the universe was growing. So our thought was we just have a better mousetrap. The universe would keep growing. We started the business in early 2000, and that clearly was not the case. Wealth creation quickly stopped.

[Ted Seides]

You said luck, and luck sometimes is tied with timing. Right.

[Brett Barth]

But then all of a sudden, we had a model that was much better than Wall Street's. It was Eliot Spitzer suing the banks over conflicts and who was getting IPOs. And at the same time, we had an asset allocation approach that used Alternatives that apps are return oriented. Those two things actually meshed really well and neither was part of our competitive business plan when we launched.

[Ted Seides]

So you guys are hanging a shingle. There were probably some relationships in those early days. What happened from going I'm not sure this is going to work to hey, we got something here, right?

[Brett Barth]

Well the catalyst to get us really started was that UBS bought GAM early in the fall of 99 and that was Evan's push to say I don't want to go to Nothing against ubs, but he'd already left one big investment bank and didn't want to go to another and he wanted to do something entrepreneurial. Art and I were convinced that doing something entrepreneurial was interesting and so we spent those next couple months although I assure you Goldman Sachs I was working full time at my job at Goldman Sachs of could this work? What does the business model look like? And quite honestly thinking through did they have any clients that would be with us day one given it was really more evident than Art Day one as it relates to Art was on a team. His team stayed at Goldman Sachs. This was not one of these lift outs from that perspective. But I was highly confident we'd have a handful of clients, enough clients to pay the bills day one and we did just like any other asset management startup, those first few dollars are the hardest quite honestly. We hit the ground running where we had a number of clients right away. We were break even right away. Each of the three of us wrote a check to working capital expenses and we thought we could survive two years on the checks we wrote and we agreed that we'd never write another check that if two years later this was not a commercial success, we were not going to continue to pour our own money into it and we were break even almost immediately and never wrote another check again.

[Ted Seides]

So before we turn to really the investing side of BBR and lots to talk about there, I'm always curious to ask if you had to throw all this away today, start a completely new profession based on everything you know now and the coulda, woulda, shouldas what would you be doing?

[Brett Barth]

I would have spent more time investing early. I think there's pros and cons to that. I think I learned a lot commercially from a lot of people I worked with at Goldman Sachs who are phenomenal mentors about how do you do business, how do you convince people to do business with you, where should you spend your time? What's opportunistic? Interesting, but I didn't do anything that was really investment oriented. Whatever deal I had to sell, I wanted to convince people to own it. Not should they or should they not actually own it. I think that would have been going to the buy side earlier. It's different when you're actually making investment decisions. Those first couple years when you're actually an investor and you're actually managing other people's money and you've got that duty and that weight of responsibility. By the way, that was.000102 it was not an easy time to be making those decisions. I think it would have been helpful to have a little experience earlier than that. With all that said, the fact that we didn't start managing money till March 1st of 2000 almost right on top of the NASDAQ high really framed our investment approach for years to come. I think it served us well. But I think I would have liked to have more buy side experience earlier.

[Ted Seides]

Let's turn to that investment approach. What do you believe about investing that permeates how you think about this challenge of people are giving you a big pot of their money?

[Brett Barth]

One we have a bunch of philosophical tenets about what we believe about investing. Those are ones that we spent a lot of time hashing out before we started. It was based on a lot of reading who we thought was best in class and those have not changed. So what are those tenet Asset allocation is critically important. It's the old Brinson study of it doesn't matter nearly as much what stock you own as do you own stocks versus bonds. We are still huge believers in that. We are huge believers in mean reversion. You've got to buy the dips and sell the rallies and be very long term focused. We are huge believers that it is incredibly difficult to market time and so don't try and do it. Have those strategic targets and buy the dips and sell the rallies. Although this sounds a little contradictory, we are also believers that at times there are really fat pitches. I don't think that's as much, although we're spending a lot of time researching it in equity valuations as it is distressed debt opportunities in 2009 and things along those lines.

[Ted Seides]

Let me push on one of those. There was this great, great, probably not that well known but debate between David Swensen and Peter Bernstein, the late Peter Bernstein, where David, similar to you believed asset allocation drives returns. Strategic asset allocation is an important part of a policy portfolio. And Peter would say to David, but that strategic asset allocation by definition includes some form of market timing. You have to decide is it 25% in stocks or 40% in stocks. And if you change that, there's an element of timing. So curious, how do you think about that contrast?

[Brett Barth]

I think they're both right. We have a forecast on what we think and to be fair, our asset allocation approach we allocate to strategies, not to asset classes. Hedge funds aren't an asset class. Long short equity is a strategy you either do or don't want to be allocated to. You'd have expected returns, risks, correlations. For our perspective, we build returns, expected returns for each of those strategies. And we don't think there's some sort of magical, mystical, uncorrelated beast. If you think equities are going to return 7.5. If you're a long short equity manager, what's your beta, what's your alpha, what are your fees? And you should have a relatively high correlation to equities. And you should have a return that has certain risk and return characteristics related to that. We build those. I guess you'd say that there is some market timing to those factors or to those forecasts because as your equity forecast comes down, you're going to want to own a little bit less equities as it goes up. But that's not a daily quarterly thing and it's at most annual. And quite honestly, it's a very long term forecast and they evolve pretty slowly for us.

[Ted Seides]

What are the buckets of the strategies that you use in your approach?

[Brett Barth]

At the top level, we believe that strategies fall into two main categories. They are higher risk, higher returning strategies and stable returning, lower risk strategies. In the simplest of case, people build stock bond portfolios and stocks are those higher risk, higher returning strategies and bonds are stable returning, lower risk strategies. From our perspective, there's lots of strategies that can fall into both within equities. In higher risk, high returning, you can be passive, passive and or active. Your active can be long or long, short or private versus public. It's those types of differentiations we make in terms of suballocations.

[Ted Seides]

Let's hop right in on that. Active versus passive. If people aren't talking about it or haven't had a conversation about it, they've been on Mars the last couple years. It sounds like you use both in your approach. How do you think about when to allocate to active and passive? When you read about it, it almost seems like, oh no, no, no, passive has to be the way to go because it's low cost. You're using both. You always have talk a little bit about how you Think through the active versus passive decision.

[Brett Barth]

Sure. I think active and passive is actually not a binary decision that there's a spectrum. Right? There is on one end purely passive. Then you can have factor decisions, value bias or dividend bias. I think you want to be on the end of the spectrum. If you're going to be passive, you want to be as passive and for us, since we're managing money for families, as tax efficient as possible. In the middle, you've got, I'll call them index funds in drag. Your average mutual fund that most of whom underperform the market. If you think about the universe of them that are fully invested most of the time after fees and transaction costs, costs on average, they have to underperform the market and they're highly diversified. As you get more and more active, you can have managers who own small numbers of stocks, are very concentrated, are agnostic in terms of their weightings versus the index. Then I would actually argue the most active are long short equity managers where they're making active decisions not just on the long side of the portfolio, but the short side of the portfolio and how net exposed they are as well. We take a core satellite approach where. Where you want to be passive and you particularly want to be passive in the most efficient markets and you want to be active in niche managers where there's a lot of inefficiencies and they've got a structure to be concentrated, where there's large amounts of active share to take advantage of those inefficiencies.

[Ted Seides]

Today. What are the markets where you are passive?

[Brett Barth]

US large cap. You could argue that we're passive in fixed income where we own intermediate duration, high quality investment grade bonds, primarily munis, again because we're families. But I would say there's a lot of defense that gets played there on the credit side. So although they're diversified portfolios, they're meant to perform in line with the indexes. We are paying a little bit for credit research just to make sure. Not to add value but to make sure you don't step in any Illinois potholes.

[Ted Seides]

We've got our high return, higher risk, mostly various forms of equities, active, passive, long, long, short, global. The lower risk, which is bonds, bond like things.

[Brett Barth]

Another one of our philosophies is that unlike a lot of high net worth investors, we're exclusively total return investors. What I care about is having more money down the road than I have today. Clipping coupons is nice. I'd always rather get a dividend or get a coupon, but we're total return investors for a lot of our history where yields have been low. So we've generally shied away from things like REITs, which you conceivably could put into that stable return low risk bucket and have decided that things that are less liquid in the real assets and real estate category are more interesting given the illiquidity. We have a higher return target, we're taking a little bit more risk. We keep those on the higher return, higher risk side.

[Ted Seides]

I want to take a break in the action to tell you about Thoma.

[Orlando Bravo]

Brotho Two hands shake. They sign the contracts and the deal is done. But what went on behind the Deal? Thoma Bravo's behind the Deal podcast takes listeners behind the scenes of the world's largest tech focused buyout firm. It's a chart topping and signal award winning podcast from our friends at Thoma Bravo. The firm's acquired or invested in over 500 companies representing over $260 billion in enterprise fees value. And behind every one of those deals is a unique story. Each episode features candid firsthand accounts from dealmakers and CEOs presented by Orlando Bravo, named Wall Street's best dealmaker by Forbes, private equity's king of SaaS by the FT, and to top it off, a guest on the Private Equity Masters miniseries. On Capital Allocators, you'll hear some of the best untold stories in private equ Equity from true insiders. Think of it like our own Private Equity deals episodes Going one step deeper. Follow Thoma Bravo's behind the Deal wherever you get your podcasts. New episodes drop every Thursday.

[Ted Seides]

And now back to the show. You also have the challenge of having 125 different families. How have you structured your investing? So you said you want it to look like a single family owner office, but at the same time there may be some customization that some of the families would like.

[Brett Barth]

Each individual family has a director responsible for that family on our client advisory team here they'll build the asset allocation and they'll say, okay, for this particular client, if we're going to have an allocation to merger arbitrage, here's the manager we're going to use. And that's sort of a matrix where the investment research team defines the rows by strategy and which managers are in it, where each family is a column. The difference being that we both inherit a lot of managers. We have a lot of sophisticated clients who source and we help vet their own managers so they don't necessarily have to use the manager we picked for each one of Those intersecting boxes. And for clients where access is a problem, it's a $5 million foundation. We're going to have only a few hundred thousand and absolute returning strategies will create a commingled vehicle. We've got clients who either go direct because they want to be customized or because they're big enough to go direct and will pull either smaller stuff or where clients are more interested in not dealing with the administrative headaches of going direct.

[Ted Seides]

Is there a model asset allocation framework that these client representatives start with?

[Brett Barth]

There is, and so they are guides, not rules. So there's no model portfolio.

[Ted Seides]

Just to give a sense of what do those look like across strategies?

[Brett Barth]

Sure. All else being equal, in public equities, we want to be about 50, 50 passive and active. On the long side, all else being equal, more aggressive strategies will own more private equity and more long only equity and less long short equity. More conservative strategies, more conservative portfolios, all else being equal, should own more bonds and less absent returning hedge funds as part of that stable returning, lower risk mix. As the person who oversees the investment management investment research process here, I actually look at how all of our money is invested on a roll up basis. I'd say about 65% of it is in higher returning, higher risk strategies. But for us that is still probably a modestly lower amount than most. If you looked at your average high Net Worth portfolio, 65% equities is probably about right. We're 65% higher risk strategies, but call it only roughly half of that in public equities.

[Ted Seides]

Let's dive in a little bit. As you said, most of your investing, if not all of it, is through third party managers almost exclusively.

[Brett Barth]

Yes.

[Ted Seides]

Where did they come from?

[Brett Barth]

Sure. We have a team of people here who do nothing but manager research and diligence. We meet over 2000 managers across the spectrum, literally from wireless spectrum to muni bond managers.

[Ted Seides]

It's 2,000 a year.

[Brett Barth]

A year. We've got thousands and thousands and thousands in our proprietary database here. Quite honestly, the research team meets every two weeks to talk about who'd you meet with and what's everyone working on.

[Ted Seides]

Let me ask you a question. Why do you need to meet 2,000 managers every year? That's a lot of new meetings.

[Brett Barth]

That is a lot of new meetings. It's interesting that you ask it that way because quite honestly I get the question the other way. If you were to hire a consultant, one of the pension consultants, Cambridge, etc. The world, I'm guessing the numbers, multiples of that if what you really wanted was a good database of understanding who all the peers are, what are all the options, tracking all the data. The number would actually be much, much bigger than that for us. Us, we're interested in doing a lot of meetings. We learn a lot about strategies that way. We meet as a team every two weeks just to talk about who people have met, what we're working on. I would say most of our ideas come from managers. You'll meet a manager who will talk about the interesting things they're doing in residential real estate. They probably aren't a manager you want to hire, but they'll tell you, hey, this is something that sounds like an interesting opportunity. We should learn more about it. Let's talk to other people who are involved in the space. Let's go find other managers that are either directly or tangentially involved, get their opinion. And so I think you learn a lot about by just talking to smart people all day about what they're doing and what they think is interesting. So there's a lot of value from those meetings. Even if we're going to hire 10 to 20 managers a year, that's a pretty small percentage of the folks you meet.

[Ted Seides]

What are the total number of managers that you'd consider core?

[Brett Barth]

We have about 50 public market managers that are core. Now, not everyone owns them all, but if you look from munis apps, returning hedge funds, active, long, only passive managers, et cetera. Private equity tends to proliferate because a commitment you made 10 years ago is still in the portfolio. How many privates? We probably have an equal number of private managers we've committed to over the years, but probably half of whom are at most are sort of active re ups today. But we have hundreds of managers, many hundreds of managers with whom we have $1 on behalf of one client because of things we've inherited and things we've done. My son's college roommate's hedge fund I'd like to invest in, et cetera, et cetera. And we're willing to be that customized.

[Ted Seides]

And will you and the team follow that one? $1 as much as one of your core allocations?

[Brett Barth]

We will absolutely follow it. I would say if it's a material investment for a client, absolutely the same way. What ends up happening is it's a small amount of money and the client's often indifferent. It's my son's roommate. He could be down 50%. I have $100,000 investment out of my $200 million net worth. We're not going to ever fire him.

[Ted Seides]

I've had that conversation with particularly a lot of former money managers who now have their own family offices and there's almost a bucket of these are relationship investments. They're not driven by returns we're never going to redeem. They're just people we know. And you almost separate that out from a normal due diligence.

[Brett Barth]

And to be fair, that's their prerogative. It's their money. We're here to give an opinion. And quite honestly, we'll often say this is not something we'd otherwise invest in. Usually it's this is perfectly fine to invest in, but our bar to make a new investment is a lot higher than it's fine and we'll oversee it.

[Ted Seides]

What do you think you have trained your team to do that gets at the kinds of decisions that you'd like to see?

[Brett Barth]

Sure. One, we put a huge premium on the quality of people and the consistency of process. So one of the things we do is we ask lots of people at the front firm the same question separately, even though you think you know the answer. Asking analysts over and over again, different ones, how do you interact with the portfolio manager? Asking the portfolio manager how you interact with the analysts, Are you getting the same answers? Are they talking about the same ideas? Are they sourcing them the same way? Are the things that they like and are getting in the portfolio have the same characteristics? Making sure that all of those people are not only incredible smart, incredibly knowledgeable, incredibly articulate and passionate about that, but that you're getting those same consistent answers. The other thing that we found very helpful is just given our networks, there shouldn't be anyone who's such a secret that I can't find at least three or four third party unprovided references where we can get very detailed, thoughtful opinions on those managers. Managers. If I can't do that and they can't all be positive, we can't make an investment where one of those is 50, 50 at best. We won't make an investment.

[Ted Seides]

That ties into your thought about quality of people. What are the temperament to such an important and difficult to measure quality of successful investment managers. How do you go about trying to figure out, first of all, what is the right quality? Quality of person? Because there's an obsession that some of these guys have that, well, I think.

[Brett Barth]

When I talk about quality of people, I mean that in the most basic sense of are they good people, Are they good partners? Do they treat me as someone who's their partner and whose money they're managing, or are they treating me as a Counterparty, Is it someone, when things are going poorly, that they are still wanting to get on the phone and discuss about what's going on poorly when they're ultimately successful? Are they pawning us off on their investor relations guy because they're too important to deal with me early on? There's no such thing as a good deal with bad partners. I firmly believe that. Do they view our relationship as a partnership and are they willing to be good partners? As it relates to temperament, I don't think there's one right answer. I think temperament and approach is one of the ways to get diversification. I'll get a question from a client or prospective client. If, if a stock's down, do you like managers who buy more or do you like managers who have stop losses and cut their losses? And the answer is yes, I like both. I want people with both approaches. But what's most important is the managers need to know their approach ahead of time and execute on it consistently.

[Ted Seides]

Yeah. Okay, so let's talk a little bit about the actual decision making process. So your team's out there doing work, you're assessing the quality of the managers, the consistency of their process, how they do the research, how good are they? And then ultimately someone has to make a decision. Who makes that decision at your firm?

[Brett Barth]

We have an investment committee here that is made up of all of the senior members of our investment research team as well as a number of other people around the firm.

[Ted Seides]

How many people total?

[Brett Barth]

There are nine people total on the committee and you need seven to vote yes to get an idea approved. Approved and separate of that, our chief compliance officer who oversees operational due diligence has a unilateral veto as well. So it's a high bar to get something.

[Ted Seides]

And then if you're investing in a money management firm and they told you, hey, for us to make a decision, we have nine people around the table and seven have to say yes. I was watching the most recent episode of Billions last night.

[Brett Barth]

I'm one episode behind, so no spoilers.

[Ted Seides]

No spoilers. But when you look at sort of the inner dynamics in any of the episodes of what happens in the DA's office, even these senior people with a great mission have this sort of jockeying for tit for tat. How am I going to get myself positioned to get what I want? So on that even on the research team, how do you think about seven people independently forming their own view, as opposed to the natural tendency of groups to want to coalesce, treat each other well? They are employees. Some if not all are partners. So how do you think about that decision making unit?

[Brett Barth]

That's a great question and it's actually something we've thought about a lot. And one of my partners, Todd Whiteneck, who manages the research team day to day, he and I have talked about that a lot. I think it's inherent in both structure and culture. First, from a structural perspective, all of the senior people are generalists. And so if you're a hammer, everything looks like a nail. If you're the private equity specialist, every investment problem has a solution that look like a private equity fund. From our perspective, all the senior people are generals. Now, people know more about certain areas than others. I've got partners on the team who are more expert in structured products. I've got other people who know more about private equity or macro or whatever it happens to be. But anyone can work on anything. And all the senior people are expected to be generalists. And so, one, it's not. I'm fighting for allocations for my area. Everyone thinks the whole portfolio is their area. Two, from a cultural perspective, this is a tough crowd. There are a lot of very smart, very intellectually curious people who are not along for the ride whenever we're discussing an investment idea. Usually earlier stages. If they're skeptical, you've got to get them on board pretty early just to make sure that your time's allocated to that project long before you get to invest committee. Because the scarcest resource we have is people's time. You meet all these managers, the question is, who do you go meet the second time and what do you go spend more time on? Unless you can convince folks that it's worth your time, which is again, a pretty high bar. It's not something we're going to meet a second time, third time, and start working more seriously on diligence.

[Ted Seides]

How have you, how have you improved the way you make decisions over time?

[Brett Barth]

Interesting. We think that there are two types of hiring mistakes you can make. One is you can hire a manager you wished you hadn't or make an investment you wished you hadn't or not make an investment you wished you had. And I would say we are comfortable with the latter and really uncomfortable with.

[Ted Seides]

The former, so fine with the error of omission.

[Brett Barth]

Right. And so one, I would say our bar has been constantly raised. One of the ways we measure are we making those decisions the right way is by tracking our turnover stats. You know, if you're firing 30, 40, 50% of your managers every year, you probably made a lot of bad Hiring decisions. And so on average our turnover has been about 15% a year. There's been years it's a little lower, a little higher. The highest number has been low 20s. The lowest number is high single digits. But we look at that data now. We do look at that data ex post. It's not the old GE where you fire the bottom 10% each year, but 15% a year means your average holds about seven years. That means our hiring bar is high enough.

[Ted Seides]

Two to the extent, by the way, does that change? Private equity is a different animal. But in the public manager managers, do you find the turnover is higher with a hedge fund manager?

[Brett Barth]

Yes, but marginally. I mean, quite often it's managers where it's smaller teams and so a key departure is more relevant or it's a smaller niche. And so asset growth is something that we're going to be less tolerant of or it's an opportunistic investment like something we want to be doing in Argentina or in a particular structured product niche that just happens to have played out.

[Ted Seides]

You mentioned small managers. Where do you guys like fishing?

[Brett Barth]

Sure. Tends to be earlier and smaller at the end of the day. Managers who are focused on earning a management fee and keeping assets and just not underperforming your average mutual fund whose job it is to never be below three or four Morningstar stars so that the 401k consultants never pull the money. I don't ever want to be there. And so we want to be in managers that are driven by performance. That might be performance fees, it might be their own money, it might just be their own ego. And actually I think the last just having the personality where success matters to them is a key characteristic. And you tend to find those folks a little bit earlier in their careers. We also have a bias to that. If you're going to be in active strategies, generally speaking, not always, but generally speaking, it's easier to turn $500 million into a billion. Although that's no small feat than $20 billion into $40 billion in terms of trying to find those inefficiencies. Lastly, I have two more points. One, if you want to be in a niche, those niches tend to be smaller and don't lend themselves to big managers. The point I was going to make as well as it relates to fees, we're in an environment where returns are hard to compensate come by that means when you can generate those returns, you want the highest quality folks. You don't want to just be in the lowest fee managers, but you want to pay as little as possible. One of the ways we do that is guys and gals who are earlier in their life cycle or smaller in their assets where our asset base makes a difference and we can accelerate them and get our pound of flesh and fees for that.

[Ted Seides]

One of the things we've seen from the Endowment foundation world is some of the now persistent performance leaders, The Yales, Princetons, MIT's, Bowdoins of the world, the CIOs have been there for a long time now. Yale, 30 plus years, you also have that benefit. You've been here now 17 years doing the same thing. Many of the people on your team have been with you for a long time and then you also have the capital behind you. This family capital is very long duration. How do you leverage those strengths in your investment process?

[Brett Barth]

Absolutely. I should bring you to my next prospect meeting because you laid it out perfectly. Being onshore, being long term, being thoughtful investor, makes us, I would argue, a preferred partner. By actually demonstrating that over 17 years we have a reputation of being that preferred partner. When someone's looking to launch and they don't want to meet with everyone and they want a handful of high quality investors, there's very few folks who are not on that list.

[Ted Seides]

What are those action steps that you've taken that demonstrate that over time?

[Brett Barth]

I would say the single biggest one goes back to our allocation philosophy, which is buying dips and selling rallies. We have managers who are closed, who are happy to take any amount of money from us over time. Because when they were losing assets and they were underperforming, we were adding money. Because all else being equal, we will only invest in things that are transparent. You have to be able to understand that the process hasn't changed, the people hasn't changed, the opportunity set hasn't changed. So if you're underperforming, it's just because there are periods of under and outperformance. The investment business is not a smooth business. If all the things you loved about a manager and the strategy and the people and the approach aren't changing and they're underperforming. Most folks pull money, we write checks. There are a handful of managers we've been with for years where they think we have been the best long term partners because we're the folks adding.

[Ted Seides]

One last investment question, we'll turn to some other things. Where are you finding the most exciting opportunities today?

[Brett Barth]

Interesting. I would say the most interesting things we're doing today are esoteric and off the run. There are a lot of folks in our business There's a lot of money looking for returns. Most things that are on the run, plain vanilla strategies that have a lot of capacity are quite crowded. And the return expectations are modest at best. I mentioned wireless spectrum. We've looked at international trade settlements, music royalties, things that are pre, institutional I would say are things that we're pretty excited about today.

[Ted Seides]

Talk about music royalties, that's a new one to me. What's the play?

[Brett Barth]

The play there is. It's both a yield and a growth investment. Historically these are like David Bowie bonds, very similar. But if you think about it, the music industry has been massively disrupted. That historically artists made money selling albums, cassettes, CDs, that doesn't exist anymore and that you make modest amounts, very modest amounts of money for streaming. And that the real incremental revenue to owning the intellectual property is from other uses, being in commercials, TVs, movies, things along those lines. A particular piece of music will generate generally a pretty consistent but not yield. You buy it based on the yield and then if you can manage that asset better, promote it, get it into television commercials where you get a royalty every time it's on. You can actually really radically increase the yield. So we've got a seasoned manager who's been in this space a long time.

[Ted Seides]

The space being the music space or the distribution space.

[Brett Barth]

Both the purchase of music royalties and the management of the musical intellectual property. I think merging those together in terms of sourcing, diligencing them and paying the right price and then not just being a passive financial investor, but actively managing the asset to increase the yield leads to some pretty interesting returns in today's environment. The other thing, by the way, just because I wanted to mention it, is we also think there are a lot of assets that fall between the cracks. That is, they used to be owned by hedge funds, but they're less liquid. And as hedge funds have put a big premium on liquidity, they can't own them. They're not high enough returning or plain vanilla enough to be private equity investments. The type of investments that used to be on Goldman Sachs or Morgan Stanley's balance sheet sheet back when they were 20, 30 times levered. But in a Dodd Frank world, they can't own things like non performing loans off of European bank balance sheets. We're talking about things that have a couple year duration, low double digit returns. We're finding that in all kinds of different asset classes that are really interesting today just because there's not a natural home for them. We've allocated quite a lot to that in the last year or two as well.

[Ted Seides]

On the flip side, what are you worried about the most these days?

[Brett Barth]

I worry about how the unwind of the post global financial crisis world is going to be. We now have a generation of investors who think interest rates are only low and that central banks are always there to bail them out. I don't think that's always going to be the case. I think in general as. As that changes, it's probably a buying opportunity. Generally speaking, I think any modest correction is a buying opportunity. We've actually done some really interesting work on that in the last month or so in terms of when do you want to be overweight potentially or when do you want to be underweight. But if people. That is folks on the buy side. This is a young man's game. Younger than you and me these days. And they just haven't seen they weren't even in business in.08 nine years ago. Now what happens when interest rates are 4, 5, 6%? That's a pretty high hurdle to own. A different, more aggressive strategy where today people are willing to take some, I would argue crazy risks to generate a 6% return in high yield in other places. That's going to be a regime change that could really scare a lot of folks.

[Ted Seides]

All right. I always like to do a set of closing questions. They're going to vary from episode to episode, but here you go. What's your favorite thing to do? That's a complete waste of time.

[Brett Barth]

Play flight simulator with my sons.

[Ted Seides]

Wow.

[Brett Barth]

You sit there and you fly a plane from airport to airport and it's. It's interesting. They both love it. I love doing it with them.

[Ted Seides]

Is that a computer game or X.

[Brett Barth]

Plane for the Mac?

[Ted Seides]

X plane for the Mac. There you go. Wow. That's a good one.

[Brett Barth]

But I'm. Those are hours I'll never get back.

[Ted Seides]

That's true.

[Brett Barth]

But it's high quality time with my sons.

[Ted Seides]

What's your favorite or most disappointing recent purchase?

[Brett Barth]

I'm not a big purchaser. Oh. I just bought new Sperry Dock siders that you don't have to tie no laces. I'm very excited about this.

[Ted Seides]

But in the middle of winter. It's contrarian. But there you go.

[Brett Barth]

It's springtime. Summer is coming.

[Ted Seides]

Okay, what do you know now that you wish you knew 10 years ago?

[Brett Barth]

As your business grows, the demands on your time versus how you'd like to spend your time investing. I'm not sure I answered that well, but I would say my biggest work challenge today is that I like to be an investor. I think my highest invest use is focusing on being an investor and driving results for clients. Ten years ago we had a business where I could spend most of my doing that and it wasn't a challenge to carve out that time that as the number of employees grows, numbers of clients grow, just the issues of running a business grow. How much effort I need to make to carve out time to do that.

[Ted Seides]

And how about anything about life in life? What do you know now that you Wish you knew 10 years ago how.

[Brett Barth]

Fast it goes and particularly as it relates to my twin boys. Back to twins who are 11, although they would argue they are almost 12 and would correct me. But Shutterfly does this really neat thing where they will send you an email saying on this day eight years ago, on this day 10 years ago ago, this happened. Facebook and my wife's done a great job of making Shutterfly albums over the years. So we get a lot of Shutterfly emails and just I can't believe it was seven years ago that my kids looked like this or it was 10 years ago today that we were doing that. It's incredible how quick time flies, particularly as it relates to quality time with my kids.

[Ted Seides]

Okay, so in your waning days, you're now 100 years old, sitting in your very sturdy rocky cheer. For me especially, what advice would you give yourself looking back on your life again?

[Brett Barth]

How you spend your time is really important and that time is the most fleeting of all assets and you should spend it on things that you really enjoy and at which you're the most productive.

[Ted Seides]

Fantastic. Brett, so much fun. Thanks so much.

[Brett Barth]

Thanks for including. This has been great tech.

[Ted Seides]

Thanks for listening to this episode.

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