Conversations with Tyler: Gaurav Kapadia on New York City, Investing, and Contemporary Art

Date: December 10, 2025
Guest: Gaurav Kapadia
Host: Tyler Cowen

Episode Overview

In this wide-ranging episode, Tyler Cowen welcomes Gaurav Kapadia, founder of XN, generational investor, art collector, and New Yorker deeply involved in the city’s civic and cultural life. The conversation explores New York City’s evolution, urban infrastructure, the dynamics of investing, the philosophy of collecting contemporary art, AI in finance and museums, the craft of building organizations, and the optimism necessary for civic renewal.

Key Discussion Points & Insights

1. New York City: Evolution, Infrastructure, and Identity

• Queens' Growth Without New Infrastructure
  • Kapadia attributes Queens’ economic growth to its proximity to Manhattan and development around existing transit hubs (like the 7 train).
    • “Around transit hubs, you end up having a lot of development. Flushing is one of the closest outer cities in an outer borough to Manhattan.” (03:58)
• Building Density & Housing Policy
  • Kapadia advocates for increased residential density and new housing construction to address affordability and growth.
    • “Increasing density would be the best thing to do.” (04:43)
• Urban Borders & Identity
  • Discusses the artificial boundaries of NYC boroughs and why the city’s structure, while odd, may be more logical than urban sprawl elsewhere.
  • “The five boroughs have a great deal of both identity but connectivity to one another.” (06:18)

2. City Scale, Economic Balance, and Political Dynamics

• Should NYC Seek to Grow or Spread Out More?
  • Kapadia argues America would benefit more from strengthened middle-American cities rather than growing NYC further.
    • “Higher GDP across America would serve all of America well. New York's pretty crowded as it is.” (07:20)
• Robert Moses: Hero or Villain?
  • Both, but Kapadia leans toward criticism due to Moses’ lack of due process and lasting challenges for infrastructure projects.
    • “The lack of due process...is starting to show in where infrastructure is built, ability to expand, etc.” (07:44)
• NYC’s Fiscal Base: Is It Fragile?
  • Myth-busting the idea that only a handful of taxpayers sustain NYC:
    • “New York is amazing because it is the only major city in America that's not a company town…there is much more of a stable base than people realize.” (09:04)

3. Governance, Mayors, and Optimism

• Most Underrated NYC Mayor: Mike Bloomberg
  • “The amount of impact that he's had on the city is extremely high... his popularity is actually quite low.” (10:16)
• Encouraging Stronger Mayoral Candidates
  • Kapadia highlights awkward election timing and low-turnout primaries as barriers to talent attracting the mayoral race.
    • Suggests moving primaries to even-numbered years and open primaries. (12:41)
• What Makes a Good Mayor?
  • “Optimism. Extraordinarily scarce. At the end of the day, people are attracted to optimism.” (12:49)

4. Investing: Philosophy, Process, & Mentorship

• Early Investment Lessons

  • Learned through curiosity, early hands-on property management, and carefully chosen mentors.
    • “I thought I was way better than I was [at 23]...I was lucky the mentors picked me.” (14:47, 15:50)

• Career Decisions & Building Perspective

  • Choosing Boston Consulting Group over standard finance tracks shaped his understanding of real-world businesses.
    • “I realized I didn't really know how the world worked…I took it as a detour on purpose to learn more.” (16:57)

• XN’s Investment Approach

  • Highly concentrated: rarely more than 10–15 positions; focus on public investments with bounded downside and unbounded upside.
    • “There are very few good ideas…We concentrate capital.” (19:32)
  • Sectors like healthcare are avoided due to lack of sector expertise and competitive edge. (20:02)

• Process Over Outcome

  • On missed investments:
    • "There are way more mistakes than wins. You almost need to be comfortable with that from the outset." (23:10)
    • Focus is on strong process, not fear of missing out.

5. Founder Energy & Company Culture

• Entrepreneurial Culture in Investing

  • Founder mentality and a commitment to reinvention are vital to staying sharp.
    • “The best investment organizations are obviously entrepreneurial.” (24:48)
  • Rigorous, truth-telling environment; deliberate about hiring for both intellect and a unique spark, not just resumes and GPAs.
    • “We look for like that extra spark, that extra gear, that extra curiosity…at every position at the firm.” (26:44–27:45)

• Open Office Dynamics

  • Open-plan office fosters cross-pollination of ideas, necessary for modern interconnected investing.
    • “It allows the organization to use the Socratic method, talk to one another, create sparks of curiosity.” (27:51)

6. Global Financial Culture & AI’s Transformative Potential

• New York vs. London vs. UAE Finance
  • New York: “swashbuckling,” risk-taking; London: “a little more buttoned up and much more banker like.” UAE: rapid talent and wealth influx. (29:58–31:39)
• AI’s Impact on Finance & Beyond
  • AI will soon speed up core analysis and improve compliance, admin, and legal functions.
    • “I’m pretty optimistic as to what AI can do in an investment organization…better, faster, more in depth analysis, much more quickly.” (31:48)
    • Most investment organizations won’t innovate; founder-driven ones will.
• Personal Use of AI
  • Using AI as an “augmenter” – replaces his previous practice of hiring subject tutors to rapidly acquire knowledge. (35:08)

7. Contemporary Art: Collecting, Museums, and the Canon

• Museums as Public Goods

  • Museums mostly run deficits, operate as public goods backed by private capital. Biggest fundraising flaw: allowing donor influence to override mission.
    • “That is the biggest mistake...over time they always regret it.” (36:44–38:12)

• Art Display & Digital Opportunities

  • Most museum works are in storage; there's opportunity in new digital and physical formats for exhibitions. Praises the V&A’s storage-as-museum concept. (38:20–39:16)

• AI in Museums

  • AI/AR will individualize museum tours and improve multi-lingual, contextual experiences.
    • “You can use AR+AI to understand the context of work much more broadly.” (39:22)

• Judgment, Taste, and Connoisseurship

  • Collecting art is about developing judgment and taste—a practice that strengthens investment decisions.
    • “Art collecting, or any collecting…forces you to really examine what's important, to really examine what makes something outstanding.” (44:00)

• Artists Discussed

  • Kara Walker: “Meticulously crafted, so clear what the point is, and beautifully put together. Even though it's a complicated subject matter, it's visually arresting.” (41:08)
  • Rashid Johnson: “His work is visually arresting, so intellectually complex that it stays with you…He’s pushing his practice, making himself uncomfortable.” (41:42)
  • Salman Toor: “Technically one of the most talented painters ever...He paints and draws entirely from memory.” (44:50)

• Art Market “Arbitrage”

  • Sees contemporary market in a 'mega reset'. The best pursuit is not searching for bargains, but following personal engagement and taste. (51:12–52:34)

• What Contemporary Art Skeptics Miss

  • Many Silicon Valley types don’t “get” contemporary art; over time, appreciation may develop.
    • “Not everyone needs to like everything, which is like the most important thing.” (52:46)

8. New Projects & The Craft of Craft

• TOTĒ: Celebrating Craft and Craftsmanship
  • Launching a digital and physical magazine focused on people who take great pride and effort in their craft, broadly defined.
    • “I wanted to create a forum to make sure a lot of craft…getting really good at something in a very broad way.” (54:23)

9. Optimism for America and Learning New Things

• Pessimism in Public, Optimism in Potential

  • Despite widespread pessimism post-pandemic—especially about youth, art, and reading—Kapadia believes America is at a positive inflection point.
    • “I think you're at a positive inflection point…” (57:11)

• Next Intellectual Challenge

  • Wants to understand more about practical policy, “how the guts of things get done in local, statewide, and federal government,” echoing the legacy of Robert Moses but searching for ethical civil execution. (58:39)

Notable Quotes & Memorable Moments

• “My goal in everything, and this goes well beyond investing, is to be the best at what we do.” – Gaurav Kapadia (20:02)
• “Optimism…is the most underrated quality that one will need [for a NYC mayor].” – Gaurav Kapadia (12:51)
• “There are way more mistakes than wins. You almost need to be comfortable with that from the outset.” – Gaurav Kapadia on investing (23:10)
• “The best investment organizations are obviously entrepreneurial.” – Gaurav Kapadia (24:48)
• “I do think there's probably a tremendous…whole amazing group of white male artists that are probably overlooked and there’s huge values, if you care about that.” – Gaurav Kapadia (52:05)
• “Art collecting, or any collecting…forces you to really examine what's important, to really examine what makes something outstanding…to develop your own [taste].” – Gaurav Kapadia (44:00)
• “There's a shocking amount of aggregate pessimism everywhere right now. I think…there's huge reasons for optimism, especially as an American.” – Gaurav Kapadia (57:11)

Timestamps for Important Segments

• [03:45] — Discussion of Queens’ growth, infrastructure, and the value of density
• [07:36] — Robert Moses & city planning, due process vs. power
• [10:16] — The most underrated NYC mayor: Bloomberg
• [12:41] — Why top mayoral candidates don’t run; the importance of election timing and optimism in leadership
• [14:47] — Early experience in real estate and on-the-ground investing lessons
• [19:32] — The philosophy behind running a concentrated investment fund
• [24:47] — Founder energy and its importance in investment organizations
• [31:48] — How AI will change investing work and compliance
• [36:44] — The true financial model of museums and public goods
• [39:22] — Use cases for AI in museums (personalized and translated tours)
• [44:00] — How art collecting shapes investment judgment
• [54:23] — Introduction of the new 'Totē' magazine celebrating craft
• [57:11] — Societal pessimism versus optimism and America’s potential

Summary

This episode paints a portrait of Gaurav Kapadia as a deeply thoughtful investor, builder, and cultural participant with a unique blend of optimism, intellectual curiosity, and dedication to excellence. The conversation moves fluidly from the structural specifics of New York City and the philosophy of governance, to how judgment and taste cross boundaries between investing and the arts, to the promise of AI and the celebration of craft. Both host and guest champion openness—of mind, of culture, and of society—while candidly unpacking the challenges and possibilities facing cities, institutions, and individuals.

This summary captures the core substance and vibrant tone of the episode, with key quotes and timestamps for accessible reference.