Podcast Summary: "Do Relationships Drive Financial Returns?" featuring Jeremy Heer

Episode E138 of "How I Invest with David Weisburd", released on February 14, 2025, delves into the critical role that relationships play in achieving superior financial returns. Host David Weisburd engages with Jeremy Heer, an esteemed investment professional, to explore the dynamics of networking, the essence of super connectors, and strategic investment insights, particularly focusing on the nuclear energy sector.

1. Understanding Super Connectors

Defining Super Connectors

The conversation begins with an exploration of what constitutes a "Super Connector." Jeremy Heer emphasizes that super connectors possess a "large network of interesting people" and have a "broad knowledge of who's who" across various industries and sectors.

Jeremy Heer [00:03]: "A large network of interesting people. Broad knowledge of who's who across a given industry, a given vertical, a given subject matter, and really just the ability to make connections and bring people together and the willingness to do that."

Unique Skills and Worldviews

Super connectors are described as individuals who maintain extensive relationships, remember personal details, and engage meaningfully over time. Their ability to recall past conversations and follow up on them fosters deeper connections.

Jeremy Heer [00:30]: "They're able to maintain relationships across a large number of people and to connect with them on some level. They usually have very good recall of names, faces, places... I remember a year ago we talked about X. You know, how did that turn out?"

2. Traits and Skills of Super Connectors

Jeremy elaborates on the unique attributes that make super connectors indispensable in the investment landscape. Their memorability stems from personal storytelling and authentic engagement, allowing them to leave lasting impressions without relying on superficial traits like attire or tattoos.

Jeremy Heer [06:04]: "Part of it is being willing to put yourself out there a little bit. You mentioned storytelling. I think storytelling is a great way to connect with people."

He underscores the importance of balancing personal authenticity with business relevance, facilitating connections on multiple levels.

Jeremy Heer [06:54]: "I think it's the people who are the best at this can do that, and they can form that connection with people on both levels."

3. Non-Financial Drives Behind Super Connectors

Jeremy discusses the altruistic motivations that drive many super connectors. Their dedication to fostering beneficial relationships often stems from a desire to contribute positively to the world, anticipating that these actions will reciprocate in various forms.

Jeremy Heer [04:37]: "Non financial is a great way to put it. They're just driven by providing good in the world a lot of the time and they know that that's going to come back to them in some form or some function."

He aptly describes this motivation as "strategic people pleasing," highlighting the intentional and purposeful nature of their networking efforts.

Jeremy Heer [04:52]: "I love that and I think that's exactly right. ... I like to be out there and meeting people and making kind of random connections and, you know, giving out to the world."

4. Networking Strategies and Best Practices at Conferences

A significant portion of the discussion focuses on effective networking strategies, particularly in the context of attending conferences. Jeremy Heer shares his approach to maximizing the value derived from such events.

Preparation is Key

He emphasizes the importance of "doing your homework," which includes reviewing attendee lists and identifying potential connections in advance.

Jeremy Heer [08:44]: "Usually I've done homework. I've seen an attendee list or at least a list of firms attending. So I kind of have an idea of who's going to be there."

Embracing Stochastic Networking

Jeremy introduces the concept of "stochastic networking," where serendipitous encounters at conferences lead to valuable connections. He advocates for a balance between structured preparation and leaving room for unexpected interactions.

Jeremy Heer [07:14]: "I call it stochastic networking, where there's a random component. Sometimes you make connections with new people because they happen to know people that, you know."

Maximizing Engagement

He advises attendees to actively engage during networking breaks and utilize conference-specific messaging apps to arrange meetings with desired contacts.

Jeremy Heer [09:40]: "There are best practices. Number one is obviously do your homework... You have to remember that... everybody's in the same boat you are. So it's okay to just go up and talk to somebody randomly."

5. Investment Insights: The Case for Nuclear Energy

Jeremy Heer shares his investment thesis on nuclear energy, highlighting its potential as a robust energy source despite current challenges.

Advantages of Nuclear Energy

He asserts that nuclear energy offers the highest "energy return on energy invested" among various energy sources and provides reliable baseload power, which intermittent sources like solar and wind cannot consistently offer.

Jeremy Heer [10:42]: "I think it's the best source of energy out there. It provides baseload power. The energy return on energy invested is the highest of all the different energy sources by a decent amount."

Challenges and Innovations

However, he notes the "long investment cycle" and regulatory hurdles that deter capital investment. Jeremy remains optimistic about advancements such as small modular reactors and believes these innovations, along with increased competition, may herald a renaissance in the nuclear sector.

Jeremy Heer [11:45]: "You have new designs, you have these small modular reactors and you have projected energy demands... I'm hopeful around this."

Addressing Nuclear PR and Safety Concerns

Jeremy acknowledges the poor public perception of nuclear energy and addresses concerns related to its potential weaponization. He points out that newer reactor designs use less enriched uranium, reducing the risk of weaponization, and weighs the probabilities and magnitudes of such risks against the benefits.

Jeremy Heer [13:00]: "Nuclear has the worst PR of any industry ever... And you have to probability weight it, but you also have to think about the magnitude of the effect."

6. Jeremy Heer's Experience at the University of Chicago

Reflecting on his tenure at one of the world's top endowments, Jeremy Heer recounts his initial challenges and the profound learning experiences that shaped his investment philosophy.

Learning the Ropes

Upon joining the University of Chicago, Jeremy had limited knowledge of endowment and foundation investing. His early projects involved Monte Carlo simulations to assess financial risks and illustrate potential outcomes for the university's endowment.

Jeremy Heer [15:02]: "My first few projects involved Monte Carlo simulations of the University's financials based on capital market drivers like growth and inflation."

Collaboration and Teamwork

He highlights the importance of working within a large investment team, navigating the complexities of private equity, venture capital, and hedge funds, and understanding the diverse perspectives of an investment committee.

Jeremy Heer [16:34]: "Learned how to work within a large investment team and try to, you know, find common ground among different people."

7. Role at the University of Illinois Foundation

Jeremy Heer discusses his unique position as the head of Investment Research and Engagement at the University of Illinois Foundation, a role designed to focus exclusively on relationship building.

Vision Behind the Role

Created by CIO Travis Shore, the position aims to generate excess returns by fostering connections that might otherwise be inaccessible. This specialized focus allows for proactive idea generation and broadens the foundation's investment opportunities.

Jeremy Heer [17:15]: "Travis thinks that there's an efficiency gain from having somebody who's just focused on that. He thinks that it'll get us into things that other places may not get into, and that those should provide excess returns above and beyond the sorts of things you get just from being good."

Pioneering a Generalist Model

Heer appreciates the flexibility of a generalist approach, allowing the foundation to venture into emerging asset classes early, thereby capturing potential high returns before the market fully recognizes the opportunities.

Jeremy Heer [18:17]: "Having somebody being the tip of the spear and going out there and being an idea generator and a searcher and a hunter, that increases your probabilities of getting there."

8. Reflections and Long-Term Value Addition

In concluding the conversation, Jeremy Heer reflects on the challenges of his role, emphasizing the importance of patience and the long-term nature of adding value through strategic relationships.

Jeremy Heer [19:08]: "The value of my role is very long run and it's got to be very... It has to be very patient."

He acknowledges that the impact of relationship-driven strategies may not be immediately measurable but believes in their profound long-term benefits.

Notable Quotes

• Jeremy Heer [00:03]: "A large network of interesting people. Broad knowledge of who's who across a given industry..."
• Jeremy Heer [04:48]: "I love that and I think that's exactly right... giving out to the world."
• Jeremy Heer [06:04]: "Part of it is being willing to put yourself out there a little bit. You mentioned storytelling."
• Jeremy Heer [10:42]: "I think it's the best source of energy out there. It provides baseload power."
• Jeremy Heer [17:15]: "Travis thinks that there's an efficiency gain from having somebody who's just focused on that."

Conclusion

This episode of "How I Invest with David Weisburd" underscores the pivotal role of relationships in driving financial success. Through Jeremy Heer's experiences and insights, listeners gain a comprehensive understanding of the art of networking, the strategic importance of super connectors, and thoughtful investment approaches in sectors like nuclear energy. The discussion reinforces the notion that cultivating meaningful relationships is not just a peripheral activity but a central strategy in achieving top-tier investment returns.