The Investor with Joel Palathinkal

Guest: Rick Pederson, Vice Chairman and Chief Strategy Officer at Bow River Capital
Date: December 15, 2025

Overview

This episode features a deep-dive conversation between Dr. Joel Palathinkal and Rick Pederson, a seasoned institutional investor and strategy leader at Bow River Capital. The discussion covers Rick’s unconventional career path, his insights into asset management, the evolution of institutional LP relationships, and key trends shaping private asset investing today. Rick emphasizes opportunism, cross-disciplinary expertise, the importance of culture in investment teams, and how curiosity and ethics have shaped his career.

Rick Pederson’s Early Journey

Unplanned Beginnings & Embracing Uncertainty

• Rick describes his youth as anything but focused on business:

  “Not only did I not know what asset management was, I didn't even know what business was when I came out of high school.” (02:20; Rick)

• He recounts choosing business school largely by default, guided toward personal growth over clear career intentions, and highlights the value of a generalist mindset.

  “My career has not been necessarily goal oriented in the long run. It's been very much opportunistic in the short run.” (02:54; Rick)

Key Takeaways for Young Professionals

• Rick advises early-career individuals not to worry about making perfect decisions or having clear long-term goals:

  “Do not make the perfect decision early on because the circumstances change and your career path is likely to do that as well.” (02:54; Rick)

• He emphasizes curiosity and accepting discomfort as foundational to professional growth.

  “The more uncomfortable I was, Joel, the more comfortable I was...” (07:45; Rick)

Consulting Foundations and Problem-Solving

Early Consulting Experience

• Rick’s first roles at Harbridge House (Har House) exposed him to high-stakes, rapid learning assignments:

  “My definition of handling change is being invited to or forced to become an expert very quickly…I thrived on the next assignment, the big assignment…It was personal curiosity. It was knowledge acquisition.” (07:09; Rick)

Transition to Real Estate and Macro Thinking

• Noticing a consulting niche in "the hard side of balance sheets" (i.e., real estate), Rick pivoted to establish his own firm and built expertise through hands-on client challenges:

  "You have to be a micro and a macro expert simultaneously to be effective..." (11:11; Rick)

• He managed major international projects (Hewlett Packard, Whirlpool), highlighting the need to master both granular financials and broader economic, political, and policy contexts.

The Evolution of LP and Endowment Relationships

Fund Structures and Industry Shifts

• Rick describes a major transformation in how endowments and foundations work with managers today:

  “All of these entities are represented by large consultants…The allocation policies are significant. But something also occurred…Yale University and David Swensen began investing heavily in private assets…It was revolutionary…” (14:18; Rick)

Challenges for Small Managers

• Gatekeepers dominate access—often defaulting to established, “safe” firms:

  “Gatekeepers will often take the safe route... As a small advisor, it's more difficult to be noticed.” (17:27; Rick)

• He outlines the complexities of selecting private asset strategies and cycles, cautioning against one-size-fits-all thinking for private investments.

Real Estate Investment Lessons

• Real estate funds, he notes, must balance short-term capital appreciation against long-term income strategies:

  “There are two ways to make money in real estate—in the very short term, capital appreciation. In the longer term, income plus capital appreciation.” (19:02; Rick)

Insights on Fund Cycles, Manager Selection, and LP Tactics

Navigating Fund Lifecycles

• Joel and Rick discuss why larger LPs avoid Fund 1s and often focus on Fund 3s after performance patterns emerge:

  “You need to understand manager competence and it takes a couple of funds to do that.” (24:11; Rick)

Emerging Managers and Track Record Creation

• Despite risk, Rick supports early-stage manager acceleration and track record building via single-asset investments or angel activity:

  “Every good investor has some pedigree, some track record. …You’re building a track record by doing that.” (30:24; Rick)

Learning from Failures

• Rick stresses analyzing failures as a foundation for firm culture and manager selection:

  “If I'm a limited partner, I'm going to look at that point just as you say—what happened in the investment that didn't work?... I want to gauge the strength, the competence of a manager based upon how they do when they don't do well.” (33:08; Rick)

Strategy, Communication, and Team-Building

About Bow River Capital and Internal Dynamics

• As Chief Strategy Officer, Rick’s key role is integrating specialist teams and promoting cross-pollination across asset types:

  “…My job in part is to make certain that these groups of experts...are talking with one another.” (25:32; Rick)

Building Effective Teams

• Beyond technical skill, Rick looks for “well-rounded” candidates with macro awareness and strong communication—the latter often being the differentiator:

  “…You can be the spreadsheet king of the world, but if you can't communicate the results of that, it isn't effective.” (41:38; Rick)

Leadership and Culture

• Rick’s preferred leadership style is grounded in “competence, humility, and transparency.”

  “…Leadership has to be, in my view, equal parts competence, humility and transparency.” (44:28; Rick)

• He encourages young leaders to welcome discomfort, seek feedback, and invite transparent, constructive dissent.

Market Trends and Macro Perspectives

AI and Data Center Boom

• Investing in the “Rodeo Region” (central U.S.), Bow River is capitalizing on surging AI infrastructure demand:

  “One particular angle on AI that we're interested in...is…infrastructure investment in AI and data centers. …More than half are being built in quote, the rodeo region.” (35:04; Rick)

• This shift is driving not only tech investment but secondary industries—trades, skilled labor, and community education partnerships:

  “Employers themselves are recognizing that they're going to have to not wait in some cases for the educational platform…they are accelerating that by their own investment.” (38:30; Rick)

U.S.-Centric View, Global Context

• Bow River remains U.S.-focused, with Rick “relatively sanguine” about the domestic economy—even as overseas investors show caution:

  “I worry a bit about the fact that we have had this long period of time without a recession…downturns are sometimes healthy…” (53:30; Rick)

For LPs: Building Better Allocator Practices

• Smaller and mid-sized LPs who make the effort to build direct relationships with managers, understand team cultures, and move beyond just performance data reap the most benefit:

  “Our best investors are the ones who understand us the best—who get to know us, we get to know them. It’s a true partnership…We do all of our fundraising internally...so we develop relationships.” (47:41; Rick)

Notable Quotes & Memorable Moments

• On career serendipity:

  “In the last 40 years, I've never been exactly sure what the next step was going to be, and it served me well.” (02:20; Rick)

• On discomfort as a driver:

  “The more uncomfortable I was, Joel, the more comfortable I was in the sense that if the challenge wasn't in front of me, I felt as if I wasn't productive, I wasn't learning.” (07:45; Rick)

• On being both micro and macro savvy:

  “…If you're not able to put that in the context of the macro environment…it’s suboptimal. And so you have to be a micro and a macro expert simultaneously to be effective, I think.” (11:11; Rick)

• On private asset strategy:

  “A perpetual type of investment in real estate must rely on income in the long run…sometimes seven and ten year strategies just don’t work.” (19:02; Rick)

• On manager evaluation:

  “You can't be afraid to be wrong en route to getting better. And that has this…transparency and humility elements that…are important to leadership, but they're important to all levels of any organization.” (44:28; Rick)

• On building a track record:

  “Everyone has the right and ability to create their own track record and their own pedigree. And a pedigree doesn’t need to be that you…grew up in the country club.” (32:04; Joel; paraphrased by Rick)

• Parting wisdom:

  “Always maintain your curiosity and follow through…don't be afraid to be uncomfortable…do the right thing…It comes back to the ethics of investing…” (55:32; Rick)

Key Timestamps

• 02:20 — Rick’s early uncertainty and opportunism
• 07:09 — Rapid learning & thriving in discomfort as a consultant
• 11:11 — The need for simultaneous micro/macro expertise
• 14:18 — The David Swensen revolution & the new world for endowments
• 17:27 — Consultants and the “gatekeeper” challenge for small managers
• 19:02 — Differing real estate strategies: short vs. long-term gains
• 24:02 — Why LPs wait for Fund 3, and manager selection best practices
• 30:24 — Advice and risk assessment for emerging managers
• 33:08 — Importance of learning from failure & building culture
• 35:04 — AI infrastructure, the data center boom, and the Rodeo Region
• 39:51 — Building and motivating teams, the value of communication skills
• 44:28 — Leadership styles: humility, transparency, and point-of-view
• 47:41 — How the best LPs engage with managers and add value
• 53:30 — U.S. economic resilience and the risk of “too good” periods
• 55:32 — Final advice: Curiosity and always doing the right thing

Tone

The conversation is thoughtful, direct, and candid, blending personal reflection with practical, actionable advice—underscored by Rick’s humility and depth of experience. Both Rick and Joel maintain an accessible, sometimes humorous, professional tone throughout.