Paul Rubens' Blueprint for Global Investment Strategy

Embark on a journey with me, Dylan Burke, as we traverse the globe from the Bay Area to the pulsating heart of Asia's financial markets. Our guide through this landscape is none other than Paul Rubens, the visionary behind Tamarack Investment Partners, who recounts his unexpected detour from a future in law to a career amidst Taiwan's burgeoning investment scene post-martial law. Sit back and absorb Paul's tales from the trenches of the investment trust industry, his strategic pivot towards business development, and the inception of his firm, which now stands as a bridge connecting North American institutional investors to expert Asia-based managers.

The conversation takes a turn as we confront the escalating tensions with China, and Paul lays out why putting all investment eggs in one basket is no longer a viable option. He illuminates the path to spreading economic roots through Japanese, Indian, and ASEAN markets, advocating for the fortitude of diversification. On the horizon for Tamarack Investment Partners is a future gilded with growth, the pursuit of new mandates, and the exciting possibility of partnership with US-based managers. While Paul remains cautious about jumping onto the AI bandwagon for fostering nuanced investor relations, his forward-thinking approach ensures that the pulse of Tamarack Investment Partners remains strong and ready to tackle the financial frontiers ahead.

Transcript

Speaker 1: 0:03

Hey everyone, welcome back to the growing Lean podcast sponsored by Lean Discovery Group, an award-winning software development firm based out of Virginia. This is your host, dylan Burke, also known as Deige. I am happy to be here today with Paul Rubens, founder and CEO of Tamarack Investment Partners. Welcome, paul.

Speaker 2: 0:22

Thanks very much, dylan. Pleasure to be here to talk to you today, yeah.

Speaker 1: 0:26

Yeah, Thank you for your time. So I'm going to get us started and tell us a little bit about your history, your background and how you got into the business you're in today.

Speaker 2: 0:37

Good thing. You know I'm native of the San Francisco Bay Area. I guess my grandparents are from here. My parents, my grandparents and I grew up, you know, in the peninsula. I went to school locally at Santa Clara. I thought I was going to go to law school, like my father was a partner at a big Bay Area law firm and my brother had entered law school and, as it turned out, there came an opportunity to go to Asia and, you know, at a pretty young age age 24, actually went out there, originally to help my dad's law firm expand into Asia and I was supposed to be that person on the ground arranging meetings, doing some different business initiatives for the firm, but then also to have my own, you know, presence. I wasn't. I went out there with not a lot of preparation in retrospect, you know having to arrange visas after arriving, things like that needing sponsorship but those early experiences were certainly very valuable.

Speaker 2: 1:44

It was only after I left Hong Kong that I got into the investor management business and when I moved to Taiwan on a friend suggestion this was just after Taiwan had lifted martial law back in the late 80s to move up there and to learn, you know, mandarin, and when the economy opens up, you'd be in demand. And so I started going back and forth between Hong Kong and Taiwan and then was hired by one of the four investment trust companies regulated regulated industry at that time. But it was a joint venture at that time with China Development Corporation, the local development bank. And then Merrill Lynch was in there, fidelity, bangkok Bank and Yamiche. So this is a time, very early days, when Merrill Lynch, fidelity would have had joint ventures in that market. That's how I got into the business.

Speaker 2: 2:35

It was really to come in as a special assistant to the president, using my English you know undergrad, my pre-law, undergrad work and being able to communicate with investors overseas. We had the Taiwan Fund Inc that we managed in that out of that office and so overseas investors wanted some market commentary. But it was a great intro into the business. You know I was secretary to the board of directors, had to write up all the notes and I wrote speeches for the president.

Speaker 2: 3:08

He was a well-known figure in Taiwan. His father was the ambassador to Singapore and you know he was. He gave speeches on the development of the capital markets and so I mean it was interesting how I was able to gain exposure to all those areas, being sort of the only foreigner you know, in the company of about 30 people only American in there, and I was able to get you know those experiences. But then you know, I had the option of being put on a portfolio and being more of an analyst or portfolio manager or continuing on the business side and I kind of decided that that was more my calling. So I stayed more on the business development side and that's what led me to, you know, continue in that area for the rest of my career, kind of on the on the sell side of investment management, I guess you'd say.

Speaker 1: 4:03

Okay, amazing, I love the history there, and could you maybe walk us through your overall business strategy?

Speaker 2: 4:11

Sure, we are looking to connect institutional investors, in North America primarily, but recently we've been reaching in other areas of the world the Middle East, south America, in Europe where we're able to, on a regulatory side, but to really build relationships, get to know their needs and then connect them with Asia-based investment managers that are mostly in liquid markets liquid alternatives that might be long, only absolute return, but more often they're hedge funds employing a wide range of strategies and we work with both single strategy managers and then also multi-manager solutions that put together the solutions for people looking for that exposure in Asia, somebody on the ground and we, knowing those managers for 20 years plus. We have selected what we think is the best way to provide that capability and our strategy is really to be a source of information on Asia and help facilitate due diligence on the managers at an independent, arms-like basis and then to be a source of ideas and really to meet that need for that exposure in a quality kind of way.

Speaker 1: 5:35

Okay, amazing. And have you learned any foreign languages in your time doing this?

Speaker 2: 5:42

Yeah, so I lived in Taiwan for four years. I lived there twice, for two years each. The second time I went back as a CEO of Far Eastern Alliance Asset Management. I did have formal lessons. The first time I went it was more listening to the sounds. But then I lived in Japan for eight years and started studying by a kumon. I don't know if you've ever heard of kumon. It's a fern bull. You could do math lessons. It's like a kid's learning company education. They do mostly math and other languages, but they also, if you were living in Japan, they would give you a sort of correspondence course and that's how I learned Japanese. You know hiragana, katakana, some kanji. It comes in handy. I speak Mandarin with a Taiwanese accent, so that's kind of funny. People have told me that, but I don't speak Vietnamese, even though I went to Vietnam a lot.

Speaker 2: 6:43

didn't really learn much Vietnamese, no that's amazing.

Speaker 1: 6:47

I love to hear it. And how have you adapted to changes in your industry and changes globally in the economy and everything that's been going on for the past, like 10?

Speaker 2: 7:02

years yeah, the past 10 years, especially with the pandemic. But aside from that, changes in our industry. The sort of endowment model has spread, starting from Harvard and some of the largest endowments, that idea of using specialists and using the best in class. We try to provide that in the liquid alternatives area. In the hedge fund space it's become pretty competitive.

Speaker 2: 7:27

I would say that over the recent, say, five years, the tensions with China have been something that we've had to address. We've had to have people look at Asia as not just China but other parts of Asia as well Japan, india, ASEAN, places like Vietnam, the greater Macong sub region, some of these areas, of course Korea, but in Taiwan. But so too, we had to address a number of trends that we see take place, but for the most part the industry has continued to grow. People are looking for that diversification. They want differentiated strategies that are non correlated, and so for a lot of investors they're so underweight Asia. They might invest in Japan passively, but they don't have a lot of interesting strategies there, and then for the rest of Asia it's usually not going as deep and as local as you might think that they should be.

Speaker 1: 8:34

Okay, 100%. And have you made use of any specific tactics or tools that have been effective to you in growing your business?

Speaker 2: 8:44

You know tactics or tools. I mean we always want to sort of help facilitate due diligence, anything that we can do to sort of show that we are helping, educate, helping to give them, give investors, what they need to do, work on our managers and and our managers are very good about doing that. I don't have to do much but we, you know we do what we need to do and so really trying to be of service and you know, after we have people as clients, to also be a sounding board but also have new ideas, but to be a source of another go to person as needed.

Speaker 1: 9:26

Okay, amazing. And how do you measure? How do you measure the success of the work that you do, First within your business itself and within your clients businesses? How do you measure the success? What KPIs do you use?

Speaker 2: 9:41

Yeah, I mean it's really pretty. In some ways it's fairly simple in terms of assets under management. You know my business model is predicated on making introductions and then if that investor ends up coming into a strategy, I'd be the manager, be sharing their marketing credit or percentage of their, of their overall management fee revenue, not the performance fee, that stays with the investment team, but the marketing credit is sort of assigned to us and so that's a clear metric. That's the clearest metric for us. We're, you know whether that's through performance or new clients or clients adding. That's how we measure success To some extent.

Speaker 2: 10:24

The other parts of it are, you know, to bring, to have quality relationships, to have the kind of client relationship that managers would like, and they, you know, in terms of expectations and what the, what the investor is looking for from a manager, something that the manager can deliver, and then kind of good mutual understanding. We use the term like minded. You know a lot and so it's not just any client to bring in, but you know clients that the management teams enjoy those relationships, and then to have clients also to get some kind of research benefit out of it, such as about performance. You know the overall relationship we like to have other benefits part of that relationship sharing of research, manager, research, other, you know, sounding board type of questions over time, and so that's that's pretty rewarding.

Speaker 1: 11:20

Okay, yeah, 100%. And are there any specific metrics that you are looking to improve currently?

Speaker 2: 11:28

Well so, we, we do look at we, we, we always report performance and we think about you know. Are you audience there? And how engaged our is our audience in terms of reading monthly reports or other research that we put out? And we've been really pleased with you know how engaged our audience has become for some of our key managers, some of our flagship managers that we work with.

Speaker 2: 12:01

I guess I always feel like you could do more. You know, if you're, if you're sending a message out to you know, say, 50 people, you feel like why couldn't that be 150 people? Or you know, why couldn't that be? Why couldn't you just have more of those similar type of relationships across the country or in North America or even other parts of the world? And so there's always that challenge of not being complacent, not thinking that you're finished, in terms of continuing to cultivate new relationships, meet new people, you know, add them to. You never know what their needs would be. Sometimes you end up meeting somebody and there happens to be a very good fit. But it was, it wasn't your intention.

Speaker 1: 12:47

Yeah, yeah, 100%, 100%. And if I, if we were to sit down again in 12 months time and everything that could have gone right has gone right in your business, what would it? What would your business look like? What would your business?

Speaker 2: 13:03

look like it would probably be a significant growth. We'd end up with a few new mandates and those would be Asia-oriented for the most part, but most likely we are looking to take on one or two US-based managers. We're currently talking to prime brokers and other capital intro people to get to meet managers that we might take on. So I mean, in the ideal world we could come through for the managers we work with and then maybe add one to two others and have a little bit of success with them Over a 12-month period. That would be tremendous.

Speaker 2: 13:44

Yeah 100 percent.

Speaker 1: 13:47

I also wanted to ask you you're obviously aware over the last couple of years there's been this huge surge in general AI. Have you been taking advantage of the tools available to you in terms of speeding up your process? Yeah, I want to know. Are you taking advantage of these tools?

Speaker 2: 14:09

Yeah, so I've had, through some of the email tools that we use, I get offers to use AI-generated email, but I guess, as a English major and having worked in this industry for so long, having written so many emails, I really feel like every word is very nuanced in what I do. I haven't tried it yet. I haven't actually seen an additional output and then tried to make edits and make it sound good. Maybe it would be better than what I could do originally, but so far I haven't used that. In terms of other AI applications, I wouldn't say that I have. I've been following it closely but have not.

Speaker 1: 15:01

Okay, amazing. Well, look, there's a number of tools that I can suggest you can look into. We can chat offline about that, though, oh really. Yeah, it's crazy what you can do these days. And last or second last question for you have there been any specific partnerships or collaborations, not only within your current business but throughout your business career, that have helped you get to where you are today?

Speaker 2: 15:30

Mm-hmm, we founded our broker dealer in 2018. And that's Yuki Co. And you know for us to collaborate in our main business of capital raising for managers and things like that. There's two ways that you could do that. We could either help another registered broker dealer with managers that they represent and try to help raise money for them and do some fee sharing, or our existing managers could be marketed in a new geography, for example, like in Europe, and we've explored those.

Speaker 2: 16:12

We haven't been able to really get a lot of traction through those collaborations. I think it's largely a function of just not enough fees to go around, is my guess in terms of, if you do marketing for my manager in Europe and you raise some money, the economics there are going to be less than if you had raised money for one of the managers that you source directly. That kind of thing, yeah, and so, having done a lot of those collaborations, but certainly on an individual product, like an investor collaboration, we've launched a couple of new funds with a wealth manager, with a Canada-based wealth manager. That was a really important collaboration for us in terms of, you know, getting their investors in and also creating a commingled vehicle where other investors could come in into that same vehicle and those have been flagship strategies for that manager. So that was very meaningful collaboration and other sort of important investors have been, you know, very sort of critical key for the growth of the overall business.

Speaker 1: 17:29

Yeah, 100%, 100% and Paul. So we are coming to the end of the show now, but before we go, what advice would you like to give to other business owners looking to succeed in your industry?

Speaker 2: 17:47

I think this idea first of all, dylan, thanks very much for organizing this talk today and I think the title of your podcast of Lean Growth that sort of lean focus is key and I've always believed that when we started Black Horse Asset Management in Singapore, we kept things lean. We did a lot of multitasking, we had our analysts doing multitasking and I think when I started Tamrak, I was also lean. You know, I wanted to be that guy in the winter in the garage with a sweater on and just grinding out emails and just keeping budget travel budgets low and keeping our overall expenses low but continuing to move forward. So I think that you know staying lean and lean.

Speaker 2: 18:39

You know staying lean gives you a longer runway as well, and that was key for us, right? Because our business is not one where you can twist people's arms or, you know, you could try to make your points, but they have their priorities and so the timeline is going to be as long as the client needs it to be. You have to be patient and give yourself enough runway, so I think staying lean is key.

Speaker 1: 19:01

And if you're an investment manager.

Speaker 2: 19:02

I've also seen if you're a startup investment manager and we've seen a lot of startups over the years startup hedge fund. They've also taken a lean approach where they don't live, they take the office space, they're inexpensive and they're able to give themselves the time to build a track record while they're starting out. That has helped them. So I think that's an important theme.

Speaker 1: 19:25

Amazing, thank you, and I love the relation to our show. That's awesome. Appreciate it. And Paul thanks again for being on the show. It's been great getting to understand your business a bit more and yourself. So what is the best way for people to get in touch with Paul Rubens, if you have any offers for them to take advantage of or if they're?

Speaker 2: 19:46

just looking to follow your journey. Yeah, so I have. I'm on LinkedIn, Paul Rubens, the same as the painter, not the recently ceased comedian. I'm for. Rest in peace, Paul, but it's. And then also Tamarack Invest is my website and I have a blog that we talk a little bit about our managers and some other trends. Tamarackinvestcom, but probably LinkedIn, would be, or paultamarackinvestcom is my email.

Speaker 1: 20:18

So Okay, amazing. Well, thank you again, paul.

Speaker 2: 20:22

Thank you, dylan, and I look forward to talking with you again soon.