Rick Selvala - Harvesting Volatility (Capital Allocators, EP.41)

Capital Allocators – Inside the Institutional Investment Industry

Ted Seides – Allocator and Asset Management Expert

Investing, Capitalallocation, Business

4.8 • 806 Ratings

🗓️ 26 February 2018

⏱️ 53 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Rick Selvala is the co-founder and CEO of Harvest Volatility, a ten-year old manager of a variety of volatility strategies that oversees $13 billion in assets. After starting his career in the Treasury department at General Motors in the mid 1980s, Rick has spent nearly three decades trading derivatives on the sell side and buy side. Rick has an uncanny ability to break down this complicated investment area and make it sound simple.

Our conversation discusses the world of volatility, including intelligent uses of derivatives, overcoming headline risk, characteristics of successful traders, assessment of alpha, the current volatility environment, and strategies that capture returns. His insights left me thinking twice about some of the assumptions my System 1 brain had formed about volatility. Time for System 2 to go to work.

DONATE TO CYCLE FOR SURVIVAL, http://mskcc.convio.net/goto/ted.

Learn More

Join Ted's mailing list at CapitalAllocatorsPodcast.com

Write a review on iTunes

Follow Ted on twitter at @tseides

For more episodes go to CapitalAllocatorsPodcast.com/Podcast

Show Notes

DONATE TO CYCLE FOR SURVIVAL, http://mskcc.convio.net/goto/ted.

3:03 – Rick’s path to Harvest

5:17 – How should one think about volatility as an asset class

7:56 – Volatility as a path to enhance yield

11:07 – Is there a programmatic way to implement

12:55 – Volatility as a path for insurance

15:45 – Where do people go wrong with leverage

18:28 – What level of understanding of this space do clients really have

21:58 – How would someone express the idea that volatility is cheap in the market

22:04 – Bill Spitz podcast episode

24:24 – What strategies could managers take advantage of in a low volatility environment

26:01 – How does Rick asses if someone is a good trader

27:32 – How do you identify firms that are too bold

29:26 – Does the community have a good sense of whether traders are acting responsibly

30:08 – How do you determine if a manager is outperforming

32:11 – Is there a structural return from selling insurance to the market

34:13 – Have computer systems changed trading in the derivatives market

35:14 – Taking a look at the current environment

38:43 – Recent market turmoil

39:58 – Are quants impacting market volatility

41:26 – What’s next on the frontier for Harvest

45:02 – Closing questions

Transcript

Click on a timestamp to play from that location

0:00.0	Capital Allocators is brought to you by Ten East, an investment platform for sophisticated investors to access private markets.
0:10.5	Ten East brings benefits of having your own family office without the cost and headaches of doing so.
0:16.8	It's founded and led by Michael LaFelle, former deputy executive managing member of Davidson Kempner.
0:24.2	Michael and his investment team offer members the opportunity to co-invest by offering at their
0:29.1	discretion. Michael and his team source, diligence, and commit material personal capital to each
0:35.3	investment. The opportunities shared on the Ten East platform
0:38.9	offer exposure to private credit, real estate, niche venture and private equity, and other
0:44.5	idiosyncratic investments that typically aren't available through traditional channels.
0:49.2	The principles have over a decade track record of investing in these types of exposures
0:53.5	across more than 350
0:55.7	transactions. Post-investment, the Tennis team conducts ongoing monitoring and reporting,
1:01.8	just as you'd expect from an institutional investment organization. I've known Michael for about a
1:07.0	decade, and after becoming impressed by the quality of 10 East offerings, its research
1:11.6	process, and high-quality investment team, I became an advisor to the organization, an investor
1:17.1	in multiple offerings. You can learn more and join me as a member at 10-east.com. That's the number 10,
1:25.4	east.co.O.
1:33.4	Capital Allocators is also brought to you by SRS Aquium.
1:37.2	Want to make sure your M&A processes aren't stuck in the past?
1:43.6	How about partnering with a company that's been defining the future of dealmaking for nearly two decades instead?
1:46.0	When it comes to M&A innovation,
1:52.7	SRS Aquium has reshaped the way deals get done more than anyone else, streamlining processes for maximum efficiency and minimum headaches. Professional shareholder representation, online
1:59.2	M&A payments, digital stockholder solicitation,
	...

Please login to see the full transcript.

Previous episode | Next episode

Disclaimer: The podcast and artwork embedded on this page are from Ted Seides – Allocator and Asset Management Expert, and are the property of its owner and not affiliated with or endorsed by Tapesearch.

Generated transcripts are the property of Ted Seides – Allocator and Asset Management Expert and are distributed freely under the Fair Use doctrine. Transcripts generated by Tapesearch are not guaranteed to be accurate.