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Capital Allocators – Inside the Institutional Investment Industry

Sustainable Investing 7: Tony Davis – Hedge Fund Perspective at Inherent Group (Capital Allocators, EP.145)

Capital Allocators – Inside the Institutional Investment Industry

Ted Seides – Allocator and Asset Management Expert

Business, Investing

4.7841 Ratings

🗓️ 29 June 2020

⏱️ 56 minutes

🧾️ Download transcript

Summary

Tony Davis is the CEO and Chief Investment Officer of Inherent Group, a value-oriented hedge fund that invests across the capital structure and uses ESG factors to source and underwrite its investments. Prior to founding Inherent Group, Tony was co-founder, President and portfolio manager at Anchorage Capital, a multi-billion dollar hedge fund.

Our conversation covers Tony's early career experience at Goldman Sachs, key lessons from twenty years at Anchorage Capital, his retirement and philanthropic work in impact investing that led to the formation of Inherent Group.  We then turn to his activities at Inherent, including his rationale for taking in outside capital, sourcing longs and shorts, incorporating E, S and G factors in underwriting, quantifying sustainability, constructing the portfolio, and engaging with portfolio companies.  We close with a few investment examples, potential opportunities in distressed debt, and tips for allocators researching ESG managers.

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Transcript

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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 10east.com. That's the number 10,

1:25.4

east.co.

1:30.9

My That's the number 10, east. C.O. My special thanks go out to Wellington Management for sponsoring this mini-series, Sustainable

1:36.8

Investing, The Next Frontier.

1:39.5

Wellington Management serves as an asset manager and trusted advisor to clients

1:44.0

representing more than

1:45.1

$1 trillion in assets worldwide. Wellington has explored long-term sustainability issues

1:51.7

since the 1970s and continues this practice today through internal research, engagement, and

...

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