E22: Alex Edelson of Slipstream on The 4 Sources of Alpha for Emerging Managers

10X Capital Podcast

The 10X Capital podcast interviews the world's premier institutional investors to deliver insights on how they manage their capital. Interview topics include investment decision frameworks, capital allocation strategies, GP/LP relationships and many more.

E22: Alex Edelson of Slipstream on The 4 Sources of Alpha for Emerging Managers

E22 • Nov 21, 2023 • 59 mins

Alex Edelson of Slipstream Investors, sits down with David Weisburd and Erik Torenberg to discuss the four sources of alpha for emerging managers (Sourcing, Picking, Winning, and Value-Add).

Key Points

A great LP not only moves quickly and is transparent but also constructively challenges GPs to help them improve their strategies.
Slipstream's concentrated strategy of investing in 9 to 12 funds aims to maximize returns by maintaining high ownership relative to fund size.
Effective portfolio construction for emerging managers involves balancing high ownership with thoughtful reserve strategies to support both offensive and defensive investment moves.

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Speakers

Alex Edelson

Guest • 87%

Erik Torenberg

Host • 2%

David Weisburd

Host • 12%

Chapters

0:00	Introduction and characteristics of a good LP
0:50	Introduction of Alex Edelson
1:14	Overview of Slipstream's fund strategy and key factors in diligencing managers
6:03	Detailed diligence process and red flags for emerging managers
9:37	Challenges for emerging managers and institutionalizing courage
12:11	Sponsor: Bidav Insurance Group
13:07	Advising family offices and strategy behind Slipstream's concentrated portfolio
17:44	LP and GP relationship dynamics and special economics
21:38	Generalist versus specialist funds and the importance of sourcing
27:44	Building relationships for deal flow and winning deals in competitive rounds
33:03	The balance of fundraising and investing skills
35:00	Capital constraints, fund size, and alpha generation
38:21	Lessons from early stage fund successes and key learnings
43:16	Value addition by VCs, portfolio construction, and follow-on strategies
47:27	The difference between a good LP and a great LP
49:16	Strategic use of reserves and preserving ownership
56:40	Penalties for GPs and final thoughts on Slipstream's goals
58:07	Personal reflections and appreciation

Transcript

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