2023 Top Episode #4: Stan Miranda – Modern Endowment Model at Partners Capital, EP.334

Private Equity

Stan Miranda shares his insights on private equity, emphasizing its potential for predictable returns. He explains that private equity allows for detailed financial modeling, often resulting in expected returns of around 15% historically, driven by earnings growth and favorable interest rates 1. Stan highlights the focus on lower middle market buyouts and specialists, such as software experts, due to their ability to grow earnings more effectively than larger firms.

The private equity owner can be a more value added owner than a huge Apollo, Blackstone.

--- Stan Miranda

He notes that while large firms haven't underperformed, the real value comes from smaller, more agile companies 1.

   

Hedge Funds

In navigating hedge funds, Stan Miranda outlines a strategy focused on diversification and leveraging alpha. He categorizes hedge funds into hedged equities and absolute return strategies, emphasizing the importance of having multiple managers to diversify sources of alpha 2. By leveraging a consistent stream of alpha, they aim for stable returns with low volatility.

We create a very stable, solid stream of alpha and then we leverage it.

--- Stan Miranda

Stan also discusses the decision to allocate to spinoffs of major firms like Citadel, which offer better returns on cost compared to the original firms 3.

   

Real Estate

Stan Miranda provides strategic insights into real estate investments, focusing on regional specialists to build a diversified portfolio. He advises against double promotions and highlights the tax benefits of U.S. properties for American clients 4. The strategy involves investing in industrial sectors, particularly logistics, which have proven successful over recent years.

We have invested almost entirely in industrial. So a lot of logistics, and that's been a big success.

--- Stan Miranda

Stan also mentions the challenges of investing in traditional resource areas like oil and gas, preferring to focus on the energy transition instead 4.

   

AI & Crypto

In exploring AI and cryptocurrencies, Stan Miranda expresses caution, noting that it's too early to fully understand AI's impact on institutional investing. He mentions that while they are not investing in cryptocurrencies directly, they see potential in blockchain venture capital 5. Stan compares crypto to gold, emphasizing its speculative nature rather than intrinsic value.

We'll invest in cryptocurrencies when they reflect their utility or they're cheap relative to their utility.

--- Stan Miranda

He also highlights the importance of maintaining strong relationships with asset managers to foster innovation and transparency 5.