In the latest episode of Wall Street Oasis Podcast, Parallaxes Capital’s Vice President Alex Orn sat down with Patrick Curtis to talk about his non-traditional career path that ultimately led him to Parallaxes Capital. Find out why Alex, a former banker, turned private equity associate hopped off the traditional finance path to pursue a career in an esoteric space and why he thinks Tax Receivable Agreements (TRAs) are a scalable investment strategy.
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See below for a full transcript of the podcast:
Patrick (CEO of WSO):[00:00:06] Hello and welcome. I’m Patrick Curtis, your host and chief Monkey. And this is the Wall Street Oasis podcast. Join me as I talk to some of the community’s most successful and inspirational members to gain valuable insight into different career paths and life in general. Let’s get to it. In this episode, Alex shares his winding path from a non-target university to breaking into a top bulge bracket group at Bammel in New York. Learn what made him a top ranked analyst and how he ended up at Permira, a top private equity fund as their first pre associate, as well as his success and failures once he hopped off the traditional path. Enjoy. All right, Alex, welcome to the Wall Street Oasis podcast.
Alex: [00:00:56] Thanks for having me.
Patrick (CEO of WSO):[00:00:57] So it’d be great if you could just give the listeners a short summary bio.
Alex: [00:01:02] Yeah. So I’ve had a eventful career. I grew up in the suburbs of Chicago, went to the University of Illinois Non-target School, was initially pre-med and, you know, got the finance bug and started my career pretty traditional. Did investment banking at the perfect time in the global financial crisis? Ended up getting a gig in large cap private equity. And then since then, it’s been largely non-traditional. You know, I’ve joined it was the first employee of a startup that was successful, ended up selling for 100 million. Ran my own hedge fund for a number of years and now today am at an esoteric asset firm, you know, trading in, you know, long dated receivables. So it’s been a long journey, but it’s been fun.
Patrick (CEO of WSO):[00:01:56] Sounds interesting. It’s gonna be a fun one. So let’s let’s go back to University of Illinois. Why did you end up there? Was it like, was it good for pre-med or just like, you know, out of high school we were like, oh, U Chicago, forget that. What was going on there?
Alex: [00:02:12] Yeah, honestly, it was primarily just to save my parents money. So I have a twin and I have an older brother within a year. So within two years my parents were putting three kids through college. And so we tried to be as helpful as possible. So I got into a number of schools. But, you know, given that I was pre-med, I was like, Hey, it doesn’t really matter. My first school, try to help out your parents stay in state. And also I did ROTC, you know, so I did ROTC, you know, for a little bit to help pay for tuition and a number of other things which can kind of get into I’m an entrepreneur at heart. Um, but yeah, that was initially kind of University of Illinois, you know, pre-med.
Patrick (CEO of WSO):[00:02:58] Was it kind of tuition like in state, like ten, fifteen, something like that?
Alex: [00:03:01] Yeah. You know, somewhere at that range, you know. Um. Yeah, but within like 6 to 9 months, you know. I went to a few labs. I was like, this is definitely not for me. And given all the schooling that you need to kind of get into med school and all that stuff, you know, very quickly, um, you know, hit the entrepreneurial bug, you know, finance and accounting. My parents, aunts, uncles, they all run their own businesses. So, funny enough, let’s go into business.
Patrick (CEO of WSO):[00:03:30] Like what? What types of businesses are they in?
Alex: [00:03:32] You know, so they ran a construction business. Real estate also managed and owned, kind of motels and hotels, you know, cash flowing, you know, businesses. And, it was a blessing because it was like basically the American dream. You know, they immigrated to the states in the early 80s and built a great lifestyle, great business. We’re able to support three kids and, you know, very thankful for that. Um, you know, funny enough, so my freshman year of college, I did a internship called College Works Painting. I don’t know if you’ve ever come across it. Um, basically during school, you’re running your painting business.
Patrick (CEO of WSO):[00:04:15] Yes, I have heard of this.Yes. So you were like one of the top ones in the country or something, you got, like 50 people to work for you?
Alex: [00:04:22] Exactly. I was number one in the country.
Patrick (CEO of WSO):[00:04:25] Oh, you were? That was a total guess.
Alex: [00:04:28] Funny enough, I think.
Patrick (CEO of WSO):[00:04:29] Did they tell that to everybody that they’re all number one in the country? No. How many people did you have working for you? Seriously.
Alex: [00:04:35] I probably had at some point, probably 20 or 30 people working for me. But I was fortunate in the sense of, you know, where I grew up is kind of, well, Matt Skokie area, the northern suburb of Chicago, where it’s kind of wealthier just in general. So me selling, you know, paint jobs, exterior paint jobs as like a kind of a hustler college kid, you know, it was easier than, maybe another neighborhood that wasn’t as, um, you know, prominent, but…So my freshman year, I basically during the spring and summer, I drove three hours back to back home every single weekend to kind of cold call, you know, hit the door, you know, hit the hit the doors, you know, selling these paint jobs. And, you know, funny enough. Yeah, you know, I was number one in the country, you know, obviously first in the state. And I got that district manager, uh, manager of the year award for that year, you know, but, uh.
Patrick (CEO of WSO):[00:05:34] So how much did you bring in, like, profit to yourself? So how much did you guys sell and how much did you bring in? How much did that come back to you?
Alex: [00:05:40] So I think I did 105, 110,000, and I took home, I think, 30,000.
Patrick (CEO of WSO): That’s amazing.
Alex: Yeah. So that helped.
Patrick (CEO of WSO):[00:05:48] How many months of work?
Alex: [00:05:51] Well started probably the winter season and till the end of the summer. I worked until the last day before going back to school. So it was, yeah, it was a decent bit. Um, but yeah, I mean, making $30,000, you have no sense of money. You’re kind of just doing this thing. Um, you know, people just love college kids painting. Yeah. Um, and, yeah, just kind of wild to think of, you know, kind of back in the day.
Patrick (CEO of WSO):[00:06:22] So you did that. This is like your freshman or sophomore year?
Alex: [00:06:26] My freshman year. So I got promoted. And then now I was a manager of managers the next year and I think I ended up doing, you know, I hired eight of my role for the BEF the year before. I think I did 300,000 and 400,000. Out of that total. So, my managers did.
Patrick (CEO of WSO):[00:06:45] Yeah. Yeah. That’s amazing.
Alex: [00:06:45] 400,000
Patrick (CEO of WSO):[00:06:47] So you, this was what your summer gig for freshman and sophomore year?
Alex: [00:06:53] This is my summer…
Patrick (CEO of WSO): [00:06:54] During all this. Now that now the world is melting right. Financial crisis. People are not ordering as many paint…paint…paint jobs.
Alex: [00:07:02] No, no, no. So,well I started my career at the start of the financial crisis.
Patrick (CEO of WSO):[00:07:06] Oh, sorry. Yes. So you were this was this was in the booming times. Everyone’s like, Yeah. How much do you want for a paint?
Alex: [00:07:10] Paint jobs, college kids, you know, might as well, you know. So things are great. I did that. So I did that for the painting stuff for two years. My junior year, I decided, hey, we want to kind of get into finance at this point. I was fully majoring, double majoring in finance and accounting, you know, so wanted to do something more related. I did an internship, I think, at JP Morgan. Not banking, but more kind of, I think transaction or operations, you know, some sort of mix.
Patrick (CEO of WSO):[00:07:40] Like a middle office gig or something like that. How did you even get that through on campus recruiting or what?
Alex: [00:07:44] Traditional kind of on campus recruiting. I think just having the story of running, you know, painting is just unique enough where I got a decent amount of interviews and then just wanted to kind of…
Patrick (CEO of WSO):[00:07:57] Pick a hustler, he’s a hustler. Yeah. Get him.
Alex: [00:08:00] Yeah, he’s a hustler. Yeah, he’s a unique. He drove home every weekend, you know, three hours just to, you know, sell paint jobs, you know? So that was unique enough where it got me in the door. You know, I think from there, you just have to refine your messaging. You have to do your homework and really resonates and develop rapport with who you’re interviewing with and at that point, I had an idea of kind of what I wanted to do. Like, you know, I had upperclassmen that were getting into investment banking and didn’t know what it was, but it was the hardest thing to get into. So you’re reading vault guys and printing reviews and all these different things. But, you know, I was trying to, you know, stepping stone. Maybe I’ll start at the middle office. So did that junior year. And then because I did two major, I took four and a half. So I was able to get another internship. Guess my quasi senior year at BofA Merrill in banking or guess at this point. BofA? Yeah, just BofA. And was lucky enough, you know, to network myself in, you know, network with a bunch of alumni and upperclassmen, you know, that help kind of show me the ropes of how to interview at investment banks or this is what they’re looking for, you know, the quasi stock answers or this is what you need to do information sessions and stuff like that. And I was lucky enough to get an internship at BofA in their Chicago office, you know, for Think TMT.
Patrick (CEO of WSO):[00:09:34] And that was banking that was full on banking internship for an office.
Alex:[00:09:37] That was full on, you know, banking.
Patrick (CEO of WSO):[00:09:39] Tell me about that summer. Was it nuts? Was it hard? This is like your after your senior year, basically, this is like your because you had half a year because you’re doing two majors right? So which was kind of a blessing because you got that second crack at recruiting?
Alex: [00:09:53] I got the second crack and it was a tale of two different summers. So this is 2007 when the first half of the summer was deals were going left and right. I was on 3 or 4 deals. I had my BlackBerry back in the day. And people were like, the times will never end. And this is, you know, and then the second half of the summer, it was the liquidity crunch, the credit crunch. All of a sudden, every single deal just died. And you’re working all these all these interesting things, but everything kind of died. But it was a blessing in disguise because I was able to get an internship in order to leverage that to do full my full time role. Um, because let’s say was a couple years later and now was 2008, 2009, it had been so much more difficult to get a full time role. Yeah. Um, you know, so thankfully enough, you know, I did well, I was whatever a top analyst in the summer class. Yeah, Summer Oh Seven was able to leverage that to the top group in New York. Um, and that was key for me because Chicago, I mean, great. Right. But, you know, starting out your career, you know, you want to do as much as you as much as you can to get to New York. Um, so it was an interesting conversation. You know, the group really wanted me to stay in, you know, the group and also Chicago. But, you know, I had my sights set on getting out to New York and was able to, you know, kind of finagle my way.
Patrick (CEO of WSO):[00:11:34] That’s a tough thing. How did you first off, how did you become a top ranked analyst? Were you just sleeping at the desk the whole summer, like on at least the first half of the summer? Like just doing whatever it took? What do you think? Why? Why were you considered one of the best versus the other interns?
Alex: [00:11:49] Yeah, I think I was just faster to pick up some of the modeling aspects of the role and then just a higher attention to detail to some of the stupid formatting stuff. Like it sounds dumb, you know, but you know, having everything look correct and buttoned up just gives a connotation that everything is right, you know? So for better or worse, like if you’re a good formatter or you can you’re fast on the model. It just…
Patrick (CEO of WSO):[00:12:20] It builds confidence.
Alex: [00:12:22] It builds confidence. It presents well, you know, I don’t think I was that much smarter or anything like that or I knew finance better. Um, you know, but yeah, I think I was just lucky enough to have the right experiences and the right people above me to kind of vouch for, Hey, we should give this, this, give this analyst, you know, this summer a little bit more responsibility and see what he can do with it.
Patrick (CEO of WSO):[00:12:45] Yeah, that’s cool. That’s great. So you basically got the full time offer clearly near the end of the summer and they pay you pretty well as intern, right? Did you get overtime then? Or No.
Alex: [00:12:56] That is, that’s exactly correct. That was that summer. Um, they gave us…
Patrick (CEO of WSO):[00:13:03] Crazy overtime. I heard, I remember this.
Alex: [00:13:05] They yeah, they, they, uh, we got paid by hour. It was crazy and…
Patrick (CEO of WSO):[00:13:11] Like, 50 grand in the summer or something like that.
Alex: [00:13:13] You may think I made something, something along those lines. Like where I made maybe 30 grand my freshman year in painting. But this was more than that. And I was like, you know, I’m tracking every single hour that I’m doing every day because, you know, it’s crazy to me because you’re working maybe 60 to 80 plus hours and they’re paying you per hour. Yeah. Which is wild to me.
Patrick (CEO of WSO):[00:13:32] Yeah, it’s nuts. So, okay, so you get the full time offer. Is it an immediate. Yes, I accept. Or are you thinking at this point, hey, you know what? You know, I was able to get to New York or I guess I was able to finagle like. Or do you just say, Hey, if you give me the New York offer, I’m in. Like I’m going to take it. Was that kind of your bargaining chips that you put in there or how did you do it?
Alex: [00:13:53] Yeah, Um. I tried to leverage that offer to get to other banks. At that point, though, it was a little bit more difficult to get full time roles. Things are things were starting to, you know, kind of crack where it wasn’t like people, you know, rescinded offers or anything like that. But you could definitely tell, um, because Illinois is a non target school. We place a certain number of kids each year. You start to get a sense of, okay, maybe it’s only a couple into New York or a couple into Chicago. Yeah, I think there was only five Illinois kids that made it to New York that year. And then next year, 2008, 2009, there’s zero. Right? So. Yeah, you can get a sense that things were starting to shift a bit.
Patrick (CEO of WSO):[00:14:42] So you just said, okay, I’m going to take it. You accepted. Tell me about your senior year. Kind of how you saw it or I guess not your senior year. It was kind of your last semester, how you started seeing things unfold.
Alex: [00:14:54] Yeah. So. So my last year…
Patrick (CEO of WSO):[00:14:55] You finish up your classes in the whole world is falling apart.
Alex: [00:14:59] Oh, well, no. I guess…
Patrick (CEO of WSO):[00:15:02] Wait. No, no, sorry. Oh seven. Okay, so you’re still. But it was still kind of like. Do you get nervous at all? Like in that I guess it was fall. It was fall Oh seven. So not yet.
Alex: [00:15:12] So not yet. It was Q4 of 2008 when things really started to hit the fan. And you were I was at my job for probably 3 or 4 months at that point.
Patrick (CEO of WSO):[00:15:23] But what did you do for the months that you were off, say, between because you finished in the winter? Right? So what did you travel?
Alex: [00:15:28] So I didn’t travel. I actually stayed on campus. Hung out with friends and just enjoyed the six months I got. I got paid, you know, per hour, you know, by BofA. So I had a great last semester, you know, whether it be just, you know. Do lifting or staying working out every day or doing a variety of different things. It was a great semester.
Patrick (CEO of WSO):[00:15:52] That’s awesome. Okay, so you start full time. It’s, I’m sure kind of a lot of work. Was it a lot harder than the internship, or did you feel like you were you were ready? You kind of obviously you were really busy at the beginning of the internship, like you said. So was it similar to that or was it worse?
Alex: [00:16:10] It was. You could tell that. Things have notched up a level like you’re in New York. You’re kind of a top group where the deal flow or the health care group.
Patrick (CEO of WSO):[00:16:21] What was it?
Alex: [00:16:22] Health care, yeah. And there was constantly deals going on. Yeah. Um, you know, whether it be we had very yeah, we had great bankers so and then you’re kind of thrown into a larger analyst class where there’s only a couple of people at Chicago and now you have an analyst class like ten plus, and you’re all just trying to feel each other out. You’re all in the same bullpen, you all enjoy each other, but at the same time you’re kind of like, this is my competition. Um, you know, and then, yeah, within like, I think the first couple of months, you’re just super green. You’re super green. You want to digest as much as possible. You’re living this banker lifestyle. And then, yeah, six months, you know, kind of in. Bear Stearns is done or Lehman. Lehman Brothers is now bankrupt. You know, I was at BofA and we had just acquired and then we eventually acquired Merrill Lynch. You know, so all these things that you read in the newspapers, it was like actually happening live. And we were investment bankers.
Alex: [00:17:23] And, you know, you don’t realize you’re working on these big deals, but it has like real consequences to people, right? You kind of forget to realize that where we had acquired Merrill Lynch and then both organizations were kind of merging together, different cultures, you know, you had different core competencies. You were all kind of, you know, navigating each other. There was definitely layoffs, you know, So it was just a really weird time. And you just want to have also have a job, right? Um, a little bit of a tangent, you know, So I played a ton of poker while I was in college. And, you know, I very briefly thought, Hey, I’m going to quit this investment banking thing. I’m going to be a professional poker player. Uh, so, you know, good thing it didn’t turn out that way. But, you know, I played in a handful of, you know, kind of the World Series of Poker events, and, you know, that was going to be this hotshot. But, you know. Better, better heads prevailed and decided to stick with finance.
Patrick (CEO of WSO):[00:18:31] So how close did you get to quitting and doing that?
Alex: [00:18:35] Pretty close, you know? Yeah. I think within the first.
Patrick (CEO of WSO):[00:18:40] You played a lot in college, too.
Alex: [00:18:42] I played a lot in college, you know. I played in the me and my twin. We both play in the main event. We were 21 and we were we thought, Hey, we’re going to be the youngest main event winners. Ever?
Patrick (CEO of WSO):[00:18:54] How did you do?
Alex: [00:18:55] Oh. I was terrible.
Patrick (CEO of WSO):[00:18:57] Terrible. Yeah.
Alex: [00:18:58] So I got knocked out the first day, but I had a pro a bracelet winner at my table, and I was like, the 21 year old, you know, hotshot that thinks, hey, I’m just going to run him over. And he was literally playing poker without even looking at the cards. He was destroying people. And yeah, I didn’t last very long. And that was a very quick, um, you know, humble, humble pie for me. But, you know, I think that was part of the reason why I too was like, Yeah, you’re probably not as good at poker as you think you are.
Patrick (CEO of WSO):[00:19:30] So that’s funny. I was a I was a co-president of the poker club at Wharton, so I know I played a lot in my day so we could we could talk a lot about it, I’m sure. Um, I don’t know if we want to turn this into poker episode. Maybe, but so, yeah. Tell me about, like, the transition from, you know, banking to mega fund and when you it sounds like at BofA you were actually, even in the crisis years, you still got a bonus like you still got paid well is it because they separated that out for people actually doing big deals still or because you’re because health care was still kind of going on? Is that how it worked out or was it like more the whole pool got something? Because I think we talked offline before, like you were still getting, what, 70% of your base as a bonus or…
Alex: [00:20:14] Yeah, yeah. 70% of my base. Yeah.
Patrick (CEO of WSO):[00:20:17] Which in O nine
Alex: [00:20:17] Granted, I think bank.
Patrick (CEO of WSO):[00:20:20] It’s pretty good.
Alex: [00:20:22] Yeah. Um, yeah, I think bankers are getting paid a lot more, you know, potentially these days. But I think it was in the range probably of 150, all in, you know, somewhere in that range, I think in top bucket list got, you know, maybe 52, 55, 60. Yeah. Um, you know, for a bonus. But yeah, I think it was probably partly the group. We were still doing deals even during, you know, that first couple of years. And I was lucky enough to work on one of the largest healthcare deals that year, you know. So, um, but yeah, kind of going out, coming out of banking. It wasn’t like recruiting now, and thankfully it wasn’t because I was a non-targeted school. Yeah, I, you know, had great GPA, kind of a decent resume. But it was a lot easier to recruit given that I had a full year under my belt and I could say, Hey, I’m the top bucket analyst. This did this deal. I’m this is my bonus, you know, versus now you’re recruiting within a couple of months and it’s just really hard to know who is good versus not. Granted, you know, now there’s so much information available. These kids are so much better prepared.
Patrick (CEO of WSO):[00:21:43] I can tell you a lot of people for private equity, a lot of people purchase their private equity interview course. So I know people are prepared because they’re drilling, you know, so like we see the usage. They’re in the they’re doing the paper, they’re doing the full blown modeling test. The cases they know like it’s not like when I was recruiting for private equity, it was like my buddy was like, you should go to private equity. I’m like, What’s private equity? He’s like, here, read this deck on LBOs. You know, like it was literally like that. And I ended up getting a job. So this was even before your time. But I’m sure by the time you came around it was even a little bit better. And now it’s just everywhere. Now everyone has to be ready and they have to be ready earlier, right? So, yes, I think this year they’re going to get out of training and be hit up. Right. Like they’re not even going to they might even get out of training. They might be like, hey, during training on this weekend, you have to come do these interviews. Because the cocktail hour is getting set up.
Alex: [00:22:36] It’s unbelievable. And I think it’s extremely tough to especially if you’re not from a non-target, if you’re from a non-target school. Oh, yeah. It’s obviously easier if you have a pedigree school grade GPA, you’re at the top of your class. And yeah, every single candidate these days, you know, I talk to a number of alumni and they’re already asking me before they start their banking internship if they should do private equity or hedge funds know. So it’s, you know, I don’t… I don’t envy how competitive it is these days. And thankfully, you know, kind of, um, slipped through the cracks.
Patrick (CEO of WSO):[00:23:15] No, I don’t think so. But yeah. So tell me a little bit about just that whole process. So it was easier. You had a full year under your belt. You had you had the deal, the couple big deals on your resume. So that was easier. But were you talking to like the traditional recruiters out there, the SG’s of the world, the KPIs, the whatnot, and just getting into a couple processes? And then tell me about was it on cycle? I assume it’s on what on cycle was that back then? Tell me a little bit about that process, because I think people like to hear those war stories.
Alex: [00:23:45] Yes. So it was on cycle was actually the summer after your first year. So you had a full year on your under your belt? Yeah. Traditional. Uh, recruiters, you know, the KPIs of the world. You’re meeting them probably Q4 of that first year, Q1 at that point. Also, you know, you just don’t know what the world’s going to look like, to be honest. You’re just thankful you didn’t get laid off. Yeah. Um, and also the recruiters, you know, to be honest, too, they didn’t know what private equity firms were hiring or weren’t hiring. But, you know, part of their job is also just to talk to everybody, you know, So, you know… you know, for I’m sure everyone knows this, but, you know, take those recruiting recruiter interviews very seriously. You know, they are the first, um, you know, kind of gatekeepers. You know, they’ve seen a thousand kids across the entire class, you know, So you have to figure out a way to separate yourself or build rapport or you point to a certain experience or whatever it may be. Um, you know, to kind of separate yourself from everybody else.
Patrick (CEO of WSO):[00:24:50] How do you do that?
Alex: [00:24:51] Yeah. Yeah, I think it’s partly, you know, maybe.
Patrick (CEO of WSO):[00:24:57] It’s kept pointing to the big deals.
Alex: [00:24:59] The big deals. Yeah. Top end, you know, poker, you know, twin, you know, uh, college works, painting, uh, just a variety of different experiences, you know. But I think I always try to demonstrate that, you know, one was a hard worker, but also, if given an opportunity that would, you know, prove out, you know, my capabilities, but went through the typical on cycle process, you know, didn’t necessarily have a ton of interviews with mega funds, but interviewed with a ton of, um, Chicago private equity firms because I’m from Chicago, another middle market private equity firm, a couple of large caps, you know. But yeah, I think ultimately it came down to a reference, you know, from, I think an associate or VP that knew the guys at Premiere very well and Permira was just starting to kind of build out their practice. You know, it’s a… it’s a large cap, you know, global fund. But at that point I was recruiting for to be the only pre associate in the New York office, you know, so there’s two Co-heads, one in New York and one in London. And it was almost like the perfect role, just, you know, truly blessed. I think I interviewed I literally counted the number of interviews I interviewed at 22 firms, and this was the 22nd firm.
Patrick (CEO of WSO):[00:26:23] Wow. So what was happening with the 2021 other ones. Are you getting offers or you never got an offer?
Alex: [00:26:30] I think I got one offer that I turned down. But the rest of them, yeah, for a variety of different reasons, it just never kind of worked out.
Patrick (CEO of WSO):[00:26:38] You weren’t ready on paper. What was going on? What, like, did you ever make it to final round and, like. Yeah. Tell me a little bit more about that, because that’s surprising from a guy who has, you know, yeah, the non-target, but you had the strong resume at that point and you speak well. So like what was going on in terms of that, like looking back or is there something you’re like, Oh, I should have done that to prep better?
Alex: [00:26:58] Yeah, I think looking back, I should probably have taken interviews more seriously. I took the Mass Dearborn interviews extremely serious because I always thought, Hey, after two years, I’m going back to Chicago. Um, you know, but and then all of a sudden, like, you’re doing like ten interviews within a couple of weeks, that it’s very easy to even though kind of they’re less brand name type firms, they’re still extremely interesting opportunities that you wouldn’t think of. Yeah. Um, and I probably didn’t take them serious enough where I was like, Hey, I’m gonna get one of these, you know.
Patrick (CEO of WSO):[00:27:38] Then none of them draw, one of them will draw and…
Alex: [00:27:40] Get enough pedigree.
Patrick (CEO of WSO):[00:27:41] And did you feel like you had like that, that very typical like 24 year old or 23 year old mentality where you’re like, I got this. Like, you’re the hotshot poker. Like, you know, you’re coming from a non-target to get the chip on your shoulder. Like, yeah, but look at me. I’m top ranked. Do you think you had a little bit of that came across maybe as a 24 year old?
Alex: [00:27:59] Yeah. No, absolutely. Yeah. And you get served up humble pie pretty quick. Yeah. Where I thought, hey, they should know that I’m a top analyst. You know, I’ve done, you know, these experiences. You can check all my references. Um, you know, but culture does matter. And, you know, I think people really do. They can tell if you’re doing the homework or you’re just going through the motions and, you know, whether it be a lower middle market or middle market or large cap private equity firm, these are all extremely successful individuals that all have their interesting stories that you can tap into and you can learn from. And yeah, I probably didn’t take it serious enough. And then you’re doing so many interviews so quickly that you kind of get past like, Oh, shoot, it’s gone. I’ve gone through 15 of these like, What is going on? Yeah. Um, you know, yeah. But yeah, extremely fortunate and blessed that, you know, Premier was like, the perfect role for me. That’s awesome. Um, from a culture standpoint, you know, being the only associate in the New York office.
Patrick (CEO of WSO):[00:29:11] Was that lonely, though? Was that lonely, or did you have like a, you know, a post right there or a couple of them above you to help?
Alex: [00:29:16] Yeah. You had, you had post associates and they’re just starting to kind of build out that practice. Yeah. Um, and then, you know, joined on and it was like drinking from a fire hose. I did more. I did more all nighters in private equity than I did. Um, I did in banking.
Patrick (CEO of WSO):[00:29:38] Wow, like so many deals, like you’re trying to get so many deals done in that time frame or.
Alex: [00:29:42] Yeah, so this is now 2010. You’re just starting out the financial crisis and now deal flow was like, pedal to the metal. And you know, you’re a journalist in the New York office, you know, So I worked on a tech deal, an educational technology deal. I worked on a, um, a logistics company, a specialty rental company. So very different business models, very different sectors. And yeah, you know, very quickly they, they had to hire a couple other associates because I was just drowning. Um, but it was a very you’re working with extremely bright people. And I think what was unique about Permira too. Is that you really understood, like the global aspect of the business because you were constantly on conference calls with different offices, whether it be in Asia, whether it be in London and, you know, Germany. We had offsites every six months, you know, So that was a ton of fun. Where was kind of work hard, play hard a bit. Yeah. Um, you know, you know, but yeah, so.
Patrick (CEO of WSO):[00:30:48] And then how was, how was the pay? Was it a it was a big pay raise obviously. But can you give a range for the listeners. Do they know how much it jumped?
Alex: [00:30:57] Yes. I’m not sure what associates are getting paid these days, but yeah, I think it was a lot.
Patrick (CEO of WSO):[00:31:03] A lot. Yeah.
Alex: [00:31:05] But it was almost double of what I had paid. Um, back at banking.
Patrick (CEO of WSO):[00:31:11] Yeah. So we’re talking like 300 ish plus 350.
Alex: [00:31:16] A little, a little less than 300.
Patrick (CEO of WSO):[00:31:18] A little less than 300. That’s pretty good for for. But you were working hard for it.
Alex: [00:31:24] I was definitely working hard for it. Um.
Patrick (CEO of WSO):[00:31:27] Yeah. And then so, so you’re kind of, you’re approaching, you know, let’s say your two years in as a pre MBA associate. Are they giving you signals like, Hey, you need to go get an MBA? Are they giving you signals? Like, what’s your thought process? Do they want to keep you on? Why not stay on and get a direct promote? I know those were less common back then, so tell the listeners, what was your thought process as you’re like going into year two, year three there?
Alex: [00:31:51] Yeah. So at premiere in the New York office, everybody had gone to business school. Yeah. Everyone was supposed to be associate. And I think the vast majority of them went to Harvard. Yeah. So it was pretty I wouldn’t say set in stone, but it was generally, if you want to come back, you would have to go to business school and come back the traditional route. That said, you know, Premiere has grown significantly over the last 10 to 15 years. I don’t think that’s necessarily the case today. Yeah. Um, and to be frank, you know, I after I think I stayed two and a half years at at Permira. I was just burnt out. I was toast. You know, now, you know, kind of 4 to 5 years into my career, I’d made a decent yeah, a decent money. And I was just extremely burnt out. Like, it doesn’t matter what kind of what deal flow it was, you know, I saw a ton. And also, you know, I think I was yeah, I knew I needed to kind of do something else know. So I didn’t even explore the route of going to B-school too much. You know, I already knew, you know, I was going to do something else, whether it be more on the public side of things or something kind of completely different.
Patrick (CEO of WSO):[00:33:09] So you’re interviewing hedge funds and stuff like that at that point.
Alex: [00:33:12] I was interviewing hedge funds. Don’t think I interviewed any private equity firms. You know, think it was either hedge funds. I think it was primarily hedge funds. And to be honest.
Patrick (CEO of WSO):[00:33:23] Like traditional long short. What were you thinking of doing?
Alex: [00:33:26] Yeah, yeah, traditional long shorts. You know, I was also looking at a lot of these platforms, you know, the Citadel’s Millennium’s Point72 of the world and was just trying to explore kind of what was out there, you know, getting as much information as possible. I think whether you’re in private equity or whether you’re in hedge funds, you know, there’s pros and cons to each of those types of roles, right? I think private equity, you probably have a little bit more stability. You know, the transaction environment is very different. And it also really depends on, you know, the the investment framework of the firm like investment committees. You know, what is that process like? You know, that could vary substantially depending on what type of firm you’re at versus, you know, maybe at a hedge fund. It’s more structured of kind of a work life balance. You’re always kind of working. But, you know, the markets aren’t open. The markets aren’t open. Um, but also the volatility of your career can obviously change very quickly as well. You know, there’s very highs. They’re very lows, you know, for a number of different reasons. You know, yeah, we could probably get into a later.
Patrick (CEO of WSO):[00:34:32] I’d agree. I’d agree with that. Yeah, I think most people would agree with that. So, you’re interviewing all these hedge funds kind of two years in any offers from any of these or no?
Alex: [00:34:43] I was, um. I was about to join Citadel and, you know, got to the last, you know, final interview. And for whatever reason, it didn’t work out. Maybe a personality test didn’t check the box and, you know, some some aspect of my personality. Um, but at the same time, I was I spoke I had spoken to a friend of mine who was in banking. We were in the same class, joined a hedge fund, one of the few hedge funds that was in the Big Short, and they shorted a bunch of banks and they kind of held on to that short way too long. Um, and they were exploring a startup. And you kind of pitched me on the idea, you know, I’ve always been kind of contrarian entrepreneur at heart, you know. I was like, hey, kind of enough in the bank maybe. Why don’t I just give this a shot and kind of see where this goes and. Me and two of the founders. Both of them were at the hedge fund. We ended up starting a company and we were at an incubator. Completely different shift in lifestyle. Um. Absolutely. Building something from 0 to 1. You know, we had started off building out financial content for high finance interviews, you know, similar to kind of what Wall Street Oasis does.
Alex: [00:36:14] You know, content along those lines. We had pivoted a number of different times and we ended up choosing a recruiting platform for high turnover positions. And, you know, it was. Think initially. I didn’t know if this was the right role to choose kind of next, you know. But at the same time, I also thought of it as this is probably my B-school is my B-school. I can do with a couple of buddies, you know, not necessarily get the brand name of a Harvard or Wharton or Stanford. Yeah, but I can learn, you know, learn the ropes as an operator and, you know, see the business. Um, and it was, it was fun, you know, it was fun, you know, building something completely from scratch, you know, having the autonomy, the ownership and responsibility. Um, and we were just kind of hacking things, you know, just hacking things along for a couple of years and, you know, seeing some traction and, um, and yeah, you know, hindsight is always 2020, you know, but I probably should have stayed a couple more years until they exited for, you know, nine figures. But, you know, that’s probably another story as well.
Patrick (CEO of WSO):[00:37:28] When you. Yeah. So as you’re kind of as it’s growing, as it’s kind of getting up, there’s probably some funding in between the acquisition and then was it something where, like you felt like there wasn’t enough traction kind of started? It wasn’t going fast, accelerating fast enough. You felt like the odds of it, like surviving were just lower than. You know, what you wanted to see at that point or you know, or was it more like, Hey, it’s been three years, I need to do something new? Even though I assume you’re doing everything because if you’re one of the first employees, you’re like, you end up doing everything.
Alex: [00:37:59] Yeah, So was one of their first employees. And you know, kind of three years in was now a quasi CFO or whatever that is. Basically everyone’s doing everything. Yeah. So you have this kind of title, but we’re now at, I think, 20 or 30 people and we were just about to raise, you know, our series A, and we were kind of in the midst of it. And I was at kind of another point where. I was, if we’re going to raise a Series A, I’m probably going to be committed to victory for another 3 to 6, you know, five plus years. And is this something, you know, that I feel passionate about? And, you know, and to be fair, it wasn’t my baby. You know, even though I was the first employee, I’m not a founder, you know. Right. So I didn’t necessarily have the pressures of being a founder and raising real capital from your family and friends and having that kind of pressure. And, you know, getting close, you know, to maybe it being a zero, maybe maybe being a donut, you know. So I had a new appreciation once I actually start my own fund. Um, but it wasn’t my baby. And, you know, we probably had differences in whether it be strategy or a variety of different things and vision at that point. There are probably too many cooks in the kitchen as it is, you know.
Patrick (CEO of WSO):[00:39:24] So personality at the top. And there’s there’s three, 3 or 4 you guys like with the executives, right? Yeah. So, yeah, I can see that being tough. Yeah. So you guys. So it was kind of like, Hey, it’s time. It’s run its course for me.
Alex: [00:39:38] It’s time, it’s run its course. I’m not going to be married to the business for another five years. Yeah. Um, and…
Patrick (CEO of WSO):[00:39:44] Which is super common, by the way. Like, it’s so rare for like, the founding group to stick together more than, like, as long as the three years, you know, 3 to 5, 3 to 5 years tends to be when it feel like ends up being, Yeah, okay, this is better for me.
Alex: [00:39:57] Hindsight is always 2020, but they sold for a big number and they also spun, you know that experience too, starting a whole business which got dispatched for billions of dollars. Yeah. So, hindsight is always 2020. You know, I’ve, you know, look at that journey and, you know, I still don’t regret it because, yes, I would be probably worth a lot more on paper if I kind of stuck around. Um, you know, but I’ve learned a ton, you know, and you embrace the journey. You know, your life’s not always, always in a in a straight line.
Patrick (CEO of WSO):[00:40:40] So before you got to go, talk to me a little bit about the. The volatility hedge fund that you, you created or founded and then Parallaxis as well. I know we only have about ten minutes. I want to make sure we hit those two. So, real quick. So you’re like, hey, I’m not going to do this startup anymore, so I’m going to start a hedge fund like, how did you come up with that? Like, not many people are like, Hey, I’m just going to start a hedge fund. So how did you get any sort of seed capital for that friends and family? Like, how did you do it?
Alex: [00:41:06] Yes. So funny. Funny thing enough, back when I was in private equity, I had barely any time to invest, but I was always an investor. But I knew that I had no, um, no ability to pick fundamental stocks, given that, you know, guys on the public market side were spending days and days on one stock doing channel checks, speaking to management, of course, I would never have an edge there, but I always had a kind of a knack for just data and data analytics and using, you know, these days it’s called kind of quantamental, but finding patterns through numbers. And it was just kind of like a random, uh, hobby or interest. But I started trading in volatility, and volatility kind of blew up during those days. I don’t know if you’ve, you know, some of these volatility ETFs and ETNs like XIV or Uvxy and all these. Long story short, uh, a hobby became kind of a passion, and then a passion became a business, you know, because a number of my friends kind of reached out to me and knew I’d kind of did this on the side. And it’s like, Hey, this is like, really interesting. Um, I need something to diversify my exposure. You know, I would seed you money, you know, to kind of start this strategy. I’m sorry. I started the strategy. You know, if I were to kind of do it again, I would definitely do it with a co-founder.
Alex: [00:42:27] Uh, given that a hedge fund, it’s just a rat race. You’re constantly raising capital. There’s you have investor gates, you have month to month marks. Um, a large part of my job was actually spending most of my time not doing investment work and doing non-investment work, which was, you know, kind of a struggle. Um, so, and also, to be honest, I never got to scale where it really mattered. You in order to take a large anchor, you had to give up a number of economics and kind of an arm and a leg. And there was definitely a first loss capital and some other ideas. But, you know, I once again, kind of a couple years in, you know, didn’t see it as a long term business. You know, I thought just the active hedge fund business was. Basically all kind of gathering a lot of these large platforms that have the infrastructure resources to kind of out compete maybe an emerging manager and, um, you know, to use a tech term, didn’t have product market fit. It was an interesting strategy, you know, but institutional investors that understood it couldn’t invest, you know, because it was a capacity constrained strategy and maybe retail or family offices. They didn’t understand it, but, you know, they could write some of the interesting checks.
Patrick (CEO of WSO):[00:43:43] Um, what’s the most you managing at that time? Like we’re talking like 5 million. 20 million? Like, what were you doing at that one point?
Alex: [00:43:49] Yeah, less than 20 million. Less than 20 million. Somewhere in that range, but…
Patrick (CEO of WSO):[00:43:54] Yeah. Okay.
Alex: A couple of years in. A couple of years in me and one of my buddies who went to school I went to school with was also starting a fund know. So we were always kind of bouncing ideas with each other. Yeah. Of how to raise capital, you know, how to do all these different things. And he was raising a long term capital strategy, building out this very kind of niche strategy that was like, Hey, this sounds interesting, you know? Didn’t think much of it, but a couple years in, he was he was starting to get. Starting to get real traction, you know, raising money and saw kind of writing on the wall of, you know, just a public markets fund versus long term capital. Building out a market where you have structural advantages was like, hey, you know, maybe I should pitch, you know, my horse to somebody else, you know? So I ended up joining him at Parallax Capital. And, you know, basically we’re building out a market for a very esoteric. Um, area. Um, we’re kind of purchasing long dated receivables from private equity sponsors that may be forced or motivated to sell once they get to the end of their lives. You know, so we had found kind of this interesting niche, um, of tax receivables that we wanted to build a market for. And you know, now kind of 4 or 5 years in, you know.
Patrick (CEO of WSO):[00:45:21] You’re saying receivables from the from the portfolio companies of these funds. Yeah. So you’re fronting them, you’re fronting them capital to purchase these receivables at obviously a discount. Um, so to give them some liquidity.
Alex: [00:45:36] Yes. So the private equity fund, let’s say Blackstone. Yeah. They acquire a company. You know, they obviously value creation. Take the company public over a couple of years or maybe 4 or 5 years and 2 to 3 years later, now they’ve sold out the equity. But based off of unique kind of tax structuring, they created this long dated receivable for a private equity sponsors found money. But now let’s say you have sold out all of the equity. Now you have this small non-core position that still has another 10 to 15 years of life. And then you kind of have to figure out what do I do with this asset? You know, do I do a continuation fund and LPs or please do not send me K-1s for this 2008 vintage on this small asset that we don’t care about. Yeah. Know please want it down, you know, and that’s kind of where we come into play where we’ll purchase these assets based off of a net present value and sometimes it ranges. Um, but a $0.10, $0.40, $0.50 on the dollar and we hold them to maturity. So there’s a duration mismatch where we’re able to have a different perspective based off of our.
Patrick (CEO of WSO):[00:46:55] It could be processes in order to be able to do all the loans and all that stuff, all that stuff you have and you don’t have.
Alex: [00:47:02] We don’t have to do it all because now here’s a XYZ private equity firm just winding down the fund. We purchase it from them. Got it. Now it’s a part of our funds. But we have. But you don’t have structures or vehicles.
Patrick (CEO of WSO):[00:47:14] You have LPs or. No.
Alex: [00:47:16] Yeah. Yeah. So typical kind of private equity type vehicles we have for vehicles have raised 250 million. We’re actually in the process of raising our fifth vehicle. Um, and yeah, you know, things have slowly gotten easier. Yeah. I think it’s, you know, back at very, you know, taking something from 0 to 1 here at Parallaxis, also taking something from 0 to 1 where 0 to 1 was extremely tough. Like, are you like, how can you even do a deal? And now, you know, taking 1 to 5, it’s been slowly, slowly getting easier.
Patrick (CEO of WSO):[00:47:51] Yeah. How is it how do you see this? Alongside the boom in secondaries and providing liquidity. Do you see yourself as almost like another option? Tell me about that. Tell me about how that the interplay there.
Alex: [00:48:06] Yeah, it’s another area of the market. You know, think second area private equity firms.
Patrick (CEO of WSO):[00:48:11] They’re kind of providing the same service, right, In a way. But just maybe on a small you’re helping clean up the stuff for the private equity fund versus like larger offloading should think of it that way. Like private equity secondaries are like larger offloading of larger positions versus you guys are more cleaning up like the receive the smaller receivable bits.
Alex: [00:48:31] Yeah well you do have you have you do have both. Right. So you have like leads where you do need to close on one vehicle and start another vehicle. I would say the vast majority of private equity secondaries you’re buying from a pension fund or, you know, a large endowment that needs to rejigger their allocation and need to sell XYZ, mega fund and all three of these funds because need to get my allocation down to X. So it’s a different exercise, but the concept is largely the same. You know, you are you can purchase assets from a motivated seller at kind of like a discount. And you know, you know, I would say our assets are just very niche because it’s just these tax receivables. But yeah, the concept is largely the same.
Patrick (CEO of WSO):[00:49:19] That’s super interesting, Super interesting. So is the do you feel like a paradox is, you know, you guys are raising a larger fund. Do you feel like it is scalable where like there’s enough out there that you could put put to work $1 billion if you if you had it?
Alex: [00:49:34] Yeah, maybe not today, you know, But I think definitely for sure we’re on a pace where we can deploy at least 100 million a year. And we’ve at this point kind of transacted with some of the largest sponsors out there. Um, so it’s now just increased adoption, but also like an increased addressable market similar to secondaries. Once more and more allocators, invest in private equity firms, there’s going to be more and more of these allocations and more more people looking to sell. Yeah. So, you know, we think we. Yeah, I think we have an interesting position in the market where first mover and you know, I think there’s going to be advantages to being first to scale.
Patrick (CEO of WSO):[00:50:13] So that’s super exciting man. Congrats on the success.
Alex: [00:50:18] No, no, no. I appreciate it. It’s been a journey. I think my parents would have preferred me to just be a doctor or, you know, me. Go to Harvard Business School and keep it safe, you know? But yeah, you know, my journey has been kind of non-traditional at the same time, you know, it’s been enjoyable. You know, I think I’ve learned a lot from each aspect of the business or each aspect of my journey. And it’s been a it’s been a ton of fun.
Patrick (CEO of WSO):[00:50:42] Any final thoughts? Looking back, kind of any advice you’d give to to people listening based on your journey?
Alex: [00:50:50] Yeah, I wouldn’t say based off of my journey, but, you know, I think given the current market environment, it’s obviously not as easy as it was over the last ten years. I think just take comfort that there’s always going to be new opportunities, always going to be new opportunities. Um, you know, whether it be AI or whether it be, you know, it’s so much easier to create a business or, you know, create content, leverage, you know, leverage so many different things that, even though the job market might be a little bit tougher, you know, just don’t feel like you need to follow one specific path. Um, there will be plenty of opportunities. And, you know, the great thing about this market, it’s always, you know, always adapting and always changing, so.
Patrick (CEO of WSO):[00:51:38] Right. Alex, thanks so much for taking the time to speak with us.
Alex: [00:51:41] Patrick, I appreciate it. Always, always enjoyed Wall Street Oasis.
Patrick (CEO of WSO):[00:51:46] Appreciate that. Talk soon. And thanks to you, my listeners at Wall Street Oasis. If you have any suggestions whatsoever, please don’t hesitate to send them my way, email@example.com and till next time.