Dan Rupp - Building Parkway Capital

Graham Rhodes (0:00)

This is Graham Rhodes, and you're listening to the Longriver Podcast, where I share conversations with my peers on global business and investing, as we see it from Asia. My guest today is Dan Rupp, founder and CIO of Parkway Capital. Dan is someone I've known for many years, and I've wanted to have him on the podcast for a while. He launched Parkway in 2024, a year after I launched Longriver, at a time when much of Asia still felt weighed down by a bruising bear market.

Dan, by contrast, was strikingly confident in the opportunity and did not hesitate to say so. What's been fun to watch since then is how starting Parkway seems to have unleashed something in him. It's revealed not just the investor many people already knew, but the entrepreneur in him as well.

So today, I want to focus less on Dan's biography or any individual companies in the Parkway portfolio, and more on the business of Parkway itself, what Dan's building and how he thinks about the craft of investing now that he's doing it on his own terms. Dan, welcome to the podcast.

Dan Rupp (1:02)

Thanks, Graham. It's great to be here.

Graham Rhodes (1:04)

Dan, before we go any further, I have to give the usual disclaimer. Nothing we say in this conversation is investment advice, nor is it marketing for any kind of security or fund.

Everyone listening should do their own research. Is that cool with you?

Dan Rupp (1:17)

Sounds good.

Graham Rhodes (1:18)

All right. So the first question is, you worked at your last job for quite a long time. What did you want to build at Parkway that you couldn't do there?

Dan Rupp (1:27)

Yeah, thanks for him. So I worked for 17 years at Overlook Investments. It's a fantastic firm founded by Richard Lawrence and the CIO, long time CIO, James Squire. They are both among my mentors, and there's a lot of great analysts on the team there. So I learned different things from different people.

But I always had this three-year-old itch and I always wanted to build something. And as you know, Hong Kong is a great place to start to see lots of interesting people doing different things.

And for me, I always knew that at some point, I wanted to build a business. I just had such a great job at Overlook, where I stayed for quite a long time before I left to join. But really, I also want to build a great firm and take a lot of lessons from Overlook. Because we're a smaller organization, we can access a part of the market that just wasn't accessible at a large firm. We're not only doing small caps, but we're doing small, mid and large caps. And there was really a gap in the market. A lot of companies, I think, are underappreciated. I tend to be a little bit off-piste. I ski off-piste, but when I look at companies, I look for things like B shares in China, or preferred shares in Korea, or less liquid shares that kind of come with discounts. So I don't like crowded trades, and I felt like there were a lot of companies which were just too cheap. And so that's why I was quite excited to get started back in 2024

Graham Rhodes (2:48)

Was the timing at all coincidental with the bear market? I mean, as I said in the intro, you were really banging the drum, and you had more confidence than anyone I can remember from amongst our friends.

So was that also like a motivation to get going?

Dan Rupp (3:02)

Yeah, I was quite concerned that when I left in Easter time of 2023, and I was just definitely afraid that there would be a big bull market the second half of 2023 before I could get started. Fortunately, I think we maybe missed the bottom by a month or two, but we were close enough to start in January 2024

But yeah, I looked at the Heng Seng Index, I think it had declined approximately by 50 percent from 2018 or so to late 2023 So it had halved, and I looked around Hong Kong, and yeah, we had lived through a difficult period, and it was a difficult five-year period, but I could sense that things would come back, Hong Kong is a resilient city with great people. So yeah, I was confident that the city would come back and as with Asian market. So the timing, you can create your own timing at some level, but there's also an element of luck. But whatever it was, I'll change it.

Graham Rhodes (3:57)

Better lucky than good, as they say.