Investing for the AI Boom: Masters in Business with Glen Kacher

Barry Ritholtz (0:02)

Bloomberg Audio Studios. Podcasts, radio, news. This week on the podcast, my extra special guest is Glen Kacher. He is the founder and chief investment officer at Light Street Capital. He's got really a fascinating background and a great track record. He worked at Julian Robertson's Tiger Management, eventually ended up at Roger McNamee's Integral Capital Partners. He's put together really a fascinating focus and track record. One of the few hedge funds located right in the middle of Silicon Valley focused on AI and technology. I found this conversation to be absolutely fascinating. And I think you will also, with no further ado, my conversation with Light Street Capital's Glen Kacher.

Glen Kacher, welcome to Bloomberg.

Glen Kacher (1:07)

Thank you.

Barry Ritholtz (1:07)

Before we get into Light Street, let's talk a little bit about your background. You graduate from University of Virginia School of Commerce with a bachelor's in commerce.

Eventually, you get an MBA from Stanford. Was investing always the career plan?

Glen Kacher (1:25)

It was. I started really looking into that industry. I read a book by Peter Lynch while I was in college, one up on Wall Street, and or Beating the Street. It could have been the first book actually. And I was just caught by this idea of the search for great companies, great ideas. And the way he told the story of finding these companies and researching them, it was really a journey of a detective trying to figure out what would matter in the future.

And that really captivated me and my interest in becoming an investor.

Barry Ritholtz (2:04)

So in between UVA and getting your MBA at Stanford, you work at Julian Roberts Tiger Management. How do you get to Tiger at 22?

Glen Kacher (2:17)

Very fortunate opportunity. So one of the teachers or instructors at McIntyre School of Commerce at UVA was a former Tiger Management partner in Michael Bills. And Michael taught several finance classes there for a couple of years. He had taken some years off from Wall Street after working at Tiger, and then before starting a fund-to-funds business that he's run very successfully. And he suggested that I take a look at it.

I certainly knew of Tiger. Tiger was, it seemed about half of the investment staff actually at one point or another attended UVA. And so a lot of the guys there, sort of knew what we were capable of as young guys coming out with advanced degrees from UVA.

Barry Ritholtz (3:12)

And Robertson was legendary in 93 Was he still running the ship?

Glen Kacher (3:16)

Oh, yeah.

Barry Ritholtz (3:17)

Very much in charge.

Glen Kacher (3:18)

Very much in charge, yes. You know, I was there from 93 to 96 full time. And then still when I went to Stanford for a year, I worked for Tiger as well. And Julian would occasionally wake me up both a 6 a.m. phone call when I was in business school.

Barry Ritholtz (3:35)

6 a.m. East Coast.

Glen Kacher (3:37)

No, 6 a.m. my time. 9 a.m. his time. Just a half hour before the market. So he had had some discretion there. But we had some great times, you know, learning and talking through the technology industry at the time, investing in companies like Dell, Microsoft, Compaq, and you know, Cisco were some of the.

Barry Ritholtz (3:59)

So really right out of college, you're full on technology. Did you look at other spaces?

Glen Kacher (4:04)

I worked briefly looking at financial institutions with Rob Pitts there, and we had a great time doing that, but I was certainly more interested in technology. I really studied that industry prior to going to New York, and so it was a better fit for me following that industry.

I think two or three months into the job, I ended up sitting two chairs away from Bill Gates at an analyst meeting after the meeting dinner, and at that point, I knew I was in the right spot.

Barry Ritholtz (4:40)

That was, to say the very least. So after Stanford, you end up at Roger McNamee's Integral Capital, and you stay for 13 years, and you're really less of a public markets analyst and more of a venture sort of banker.

You either lead or co-lead venture investments, and the list is pretty impressive. Agile, ArcSight, Blue Nile, Epiphany, Extensity, Fortify, Interwoven. Log me in, open table, overture, go to.com. What's the common thread? Is it just, hey, that's what was hot in the late 90s? Or what tied that list together?

Glen Kacher (5:21)

Well, the amazing thing about Roger was he really focused on saying, look, we can't cover every company in this industry. We were a small team, much like at Tiger, there were two or three of us looking at tech at any one time, and at Integral, even though we were tech focused firm, but we had four or five people total. But even with that number, you can't cover the entire industry. So you have to focus in when you're investing and say, where is the change really happening most quickly? Where is it most dramatic? That disruption equals opportunity as an investor.