SPECIAL EPISODE: Introducing Capital Allocators Podcast with Host Ted Seides

**Patrick O'Shaughnessy** (0:00)
This is a special guest episode. I'm hoping to spread the word for what will be a fascinating new podcast hosted by my good friend, Ted Seides. The show is called Capital Allocators and will feature a wide range of people that control the flow of money through the capital markets.
Ted is in a unique position to do this. He knows the world as well as anyone, having spent his career with both allocators and the money managers who invest on their behalf.
My guess is that most of Ted's guests will never have done an interview of this type before. So we are lucky to be along for the ride. What follows is the first episode in full, which is filled with great stories and insights. Once you are done, you can subscribe to Capital Allocators on iTunes or wherever you get your podcasts. You can also learn more at capitalallocatorspodcast.com. I really loved this first episode and I think you will too. I'll let Ted take it from here. Enjoy the first episode of Capital Allocators.

**Ted Seides** (1:00)
Hello, I'm Ted Seides, and this is Capital Allocators.
This show is an open exploration of the people and process behind capital allocation. Through conversations with leaders in the money game, we learn how these holders of the keys to the kingdom allocate their time and their capital. You can keep up to date by visiting www.capitalallocatorspodcast.com.

**SPEAKER_3** (1:27)
Ted Seides is the Managing Director of Hidden Brook Investments, LLC. All opinions expressed by Ted and podcast guests are solely their own opinions and do not reflect the opinion of Hidden Brook Investments. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.
Clients of Hidden Brook Investments may maintain positions and securities or managers discussed on this podcast.

**Ted Seides** (1:51)
My guest on today's show is Steve Galbraith, an investment manager, brilliant writer, engaging thinker and one of the most well-liked men on Wall Street. Steve's career has touched every aspect of investment management. He has worked as a research analyst, portfolio manager, investment strategist, business leader, entrepreneur, and on the boards of an endowment and a family office.
He started as an analyst at Chase Bank in credit and Samford Bernstein in equities and later got recruited by Morgan Stanley to succeed the legendary duo of Barton Biggs and Byron Ween as chief investment strategists.
Steve left Morgan Stanley in the mid-2000s to join and help lead multi-billion dollar hedge fund Maverick Capital. He departed some years later to take his hand at his own hedge fund startup. Today, he manages his own family office in true family style, as you'll hear later in the show. At barely past 50, Steve has had a remarkable career and still has a full tank of gas. Alongside his storied career in finance, Steve has dabbled in a European soccer team, a local beer company, and a wildly successful charter school. We discussed Steve's very personal take on all of this, and I promise you won't want to miss a second. So without further ado, I bring you the incomparable Steven Galbraith.

**Patrick O'Shaughnessy** (3:08)
Thank you.

**Steven Galbraith** (3:13)
Hello, happy to be here, thanks, Ted.

**Ted Seides** (3:15)
There's a lot we can talk about investing. I think we may want to start with one of our shared passions of sports. Somehow in your life, you've found your way into owning a piece of a European soccer team, European football.
Why don't you tell the story of how that came about?

**Steven Galbraith** (3:31)
Well, one of my buddies actually from, I went through the Chase training program with one of my dear buddies from, he's a fellow Rhode Islander, and he actually has turned his passion into his business, and he buys and sells effectively minor league baseball teams. And it was actually at one point was a very inefficient market, Ted. It was unlike the majors, which really are trading off egos and big price tags, it was an inefficient market. So he came to me with this wonderful value proposition. There was a club called the Darby County Rams, and he said, Steve, in the UK, what happens is if you're in the effectively the major leagues and your team stinks, you get sent down to the minors as a team.
And the economics of it can be actually catastrophic because you go from the big leagues where you're getting all these sponsorships and AIG sponsoring you and you're selling out and you have TV contracts. And so it's worth a multi, multi, multi million. And when you get what's known as relegated, it results in a huge diminution value. And so like as with a stock and as a value guy, as you well know, we look at this and say this is a gift. We're like, we're basically buying this team because the seller panicked. He saw the future cash flows of this team imploding and he said, I'm out of here.