· Alexander Taubman, David Senra
[00:00:00] S1: Yeah. So, I knew I was really interested in business, and I wanted to learn about capital markets, and I started my career at Goldman. That's where I met one of our co-founders, Zach, who helped introduce me to Rasmus, and sort of all this ended up coming together through that. But when I was at Goldman, I worked in the internal investment unit, which was called Special Situations Group. And it doesn't really exist in the same way because of regulation now, but at the time, it was a very cool group, which I can talk more about. But I sort of just fell in love with this whole idea of capital allocation, and I had some really amazing mentors there. And the whole idea of putting resources of the economy into the highest and best use, and the whole concept of capitalism, I just kind of fell in love with it, and capital allocation across industries. That was one of the beautiful things about SSG at Goldman at the time was the pitch to young people coming out of school was you get to sort of invest right away. We invest up and down the capital structure, from debt down to equity, public and private, across all industries. So I just got tremendous exposure at a young age to all these different types of businesses and ended up working on some really interesting investments there. Learned a ton by sort of not just observing, but also like getting to manage risk at a young age, which was a very unique experience. [00:00:00] S0: Young age is what, early 20s? [00:00:00] S1: Yeah, I think I was like 22, 23. [00:00:00] S0: Okay.
· David Senra, Alexander Taubman
[00:00:00] S0: Okay. [00:00:00] S1: And actually, I had a great mentor there who I later partnered with and worked with at Oaktree, a guy called Patrick McHaney, who empowered me very early, I think in my first year, to basically manage like a couple of hundred million of invested capital. I mean, he was helping me, of course, and he gave me a lot of guidance, but he empowered me to take real risks early in my career, and that was very formative for me. And I realized I loved investing. I loved allocating capital, and I loved businesses and learning about how the world works. To me, understanding how these different businesses work and all these industries is sort of like really understanding how the economy in America really functions. And so I love that, the intellectual curiosity of just learning more about how different things work. [00:00:00] S0: So wait, then you go to Oaktree. [00:00:00] S1: It's funny. People ask me about Long Lake. I never could have told you at any point in time that I was going to be doing what I'm doing today, but if you- [00:00:00] S0: Did you think you were going to found your own company, or you thought it was going to be a fund? Like, what'd you think it was going to be?
· David Senra, Alexander Taubman
[00:00:00] S0: Did you think you were going to found your own company, or you thought it was going to be a fund? Like, what'd you think it was going to be? [00:00:00] S1: I didn't know what I wanted to do. I was very focused on just continuing to learn and get better and improve my skills. So after Goldman, I went to business school, and I actually, what I was going to say is my favorite case was Danaher. I've talked about Danaher. They're a big inspiration for us. The idea of like having that long-term compounding model where you have a structural advantage, you can operate the businesses better, you can have a better cost of capital, and you can have the best people and all that. [00:00:00] S0: Hold on, let's come back to Danaher- [00:00:00] S1: Yeah [00:00:00] S0: ... because I want to hear about that, Danaher, which you and I have talked about before, but also the other people that you guys look up to and you emulate. But you go to business school.
· David Senra, Alexander Taubman
[00:00:00] S0: ... because I want to hear about that, Danaher, which you and I have talked about before, but also the other people that you guys look up to and you emulate. But you go to business school. [00:00:00] S1: So I went to business school. I ended up interning. I'm just going chronological order, but I ended up interning at a holding company called Leucadia. So I was interested in holding companies, and then I spent some time hanging out with Josh at Thrive. So basically, I was always interested in technology and holding companies dating back 15 years. None of this clicked for me until much later. So I went to Oaktree after business school. I graduated, I decided I wanted to stick with investing, and partnered with the guy I mentioned, Patrick, and we worked directly with Howard Marks and Bruce Karsh, two legends of the investment world, to build kind of some new businesses for them. We had started Oaktree's first equity business. We ended up getting involved in some of their credit businesses and helping out with a few things and doing... We started several different products there and worked very closely with Howard and Bruce and just had a tremendous amount of fun, learned a lot from them. But the whole time, I knew I was not sort of fully expressing myself. I eventually wanted to start something, but I didn't know what it was. [00:00:00] S0: On your own. [00:00:00] S1: Yeah. [00:00:00] S0: As a founder, even if it was going to be a fund or an investment company.
· David Senra, Alexander Taubman
[00:00:00] S0: As a founder, even if it was going to be a fund or an investment company. [00:00:00] S1: Yeah, I think I just knew I wanted to do something entrepreneurial. I wanted to build something, and I wanted to do something on my own. But I didn't really know what it was. But then when I started really thinking, after I was at Oaktree for almost 10 years, I started really thinking and brainstorming with some of the early co-founders of Long Lake, who we've talked about, and the ChatGPT moment came out, and it just became very obvious to me, like this was the thing. [00:00:00] S0: But wait, where was the Taubman Capital? When did that happen in your life? [00:00:00] S1: Yeah, so when I was at Oaktree, I mentioned my dad and and grandfather's business, and I was helping working with our family to build out Taubman Capital, which is our kind of family investment business, which was all our own money. And we ended up partnering with... We did a bunch of these deals with investments in founder-owned companies, and we did, I think, close to 50 of them over that decade. [00:00:00] S0: So that's where you learned how to buy companies, do you think? [00:00:00] S1: Yeah, it was a combination of stuff I learned at Oaktree and stuff I was doing with Taubman Capital. And Oaktree stuff was generally larger companies, public companies. [00:00:00] S0: Yeah, but the returns you had at Taubman Capital, you don't like talking about this, but I'll just say it, and we can cut it if you're embarrassed, but it was like something like 70% IR or some shit like that, correct?
· Alexander Taubman
[00:00:00] S1: We had a very good run. We had a very good run. But yeah, it was an eye-opening experience for me because what I realized is we there's some remarkable businesses out there. And just because something is a small or mid-sized business doesn't mean it's a bad business. Actually, I mentioned that business in Minnesota we partner with that's been building all most of the schools in the entire state for the last like 70 years. It's an amazing business. And so my learning was there's some unbelievable entrepreneurs. Going back to my roots in Michigan, it really resonated with me to be able to partner with some of these folks and help them grow their companies. And so to your point, we had a very successful run in bringing sort of permanent flexible capital, which was our own internal balance sheet, a long-term horizon, being comfortable in it, not just comfortable, very encouraging of investing in growth. We're not focused on short-term quarterly earnings. We're not over-levering the companies like a lot of private equity funds do. We basically are a long-term growth investor in great American businesses, partner with great founders, and we can bring them things that they may not have. Like, for us, it was helping them get growth resources, helping them get M&A resources, helping them have capital. A lot of folks have built an amazing business, but they've never done an acquisition before. And they may have tons of competitors that they could run the business better than, and we can help them go and consolidate that industry and become a bigger scale player and get the sort of industrial logic of that. And so we had a lot of fun. That was sort of nights and weekends for me over the 10 years when I was working at Oaktree. So that was a very formative experience as well. Longlake, it all clicked. It turns out I was always passionate about partnering with founders. I was always passionate about technology.