Richard Lawrence, the founder of the Overlook Group, was a recent guest on the Capital Allocators podcast. The episode with Richard covers his early career experiences, the founding of Overlook and the particulars of the approach he takes to investing and running his firm. The Capital Allocators podcast series was launched by Ted Seides, formerly of Protégé Partners, in early 2017 and features in-depth conversations with leaders from across the money management industry.
Below are a few highlights / excerpts from the hour-long episode – please note that this is not a comprehensive transcript, just a few things I found interesting (any mistakes are also my own). I highly recommend listening to the conversation in its entirety.
- On his firm’s recent pivot towards China: For many years, they exported out of China or sold to China, but were very peripherally involved in Chinese stocks. Four years ago, they really pivoted and put the bulk of their money in China, particularly A-shares. In many ways, China today is just like (the rest of) Asia 20-25 years ago. The local investors are largely punters but it’s not their fault because they haven’t known what a good investment is. We are now in the early stages of building blue chips in China and that’s helping local investors better figure out what to do with their money rather than just be speculators. More importantly, for Overlook, they are now finally able to invest in China on their terms.
- On his biggest investing mistake: He says he has made them all at one time or another. One thing that he should have done is hedged the currencies in Asia when current accounts went above 5%. Back then, however, he was still influenced by Buffett who was saying just buy stocks and don’t look at the economy. That didn’t work out well in the crisis and they pay more attention to macro indicators now.
- On the most underappreciated risk in the markets today: He sees the geopolitical risks in Asia evolving. President Trump is perhaps the biggest risk to Asia. In his view, Trump doesn’t understand North Korea or the importance of a strong relationship with China. The latter should be a natural strategic ally to the US, the way Europe is. The two countries actually share a lot of the same beliefs but the US government seems hell-bent on making China the enemy.
- On the one phrase from when he was growing up that has stuck with him over time: “Fools’ names and fools’ faces always appear in public places.”
- On the most profound book / publication he has read in recent years: The Economics of Climate Change by the British economist Lord Nicholas Stern.
- On what he knows now that he wishes he knew ten years ago: He is more philosophical about things now and doesn’t take successes or failures as personally as he used to. He has learnt that certain things are out of our control.
- What other advice he would give his younger self: Do more, do it faster. Have as big an impact on the world as you can, outside of work. Pick your cause and really go for it. You can’t take the money with you.