E21: "The Long Story" Part 1 - Interview with Larry Powell of LP Institutional, Inc.

Alt Investing Made Easy

Summary
In this episode of Alt Investing Made Easy, hosts Sarah Florer and Roland Wiederaenders welcome Larry Powell of LP Institutional, Inc., a seasoned investment management professional. The conversation delves into Larry's extensive background in the investment industry, his experiences with alternative assets, and the evolution of investment strategies over the years. Larry shares valuable insights on manager selection, the importance of due diligence, and the lessons learned from his early career. The discussion also highlights the changes in the investment landscape, particularly at the Texas Teachers Retirement System, where Larry played a pivotal role in shaping the alternative investment strategy. In this conversation, Lawrence Powell discusses the evolution of asset management strategies, the importance of building a strong investment team, and the critical role of external managers in managing pension funds. He emphasizes the need for thorough due diligence when evaluating money managers and shares his personal rules for successful investment management. The discussion highlights the complexities of asset allocation and the necessity of trust and understanding in the investment process. In this conversation, Lawrence Powell shares his insights on the critical aspects of due diligence in asset management, emphasizing the importance of networking, intuition, and transparency. He discusses the risks associated with impulsive investment decisions and the necessity of thorough evaluation of investment managers. Larry also highlights the significance of asking probing questions to uncover potential issues and the role of intuition in making sound investment choices. The conversation serves as a guide for asset owners and investors to navigate the complexities of manager selection and investment strategies.

Sponsored by:
Real Advisers, Austin, Texas

Special thanks to:
Larry Powell: https://www.linkedin.com/in/lrpowell

Grable Martin PLLC

Red Sun Creative, Austin, Texas

For more information: AltInvestingMadeEasy.com

Please contact us: [email protected]

Roland Wiederanders: [email protected]

Sarah Florer: [email protected]

Disclaimer: “This production is for educational purposes only and is not intended as investment or legal advice.”

© 2025 AltInvestingMade Easy.com LLC All rights reserved

Takeaways

• Larry Powell has over 40 years of experience in investment management.
• The importance of building relationships in the investment industry.
• Manager selection requires a comprehensive understanding of the market.
• Due diligence is crucial in avoiding investment pitfalls.
• Larry emphasizes the need for a quantitative framework in trading.
• The evolution of alternative investments has transformed the industry.
• Understanding different investor objectives is key to successful asset allocation.
• Larry's experiences have shaped his approach to evaluating money managers.
• The significance of mentorship in developing investment skills.
• Texas Teachers Retirement System has significantly increased its allocation to alternatives.
• The stock market crash led to significant changes in investment strategy.
• Building a strong team is essential for effective asset management.
• External managers play a critical role in pension fund performance.
• Trust is more important than track record in manager selection.
• Understanding jargon is key to evaluating money managers.
• Due diligence should be thorough and personal.
• Avoiding poor managers is as important as selecting good ones.
• A manager is guilty until proven innocent in the evaluation process. Due diligence requires multiple meetings to assess a manager's integrity.
• Networking is essential for career growth and investment success.
• Intuition plays a crucial role in investment decisions.
• Transparency from managers is a key indicator of trustworthiness.
• Probing questions can reveal critical information about managers.
• Avoid impulsive investment decisions based on superficial impressions.
• A diversified network enhances due diligence efforts.
• Be wary of managers who resist transparency or probing questions.
• Trust your gut feeling when something feels off in an investment.
• The best managers often have significant personal investments in their funds.

Chapters

00:00 Introduction and Background of Guests

03:04 Larry Powell's Journey in Investment Management

05:58 Early Influences and Career Beginnings

09:03 Transition to Trading and Mentorship

12:01 Building a Quantitative Framework

14:55 Experiences with Manager Selection

17:48 Lessons Learned from Early Investments

21:02 Establishing a Hedge Fund

24:02 Navigating the Investment Landscape

27:07 The Importance of Due Diligence

29:59 Larry's Role at Texas Teachers Retirement System

33:01 Evolution of Alternative Investments

35:52 Current Trends in Investment Management

44:30 Strategic Shifts in Asset Management

48:06 Building a Robust Investment Team

52:14 The Importance of External Managers

54:01 Evaluating Money Managers

01:38:45 Networking and Career Development

01:46:34 Navigating Career Risks in Asset Management

01:52:34 Probing Questions and Manager Transparency

02:01:43 The Role of Intuition in Investment Decisions

02:02:13 Transparency as a Fraud Detection Tool