Mark W. Yusko, CEO and Chief Investment Officer, Morgan Creek Capital Management
Undergraduate BS in Chemistry, Biology from the University of Notre Dame, MBA, Finance and Accounting from the University of Chicago. Business Analyst, MMI Companies, Associate, Disciplined Investment Advisors.
Assistant Investment Officer, University of Notre Dame. Founder, CEO and CIO, Morgan Creek Capital Management. Founder, Managing Partner, Morgan Creek Digital.
Financial Services professional with three decades of experience building and growing asset management businesses. A frequent speaker and commentator on Financial Markets across industry and media. Founder and President of Morgan Creek Foundation and Hesburgh-Yusko Scholars Foundation.
What is your favourite social media platform, and why?
Twitter, best communities, best engagement, strong content.
Tell us about you and your current role or area of interest.
CEO and CIO of Morgan Creek Capital Management, a registered investment advisor and investment management firm focused on bringing the endowment investing model to a broad spectrum of clients. Managing partner of Morgan Creek Digital, a Venture Capital firm focused on investing in infrastructure powering the transformation to the digital age.
What do you like about your career or area of focus?
I love investing and love educating others about investing. Morgan Creek focuses on all asset classes, and that breadth of opportunity is one of the things I like most about my current role.
Very fortunate to have the flexibility to invest across multiple styles of investing as well, from traditional stocks and bonds to hedge funds, to private investments and venture capital.
What is the best advice you have ever received?
Five come to mind, and they are tough to choose...
Do what you love (then you will never "work" a day in your life).
Failure changes for the better, success for the worst. Resilience is a superpower.
Your 20s are for getting educated, your 30s are for building your reputation, your 40s and 50s are for capitalizing on your reputation, and your 60s and 70s (and longer) are for enjoying your reputation.
Until people know that you care, they don't care what you know.
If you continually give, you will continually have.
What inspires you, motivates you, or helps you to move forward?
I have always had a strong desire to learn new things and to build businesses to provide solutions to pressing problems. I also believe in the philosophy that: to those that much is given, much is expected, and I am driven by paying forward the gifts. I have been blessed with my parents, teachers, friends and mentors in my life.
What are you proud of in your life so far?
I am proud of building the Endowment Management Company at the University of North Carolina at Chapel Hill. I am proud of building Morgan Creek Capital Management. I am proud of pivoting to become a venture capitalist and found Morgan Creek Digital. I am proud of establishing the Hesburgh-Yusko Scholars Program and the Morgan Creek Foundation.
But, all that said, I am probably most proud of building a loving relationship with my wife and raising three great kids who are carrying on the family philosophy of a growth mindset and an attitude of gratitude.
What is your preferred way to meet new people/network?
I love Twitter for the community. I love the sales process of trying to meet people with challenges that we might be able to help solve with our products and services. I believe in the extreme power of networking your relationships to grow the contacts and power of the network itself.
What skills or qualities do you feel have helped you?
Strong communication skills and an ability to explain complex ideas in simple terms. Resilience to recover quickly from setbacks and failures. Believe strongly that "success is simply moving on from failure without loss of enthusiasm. The ability to transfer my enthusiasm to others. Integrity is critically important, and being able to stay true to my principles even when there is a cost. Not being afraid of doing what is hard. Boundless intellectual curiosity and an insatiable desire to learn new things.
What do you wish you had known when you started out?
Take more risks when you are young (the costs of mistakes are lower). Read more books and less news. Invest more often earlier and always keep investing, but cut losers faster and let winners run longer.
Invest in private businesses to capture the illiquidity premium. Find mentors faster and spend more time with them. Invest lots of time in building friendships as those friends are critical in the inevitable tough spots and for accelerating success in the good times. Finally, say no more often and be relentless in guarding your time.
Who do you most admire in business, academic or creative circles and why?
Julian Robertson is an investor and philanthropist.
Steve Jobs was a visionary for his relentless pursuit of perfection of purpose.
Jim Simons for his ability to think differently about investing and generate the best returns in the business.
Ken Griffin for his ability to anticipate future trends and build dominant businesses in multiple disciplines.
Oprah Winfrey for her dedication to the craft of her ability to build an entertainment empire.
Michael Jordan for his intensity and commitment to winning Paul Romer for his theory of Increasing Returns.
Harry Markowitz for the CAPM.
Robert Metcalfe for Metcalfe's Law on Networks.
Senecas the younger for his timeless wisdom.
Steven Spielberg and Jeffrey Katzenberg for their creative genius.
Fr. Ted Hesburgh for his transformational leadership and his dedication to a life of servant leadership.
Mother Teresa for her devotion to improving the lives of others.
Outside of your professional/work area, what hobbies or interests do you have or what other areas of your life are of real importance to you?
Family travel, skiing, fly fishing, reading, writing and public speaking.
Has the pandemic had a positive or a negative effect on you and/or your business, and how have you managed it?
Managing through the pandemic was difficult for everyone, and our business certainly was challenged. That said, our challenges were not nearly as extreme as those on the front lines of healthcare, logistics and hospitality nor as challenging as those dependent on the gig economy. For that, I am very grateful.
As an extreme extrovert, not being with people was very hard, but there were tools to help me manage through that element. We managed through the challenges by being flexible with our team and helping to provide a dynamic work environment that could enable multiple modes of work-from-anywhere.
We relied on a bit of luck as well as we had pivoted to the digital asset segment in 2018, and some early wins in our funds helped cushion the losses in other areas of the business hit harder by the lockdowns and restrictions.
They (whoever they are) say that which doesn't kill you makes you stronger. With all due respect to the fact that there was a loss of life during the pandemic, our business, our community and our family emerged stronger from the trials. We learned valuable lessons that we can apply going forward.
Do you have a mentor, or have you ever mentored anyone?
I have been blessed to have multiple mentors over the course of my career, and I have served as a mentor to a number of young people in my firm and outside my firm over the years. I believe a mentor/mentee ship is critical to success in business and life.
What advice would you have for someone looking to get into the same area of work or interests?
Make sure you are driven by genuine passion and interest, not by remuneration and/or prestige. Take as much science, philosophy, psychology, history and literature as you can as preparation. I believe that (like the book title) Investing is the Last Liberal Art and a strong core education and intellectual curiosity are necessary for success.
Find mentors fast, ask them for help, and read biographies of famous investors (another form of mentorship). Look at non-traditional paths beyond stocks and bonds as the financial system and investment business are rapidly changing.
What do you feel is the most common reason for people failing or giving up?
Lack of true passion for an idea or endeavour.
Is there a phrase, quote or a saying that you really like?
Too many to list... a couple from earlier
"If you continually give, you will continually have."
"People don't care what you know until they know that you are a few others."
"A plan conceived in moderation must fail when circumstances are set in extremes."
"People always underestimate how much will change over the next two years and underestimate how much will change over the next ten years."
"Gold is money, and everything else is just credit (and Bitcoin is Digital Gold)."
"You make the most money in investing when things go from truly awful to merely bad."
"The greatest wealth is created by investing in something you believe in before others even understand it, and you will be mocked and ridiculed for your non-consensus action, but it is worth it."
What companies, brands, or institutions do you like or do you think are getting it right?
Apple, Nike, Bitcoin, Amazon, Samsung, Sony, Alibaba, and Tencent.
How do you define success, and what lessons have you learned so far that you could share with our audience/readership?
Success can be measured in many ways. However, I believe true success comes from having strong relationships with family, friends, colleagues and clients forged in mutual respect and a genuine desire to serve others.
Success is having a reputation for being a good person, one who does what they say they will do, is there for others when needed, has the highest integrity and character and works to leave the world better than they found it.
Some lessons:
Risk Management is more important than return maximization in investing; if you take care of the losses, the gains take care of themselves.
As Roy Neuberger said, there are three rules for managing money, Rule #1, Don't lose money, Rule #2, Don't lose money, and Rule #3, Don't forget the first two rules.
Don't be afraid of being wrong and obsessed with being right.
George Soros taught me that investing doesn't matter if you are right or wrong; what counts is how much money you make when you are right and how much money you lose when you are wrong.
Being wrong is not a sin; staying wrong is.
When facts change, change your mind.
We all make mistakes; they are inevitable, but the majority of the time, they are not fatal. When you make a mistake, Dean Smith said you must RALF, Recognize it, Admit it, Learn from it, and Forget it.
Coach K taught me that what separates the great players/investors from the average players/investors is the average players are always focused on the last play (miss shot, go commit stupid foul), while the great players always focus on the next play (miss shot, forgot took it, go play great defence, steal the ball, make layup).
Choose your partners well, as some people change, particularly with material success, and you should surround yourself with people who have the same value system and commitment.
Look at the five people you spend the most time with; that is who you will become; choose wisely.
Will Smith taught me to "Fail Fast, but Fail Forward."
Science training is the best preparation for investing, and it is all about the Scientific Method and forming hypotheses.
Run Test, Gather Data, Analyze Data, Prove/Disprove Hypothesis.
Repeat as necessary if two people always have the same opinion; one is unnecessary dialogue, and debate in search of truth is the key to understanding.
If you can't explain something simply, like to a 5th grader, you don't really understand it and shouldn't act on it.
Seek people with different opinions from your own and listen to them.
When investing, always keep in mind that the person on the other side of the trade (seller or buyer) has done work too and came to a different conclusion than you did.
What do they know. Not know that you don't/do?
When investing, you have to have an edge, an information edge, an analytical edge, a liquidity edge, a time horizon edge or a structural edge; always know which one and work hard to maintain it as circumstances change.
Comfort is the enemy of returns. With every investment, we become richer or wiser, never both.
Time arbitrage (having a longer time horizon than others) is an investment superpower.
Synthesis of information is more important than access to information.
In a world where we are drowning in information and thirsting for knowledge, knowing what to ignore is a superpower.