This marks the first book recommendation list of Everest Growth Capital. Every day, people are very busy handling so many responsibilities in life and work. We believe it is important to take some time back and smell the roses, by reading and thinking. Each month, our team read one book together, then we share our takeaways by discussing the implications to long-term investing and our fund. We want to make our list available to everyone. Sharing and transparency are important parts of our fund’s DNA, and we believe they will help us grow stronger over time. Hope you will enjoy our book list in 2021 and feel free to share your own takeaways or other books you like. Stay healthy and hungry in 2022 and beyond!
Pioneering Portfolio Management: An Unconventional Approach to Institutional Investment – by David F. Swensen
This book is the source of inspiration for our fund’s investor-centric model. This book has taught us the core of an investment manager is fiduciary responsibility. This is the key reason why we have to be fully aligned with investors' best interests to achieve long-term investment success. Also, this book has defined what are the key characteristics of an excellent active investment management company, and this is our goal. As the book has put it: Attractive investment management organizations encourage decisions directed toward creating investment returns, not toward generating fee income. Such principal-oriented advisors tend to be small, entrepreneurial, and independent.
Perspectives for Aspiring Superinvestors – by MITIMCo
This is a very concise and insightful interview report done by MIT Investment Management Company (MITIMCo). MITIMCo is a very reputable and one of the most start-up-friendly endowments in the US, it has even created a dedicated section on its official website for emerging managers (link). The website has explained MITIMCo’s unique approach to partner with emerging managers in the very early stage, which is super inspiring to those who dream big and long-term. It has also provided so many insights and advice to help emerging managers to form correct positioning in the very beginning. Our budget-based management fee and long-term performance fee schemes are learned from this interview note. We believe this innovative fee rate structure helps us to partner with future top-quality LPs who share our long-term investment philosophy.
Investing: The Last Liberal Art - by Robert Hagstrom
The book is built upon Charlie Munger's "latticework of mental models" concept. It echoes very well with our belief that we have to keep reading widely and extensively to distill the best ideas from different fields since investing is a relentless pursuit of truth and constant learning about the complex world. It is almost impossible to make good investment decisions based only on business, finance, and accounting. This book also teaches us the importance of a diverse team with different backgrounds, it helps us to build conviction on our generalist talent development model. We want our team to have a broader view of various industries, instead of only focusing on one particular industry or a shortlist of companies. In this way, we can make better investment decisions by drawing valuable lessons from various industries.
Capital: The Story of Long-Term Investment Excellence – by Charles D. Ellis
This compelling book has provided so many insights on the corporate culture and long-term success of Capital Group that has gone through the test of time. The success, we believe, is largely driven by its single-minded focus on long-term, performance-driven, entrepreneurial attitude, efficient communication, and keep doing the right things. It’s also quite inspiring to see how a successful organization has evolved with its core principles, and has been consistently adopting these core principles alongside its development.
The Seven Habits of Highly Effective People – by Stephen R. Covey
We believe great investors and great performers of all types are mostly similar. They all have great habits and relentless pursuit of excellence. This book has not only lightened the garden path to achieve success in business, but also shared so many insights on live a sustainable and happy life. We have adopted the wisdom of the 7 habits into every aspect of our start-up fund, and find that our efficiency has been greatly enhanced. The 7 habits include always be proactive, begin with the end in mind, first things first, think win-win, seek first to understand and then to be understood, synergize, sharpen the saw.
The Fundamentals of Hedge Fund Management – by Daniel A. Strachman
This book covers many basic aspects of a hedge fund, including various service providers, structures, front & back office etc. It is a helpful toolbox for those who dream about embarking the exciting and challenging hedge fund start-up journey. The author has included many lessons learned from his prior extensive experiences of working with start-up managers who are creating, building, developing hedge funds. Though the book is mainly designed for US-based hedge funds, but we find it can also provide helpful insights to other jurisdictions since the infrastructure and way of doing hedge start-up are more or less the same.
The Art of the Start 2.0 – by Guy Kawasaki
This book has provided a time-tested and actionable guide for anyone starting anything. For those who want to make a jump from a well-defined role in a large organization to a master of everything (三头六臂) in a start-up, we all have to go through a transformation process. This is an endless process that includes the launching, bootstrapping, building a team, partnering and more importantly enduring. This book is always a source of wisdom and energy for us to continue our exciting and enduring start-up journey.
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