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Does age matter when it comes to investment Founders?

“You won’t win anything with kids”

Football pundit Alan Hansen criticizing Alex Ferguson’s young Manchester United side (Beckham, Scholes, Giggs, Neville) following their opening day defeat in the 95/96 English Premier League.

They went on to win both the Premiership title and the FA Cup that year!

  • 2 years old – the youngest ever Mensa members, Adam Kirby and Christina

  • 13 years old – the youngest ever chess grandmaster, Magnus Carlsen, from

  • Almost everything that is great has been done by youth.” Benjamin Disraeli

Alongside more standard factors that can drive asset manager performance (access to data, research capabilities, risk management philosophy) we consider nuanced performance drivers such as personality, motivation, and lifestyle – through to even what car you drive. Since our first Strategic Partnership in 2004, the Stable team has noticed a significant trend of younger managers looking to launch – and so thought of exploring whether age matters when it comes to asset management.

 Top performing managers age at launch



Age at Launch

Ken Griffin



Seth Klarman



Ray Dallio



Paul Tudor Jones



Steve Koltes

CVC Capital


Michael Steinhardt

Steinhardt Partners


Stan Druckenmiller



Lee Ainslie



Michael Chu

L Catterton


David Einhorn

Greenlight Cap


Tom Steyer



Louis Bacon

Moore Capital


Steve Feinburg

Cerberus Capital


Ben Levine



Thierry Tamsit

Astorg Partners


Eric Forday



Steven Schonfeld



Eddie Lampert



Neal Aronson

Roark Capital


Chase Coleman

Tiger Global


Warren Buffett

Buffett Partnership



Theoretical models have hypothesized that more experienced managers would take more risk as they get older, as knowledge and confidence in their abilities grew. Evidence from studies done on mutual funds, security analysts, and macroeconomic forecasters has supported this theory: older managers are more likely to take bold, aggressive actions while younger managers are more likely to herd and show more risk aversion. However, empirical evidence specific to alternative asset managers shows the opposite: older managers tend to display lower returns and lower risk (Liang (1999), Edwards and Caglayan (2001)). So why are alternative asset managers different?

Boyson (2003) posited that this is a function of the dynamics of the alternatives industry compared to the mutual fund industry: some alternatives managers have more skin in the game and have more to lose if their funds fail – reputation, future career prospects, etc. Therefore, younger Founders at the start of their careers are more diligent and driven to produce absolute risk-adjusted returns – arguably a key reason behind why younger managers outperform. This would not only imply that – all else being equal – one should prefer younger managers, but also prefer younger and smaller funds: both positive findings for us as a Strategic Partner to these businesses.

When one thinks of ‘legends’ in the alternatives industry, one does not immediately think of youth; most of these legends are well over 50 years old. However, it’s worth remembering that most of today’s legends launched their firms in their early 30’s or younger. As can be seen by the table above, many launched under the age of 30. In our list of the top lifetime P&L generators across both public and private investment managers, the average age at launch is 33.

As part of our investment process, potential Founders complete personality questionnaires to help us understand their background and mindset. A Founder’s hunger, focus and desire to perform is assessed; alongside lifestyle factors such as how many hours a week they work, how they define success, or how they plan to compensate their team.

If one had to try to put numbers to it, our view is that you’re a person’s 30’s is a good decade to launch – you are still hungry, not too wealthy, and able to work very hard without concerns about health or energy levels. We find investor opinions around the ‘appropriate’ age for an asset manager is idiosyncratic to allocator types (endowments and family offices prefer younger) and cultural differences (North American allocators generally invest younger than their European counterparts).

Being too young may make investors concerned that they lack experience or maturity, having not been through a cycle or experienced extreme market environments but being too old can also damage investor perceptions: is the manager still ambitious and hungry enough to make a new business work? Can they embrace new technology and understand new trends driving bottom-line growth and price action? Can they adapt well to different environments or are they set in their ways?

As an experienced allocator of capital, Stable is well aware of how younger Founders can affect a diligence process. Younger Founders generally have shorter investment track records; and have usually worked as part of a team as opposed to being the lead Portfolio Manager. This means that there is often less information for allocators to base investment decisions on. As a Strategic Partner, this difficulty is magnified due to the longer-term nature of our Partnerships – and so our diligence processes have been refined over the last decade to address this.

We are not ageist; we would never base investment decisions on age – it would be foolish to do so. Age is – by itself – not important. What is important is a Founder’s hunger, mindset, personality, lifestyle, risk seeking behavior, experience and skill set – all factors which may have correlations with age.

  • Liang, B. (1999). On the performance of hedge funds. Financial Analysts Journal, 55(4), 72– 85.
  • Edwards, F. & Caglayan, M. (2001). Hedge Fund Performance and Manager Skill, Journal of Futures Markets, vol. 21, issue 11, 1003-1028
  • Boyson, N. (2003). Why do experienced hedge fund managers have lower returns? Journal of Financial and Quantitative Analysis
  • Baba, N., & Goko, H. (2009). Hedge Fund Survival: Non-Normal Returns, Capital Outflows, and Liquidity. Journal of Financial Research, 32(1), 71–93.

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