Interview #71 : George Livadas (Upslope CM)
Interview #71 : George Livadas (Upslope CM)
Long/Short Public Equity Investment Strategy
For this issue we had the pleasure of interviewing George Livadas, Founder and Portfolio Manager of Upslope Capital Management.
⚡ Consider becoming a Premium Subscriber to read these interviews in full, and gain access to the growing archive, for just $10 monthly or $100 annual subscription.
Read the last two interviews with Christian Ryther (Curreen Capital) and Jeremy Kokemor (Right Tail Capital)
Hi George, thanks so much for taking the time to do this interview.
Can you please tell readers about your background, and how you got involved in investing?
Of course, and thank you very much for having me, Jon. I was a late bloomer to professional investing and divide my career into two stages: first half was investment banking and second half investing.
I was a Russian major in college and only started to develop a personal interest in stock-picking after graduating. Eventually, I made my way to business school in the fall of…2008. And it was during those two years that I really fell in love with investing and alternative investing in particular. I was glued to my screen – investing my own money – and obsessed with the game of trying to protect capital and make money during the financial crisis. I still vividly remember watching the Flash Crash in real-time.
I technically belonged to a few of the MBA program’s investing clubs, but, I confess I wasn’t all that interested in doing formal stock pitches. Mostly, I kept to myself on the investing front, and was just focused on my own portfolio and trying to figure “it” (the crisis) out. It really clicked for me that investors have a wide range of tools at their disposal – not just “long stocks and hope for the best” – and this meant I was naturally drawn to long/short investing. I had no idea what I was doing at the time. But, I absolutely loved trying to figure it out.
As much fun as I had investing on my own, after graduating I needed a job. I had interned at a CLO manager (Monroe Capital), but there were no full-time openings. The job market was still lousy and I’m a mediocre interviewer on a good day. So, I hid out in investment banking a bit longer, and joined BMO Capital Markets’ FIG investment banking coverage team in New York. I mostly covered exchanges, brokers, and other non-bank financials – areas I still spend a lot of time in today.
After tagging my VP promotion, I stepped back and re-evaluated my career. What could I really see myself doing long-term – “what doesn’t feel like work?” The answer was extremely obvious. I made the unusual move to request a transfer from IB to research. BMO had just hired a top-ranked analyst from Deutsche Bank that needed to build out his team. Mark Wilde, aka “Dr. Paper” covered “packaging and forest products” and I saw it as an excellent opportunity to learn a new sector under a veteran. I cannot say enough good things about Mark and my time working for him – he is truly one of the few genuine articles on Wall Street.
Unfortunately, my timing was bad and after a year my family and I decided to move to Denver for personal reasons. Given my very late start to professional investing, it made sense to rip the band-aid and move to the buyside. I took a job at a start-up long/short fund and started the strategy that would become Upslope’s a year later.
What type of businesses or situations do you like to invest in? Are there any specific quantitative or qualitative characteristics you seek?
I naturally gravitate to predictable, less-cyclical, “quality” businesses that tend to fall somewhere in the GARP-to-value spectrum.
On the long side, I think of “needs” and “wants” and bucket ideas depending on how many boxes they tick. Some “needs”: understandable (to me) business model, supportive or neutral secular trends, obvious and straight-forward competitive advantages, solid cash flow per share generation (minimal stock comp or adjustment shenanigans), straight-forward and motivated management, and reasonable valuation.
On the “want” side, I look for: potential “forever” holdings (know it when you see it), under-utilized balance sheet, scarcity value, identifiable catalysts, and significant insider ownership. Aside from all of that, I have a non-fatal allergy to hedge fund hotels.
I’ve owned stocks that were popular among hedge funds, but in general I have a fairly extreme bias against them (for longs, at least).