Episode summary
Kathryn Robinson compares hedge funds and family offices and discusses her investment career.
Key takeaways
- Hedge funds and family offices can have different investment priorities.
- Investors evaluate companies beyond financial numbers.
- The conversation addresses resilience, fraud and technology skills.
About this episode
Join Ashley Leftwich, CEO of Rock The Street, Wall Street (RTSWS), for an inspiring conversation with Kathryn Robinson, an accomplished investor who built a 15-year career spanning hedge funds and family offices.
From her roots in a small mining town in South Africa to managing global investments in London, Kathryn shares a powerful journey of resilience, adaptability, and purpose. She offers a rare inside look at the fast-paced world of hedge funds, the legacy-driven focus of family offices, and the skills needed to succeed in today’s evolving finance industry.
In this episode, you’ll learn:
The real differences between hedge funds and family offices
How top investors evaluate companies beyond the numbers
Lessons from navigating a major investment fraud
Why coding and tech skills are essential for future finance careers
Strategies to overcome imposter syndrome and build confidence
Practical steps students can take to start investing and growing their network
Gives students and young professionals an honest, inside perspective on what it takes to thrive in finance today
Learn more about Rock The Street, Wall Street and our mission to bring the M in STEM to life: https://rockthestreetwallstreet.com
Disclaimer: All financial and investment information contained in this podcast is merely for educational and informational purposes. It is not intended as a substitute for professional advice. Should you decide to act upon any information in this podcast, you do so at your own risk.
Listen to the episode
Transcript
Transcript supplied by Riverside; it may contain transcription errors.
speaker-0: Welcome to Rocking Finance, the Rock the Street Wall Street podcast. Real stories, real access, real pass into finance. Join us for candid high impact conversations with industry leaders sharing the insights, experiences, career pivots and journeys that can help young women advance through the financial industry with great confidence. Rock the Street Wall Street equips high school and university students, especially young women, by bringing the ⁓ in STEM to life through financial and investment fundamentals. We provide direct industry access and guidance supporting students and young professionals on their journeys from classrooms to careers while expanding participation in the capital markets. Through cohort-based learning, mentorship, and individual career connection, we help students build confidence, capabilities, and networks that open doors. Our goal is clear. Expand participation in the capital markets and strengthen the future of finance one cohort at a time. Today, I'm your host, Ashley Leftwich, CEO of Rock the Street Wall Street. Now let's rock finance. thank you for being here. You've built a 15 year career across hedge funds and now at a family office. Let's start with your story. Can you share your education? What sparked your interest in finance and how did you land your first role?
speaker-1: Hi Ashley, it is such a privilege to be here and to be speaking to you from the other side of the Atlantic and just to compliment you and the team on the great job that you are doing at Rockford Street. But a small background, came from a rather humble background. I grew up in a dying mining town in the arid regions of South Africa. I went to government school. My mother was a teacher. My father was a artisan. or had an office in business, so hardly the perfect playbook for an aspiring hedge fund manager. But ultimately, it took me growing up in an environment like that, knowing that I needed to get good grades to be able to move my life onto the next level. And through those good grades, I managed to get into a great university, one of the leading universities in our country where I studied finance and investments and I really took that time at university because it's such an amazing time in your life in your early 20s because you suddenly exposed to so much more other than just your academics, you exposed to a world that you've been protected from for the last 18 years of your life. And just understanding so much more that was happening in society, learning, meeting different people. And it was through meeting different people that I came across the opportunity at City Group to join their graduate program, which was superbly timed in the beginning of 2008, which if you'll remember was basically the beginning of the end in the global financial crisis. So it was a wonderful year where you learn so much about the world and how to dodge the shrapnel as the United States financial sector came crashing down around you. And ultimately, with chair prices of the big banks heading to $1, it was never going to end well for the graduates. But it was an example of just one of the times that you pick yourself up and you dust yourself off and you repivot and find another lane to swim in. And it was amazing grounding that I got. I'm so grateful for the people that I learned from during that time. It really was the beginning of a great career in analyzing companies and valuations.
speaker-0: It's a wonderful journey and I can't wait for us to dive into it more throughout our conversation today. How would you describe hedge funds and family offices generally?
speaker-1: Hedge funds and family offices are very similar in their investment profession, in their investments strategies. However, hedge funds are lot more fast-paced, a lot more focused on shorter-term developments, whereas family offices are far more focused on a family's legacy across generations. and putting together an investment philosophy that works together with the requirements of that family.
speaker-0: That was a great description. So you started to share about data and with my background in math and technology, I love how data can tell powerful stories. So when you look at a company to do the evaluation or you're looking at a company, what draws your attention first? The numbers, the business model, the leadership. What does that look like for
speaker-1: I think generally in most investment cases, the narrative does a lot to draw you in. The story does a lot to draw you in, whether that is a story around multi-generational changes in energy supply, whether it's a story on aging populations, that's generally the story drags you in. But what I always talk about is numbers above narrative. So while you can build your investment case around what the narrative is, you have to have the numbers to back that up because so often what we find is you can find really good narratives or really good stories, but the numbers don't stack up. So there's the adage that says a good company isn't necessarily a good investment. And similarly, similarly the other way around. So for me, when I'm doing my identification, it's about the drivers in an industry, the drivers behind demand. how the industry is made up and then take that to the next level and say, what are the numbers saying? What are the data leads that we get in that are feeding through into this? And based on that, do I have enough conviction that there is upside to this investment or what the potential downside is if that is the way that you're looking at it? But one thing I must just state, You know, we speak about narrative and we speak about numbers. But one thing we haven't touched on is leadership. So I come from a sailing background. in that world, you can have the best boat. You can have the fastest boat with the best spec. But the reality is if you don't have someone that is a very good skipper on board and a very good tactician, your performance will always be suboptimal. So in every investment that we look at, be it on a hedge fund level or on a family office level, is that largely comes down to the leadership of that vehicle, whether it's a private company or whether it's a public company, who are the people in the decision-making seats that are taking the strategy of those investment opportunities forward.
speaker-0: We should certainly talk about sailing at another time because I'm very interested in that. But you recently shared the powerful guidance of staying humble, stay flexible and never confuse conviction with certainty. So how does that play out in a typical day for you?
speaker-1: Well, I'm sure similarly to so many other ladies within your network, the great thing about markets is every day is so different. And it's even more so when you are dealing with families that have multiple assets across multiple geographies. It doesn't only come down to what's impacting the asset class, it comes down to what is impacting the geography. often there's a common thread. Geopolitics is a very big thing that we keep an eye on. share prices, market movements, currency movements. But ultimately, you have to step back from the day because your day cannot only be dictated by numbers on your screen the whole time. And so what I try and do is I try and find a balance of behind the screen and actually walking the streets, speaking to our families, understanding what the underlying needs are. and trying to get a very good sense of what the real investment landscape is and compare that to what the numbers that are coming up on the screen are telling us.
speaker-0: referred to needing to pivot earlier so over the years I'm sure things didn't always go exactly as planned. Can you share a time you had to pivot and what it taught you?
speaker-1: Yeah, well, we spoke a little bit about the end of 2008 where City Group basically restructured their graduate programs. That was a perfect example. An example of where an investment went against me, which was quite a pivotal learning experience in my career, was in 2017 we were invested in a global furniture retailer. I'd covered it for five plus years. knew it inside out. I'd been to all the operations. I'd been to Florida. I'd been to Europe. I'd been to Africa. I knew the management team really well and we were all set up. There was a listing taking place. Everything, the stars were perfectly aligned. And I kept on having very credible people saying to me, but are you sure? And I was quite sure that I had done enough work on it. And ultimately it came out that it was one of the biggest frauds that Europe had seen. we started with the rumblings in the markets, but there potentially been some gray business taking place. We then went when the auditors wouldn't sign off and finally the CEO stepped down. But I think at that point in time, even then there was a question of Well, if the share price is not worth 70, maybe it's at least worth 35, which is half. You you can't say business is worth zero. So we had to do a lot of introspection at that point and a whole new analysis over the weekend looking into this and saying, well, what are the underlying tangible properties here that could maybe bring a value, et cetera? And our analysis showed that there actually wasn't enough tangible assets in the business to cover how big the hole was. And as a result of that, we had to take a very tough decision to get out after the share price had halved and walk away and be okay with that, that the share price could potentially back go to 60. It could potentially go back to 70. The result was that the share price actually went to one. So in hindsight, it was a great decision, but it's Definitely was a pivotal point in my career where I had to say you have to change the way that you're looking at things because your current process is flawed. You have to spend a lot more time understanding where your blind spots are. You have to spend a lot more time understanding where, why, who is selling the stock that you're buying and what do they know that you don't know? What do the hedge funds that are short know that the hedge funds that are long don't know? Doesn't know. that was, you know, and also just the case of realizing that you can't trust everyone. I was in my late 20s at that stage and I think that to me was a very hard learning curve. You know, you always think you can trust the auditors, you could trust management, but you have to ultimately become quite cynical in the world of investments because it is quite a commercial world with money driving and The naivety, I think, that you come out of university with sometimes gets tested. And I hope for most people on the podcast sake is that it doesn't get tested as severely as what mine got tested.
speaker-0: love the critical thinking, solving problems. I do have a couple questions here that were submitted by students that I wanted to ask you today. So the first one is with new tools like AI and advanced analytics, how is tech changing investing and what skills should students focus on now?
speaker-1: It must be said upfront that it is a wonderful time to be coming into this industry as a student because you almost have a more valuable skill set at your fingertips than someone with 15 years experience because technology is just becoming a more and more vital part of the investments landscape. If I have a look, even in my, the five years that I've been in London, how the evolution of tech and investment decision process is changing. It is vast and it moves quickly. When I look at skill sets, when people say to me, you know, what is the typical skill set I should focus on as a student? My number one is coding. And it's not because I want you to become a coder. I don't think you need to become a coder, but what you need to do is you need to. Only when you learn to code do you appreciate the efficiency that coding can bring into your process. I decided to learn to code and to learn to code in Python because I needed to be able to speak to the juniors within a team and be able to enhance what they can bring to the table. So coding is definitely, coding is definitely number one, understanding the opportunities in language models and also understanding where the blind spot sits, you know. being able to recognize that while there's such huge opportunity out of language models and what they send in to you, there are also a lot of mistakes. And if you work purely on what the language model is telling you without checking that data, you can end up with some very serious errors in your process.
speaker-0: Wonderful. Students are also curious. Can you tell us more about how you built a network in the industry and how you champion the next generation in finance and investing? Just a small question.
speaker-1: It's not the easiest thing to do. I don't think networking comes naturally to anyone. I mean, perhaps the small few, 3 % of the population. But other than that, it's as difficult for me to network as a rather extroverted person as it is my colleague who's a more introverted person. But there is no doubt in my mind the importance, particularly as females, to build good networks. And it seems a little bit, yeah, I think you've got an underappreciation for it when you're younger, when you're at varsity, because you have a lot of people that are throwing stuff at you all the time. And you've got many other, many other opportunity, ⁓ the opportunity set in front of you is huge. But as you move later into your career, it becomes more and more important. And it becomes more important because investing is a lonely game. You can often, particularly when you go through tough times, and so it's so much more important to have a great network. I've learned this firsthand in the last five years that I've been in London because I've had to build up a network from scratch. The easiest way I've found over time is to start small. Start, meet people that are on your level in your organization and people that are on your level outside your organization. What is wonderful about London and New York is that they've got great, great facilitators like yourselves. People are far more open than you think to having that coffee with you for no other reason because most of the time they've had somebody offer to have a coffee with them. So in them paying that forward to you, it's actually a lot easier than you think, particularly when you're younger in your career.
speaker-0: I certainly think that there is times for our students and of course for many of us where we feel intimidated and wonder do I really belong here. So what would you say to them?
speaker-1: Markets in general push you out of your comfort zone more often than you think. It's not like you have a set job in any other industry. You get in many uncontrollables, a lot more uncontrollables than in a typical industry. And as such, we often get pushed into an uncomfortable position where you look around the room or you look around the table and you go, ooh. is this really it? And even in my late 30s, I get that on occasion where I feel potentially I'm out of my depth. Imposter syndrome is real. It's something that young people suffer from. It's something that leaders in very high places suffer from. And you shouldn't be scared about it. But rather than shrinking into the shadows, I always encourage the young people that I work with is that you've got to allow it to fuel your hunger. to forward because the reality is, is everybody has been given an opportunity. They've seen your potential. They know that you should be at that seat of the table. And now you've just got to let your light shine a bit. And once, once you do that, and once you get that confidence, it all starts to fall into place.
speaker-0: wonderful. One of the, you know, actions for, what are some actions for our students? I mean they're joining this webinar and already a great step in the right direction, but when students want to go further, what's one thing they can do on their own right now?
speaker-1: Lock the Street is a great initiative. It's a great starting point. The fact that they've logged on, as you say, is step one. When I was starting out, none of these were available. You were very much coming out of university. You were in the dark and you were making your own way. And as such, I encourage people to embrace them. There are large teams behind these organizations that many times are putting in of their own hours into the content that you see. and their best learnings. So grab that opportunity. The second one is listening to podcasts and finding great people to follow on LinkedIn. Generally from that, I feel you can almost get a sense of which way your passion is pulling you. Because if you're listening to a podcast and you don't feel like it's really grabbing you, it's unlikely that you're going to want to spend 13 hours of your day, five days a week doing it. We are just absolutely blessed with the huge amounts of content that is out there by really incredible investing minds, which even five years ago wasn't available to the general public. And now it's there on your podcast. And then lastly, the one that I would encourage, regardless of where you are in your career, regardless of whether you choose finance as a career is start your own investing. It is. It is really easy to do. The barriers to entry are much lower than what they've ever been before. Financial literacy is, you spoke just now about what are the skills that I think people should pick up. Financial literacy is another skill that I think should be compulsory across the board, particularly with young people that are coming through financial independence. So you will start to experience that huge euphoria that you go through when you have a winning trade. And at the same time, you will understand that kick to your guts that you get when your investment goes down 10%. Because only until you've got your own money in the game, I think do you truly have a feel for it. And it doesn't have to be a lot of money at all. It can be the smallest amount, but as long as in your life, it's something that's meaningful and you can really get that feel.
speaker-0: Catherine, thank you so much for sharing your journey and advice with us. And to all of our students, stay curious, lean in, and remember early steps make big impact. Thank for joining the conversation. Visit rockthestreetwallstreet.com to learn more. Make sure to follow and join us for the next episode. Until next time, let's keep rocking finance.
