Mr. Liow earned a Bachelor of Laws (Hons.) and Bachelor of Commerce from the University of Melbourne in 1994 and a Masters of Business Administration (George F. Baker Scholar) from Harvard Business School in 2001.
Mr. Liow lives in Manhattan, New York with his wife and two children. Mr. Liow serves on the Finance and Audit Committee of the Trinity School (NYC), is a board member of the Success Charter Network and is a board member of We.org (Tristate area). Mr. Liow is an Adjunct Professor at Columbia Business School and guest lectures regularly at universities around the country.
Graham & Doddsville (G&D): Could you start by discussing your background and how you got into this business?
Yen Liow (YL): I´m Malaysian-Chinese Australian. I was born in Kuala Lumpur, Malaysia, but I immigrated to Melbourne, Australia in 1976 when I was four years old. My dad was a dentist and my mom was a teacher. They didn´t know much about business, but I fell in love with it at a really young age. My best friend´s father was a gentleman named Peter Gunn; he was a self-made transportation magnate in Australia and I was very fortunate that he took me under his wing and became one of my key mentors when I was young. At the age of 15, Peter essentially helped inspire the next 25 years of my life.
I started working when I was I worked every summer and took every opportunity I could find to learn about business. It was mostly a lot of manual jobs that eventually led to professional internships and opportunities. I bought my first stock when I was 14 (it was Santos, an Australian Oil & Gas company) and have been investing ever since.
For my undergraduate studies, I did a double degree at the University of Melbourne in Commerce and Law. I originally started with a triple degree – I also studied Actuarial Sciences for the first few years – but I wised up to the fact that it was far too much work and I wanted to have some fun.
After that I went to Bain & Company. I started off in their Sydney office and then went to their San Francisco, Singapore and Beijing offices over the course of five years. Bain was an amazing, diverse set of practical experiences. But the most important part for my development was the two years that I spent consulting with Dell Computers. Dell´s stock price grew tenfold over that period. I learned an unbelievable amount about hyper-growth and what world-class execution looks like, which had an important impact on my focus and philosophy as an investor. After Bain, I went to Harvard Business School where I graduated as a Baker Scholar in 2001.
During the summer in between my first and second year at business school, right at the peak of the dot-com bubble, the startup that I was interning at shut down. I was fortunate to get a summer internship at Ziff Brothers Investments for the remainder of the summer. Ziff Brothers really opened my eyes to the professional investing world. I thought hedge funds were traders, which was not appealing at all to me. What I found at Ziff was a great group of people who did deep and creative research. Ziff had a learning culture in which I spent the next 13 years helping to build an amazing business. Eventually I ran their Technology Media Telecom, Agriculture, and Energy groups.
Ian McKinnon was the portfolio manager there. He was one of the greatest human beings, coaches and mentors one could ever wish to work for. Ian had a huge impact on my career and remains a close friend.
While I was with Ziff Brothers, I also had the opportunity to spend time with Eddie Lampert, who opened my eyes to case studies. I asked him how he developed such an incredible business acumen so early in his life, and he shared with me that he spent a substantial part of his twenties and thirties purposefully training by studying the best investments in history through a case study methodology. I took that on. We started doing cases internally at Ziff and taught our approach at Harvard Business School in 2008, and continued the process at Columbia Business School in 2013. The case study methodology was the most important part of my personal development and is one of the cornerstones of Aravt Global´s creation.
In 2013, I was a bit over 40 and I had to scratch the itch - to find out what it would be like running my own investment firm. So, in February 2014, we launched Aravt Global.
G&D: What´s the inspiration behind the name?
YL: Aravt means the number “ten” in Mongolian, which was the smallest unit in Genghis Khan´s army and represent our humble beginnings.
Genghis Khan´s army had 200,000 cavalrymen who conquered 10 million square miles of the Earth over 30 years in the 13th century. This is relevant to investing because you can´t do something of that scale by picking fair fights. You can´t just do common things. The central premise of Genghis Khan´s strategy was unfair fights. Genghis Khan was successful because he hated putting his men in harm´s way, and that is the first principle of Aravt Global. We just don´t back situations where the win rate is even. You can´t compound capital if the odds are not well in your favor. We´re looking for unfair fights, where a company´s advantage is substantial and repeatable.
G&D: Can you talk a little bit about the other principles that guide Aravt Global?
YL: Albert Einstein said that compound interest is the most powerful force in the universe. We agree – we think compounding is the most important framework in investing. Our business model, portfolio and structure is built around it. We focus on horses, sub-genre of briskly than the broader market.
Over ten years ago, my team did a deep empirical study on stocks that compounded at north of 20% on five- and ten-year rolling periods over the last three decades to try to understand what drove performance. We wanted to deeply understand the patterns and if they could be repeated.
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