Inside the Secretive World of Pod Shops | Bob Elliott
Excess ReturnsDecember 19, 202400:57:38

Inside the Secretive World of Pod Shops | Bob Elliott

In this episode of Excess Returns, hosts Justin and Matt sit down with Bob Elliott, founder of Unlimited Funds, to explore the fascinating world of multi-strategy hedge funds, also known as "pod shops." Bob breaks down how these complex investment vehicles work, discussing their unique structure where multiple portfolio managers operate independently while sharing infrastructure and risk management resources.

The conversation covers crucial topics including:

How pod shops attract and compensate top trading talent
The economics and fee structures of modern hedge funds
Risk management challenges when running multiple strategies
The evolution from traditional hedge funds to pod shop models
The impact of growing assets under management on performance
The emergence of ETFs as alternatives to hedge fund strategies

Drawing from his extensive experience in the hedge fund industry, Bob provides unique insights into why pod shops have captured headlines despite representing only a fraction of the overall hedge fund industry. He also discusses his current work at Unlimited Funds, where he's working to make hedge fund strategies more accessible through ETF structures.
Whether you're an investment professional or simply interested in understanding complex investment strategies, this episode offers valuable perspectives on the changing landscape of institutional investment management.

0:00 - Intro and Welcome
1:13 - What are Pod Shops?
4:02 - How Pod Shops Work
8:11 - Major Players and Market Size
12:14 - The Fee Structure
16:32 - What Makes a Successful Pod Manager
23:48 - Capital Allocation Process
31:19 - Risk Management and Market Events
36:52 - Asset Size and Returns
42:17 - ETFs vs Hedge Funds
46:55 - Strategy Implementation
51:07 - Short-Term Alpha Opportunities
54:03 - The Future of Liquid Alts
55:35 - Bob's Contrarian Take
57:18 - Closing

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