Is it more important to be liked, or to be respected as an investor

earthwalker7's picture
Rank: Almost Human | 9,121

I had an interesting meeting with an LP recently. And the conversation led me to wonder if it's more important as an investor to be liked, or to be respected. Or better question - how far can you get in business while still being a total A-hole, and is there a point when it catches up with you?

About 2 years ago when I was at my last fund, I worked for a real POS. The CEO/CIO was a decent investor - but a total prick. The kind of guy that made several people quit with in a few days of joining the firm. The kind of guy that berates his fellow fund partners/MDs in front of the firm based on their investment thesis in the morning meeting.

Anyway a couple of years ago we had a truly outstanding buyout deal on our hands, and we opened it up to co-investment. One LP did a ton of DD and we believed that they would invest. But ultimately, at the last minute, they pulled out inexplicitly, and gave some unconvincing excuse. I remember the CEO just tearing into me and my MD for our failure to close.

Anyway a couple of months ago, I ran into the same LP at a conference, and the LP said "It was a brilliant deal. It was one of the best opportunities we saw in a long time. But we walked away because we did DD on your boss, and spoke to his former GS colleagues. They said he was very smart and a great investor. But his old colleagues said he was very difficult to work with. And we just don't have interest in being in business with someone like that. And especially we worried what would happen if things went sideways on a deal. How would it be to work with him then?"

Anyway, it got me wondering to what degree this otherwise decent investor got in his own way by alienating/angering his LPs, his partners, subordinates.

Comments (24)

Jan 10, 2020

It's not an either/or.

No one wants to work with assholes.

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Funniest
Jan 10, 2020

probably most important to make good investments bud

heister:

Look at all these wannabe richies hating on an expensive salad.

https://arthuxtable.com/

    • 8
Jan 10, 2020

Cliff Asness was literally breaking computer screens when he was back at Goldman but was still allowed to stay because he performed. Even now his investors know of his temper but they're still invested with him.

Jan 10, 2020

If we are talking PE, I'd say it's incredibly important. After all they will be sitting on your board and most likely call a lot of the shots. I've seen highest bidders lose simply because mgmt/owners didn't like the person running the deal.

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Jan 10, 2020

I agree with Goldie, it's far more important to make good investments. The world has a ton of nice poor people.

However being a halfway decent human being isn't that hard. No one says you have to save manatees and orphans on weekends while crushing returns. Just don't be a raging assshat.

In this case, the CEO couldn't even get the LPs to go along for the ride. His being a dick was costing him tens/hundreds of millions of dollars - in the sense that LPs were walking away from the fund/deals, his COO quit, two CFOs qut, and he had a lot of team turnover in the execution ranks. He would go into LP meetings and talk down the the investors who didn't invest in his last deal/fund, with a subtext of "see I'm right, you're wrong, and this deal went well."

Another thing is, is behavior also dictates how others treat you when things aren't going well. There was one time our biggest anchor LP got up in the AGM and berated the CEO publicly for losing money by following a certain strategy (deviating from healthcare and diving into TMT). I've never seen that happen. I think if the CEO kept things civil, perhaps the LPs would have behaved civilly back.

Anyway, just some musings. No conclusions on my end. One just hates to miss out on money just because the CEO is a dick.

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Jan 13, 2020

"The world has a ton of nice poor people."
It has a ton of poor assholes too. It is common sense that being an asshole rarely pays off. Even if you are a superstar in your area I'd argue that you'd have to be very lucky to people not to ding you eventually. The Steve Jobses of the world are very rare. Most assholes get fucked over sooner or later.

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Jan 10, 2020

I think it's important to be pleasant to work with because it doesn't help being an asshole and at some point...people don't really care about making money as much as they do working with smart/good people they can learn a lot from.

Jan 10, 2020

I think this makes the most sense. It's probably like those break-even graphs, it's tolerable until you get enough money, but after that point you just want someone that's not a dick at the end.

Jan 12, 2020

Like the hot-crazy matrix, maybe someone should make a 'competent investments vs. likability matrix'

1

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Jan 12, 2020

Literally lol

Jan 11, 2020

Being a good investor is the most important. If you're such a dick that you're losing out on good deals you aren't a good investor. Character and likeability are just as important as technical skills and foresight.

Array

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Jan 11, 2020

I'd actually like to know how to be more likeable at work. The CEO of course is an egregious example of mis-management and mis-behavior. But maybe I should look in the mirror and see how I can be more likable and helpful.

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Jan 12, 2020

If I had to choose between one or the other, performance and respect has to come first.

But being liked gets you second chances. When people dislike you they will jump at the chance to destroy you with any failure.

Jan 12, 2020

The margin of error is much smaller for dicks. People only tolerate such behavior so long as everything is ok - but they second there is a speed bump, and no matter how good you are there always is, people will turn.

In any repeated game you need to have a good reputation, ie be liked, to succeed in the long run.

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Most Helpful
Jan 12, 2020

Being likeable in any career or even in personal life is extraordinarily important. It's how networking works, how doors are opened etc etc etc. it's literally how society runs. People will literally bend over backwards to help people that they like even if they don't know them well.

Going back to the OP's question: one can certainly get away more with being a straight up "great investor" without being liked in public market investing. He/she had better hire a good investor relations person/team or colleagues to present because unless he/she is truly special and over the long term (which very very few are especially given constraints placed on investment managers today) that capital will either flee in bad times or go to others even in good times.

I won't beat the dead horse of PE investing and the need to be likeable since others have talked about it here. There are plenty of capable PE investors desperate for deals and companies can choose who they want (within reason of course).

In many scenarios being likeable (Ie. Just being pleasant) can be practiced and mastered.

A simple template: Ask your counterparts about themselves. How was their weekend? How is their family? After speaking do you notice if there something they need that you can deliver with little time and effort or something they asked for? Do it or ask an underling (nicely - and give them credit internally and externally). It costs you next to nothing and builds good will and good juju. I think of that as a deep out of the money low cost call option. That shizzle builds. If you have to, keep a log with notes of people like one does for work things. Because for some, this is a huge part of work. Smile. Hold the door open. Say thanks and you're welcome. Say have a nice day. You can always exit by saying you have to do something or go to the bathroom and that it was nice chatting.

That's it. One doesn't need to have long conversations about others or their feelings. Just basic little things. People will understand if you are introverted or socially awkward but mean well. Some will find it charming. It just isn't that hard to be nice. Or seem it. That's why it amazes me how many people, especially in our industry, seem to have zero concept of literally being decent human beings.

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Jan 12, 2020

Well spoken, +1 SB.

No pain no game.

Jan 12, 2020

SB homie. Well said.

I'm actually curious, as a worker bee, how one can make oneself more well-liked internally.
I've been told I'm "on the spectrum" ADD wise. I've apparently pissed a fair few people off by getting into the Q&A portion of a presentation and just drilling. Because I'm trying to find the answers to tough questions, and I just start asking and asking. So I'm somewhat useless with people, and I want to make myself (if not liked) at least less DISLIKED. I'm keen for advice here. Hope you guys can help me out.

One thing I intentionally did recently - there's a tradition in HK of giving out little cookies/cakes when you're about to leave a job. Instead I did the opposite when I moved in to my co-working center, and gave out cakes person-to-person when I first moved in. That seems so childish and silly, but while 50% of them looked at me all weird, a few of them took 5 minutes to talk. And it turns out one of them was an LP I used to call on but never met. He recognized my name, and we've found some business to do together. Others have taken the time to give out advice, etc.

So, it ain't easy out there. It pays to make friends, to go out for beers with folks, and whatnot.
To try to enable PE capital raising, I've started hosting quarterly LP-only cocktails. That seems to be a good thing too.

I apparently lack that part of the brain of how to be social. I've consistently failed to win over bosses, co-workers, etc. Keen to hear what works for you folks, sincerely.

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Jan 13, 2020

The cookie/cakes thing was a genius move. It may well be worth doing every time you leave town and go to some place. Bring back snacks/sweets for the kitchen counter and send out the email saying "snacks from x place on the counter, enjoy!". That's a good brand to have "the snacks/sweets guy" because everyone loves that. Sometimes its just openly admitting in your DNA that leads you to be certain ways so people know what to expect and they can just think "oh yeah that's how he is when it comes to x"

I do not know your method of questioning and cannot comment so perhaps you can have someone sit next to you, like a trusted junior or peer and they can honestly tell you. Maybe it's just a case of trying out new ways of asking things. Sometimes asking directly is the best way, sometimes it offends people. Sometimes the indirect way is how to do it.

Other times it's best to ask some questions and then question that with the wrong answer and let them correct you. Sometimes you know its the wrong answer, but they may not know that you know that. If they don't correct you, they are either clueless or trying to mislead you. Other times they will correct you and take off like a rocket and say much more than they should. Then you don't have to ask that many questions.. For example you've asked 2 questions and then you can say something like "oh so what I understand is you think x and y... would that be (in)correct?" or something like that.

Other times its just hard and you are never going to get to the bottom of it or will piss people off. You can't win them all and remember the conversation is a two way street.

Good Luck

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Jan 13, 2020

One thing I did back in my master's program --- I wasn't in a frat, was poking fun with both the professors and classmates in class and out of class --- of course I didn't joke with every single professor since a couple of them would have definitely taken my participation points off --- including some self-deprecating ones. A few of my friends define myself as an introvert who is very funny. To be honest, I didn't dare to think myself as "funny" because I always have a stone face on when I just meet someone --- unless it's in a business occasion or meeting an attractive woman for a date :)

The way I do it is this: for example in a class, be it corporate strategy, financial valuation, asset management, or xyz, most professors usually spend sometime chatting with students. When there was something I thought that was very funny for myself adding some ingredients to it, I raised my hand and spoke it out loud. Quite of few times what I said was sarcastic, and that made me best buddies with this guy in my program who just loved what I was saying and whose dad apparently worked for some senior people in la casa bianca and has deep connections. Not that I'm trying to take advantage of him, but just saying that he is probably willing to help, since I've talked with him about that possibility.

The one critical point for this approach is not to laugh (first) yourself, because if you do when you are talking, it would be too obvious that you are trying to be funny, regardless if what you are saying is actually funny or not. I rarely laugh if I sense the person is trying to be funny, even if he/she is well-intentioned.

Some people call this dry humor in English.

Worked well for me throughout my year in the program and in the yearly celebration dinner, a few students and some professors spoke about their favorite memories and students. I was nominated 4 times by 3 different people. When one of the marketing professors did, it was totally unexpected.

Of course this doesn't work that well on everyone, but for some people that I didn't really know, it built a friendly rapport --- we could have some nice short conversations and when we reach out to each other, it would be pleasant.

The downside for my approach is this: you need to be in an environment where you can speak freely and you actually have opportunities to say what you want to say. This is less so in a business environment, especially for junior people, but I would assume this to work well if you are a senior.

I hope this helps and I don't mean to show off or anything since the school I went to is not HBS or Wharton's new Master in the Universe program, as some of people in this forum clearly went to.

Jan 13, 2020

You're conflating respect with fear. That guy was not respected, but feared. Respected people aren't necessarily liked but they aren't hated either. Being respected means being seen at least as an equal by your peers and not having them wanting you to leave.

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Jan 13, 2020

This was a pretty dumb of the LP. The guy may be a total prick, but lets be honest...co-investors are barely involved with their portfolio investments at all. Maybe they dial into quarterly updates, but that's about it. The co-investors should check their ego and understand they're lucky to be let in on these deals where they can share in the upside w/o the heavy lifting.

To be sure, I am not endorsing being an asshole. You don't have to be an asshole to be a good investor.

Jan 13, 2020

Do I need to be like to be liked? Absolutely not! I like to be liked, I enjoy being liked, I have to be liked, but it's not like this compulsive need to be liked.

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Jan 13, 2020
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Jan 16, 2020