Why am I doing this? My dream is to cultivate a community of finance professionals running their own firms, each with a unique vantage point through which they view the world. The goal here is to elevate the conversation to something more meaningful away from the nuts and bolts (which I’ll cover through my writings — some of this may be mundane). I’ll do my best to cover the early days — our struggles (for which there were many) and the mistakes we made (countless — hopefully you can enjoy a few laughs). Many of our challenges were NOT unique to us, they’re experienced by emerging managers as they traverse Wall Street — hopefully you can avoid our mistakes and make new ones instead. I’m writing this for the next generation of emerging managers — we stand on the shoulders of giants and it is our duty to pay it forward.
So first, let me just give a quick introduction. My name is Andy Lee and I’m the Founder and Chief Investment Officer (“CIO”) of Parallaxes Capital, an alternative asset manager focused on esoteric assets. The following is a singular point of view (“PoV”) from a young financial entrepreneur. I’ve been blessed to be entrusted with capital by institutional investors (including endowments, foundations and family offices) to invest before my 30th birthday. This is the story of a reluctant / accidental entrepreneur. I grew up in the middle of nowhere Illinois, Champaign-Urbana on the campus of the University of Illinois. I recognize the privilege I was brought up with, a safe, stable, loving and high achieving family. Attended the University of Illinois on the back of the Final Four run. Post-graduation, I joined Citi Investment Banking and thereafter joined Lone Star Funds (“Lone Star”), a $80+bn asset manager focused on investing in market dislocations. In this part of my life, there’s really nothing to see, I was your traditional 2 (investment banking) + 2 (private equity)
At Lone Star, I had the opportunity to look across the capital structure, investing in regular ways buyout and special situations. Lone Star was a special place, my bosses highly encouraged my intellectual curiosity and afforded me the opportunity to let my imagination run wild. Everything in life was “Crawl and Walk before you Run” and my annual reviews were punctuated by “Impatient Exuberance” — I couldn’t wait for my opportunity to shine. At the end of 2016, I broke off a personal relationship and buried myself in work, in an unhealthy way. Seeking to get away from it all, I resigned from my role at Lone Star to take some time off. As I served out my transition period from Lone Star, the seeds for Parallaxes came to fruition. At Lone Star, I had ideated on a number of opportunities with varying levels of success, but one concept had progressed to the point of implementation. However, when contemplated on a larger scale, Lone Star had decided the opportunity set was too small and the idea had died on the vine.
I was 26, newly single with a dream — I moved to New York in March 2017 and decided I would work on this idea for the next three months. At worst, I could always find a new job. In New York, I set to work, initially in Starbucks then taking a desk at a startup of a friend. I buried myself in knowing everything there was to know about the asset class, attributes, stakeholders, etc. During this period, I took to utilizing my network to get their perspective and received positive feedback, many viewed it as a niche opportunity and some on the spot offered me capital to invest. At that same point, via various avenues I had been put in touch with some of Lone Star’s smaller / nimble competitors who were opportunistic in offering to serve as a dedicated source of capital. The positive feedback spurred me to pursue both avenues in earnest in June 2017. We were extremely fortunate that the reception to a dedicated fund was strong and we closed on the vehicle with approx. $25mm in capital in September 2017. We struck our first transaction in April 2018. We were fortunate that the soil was fertile and we subsequently did four other transactions by year-end 2018. In January 2019, we began the fundraise for Fund II, a $85mm vehicle, which closed in October 2019. That vehicle was deployed by June 2020 and we set off to raise our third fund.
Again — I will repeat, relative to many, I recognize my insane privilege. Loving family, supportive bosses, a relatively low opportunity cost and sheer luck were ingredients that led to our ability to achieve. There are many heroes on this journey that I’m so thankful for, who took a chance on me when I had no business interacting with them.