Illuminating the Garden Path

Joel Cohen
4 min readOct 27, 2020


A wonderful yet often ignored path. Photo credit: Emily Hishta Cohen (my talented wife), @heirloomconservatory

Please visit MIT’s new webpage written specifically for emerging managers, a key demographic we want to reach, help, and invest with

Please also visit, a new webpage we created to post additional content relating to starting a stockpicking firm.

Note: this essay is written with public market stockpickers in mind and might not make sense to those who do something different

We had a conversation with one of our managers a few years ago about what we could do to be more broadly helpful to emerging managers.

His response caught our attention: One of the most valuable things you can do is illuminate the garden path. You need to help people see what is really possible, and then it is up to them to do it.

What he meant was that there is a proven but unconventional path to starting and managing a stockpicking fund, but it is not as visible as the conventional path, so many think the conventional path is the only way. The unconventional path typically involves launches with no fanfare and a little bit of capital scraped together from friends, family and a few mentors. It often involves launching the fund before you have accumulated the traditional well-padded resume.

In order to illuminate the garden path, MIT should be sharing success stories of some of the many people who went down the unconventional path and made it work, so that people know it can be done and start to see how to do it. That is exactly what I am here to do!

We commonly hear people tell managers that you can’t start a small investment partnership today, like Buffett did in the 1950s. Regulation is too heavy. Costs are too high. You have to be running $100 million just to break even. LPs will never invest with someone without a 10 person back office, an army of analysts, and office space in a Manhattan high rise.


Here are some real-life examples of MIT’s investor partners that started with very modest AUM, focused on compounding capital, and patiently grew AUM organically and through word-of-mouth referrals. We are not able to share names for confidentiality reasons, but we wanted to share their stories so you see that it can be done.

1. Two partners based in the U.S. who started their investment partnership as undergrads in college and have managed it for well over a decade since. When we met them about ten years ago, they had $20 million of AUM and had earned exceptional absolute returns through a period which included the financial crisis. We invested $5 million initially, and have been partners for over 8 years. They have compounded at extraordinary rates for us, and produced many hundreds of millions of dollars of profits. The partners are in their 30s and are just getting started. At no point did they market their partnership, and all of their new investor partners come by word-of-mouth referrals.

2. A single portfolio manager, with one analyst, based in the U.S. who founded his firm in the early 2010s. When we met, he had approximately $70 million of AUM and had compounded his investors’ money above 20% per annum for several years. We invested $10 million initially in 2015. He has compounded MIT’s capital at similarly exceptional rates for nearly 5 years, and our investment has grown significantly, much of which is profits. While he did not have much luck marketing his fund given his unconventional approach, capital from MIT and organic compounding has brought him to a significant level of AUM.

3. A single portfolio manager, with no analysts, based in the U.S. who founded his firm in the mid 2000s after graduating from business school. He never marketed his fund (and in fact turned down several LPs he did not think were a good fit for his approach) but we were referred to him by a mutual acquaintance who recommended him highly. He managed approximately $7 million in total when we met him in the early 2010s, but has patiently grown AUM to hundreds of millions of dollars by an even mix of compounding and patiently collecting exceptional partners. Since inception he has earned very healthy mid-teens returns.

4. A single portfolio manager, with no analysts, based in the U.K. who founded his firm in his mid 20s with GBP 5 million in 2014. We met him just prior to his launch, and invested shortly after. A patient and highly selective addition of partners, plus very strong rates of compounding, have increased his AUM more than two orders of magnitude since we invested. Despite the increase in AUM, the future looks even brighter for the firm given the quality of the LP base, the reasonable levels of AUM despite strong compounding, the scalability of the strategy, and the age of the sole PM.

None of these managers worked at a name-brand firm. All launched their fund before the age of 35 (two in their early to mid 20s). Only one had a “pitchbook” (to his eternal chagrin). Many started out with <$5 million at the outset and compounded the money into larger sums while selectively adding investors along the way.

There are plenty more examples of people who built great investment firms in similar ways. On the other hand, I do not want to make it sound like it is easy, or that success is assured. It takes very unusual people, with plenty of luck, to be able to make this happen. And even for those that succeed, the path is very hard.

To learn more about MIT’s approach to win/win partnerships with emerging managers please visit and get in touch if you’re interested in working with us!



Joel Cohen

10+ years on the Global Investment Staff at MITIMCo, helping invest MIT’s endowment in exceptional investment firms around the world.