Meet The 21 Year Old Who Runs His Own $5m Hedge Fund

Julian Marchese

In Episode #756, Nathan interviews Julian Marchese. Julian was introduced to Nathan by a mutual friend and he’s the CEO and portfolio manager at Marchese Investments in New York City. Julian is only 21 and was already featured in Bloomberg, CNBC and Dragon’s Den, which is Shark Tank of Canada, where he managed to get 4 out of 5 dragons in the den that showed interest.

Famous Five:

  • Favorite Book? – Market Wizards
  • What CEO do you follow? – Peter Jones
  • Favorite online tool? —com
  • How many hours of sleep do you get?— 6-7
  • If you could let your 20-year old self, know one thing, what would it be? – “Multi-strategy”

Time Stamped Show Notes:

  • 00:51 – Nathan introduces Julian to the show
  • 01:47 – Going into the hedge fund world has always been Julian’s passion
  • 01:55 – Julian was introduced to the world of investing by his parents when he was 11 years old
  • 02:50 – When Julian turned 18, he decided to start his own firm
    • 02:58 – He waited until he reached the legal age
  • 03:27 – Julian took a course in Toronto and people in press found it fascinating that he was studying trading at a very young age
    • 03:48 – A lady took it upon herself to take Julian’s story and publish it
    • 04:05 – Some of Julian’s first investors saw his story from the media
  • 05:00 – Julian wanted to build a community for young learners like himself
    • 05:10 – A lady emailed Julian because she wanted her daughter to join
    • 05:36 – Julian met the lady and her daughter when they were in Toronto
    • 05:51 – 2 years later, the lady invested $75K for 1% of Julian’s management company
  • 06;11 – The management company has raised $675K with a $4M valuation
  • 06:38 – Hedge funds usually have multiple entities who have different roles
  • 07:28 – Julian also pays himself for personal expenses which is around $25K to $30K
    • 07:53 – The other costs are on the management company side
  • 08:44 – The investors make money from the GP interest accumulated
  • 09:43 – Julian was able to raise the $6M capital through value generation
    • 09:45 – “I’ve been managing money since October 2015”
    • 10:07 – The best months for Julian are the months where the market is down
  • 10:28 – Julian latest deal was an institutional money manager
  • 11:03 – Julian isn’t doing traditional investments
  • 11:42 – Julian explains how he does his investments
    • 11:45 – First, they’re able to trade volatility and how much the market moves up or down
    • 11:59 – Most people invest in the stock market, they want to benefit with the stocks are up, but they also want protection when things go down
    • 12:21 – One of Julian’s strategies is to systematically sell insurance
  • 13:04 – The investment return depends on the investors
    • 13:40 – If you put in a million dollars in October 2015, today you will now have $1.2M
    • 13:50 – You can take it all or leave any amount you want
    • 14:09 – They now cater to different types of clients
  • 14:36 – Julian doesn’t worry too much about what other hedge funds usually worry about
    • 15:10 – Julian worries more about their process and how can they develop more
    • 15:20 – The real risk for Julian is when there’s something wrong with his analysis process
    • 15:45 – Strategies are reciprocal
  • 17:04 – Julian has multiple strategies and none of those strategies are correlated
  • 17:53 – Brexit can affect the volatility strategy but it’s a selective strategy and not always in the market
  • 19:03 – “The main risk to us are not macro events like a stock market crashing”
  • 19:40 – Julian makes money from 53-55% of their trades
    • 19:49 – They try to limit their exposures
    • 20:02 – “The risks are very circumstantial”
  • 21:20 – Julian is unsure of his future positioning, but it’s completely content specific
  • 23:23 – The Famous Five

3 Key Points:

  1. Having multiple strategies can help you stay on track.
  2. Start as early as possible—you are building your skills and knowledge base for the future.
  3. People desire taking risks in trading and stocks, but they also need the securities in place.

Resources Mentioned:

  • Simplero – The easiest way to launch your own membership course like the big influencers do but at 1/10th the cost.
  • The Top Inbox – The site Nathan uses to schedule emails to be sent later, set reminders in inbox, track opens, and follow-up with email sequences
  • GetLatka – Database of all B2B SaaS companies who have been on my show including their revenue, CAC, churn, ARPU and more
  • Klipfolio – Track your business performance across all departments for FREE
  • Hotjar – Nathan uses Hotjar to track what you’re doing on this site. He gets a video of each user visit like where they clicked and scrolled to make the site a better experience
  • Acuity Scheduling – Nathan uses Acuity to schedule his podcast interviews and appointments
  • Host Gator– The site Nathan uses to buy his domain names and hosting for the cheapest price possible
  • Audible– Nathan uses Audible when he’s driving from Austin to San Antonio (1.5-hour drive) to listen to audio books
  • Show Notes provided by Mallard Creatives