From Apollo and Viking Global to Goat Farm: An Interview with Kyle Tucker
What do non-traditional pools of capital in the private markets look like? What long-standing cultural assumptions drive our understanding of "success" in this industry?
For this weekend, today’s post is a (very) candid and wide-ranging conversation with Bermuda-based Kyle Tucker, whom I met through a good friend.
At roughly 5,000 words, it’s an unhurried meditation on traditional private fund managers, the challenges of building without chasing AUM growth, and what it means to grow publicly in a way that isn’t for everyone.
More about Kyle: Kyle is chairman of Tucker’s Farm Corporation, a value-oriented holding vehicle that aims to deploy approximately $100 million of long-term equity capital annually in the lower-middle market. Previously, Kyle was an investment professional at Apollo Global Management and Viking Global Investors. He began his career in investment banking advising on M&A and capital solutions. Tucker’s Farm also maintains a herd of ~20 Nubian half-pygmy goats.
You worked at some of the most disciplined fund managers in the world. What eventually pushed you to step away from institutional platforms and build something that reflects your own temperament and philosophy? Was it about autonomy, time horizon, risk tolerance, or something more existential about how you wanted to spend your working life?
All the things you mentioned and more: autonomy, time horizon (compounding good assets vs. rinse-and-repeaters [investments that generate 2x returns), wanting to get back to my family farm in Bermuda, do PPM rollups for Tree Rock Lane Color Capital Management, and removing the pressure to deploy.
But I didn’t have these words at the time. I just had a sense that I wasn’t right for the institutional environment. Which was odd because I loved school. I loved grades and tests and math proofs. And all this typically translates to success in an institutional setting.
But not for me. I could fake it for some time, but eventually my motivation would wane, and the wheels would come off. Worth noting that I love my previous firms and have great relationships with the folks at them – it was a “not you, it’s me” thing.
I’ll highlight a few specific underlying drivers:
First, I’m an entrepreneur. I like this word because it means a bunch of things. I like autonomy. I like to win. I like to do things my way. I have certain immovable ideas about the world and how to interact with it. I deeply value intellectual honesty and want to be rewarded for that. And maybe mostly, I like owning all the results of my efforts.
Second, I want to build my own thing. To me there’s something aesthetic about the folksy Midwest compounders (e.g. Koch, Berkshire, etc.). Folks who have been perfecting the same canvas for 60+ years. I think these non-fund, corporate-form conglomerates (which are true compounding/MOIC stories) are cooler than KKR and Blackstone (AUM/IRR/fund stories).
Now don’t get me wrong, those managers are led by remarkable entrepreneurs and resource allocators. But maximizing the value of a GP is a fundamentally different endeavor than maximizing the value of an underlying balance sheet. And the latter is how I think I want to spend my life.
Third, I deeply value independence and self-sufficiency. I didn’t know this at first. But at some point, I realized I’d be happier making $300k a year as a plumber with complete control of my time than $3m a year as a private equity partner.
There’s a bunch more stuff that I’m leaving off but you get the gist.
Do you think this industry still meaningfully rewards long-term compounding and discipline? Have perception, momentum, and social proof begun to outweigh fundamentals in how capital flows? How should a serious investor think about that tension?
I’m not sure if the active investment management industry cares about long-term compounding or ever has. Let’s take one of the industry’s biggest winners, Blackstone. While its GP has been a compounder, its investment products have not.
Compounding or MOIC is generally not what traditional fund managers are selling.
Further, I don’t think anything is new.
Specifically re: why successful managers are not fund compounders. It’s fundamentally a principal-agent problem.
Nine out of ten GPs are optimizing for their net worth per unit of risk, hassle, and effort. This is as good as a Newtonian law. (And if they say they’re not, they doubly are, an even stronger law).
And by net worth, I mean not only the specific number but also the prestige and clout and relevance associated with that number. So anyway, when a GP gets some momentum and prints a few good deals (or funds) and is now a darling to the gatekeepers and has an institutional investor knocking on its door, it’s way easier to raise another billion than to turn your last billion from 2.8x to 6.2x.
The wealth creation vs. effort equation is such that the additional AUM will always be the answer (at least in a 2-20 structure, a longer conversation there).
Further, this dynamic has been compounded by the proliferation of stake aggregators (such as Blue Owl) and the resultant enterprise value that has accreted to growing GPs. Asset gathering is a canonical: a “you show me the incentives, and I’ll show you the outcome” situation.
Now this is all fairly well known (except the wealth creation from GP stake math. I actually think that’s under-appreciated by most folks, even those who wag their finger at asset gatherers).
One of the sneakier AUM drivers is employees and what I’ll call “general bigness.” The private GP invariably has a ton of employees at the juncture mentioned above.
Your investment team is pushing for more agency and opportunities and salary and carry. Your COO wants to hire some tech folks and build custom AI workflows. You’ve always wanted to try this interesting new hybrid “lower-return but great risk-reward!” product.
And Orlando Bravo is sort of your mentor now and he went big, after all. And you’re increasingly getting invited to important panels and parties that celebrate bigness. You get the point. All the mimetic stuff. The gravitational pull of AUM is too great.
We try to counter-position here (with emphasis on “try”). Stay small but have non-traditional fee structures which incentivize us to compound vs. raise more money. Don’t get me wrong, I can’t emulate the same wealth creation as asset gathering (certainly not at the same speed), and that sort of stings.
But with the right ownership at the right MOIC hurdles, I can kind of mimic it over the long term if we do well, while also providing a great return to my partners (with all the usual compliance caveats).
Point is, we try to engineer a true win-win. That said, it’s surprisingly hard to find LPs that appreciate this, so we need to be hyper selective with our partners, or our structure quickly becomes a “no-good-deed-goes-unpunished” sort of thing.
Every generation seems to have its legends of early breakout wins that cement reputations. How much of that story is skill vs. timing and luck? And what does that imply for younger managers who may be strong but don’t get a catalytic early outcome?
Catalytic – great word.
I go back and forth on this. It’s probably somewhere in between. If you swapped the first and second halves of David Einhorn’s career, would he still be David Einhorn? And for the record, I love Einhorn and think he’s a remarkable investor.
If Icahn successfully took over Saxon Industries (an early target which he bet the farm on, then was luckily greenmailed out of before it unexpectedly melted) would he be Carl Icahn? I don’t know.
So yeah, there are definitely “sliding door,” luck-type moments where if a certain thing breaks your way early on, then you have momentum. I think that’s real. (I also think genuine overnight successes, counter to popular belief, are real. I’ve seen a few!).
For example, my friend launched a GP in an obscure investment niche. Smart guy but had no real track record or anything. He does a year of door-knocking for money and nothing opens.
Then, one of the shiniest allocators decides they wanted to get into the same niche in a big way. A strategic priority sort of thing. Anyway, they met him, liked him, and wrote a $100m check. Then basically $1B under great-terms in a zero-manager-diligence type of way fell on his head (following the shiny allocator). So lightning struck. He got the hot hand. The power of FOMO, contagion, etc.
Conversely, I know of two different rockstars that hit pavement on their first deals. Both super talented investors. But the universe frowned on them and their first swings ended up being “meh” (one was a zero, one was like ~1.5x over four years).
They’ll probably lose five years of progress as they slog through the cold start problem. Maybe even ten years for the one guy with the donut - that’s a tough Scarlet Letter to overcome.
But again, over the course of thirty years you’ll probably get back to where you belong. You’ll ultimately get the reputation you deserve.
We’re probably somewhere in between. We’ve had many good things happen to us that we didn’t deserve. And some bad things that we didn’t deserve. But I really try to ignore the bad stuff.
I think you live the narrative you tell yourself and that sort of thinking (rumination, victimization) isn’t how winners win (key word for us here is “try”). Overall we’ve been lucky.
And at a higher level, very, very lucky (born in the West, healthy kids, loving wife, wonderful family and friends, loving the craft you practice, etc.).
There’s a difference between being excellent inside a machine and being responsible for the machine itself, capital raising, credibility, culture, pacing, trust. What surprised you most once you became the one building the platform rather than operating within it?
Absolutely a difference. But I don’t think it surprised me. I always understood that being a great chef and building a great restaurant are two different things.
What surprised me was that I was relatively well-suited for restaurant building, while my identity was all about being a great chef: being a great investor, not an operator/firm-builder.
Further, I’m continually surprised by how hard entrepreneurship is. I think all the fun chestnuts from my friend Brent Beshore like “eating glass” or “daily knife fight” are apt. And the older I get, the more I think this.
As a young guy, I basically thought there were two paths to (conventional) professional success. You’re either a finance type and trying to get to Blackstone PE/Pershing etc. Or you’re a start-up type and basically live the contours of The Social Network. But no real in-between.
My entrepreneurial journey was different. We do rollups. Or as I call them, “smart” rollups or “frontier” rollups. It’s entrepreneurial-ish. Entrepreneurship-lite. Half PE and half start-up . The outcomes are (generally) more bounded, too.
Sure, you have the rollup 1,000x returns (e.g. CSU, TDG, etc.). But mostly, M&A strategies are riskier than working at Goldman but less risky than starting an app in your living room. All in all, this skew deeply suited me and still does.
But it comes with real costs. It’s hard. While it can look awesome on paper when it’s all said and done, the reality is we deal with small assets. Small deals. And the issues are endless. I read somewhere that “being a good deal guy is not sink or swim, it’s a dance.”
And I feel that. In my bones.
You have sellers, lenders, investors, bankers, lawyers, brokers, consultants, etc.
Each constituent with her own bag of issues and incentives and so forth. Assets constantly crescendo-ing or, more likely, falling apart in diligence.
So, while not a true start-up, managing this jive maps nicely to the Marc Andreessen comment that the entrepreneur typically oscillates between the poles of “euphoria and terror.” This surprised me.
Conversely, if you’ve climbed the ranks at KKR for ten years, you’re a creature of that system. You know how to navigate and optimize it. How to balance external and internal relationships. Which associates to avoid. Committee biases. How to layout deal math and optimize memo construction.
You know to socialize the deal with Susie before Joe because Joe always parrots Susie. You know why everyone hates Monty. And you’ve likely never faced indignity.
This point is important. It’s kind of like you’re a fierce animal (smart, hardworking, and capable), but you grew up at the Bronx Zoo. So all you know is the Bronx Zoo and its consistent food, lighting, and Steve the caretaker. Versus being in the wild, starving, and figuring out how to hunt on your own.
Relatedly, I’ve been surprised by how many smart, hard-working, and honest folks have struggled at independent dealmaking.
They post a “I’m thrilled to announce Leaf Road Legacy Partners” and then a few years later I notice their LinkedIn says “Carlyle Performing Credit.”
But if you think about it, this sort of makes sense. It doesn’t feel good to drive from strip mall to strip mall on the outskirts of Topeka to convince owners with $1m of EBITDA to sell to you, when you used to do billion-dollar LBOs at TPG. It doesn’t feel good to have small bankers not take your call and brokers ask if you even have the capital. “I used to deploy a billion dollars a deal man!”
The cold start process of firm building is a conveyor belt of indignity and that can be soul deadening.
From your vantage point, what do you think drives allocator decision-making in practice? Not the memos and committee decks, but the human layer: reputation, narrative, familiarity, signaling, FOMO, etc. Where do you see rational capital allocation falter?
There are very smart and talented LPs out there. Impressive and deeply rational folks. But irrationality exists in all markets and LPs are not an exception.
But frankly I don’t know. I’ve wasted too much of my life trying to divine LP astrology. It’s too hard.
I think all the classic tropes can be true in some form at some time: “who else is in?,” scarcity, animal spirits, FOMO, narrative, principal-agent problem, “no one gets fired for investing in [Blackstone]”, etc.
At first, I assumed that the most important thing to investors was money-making. That is, answering and acting on the fundamental question: is this bet a good risk-reward? But I think this is often more like a top two, maybe top three consideration.
I’ll give you a recent example: I saw a committee pass on a rockstar (but anchor-less) blue-collar HVAC operator with a compelling HVAC rollup because (ostensibly) (1) they felt the starting asset was too expensive at ~8x [the sale price, above its annual profit] and (2) they felt her 2-20 fee was rich.
All good. That’s their prerogative!
But then, that same committee invested in a white-collar AI HVAC rollup guy with a shiny anchor investor. The starting asset was ~15x. He implicitly had 70% carry in a permanent equity structure, via a HoldCo [and valuation based on pre-money framing, which prices the asset favorably to the GP before the new money comes in]. The math didn’t math (it mathed wonderfully for the GP).
I’m still not sure how the same committee that rejected the first deal got excited by the second one. It was like price-sensitive folks passing on $1 mayo for $15 aioli. I guess the lollapalooza combination of a shiny anchor plus reframing is powerful. Aioli is no joke!
Another example that’s closer to home for us: I have a small family office (FO) LP that I love and wish I could just go directly to and capitalize our vehicles on our terms (which are fair, and ones I know they’re good with). But the FO reacts to scarcity and pressure. So first I need to manufacture social proof and uncertainty for her. Which is easy but inefficient and time-consuming. It’s a silly dance.
Anyway, it doesn’t matter. You need to interact with the world as it is, not as it should be. You can either laugh or cry with these things. And life’s better when you laugh.
I should note, re: the HVAC example that this is all in the short and medium term. I’d like to think in some abstract, long-term sense, folks get the career they deserve.
The blue-collar HVAC girl with the reasonable deal will delight her LPs (when she eventually finds them) and do more deals. And the white-collar HVAC guy will delight himself (as Buffett says, “You only need to get rich once!”).
Some people enter the capital world with embedded credibility: networks, surnames, institutional inheritance, social proximity to capital, etc. Others don’t. What strategies work for someone building legitimacy without inherited access?
I’ve thought a ton about this.
Overgeneralizing here but there are basically three ways to create esteem for yourself as a young manager:
Moonshot returns / results quickly and “So Good They Can’t Ignore You” (Steve Martin). Think Neil Mehta/Coupang: someone told me his first fund had like a 20x return!
The things you alluded to, like lineage: mom founded eBay, dad’s a senator, etc.
Content/audience. I’m referring to people who are ~thirty years old or younger here, which mostly precludes shiny spinouts. Given the maturity and institutionalization of prestigious funds, it’s hard to rise that quickly and be a meaningful spinout these days.
I think in the long term all that matters is #1. Danaher, Buffett, Koch etc.
All these compounding stories were basically unknown for decades. But eventually the MOICs became “So Good They Can’t Ignore You,” and they became cool kids.
Not coincidentally, none of these are managers. They’re all non-fund, balance sheet stories (i.e. true compounding/MOIC stories), but I digress.
The short term is different.
#1 is basically impossible to do in the short term. Assuming you’re not a genius, you may catch lightning in a bottle, take a big swing, YOLO leverage, rollup with crazy velocity etc. And things just hit. We’ve done a little of this and it worked but candidly, I wouldn’t do it again (I’m sure glad LPs can’t put some of my early Farm decisions into a Monte Carlo simulation!).
#2 is impossible to plan for.
#3 is possible! Today’s media is permission-less leverage (I forget whom I stole this from so sorry for no attribution) [Shahrukh’s note: it’s Naval Ravikant!].
And not coincidentally, this is the approach most folks who don’t have a seat at the table take. Think Seth Klarman [founder of The Baupost Group, an investment manager] early on publishing Margin of Safety to get investors.
Or Buffett’s countless attempts at publicity early in his career. Or another good one: Bernard Arnault [founder of LVMH] is often regarded as elusive and reclusive but if you look at his early career, he really wasn’t.
So this is the path we’re taking. But content needs to be quality and consistent over a long period of time (lessons I’ve derived from our immense success in audience building (526 followers!)).
Quality is self-explanatory. Consistency is downstream of enjoyment. Joy is one of the bigger lessons of my career and worth digressing on. If you like doing something, you do it a lot and for a long time.
If you do something a lot and for a long time (and deliberately), you generally find success (Duckworth, Ericsson). Therefore, I’m highly intentional about my energy and joy, and think often on what activities contribute or detract from these forces. Everything I’ve failed at in life (and the list is very long) went against this rule.
At some point you yourself realized that returns alone don’t create outcomes, but a strong story can. How do you think about shaping a coherent narrative around what you’re building without slipping into self-mythologizing or empty branding? What makes a story credible rather than promotional?
Again, in the long-term, returns are probably all that matter, assuming table-stakes elsewhere like manager honesty, kindness or at least likability etc.
But in the short term, you’re totally right; narrative is helpful. It can be an accelerant.
I cover this theme above (the power of story, audience, content) so I’ll redirect you there.
But I’ll touch upon the other part of your question, because it’s interesting and I think about this.
My solution has basically been (1) to overshare and be transparent as possible (especially the losses, the indignities of firm building, etc.) and (2) try to be as likable as possible (earnest, self-aware, self-deprecating, good-natured, vulnerable, etc.).
Re: oversharing. I think I’m okay with folks seeing too much because I like what we are, and I think we’re really good at what we do (did I mention we’re also humble?).
“We got this right, this wrong. We have this issue” sort of thing.
But candidly, we’ve gotten mixed results here. Some of our LPs love this. But in many ways I underappreciated how much institutional folks value things like tightness of narrative over candor and transparency and oversharing.
Which I think is why most institutional GPs evolve to a “show no weakness” approach. This really puzzled me when I started out but the more time I spend in the business the more I understand it. But I hope to God we don’t conform to it.
Re: likability. This is just good life advice and anyone can do it. I tell my guys often that my long list of failures would be much longer if I didn’t try like heck with people.
And for some reason finance folks are terrible at this. I’m constantly pushing my team to be more heartfelt and humorous when dealing with sellers. Even joyless suits don’t like joyless suits!
So yeah my hope is that things like transparency, vulnerability, self-awareness and tone neutralize any self-mythologizing or empty branding.
You’ve become more visible over time. Writing, speaking, showing your thinking publicly. How do you decide what belongs in public versus what should remain private or internal? Where’s the line?
First, why am I increasingly sharing stuff? Well, at risk of grossly overgeneralizing, many young Turks who do things publicly don’t have a seat at the table.
If mom’s a billionaire, dad’s a governor, or you have some other embedded tailwind like this, the “We’re low profile. Doing public stuff is not our style” approach makes sense. Not only from a risk-reward perspective but it’s aesthetic, romantic even, and just affords you more dignity.
But other folks don’t have that luxury. Think about Andrew Wilkinson, or a young Buffett. None of them were born with embedded credibility and esteem. So, they had a fundamentally different relationship to attention.
This was a hard decision for me. But I sort of felt the same way. “Not having a seat at the table” is probably too strong given my institutional experience (I was always in the room but usually like in the seat in the back corner by the door).
But I felt I needed a way to generate esteem. I needed some way to build my business and brand. And candidly, some way to defend it if needed (and this is always needed at some point).
Especially because my story is non-traditional: I live in Bermuda and I’ve built my firm inside my dad’s goat farm. For context, I live in Bermuda not for a shady tax, insurance, or bitcoin thing! It’s because I grew up here and my family, friends, and community are deeply important to me. The tribe is strong.
And candidly, there was probably something inherently appealing about becoming known. Recognition in and of itself. I basically spend all my time thinking about this business (at the risk of being hifalutin, I really think of it as a craft), and feel strongly that we’re good at it, so maybe I wanted validation for that?
I don’t know. It’s distasteful to say out loud, but call it ego or ambition. Those sorts of superficial but human things are never fully absent.
Regarding what remains private, I’m also conflicted. While I really enjoy teaching and helping folks, it’d be irresponsible to have an “abundance mindset” at this point in my career.
It’s too early and we haven’t won enough. And I’m skeptical of influencers who say otherwise. So, the calculus is: does sharing this help us more than it hurts us? And the answer is often yes.
What I’m conflicted on is how much it hurts us. On the one hand, information is commoditized and everywhere these days. And I’ve seen many folks struggle despite having all the playbooks and support.
On the other hand, we only need to convert one competitor to make our talent and deal hunting marginally more difficult. So yes, I believe I do erode barriers by giving away inside baseball.
One thousand people will hear or read my stuff and do nothing with it. But three will operationalize it, maybe better than us, and boom I have more folks calling on Joe in Poughkeepsie to sell his juicy little services business to them, not to me.
But again, I think the trade is worth it.
There’s a romance in just doing excellent work and letting time compound. But visibility accelerates opportunity and access. How do you personally reconcile that tension? Have you ever felt resistance to being more outward-facing? If so, how did you work through it?
I think you’re right. Visibility does accelerate opportunity and access (if tastefully done, a big if).
But I also think visibility and doing excellent work are related in this business. This is something folks miss.
Let’s take a step back. We’re in the private markets. Control investors. We’re not transacting on a faceless exchange like hedge funds do.
That’s a permissionless, equal-opportunity (mostly) endeavor (whether you’re at Pershing Square or you’re a guy and a dog and a Bloomberg terminal in Hackensack – you’re running the same screens and can buy the same stocks).
Our business is different. I need humans to opt in and work with us. I need deals and talent and the right capital (finding capital is not a bottleneck – finding compounding-aligned capital is). And it turns out having a brand and reputation and megaphone is anywhere from a lubricant to a superpower when it comes to mining these things. Buffett’s early transition to becoming more public is a great example of this.
As far as resistance, its a good question. For sure. My wife is intensely private and dislikes it.
My parents are confused by it. My dad correctly interprets my stuff as promotional and often references Dr. Seuss: “Self-promotion is about as charming as an eel.”
I wince.
I was even at a wedding when a college friend with a prestigious PE job “checked in” on me because of my LinkedIn activity (with some mix of confusion and pity!). But that’s okay. I think this sort of thing is inherent to the frontier. But low status things become high status. The fringes come to control the center (I think Game of Thrones?).
Now I do deal with a tension you didn’t ask about. It’s wildly time consuming. I have not been able to reach a peace with this.
When managers innovate around structure, fees, permanence, or ownership models, do you think allocators evaluate those choices analytically? How should emerging managers think about experimentation without eroding credibility?
I don’t think credibility is a risk. If you can’t raise the money, you’ll probably have egg on your face irrespective of the underlying structure. If this is you – don’t dwell on it, just do great deals and you’ll be fine.
Further, folks have done it all before (every combination or permutation of structural-attributes), so you can almost always point to a precedent, and often a successful precedent.
As far as experimentation goes, I think you just need clarity on what you care about. That is, which vehicle characteristics you’re willing to trade away.
For example, if you’re trying to build the next Blackstone (or live on the UES and are exposed to the bigness, mimicry, and ambient overstimulation of New York), then you’re likely solving for AUM. And probably willing to trade everything else away (fees, control, etc.).
If you’re trying to paint a beautiful picture and compound, then you can trade AUM away, be equity efficient and highly selective with your partners.
At the end of the day, the market will give you what it will give you, fairly or unfairly.
We are watching a wave of talented professionals leave institutions to build independent platforms: holding companies, evergreen vehicles, solo capital models, niche strategies. What do you think will separate the ones who build durable franchises from those who stall out after early momentum?
I don’t have anything unique here. Are you good at making money? Judging risk-reward. Finding deals. Finding talent. Being honest. Being persistent.
And more good at finding deals? And most importantly, lucky? Then things will work out.
That said, one odd pothole that folks miss: if someone launches a HoldCo because they perceive it as the natural next step for a high performing person, that’s no good.
I’ve pondered any relative success I’ve had.
And one difference for me is that I’ve always been obsessed with this game. Investing, finding skewed risk-rewards, inhaling anything related to Berkshire Hathaway (I know, a cliché), finding a dollar for 50 cents, and the general intellectual framework of value investing.
My story wasn’t Deerfield to Princeton to Goldman to KKR (I wish!). Anyway I’ve seen some of these profiles struggle when things get tough. So if you find a killer resume continuing the mimetic thing (“The smartest people I know are doing these HoldCos so I want to go do that”), expect a higher degree of failure-risk.
If you zoom out 10-15 years, what do you think makes a capital allocator or operator “inevitable”? Like, someone the ecosystem wants to work with, back repeatedly, and learn from?
Returns.
Actually, I take that back.
It depends on what you mean by capital allocator.
If you’re trying to build the next Blackstone, again, returns is probably a top two or three driver. There’s probably a minimum you need.
But it’s mostly: are you in the flow, status, podcasts, narratives, scarcity, having a nice office. Are you different enough but not that different?
Things like that. I think if you can net 2.1x and tell good stories, you’ll probably be fine?
If you’re trying to be a money maker, a compounder (of the underlying balance sheet, not the GP), I’d say returns + honest/integrity + persistence. That formula, over a long period of time, will win.
Excellent interview with great questions. Thank you.
great interview