The Inefficiency Advantage: Why the Best Alpha Lives in Private Markets' Hidden 90% - Raphi Schorr - Deputy Chief Investment Officer and Partner - HighVista Strategies
The Distribution by Juniper SquareShow Notes
On this episode of The Distribution, Brandon Sedloff and Raphi Schorr explore what makes inefficient markets the last bastion of alpha in private investing. Schorr, Deputy Chief Investment Officer and Partner at HighVista Strategies, explains how his firm deploys $14 billion across overlooked corners of the market, from lower middle market private equity to venture capital, private credit, and public biotech, where large addressable markets, poor information, and limited competition still reward patient capital and deep networks.
They discuss:
- Why lower middle market private equity operates beneath the radar of most institutional investors
- How backing fund one managers in venture capital creates decades of compounding access
- Why 50% of the S&P 500 is venture-backed and what that means for where value is created today
- The rise of GP-led secondaries in the lower middle market as sponsors seek to hold their crown jewels longer
- How pattern recognition built over 20 years helps identify winning managers and companies in fragmented markets
This episode offers a clear view into how experienced allocators find alpha in markets most investors never see.
Topics:
(00:00:00) - Intro
(00:01:05) - Meeting Raphi Schorr and HighVista Strategies
(00:02:32) - Mathematics and early investing exposure
(00:06:40) - From physics to operations research
(00:09:27) - Joining HighVista and the shift to private markets
(00:12:10) - Building the firm from day one
(00:16:28) - What HighVista does today
(00:20:18) - Inefficient markets and where alpha lives
(00:24:54) - Pattern recognition in lower middle market PE
(00:28:00) - Balancing analytics with relationships
(00:31:10) - Access and the venture capital power law
(00:34:44) - Backing fund one managers
(00:42:29) - Creating optionality through early partnerships
(00:48:22) - Structural themes for the next 36 months
(00:52:41) - What keeps Raphi up at night
(00:54:54) - Closing thoughts on talent and opportunity
Speaker Profiles:
Brandon Sedloff
LinkedIn — https://www.linkedin.com/in/bsedloff/
Website — https://brandonsedloff.substack.com/
Raphi Schorr
Linkedin - https://www.linkedin.com/in/raphaelschorr/
Companies:
Juniper Square — https://www.junipersquare.com/
HighVista Strategies — https://www.highvistastrategies.com/
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