Investing in the New Economy w. Harlan Capital – Ep. 65



SUMMARY

We have witnessed a significant shift in the investing landscape: companies no longer derive their value from their net tangible assets. Companies can now grow by leasing assets as and when they need them.

Today we speak with Joshua and Leonard Harlan from Harlan Capital about investing in asset-light opportunities. We open our conversation by chatting about new economic trends and how Joshua and Leonard, as the son and father founders of Harlan Capital, specialize in investing in intangible assets.

“Value used to be owned by tangible assets that businesses owned. Now companies can grow by leasing assets as they need them. Value is derived from services and copyright.” — Joshua Harlan [0:08:14]

After exploring their respective careers, we discuss how large companies have moved towards licensing and not owning assets. This has led to a fragmented market that’s ripe with opportunity.

“In the old days, handshakes were the key. And today, it’s all transactions, lawyers, and thick legal agreements. But we still focus on looking after our investor’s interests.” — Leonard Harlan [0:15:39]

We then dive into changes in the buy-out industry and how Harlan Capital nurtures an investing culture based on tried and tested values, not on chasing deals. Reflecting on how digital is transforming the marketplace and why the best companies over-communicate, Joshua shares his insights on why media and intellectual property are key investment avenues before talking about how his company is primed to adapt to change.

“In the 40s, all aspects of movie-making were vertically integrated. Today, every film and television show is produced by a special purpose company and everyone is contracted in.” — Joshua Harlan [0:13:02]

We also touch on Harlan Capital’s investing focus and what they look for in their clients. Near the end of the episode, Leonard and Joshua provide their perspectives on the state of the world, foreign affairs, and what the future of global trade might look like.

“In the United States we have a culture that accepts failure and there are very few other countries where that can be said. And failure, if done right, is a badge of glory that leads to innovation.” — Leonard Harlan [0:30:30]

Representing a balance of old school experience and forward-thinking, tune in to hear our discussion with Joshua and Leonard Harlan.

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Key Points From This Episode:

  • Introducing Joshua and Leonard Harlan, a son and father investment team.
  • Exploring Harlan Capital’s focus on new and emerging asset classes.
  • Reflecting on Joshua and Leonard’s investment careers.
  • Why companies no longer need any net tangible assets.
  • From media to intellectual property, hear about Harlan Capital’s investment categories.
  • The move from vertical integration to licensing assets.
  • Leonard’s perspective on changes in the buy-out industry.
  • How digital has shifted the business world, presenting challenges and opportunities.
  • What Harlan Capital has done to adapt to COVID and our fast-paced business environment.
  • Insights into Harlan Capital’s investing thesis and how it guides their decision-making.
  • What Leonard and Joshua look for in ideal investment.
  • Leonard shares his views about where the global and domestic market is heading.
  • Why the United States is still fertile ground for innovation.
  • Understanding America’s international role at the end of the Cold War.

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