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Jose Medeiros Invests for the Long Term

Jose Medeiros Invests for the Long Term

How Jose Medeiros built a career on waiting for the right moment to cofound Stonerise Capital Partners and join Kabouter Management’s advisory committee

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“There are people who will say that they knew what they wanted to do from a very young age. They just molded their career around their initial ambition,” says Jose Medeiros, managing partner and cofounder of Stonerise Capital Partners. “But I think for a large set of others, myself included, it’s not that way at all. At many times in my career, if I had tried to guess where I would be ten years ahead, I would have been resoundingly wrong almost every time.” 

After initial pleasantries, this is the first thing that comes out of Medeiros’s mouth. For him, it’s an important admission for those early in their careers. Born in Rio de Janeiro and raised in São Paulo, the Brazilian native has found success by making himself open to opportunities and balancing that with pragmatism and a curious mind. 

While attending college in Brazil, Medeiros pursued what is a normal part of the undergraduate business degree in the country: he worked as much as he studied. First, he interned at a Coca-Cola bottling factory in São Paulo. Then he was able to land an internship at Chase Manhattan Bank on the “less-developed country” desk, or emerging markets, as it’s known today. “Thankfully that name has changed over the years,” he notes.

Following college, Medeiros would spend six years formative years at McKinsey: first in São Paulo, then in Buenos Aires, Argentina, and eventually in San Francisco after earning his master’s degree at Harvard Business School. 

“If I had tried to guess where I would be ten years ahead, I would have been resoundingly wrong almost every time.”

Jose Medeiros

Moving to the US was eye-opening for Medeiros, who had spent his entire career in Latin America. The plan was to get a few years of experience in the US before returning to Brazil. “But of course, here I am, still sitting in San Francisco,” he says, laughing. 

Instead, he elected to gain experience at a boutique tech-focused investment bank where his business-school classmate was working. His mentors were strong, and his interest in the private equity space continued to grow. That interest would ultimately play out at Blum Capital Partners, one of the only firms in the country in the late nineties that was doing true crossover investing. 

“There was no distinction between doing a private or control deal, or simply buying stock in the open market,” Medeiros says. “It was ahead of its time and really gave me the opportunity to figure out what my own investment style was.”

It was at Blum that he met Jeff Ubben, who went on to found ValueAct Capital in 2000, and John Walker, who was then partner at Blum. Both men taught Medeiros about the importance of finding good, operational businesses and being disciplined about when to invest. “It’s what Warren Buffet calls ‘Waiting for the Fat Pitches,’” Medeiros explains. “With patience, you will have the opportunity to buy almost any business at an attractive price. You just have to be patient and put in the research hours.”

That philosophy would lead to the founding of Stonerise Capital in 2007 with Walker and Jeffrey Cozad, and it’s where Medeiros has been ever since. The success of the firm has led to Medeiros being sought out by firms whose DNA is founded in similar principles. When Medeiros was asked to sit on the advisory committee for international small-cap investment specialist Kabouter Management, Medeiros already knew it was the right fit. 

“I think it would be difficult to be in this role unless you start with a couple fundamental premises,” the partner says. “One is you like the business and trust the team to be good and honest stewards of capital. Second is that they have the right experience and temperament to manage the ups and downs of the market. On both accounts, [Kabouter founders] Marcel Houtzager and Peter Zaldivar and the entire team are absolute straight shooters. They fit the bill in spades.” 

In his advisory position, Medeiros says it’s a valuable role to play as an industry veteran, one whose tenure has seen multiple financial crises and the ebbs and flows of an unpredictable market. He’s someone to whom the business can bring ideas and someone who understands what true activist investment looks like over more than a few financial quarters. 

“Kabouter has an investment style that is built for the long-term,” Medeiros says. “I was delighted to be an investor from day one. Perhaps because we share much of the same philosophical DNA, we have a very synergistic relationship.” 

The success of Stonerise Capital is obviously a high point for the cofounder, but it’s also clear that the executive has found great reward in helping companies succeed whose long-term vision is obviously about accumulating wealth, but not by sacrificing ethics or cutting corners.

It makes sense that Medeiros’s time outside the office is spent on the jiu-jitsu mat, the martial art that was made popular worldwide by his home country. It’s all about patience, endurance, and waiting for the right moment to strike. The opportunity will come; you just need to be ready. 

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