This interview is about investor Ali Hamed finding hidden money in overlooked assets. He thinks YouTube content rights are the most undervalued billion-dollar asset class, steady like music royalties but growing 40% yearly. He backs Spotter, the dominant buyer of those rights; he also lends to Amazon third-party sellers (warning of rising costs) and is testing California's backyard homes (ADUs), seeing a multi-billion opportunity.
Ali Hamed, in an episode of Invest Like the Best, reviewed the six-year development journey of his investment firm CoVenture, whose assets under management have grown from zero to $2.5 billion. The core thesis is to seek alpha in overlooked areas such as YouTube content assets, real estate innovatio
Ali Hamed (Co-Founder and Managing Partner of CoVenture) managed approximately $250 million in assets when he first appeared on the show in 2018; today, that figure has reached $2.5 billion. The core theme of this episode is: how to systematically seek alpha in overlooked asset classes, and build a resilient, examination-proof investment institution through cross-strategy synergies (credit + venture capital + hybrid capital). The most impactful judgment in the entire episode: Ali Hamed believes that YouTube content assets are the most undervalued hundred-billion-dollar asset class today — "most people think it's niche and nascent, but YouTube has existed for 20 years with a CAGR of about 40%, and if priced like music copyright assets, the scale could reach hundreds of billions to trillions of dollars."
Ali Hamed believes that the market scale of YouTube content assets is far from fully recognized by the market, and their investment logic is similar to music copyrights but with more prominent advantages.
Mechanism Breakdown:
Partner Effect:
Deduction and Verification Conditions:
Ali Hamed argues that the fundamental mistake most new fund managers make in capital formation is: first crafting a story, then finding an investment theme, rather than first building investment capability, then matching capital.
Three Capital Source Models:
| Model | Dependency | Risk |
|---|---|---|
| Social Relationship Type | Existing LP trust, willing to invest in "anything" | Not scalable, relies on personal network |
| Performance-Driven Type | Existing verifiable track record | No reference data for new strategies |
| Story-Driven Type | Packaged as "geographic/industry focus" etc. | Most are bad stories, leading to distorted investment strategies |
Mechanism Breakdown:
CoVenture's Opposite Approach:
Ali Hamed argues that the most significant pricing distortion in the current private credit market is that the market prices sponsor-backed direct lending far lower than non-sponsor direct lending, yet the actual risk may be exactly the opposite.
Market Consensus vs. Actual Risk:
| Dimension | Sponsor-Backed Direct Lending | Non-Sponsor Direct Lending |
|---|---|---|
| Market Perception | Low risk (backstopped by PE funds) | High risk (first-time underwriting, high execution risk) |
| Actual Risk | High (PE funds are rational investors and will not go all-out for the 20th position) | Low (founders’ personal wealth is tied to the company, making them more willing to fight) |
| Pricing | Low (capital inflows create competitive pressure) | High (less competition, lenders hold pricing power) |
Key Mechanisms:
Two Classic Cases:
1. The Caesars Palace coup (Elliott / Oak Tree / Apollo contest) — proving that PE funds have more tools at their disposal in distress than commonly believed.
2. One-time supplier fraud — after encountering client fraud in an early CoVenture investment, the firm still achieved a 100x return through multiple bridge rounds and management turnover.
Ali Hamed distills three types of investment institutions with the greatest flexibility, whose common thread is a capital structure with a "low social contract, high commercial contract."
Characteristics of the three types:
1. Extreme outperformers (e.g., Soros, Ciciano) — because returns are so spectacular, LPs approve almost any strategy change unconditionally.
2. Predominantly proprietary capital (e.g., family offices, own funds) — can change their minds at any time without explanation to anyone.
3. Insurance/annuity hybrid holders (e.g., Eldridge, Apollo Athene) — a pure commercial contract with policyholders (a 4%–5% return promise), leaving all excess returns fully discretionary.
Comparison:
Implications for CoVenture:
Ali Hamed believes that the culture of a successful investment firm should be built around a small number of "non-negotiable principles." Everything else can be compromised, but the principles themselves must remain unshakable.
Core non-negotiable principles:
1. Do not be forced to deploy capital in a bad year — achieved through a multi-strategy approach, not a single strategy.
2. Do not rapidly expand headcount based on short-term visible performance — prefer to slow down growth and develop senior leaders internally, rather than hiring expensive external veterans.
3. Do not pursue investments that are "easy to raise capital for" — in 2020, avoid chasing vertical SaaS venture funds, and instead stick to new strategies that are harder to raise capital for but offer higher returns.
Mechanism breakdown:
Insight into human nature:
| Ticker | Guest Stance | Key Data |
|---|---|---|
| Spotter (YouTube content assets) | Bullish (has been investing for years, has become its largest position in the field) | YouTube annual compound growth rate of ~40%, annual payouts to creators ~$15 billion; the asset class is estimated to be worth hundreds of billions to trillions of dollars |
| Amazon Ecosystem (third-party seller financing) | Neutral to cautious (has invested, but faces multiple challenges) | Container costs rose from $2,500 to $21,000 (impacting margins by ~400bp); some tickers have far exceeded expectations (20x returns, 42% IRR), while others are struggling |
| ADU Market (California accessory dwelling unit construction) | Early-stage exploration (has invested tens of millions, sees potential to scale to billions) | California housing gap of ~1.5 million units; at $300,000 per unit, total addressable market of ~$450 billion |
| iBuyer-type Companies (e.g., Opendoor) | Cautious (model distorted by venture capital) | High LTV, lack of due diligence, fraud in some cases (video verification replacing physical inspections) |
| Alphabet/Google | Bullish on ecosystem stability (but YouTube as a platform remains an investment target) | Issues of platform governance instability similar to others (e.g., Shopify, Facebook) |
| Shopify | Cautious (unpredictable ecosystem governance) | Platform may compete with, kill, or acquire successful third-party apps |
| Salesforce | Neutral (not invested but monitoring) | Ecosystem is large but historically never investable |
| Uber | Not explicitly stated | Cited as one of the "platform economy" governance cases |
1. "YouTube is a Hundred-Billion-Dollar Unpriced Asset" (Ali Hamed)
Support: YouTube has been around for 20 years, growing at 40% annually, paying creators $15 billion per year; if priced like music royalties, its asset scale could reach hundreds of billions to trillions of dollars. Spotter uses exclusive historical viewing data to achieve a pricing advantage, making it difficult for competitors to enter.
2. "Non-Sponsor Direct Lending is Safer than Sponsor Direct Lending" (Ali Hamed)
Support: Market consensus is that PE funds backstopping reduces risk, but PE funds rationally choose to walk away in distress (the 20th position vs the entire business model); founders bet their entire net worth and are more likely to fight to the end. In current pricing, non-sponsor direct lending provides lenders with 50%-100% excess returns due to "lack of competition."
3. "The Prettier the Fundraising Story, the Worse the Investment Typically Is" (Ali Hamed)
Support: Most new fund managers only have a "good story" to tell (geographic/sector themes), because they lack both trust relationships and a track record in a new strategy. This motivation to "make up stories for fundraising" leads them into consensus, overheated markets, ultimately destroyed by high valuations.
4. "Commercial Contracts are Superior to Social Contracts" (Ali Hamed)
Support: Insurance liabilities (e.g., Eldridge, Apollo Athene) are pure commercial contracts—promise 4-5% returns, then everything is discretionary. Traditional funds have social contracts; after committing to a strategy, they cannot deviate even if markets change. "The most resilient investment institutions all fall into one of three categories: abnormally good performance, proprietary capital, or pure commercial contracts."
5. "Being Forced to Deploy in Bad Years is the Biggest Death Trap for Investment Institutions" (Ali Hamed)
Support: Single-strategy firms either continue investing in bad years (losing money) or pause for two years (losing staff, losing momentum). CoVenture, through multi-strategy (VC + credit + hybrid capital), can find the areas with the highest relative value in any year, staying "always on."
6. "Hiring External Seniors is Much Riskier than Cultivating from Within" (Ali Hamed)
Support: External hires lack political capital and dare not make contrarian bets; internally cultivated talent has long-term social capital and can endure being "wrong and alone." Apollo's average partner tenure is 18 years—this is the core mechanism for replicating "Apollo-style decision-making."
7. "Being Wrong and Alone is the Price of Alpha" (Ali Hamed)
Support: Uncorrelated returns are great when everyone else is losing money, but extremely painful when "only you are losing money." "Wrong and alone" is a state most investors cannot bear, but it is precisely this "priced loneliness" that delivers excess returns.
8. "Most People Only Look at Problems, Not the Weight of Problems" (Ali Hamed)
Support: Investors are willing to pay extremely high premiums for "flawless" companies, but unwilling to pay a fair price for companies with problems. But "perfection" is harder to achieve—"if you pay a high price for perfection, the probability of failure is actually higher." Examining the weight of problems is more important than outright rejection.