Optimizing for maximum drawdown

What if the easiest alpha in public markets isn’t stock picking… but taxes? In this episode, I sit down with Zach Wainwright, Founder of Twin Oak ETF Company, to break down structural alpha, ETF tax efficiency, and how high-net-worth investors can compound capital more intelligently. Zach shares lessons from his time at Wellington, TIFF, and inside a single-family office — and why long time horizons, incentive alignment, and tax awareness may be more powerful than traditional stock-picking alpha. We also dive into tail-risk hedging inside an ETF wrapper and how families can design portfolios to survive extreme drawdowns without sacrificing long-term compounding.

Highlights:

• Why “long-term” means something different for asset owners vs. traders
• Lessons from Wellington, TIFF, and investing in emerging managers
• Why fund one through fund three often generate the most alpha
• Incentive alignment and GP capital commitments
• Structural edges inside single-family offices
• The three levers of value creation: security selection, asset allocation, structural alpha
• Tax drag in mutual funds vs. ETFs
• How ETFs preserve tax alpha through in-kind redemptions
• Tail-risk hedging inside an ETF vs. private hedge funds
• Avoiding the 10 worst days — and capturing the 10 best
• Designing portfolios to reduce maximum drawdown
• Why tax deferral may be the most sustainable form of alpha

Guest Bio:

Zach Wainwright founded Twin Oak ETF Company with a singular focus: delivering innovative, institutional-quality, tax-efficient solutions to high-net-worth clients. Throughout his career at firms such as Wellington Management and TIFF, and later within a single-family office, Zach observed that taxable investors were often underserved — losing significant performance to unnecessary tax drag despite strong investment selection.

At Twin Oak, Zach focuses on what he calls “structural alpha” — leveraging time horizon, tax efficiency, and thoughtful implementation to unlock portfolio potential. His approach blends institutional rigor with family-office pragmatism, creating ETF-based solutions that aim to preserve compounding, reduce drawdowns, and optimize after-tax outcomes for long-term investors.

Our Podcast now receives more than 300,000 downloads a month. Are you interested in sponsoring an episode? Please email David Weisburd at david@weisburdcapital.com.

We’d like to thank AlphaSense for sponsoring this episode!

Sponsor:

AlphaSense is the AI-powered market intelligence platform trusted by 85% of the S&P 100, helping investment professionals make faster, more confident, data-driven decisions. Built for hedge funds, asset allocators, private venture capital firms, and investment bankers, AlphaSense uses advanced AI and powerful search across premium proprietary content to surface the insights that matter most—before the market moves. Elevate your research and stay ahead of the competition. Visit https://www.alpha-sense.com/howiinvest/ to learn more.

Stay Connected with David Weisburd:

X/Twitter: @dweisburd LinkedIn: https://www.linkedin.com/in/dweisburd/ Weisburd Capital: https://www.weisburdcapital.com/

Stay Connected with Zach Wainwright:

LinkedIn: https://www.linkedin.com/in/zcwainwright/

Questions or topics you want us to discuss on How I Invest? Email us at david@weisburdcapital.com.

Disclaimer:

This podcast is for informational purposes only and does not constitute investment, financial, legal, or tax advice. Nothing in this episode should be interpreted as an offer to buy or sell any securities or to participate in any investment strategy. All opinions expressed by the host and guests are their own and do not represent the views of Weisburd Capital. Participants may hold positions or have financial interests in the companies, funds, or investments discussed. Any references to specific investments are for illustrative purposes only. Investing involves risk, including the potential loss of capital. Past performance is not indicative of future results, and any forward-looking statements are subject to risks and uncertainties. Any third-party data or opinions have not been independently verified. Listeners should conduct their own research and consult their own advisors before making any investment decisions.

(0:00) Introduction (0:13) Importance of long time horizon and differences in investing perspectives (1:16) Lessons from Wellington and transition to TIFF and early stage fund managers (2:25) Risk, incentives, and alpha generation with early fund managers (4:08) Risk-return tradeoffs and identifying traits in emerging managers (5:57) Transition to single family office (7:40) Structural advantages and unique investment strategies of family offices (10:25) Founding Twin Oak, investment philosophy, and tax strategies (13:48) Tail hedging strategies and costs/benefits of hedging (18:18) Optimizing portfolios: Long-only versus hedged performance (20:36) Client-driven innovation and optimal long-term public portfolio strategies (22:31) The evolving ETF ecosystem and the rise of taxable investors (24:51) Partnering with offices, hedge fund managers, and the importance of tax-aware investing (26:44) Advice for a younger self and the value of diverse experiences (28:14) Closing remarks