Say goodbye to tired market takes and superficial sound bites. Because here, instead of skimming the surface, we dive into the heart of capital allocation — striking the perfect balance and exposing the subtleties that reveal the topic’s true essence.
Prepare to have your perspectives challenged as we open up the issues that resonate with the hearts and minds of those shaping asset management.
We’ve enlisted the wisdom of visionary leaders in the industry and just like a meticulously crafted wine, we’ll allow their insights to breathe, unfurling their hidden depths and transforming our understanding.
YOUR CO-HOSTS: GET TO KNOW JOHN & AARON
John L. Bowman, CFA, President, CAIA Association
John oversees the industry leading CAIA Charter, thought leadership and content development, operations, and CAIA's Asia Pacific strategy. John has devoted over 25 years to the asset management industry to recover the narrative of the value that the investment profession brings to society. He is a staunch public advocate for market integrity, long-termism, investor outcomes, diversity, human dignity and educational standards.
Aaron Filbeck, CAIA, CFA, CFP®, CIPM, FDP, Managing Director, Global Content Strategy, CAIA Association
Aaron leads CAIA Association’s global thought leadership and content development agenda, content marketing efforts, and industry events. He also oversees strategy for CAIA’s 20 chapters across the U.S., Canada, and Latin America. Previously, Aaron founded UniFi by CAIA™, an online platform dedicated to educating the private wealth management industry on alternative investments. He has also sat in various other content development and educational programming roles at CAIA.
LISTEN TO OUR EPISODES BELOW!
S2 | Episode 3: Will Artificial Intelligence replace the Investment Professional with Martin Escobari and Dave Morehead
AI dominates headlines and investment conferences these days…often to excess. Sensational stories like “Here’s the robot that will steal your job” and charges of “Disrupt, transform or die” fill our feeds and raise fearmongering narratives that channel Issac Asimov’s I-Robot or James Cameron’s Skynet--of course from the Terminator series. Quant shops, hedge funds, and algorithmic trading firms have embedded AI in their models for over a decade. But have we hit a tipping point where applications of these accelerated computing capabilities are ready to invade the more traditional asset management business? What are those use cases and which are most promising? And how should we think about peaceful future co-existence of the human and the machine in managing portfolios. Martin Escobari and Dave Morehead join us to unpack this provocative topic.
S2 | Episode 2: Multi-Strategy Investment Firms—the Future Convergence of Public and Private Offerings with Jenny Johnson and Jean Hynes
Today’s asset management business has quickly transformed into a race to build out a stable of thoroughbreds--investment strategies across a spectrum of conventional public equity and debt as well as offerings across the continuum of private capital--equity, credit, secondaries, real estate, infrastructure etc. What makes recent history particularly unique are the crossover deals from traditional managers with alternative managers. For several decades, traditional long only mutual fund shops and institutional firms stayed in their lane and idiosyncratic, complex private capital partnerships lived in a different world---there was a peaceful co-existence and mutual exclusivity. Those distinctions and parallel worlds have evaporated. We explore why with two of the most revered leaders in the industry and compare and contrast their different approaches to meeting this challenge.
S2 | Episode 1: Long-termism: The Greatest Asset in Asset Management with Sarah Williamson and Geoff Rubin
No investor claims to be short-term but in the face of the seductive siren call of the emotionally volatile markets, even the most disciplined of investors buckles at the knees. The apparatus and systems in which we work---governance, investment policy, benchmarks, asset allocation frameworks, compensation systems along with the behavioral spiral that haunts us all in times of market trauma tend to perpetuate herd mentality. With the help of some of the best minds on the subject, we work to define long term investing more precisely, explore the virtues of a multi-cycle horizon, and warn of the common pitfalls that so easily break our convictions.
Episode 14: Private Capital Secondaries: From Stigmatized Distressed Selling to Sophisticated Portfolio Toolset with Vern Perry and Taylor Robinson
It’s another coming of age story on Capital Decanted. In this case, since Dayton Carr conceived the space in 1984, we’ve seen private capital secondaries morph from a niche set of transactions of distressed limited partner selling to a more than $600B asset management and liquidity tool utilized by the most sophisticated LPs and GPs in the world and now devoid of the original stigma that plagued these activities. We’ll examine that winding and explosive history of their beginning and then tackle the state and progression of today’s market with partners from the two largest secondaries funds on record.
Episode 13: Blockchain Computing: Magic Beans or the Next Computing Paradigm with Chris Dixon
Blockchain, Bitcoin and Bubbles, oh my. No technology in history has caused more rancor and division for investors than crypto and blockchain. But does history teach us that passion might portend something special? With the help of the most authoritative crypto investor on the planet, A16z’s Chris Dixon, we explore the history of computing platform evolution and the conditions to identify the next one while avoiding frothy FOMO. We discuss how to construct a responsible framework for investing in emerging technologies versus a casino mindset. We review the inherent advantages of blockchain networks for content creators and founders and conclude with some of the more promising use cases on the horizon.
Episode 12: Gender Diversity: The Curious Case of Stagnation with Nicole Musicco and Ron O’Hanley
One of the key doctrines of modern investment management is diversification, and yet it is remarkably absent from team construction across all spectrums of the investment profession. Countless studies have shown that there is a diversity premium for organizational performance, capital allocation and indeed, investment outcomes and yet we seem trapped in mid teen representation of women. More concerningly, progress seems to have stagnated in recent years. In this episode we lament the lack of impact but more importantly delicately attempt to unearth the root causes of this flattening of the curve, namely the pipeline, COVID, and the DEI movement. Join us for this earnest and honest assessment of what works, what doesn’t, and how a more mature discourse is needed on this generationally important topic.
Episode 11: Private Credit: Does this Decade Long Torrent need some Spring Cleaning? with Katie Koch and Kipp DeVeer
Private Credit has risen from obscurity within the private equity financing world to a greater than $2T asset class in just over a decade. In this episode, we examine the conditions (M&A, debankification, regulation, staying private longer) that accelerated post the GFC that created a torrent of issuance and demand for private credit across direct lending, asset backed credit, structured credit, and innovative special situations. And more importantly, we debate whether we’ve come a little too far, too fast, and if some rationalization and refining is needed before this exciting space continues its upward trajectory.
Episode 10: GP Stakes - A Purer Alignment for LPs/GPs or Unnecessary Distraction? with Sean Ward and Shawn Ury
Permanent Capital or GP Stakes structures aim to take further advantage of long-dated patient capital in private markets. Furthermore, they allow the LP to participate in additional cash flow streams with the GP that are elusive in a traditional fund structure. In other words, it allows LPs to get exposure to a variety of alternative asset managers as minority owners in the GPs themselves. But does this provide a purer incentive alignment of investors and GPs or simply split allegiance and attention between multiple masters? In this episode, with the help of the largest GP Stakes participant, Blue Owl, and a large LP in their fund, USAA, we examine the evolution of the approach, its idiosyncratic and multi-faceted return stream, and try to honestly assess some of the myths that haunt the space.
Episode 9: Total Portfolio Approach: An Unexpected Journey with Ben Samild and Jayne Bok
Since the arrival of Modern Portfolio Theory (MPT) in the early 1950’s by the legendary Harry Markowitz, the industry has been sturdily anchored to this philosophy and all of it’s artifacts when constructing portfolios. In recent years, however, an enterprising handful of large institutional asset owners have begun challenging the common wisdom of a strategic asset allocation approach given it tends to breed silo behavior, unhealthy competition for resources and attention, unrecognized duplication or disjointed risk exposure across the portfolio, and difficulty in managing the capital pool holistically around a view of the future. This is the story of how CAIA convened some of the most reputable and largest asset owners in the world to amplify the benefits of TPA and perhaps, the beginning of a new era.
Episode 8: OCIO: The Phoenix that Keeps Rising with Mark Anson and Sarah Samuels
The Outsourced Chief Investment Officer—once a last resort option for sub-scale capital pools looking to avoid the hassle and cost of building their own investment office to today, a multi-trillion dollar subset of the asset management profession and arguably the hottest structural trend in the industry. Take a listen while we examine: What insights and opportunities led to the creation of this segment of organizations and why has that exploded in the ensuing four decades? What defines a successful OCIO? And why has that trajectory and evolution seemingly reached an inflection point—hyperdrive really-- in the last five years that has redefined the space and encouraged newer, larger entrants?
Episode 7: A New Global Order: Integrating Geopolitics with Anastasia Titarchuk and Marko Papic
After a four decade relative period of global stability, the world order has fractured and grown more unpredictable. The new multi-polar reality poses a major problem for leaders and investors as our traditional guardrails, narratives, and structures seem less useful. How should an investor integrate geopolitical trends into their investment thesis and what pitfalls and common mistakes should we watch out for?
Episode 6: Private Market Regulation: Overreach or Overdue? With Jen Choi and Jon Grabel
In order for the capital markets system to continually grow in its transparency, efficiency and fairness, it needs a combination of free market ingenuity and regulatory protection. With the meteoric rise and importance of alternative investments in the past decade, did the SEC strike that balance correctly with the new Private Advisors Rule? Directionally, probably yes but certainly the details are far from perfect and unintended consequences are inevitable. With an aim to provide a practical guide for the layman practitioner, we explore the history of light touch regulation of private funds, highlight the important elements and implications of the rule, and explain why CAIA joined ILPA and many asset owners in submitting an Amicus Brief to the 5th Circuit Court of Appeals defending the spirit of the rule.
Episode 5: Wine Investing Holiday Special with Matt Parker and Anthony Zhang
This episode had to happen. The origin story of this show necessitated it. And what better timing then to release it as our holiday special when many of you around the world will be sitting around the table with family and friends, breaking bread and sharing a bottle of fine fermented grape juice. But beyond our passion for drinking and socializing around wine, is there an investable asset class here yet? We examine the history of wine investing, the lifecycle of the grape, and the very unique investment characteristics of each stage of the lifecycle. Then we invite two experts, both of which have brought the category to mainstream acceptance in different ways, on either end of that production spectrum to help us think through this burgeoning opportunity set.
Episode 4: Culture: The Irreplicable Superpower with Kim Lew and Jim Dunn
A healthy culture is the oxygen by which you accomplish the work of the organization. It breathes life and vitality into the collective work of the enterprise. It gives meaning and connection to a shared purpose or goal. And it is predictive of sustainable outsized investment performance. And yet, cultivating healthy organizations have rarely been a defining characteristic of the investment industry. Why? And how can we accelerate the profession’s social license with a renewed focus on culture?
Episode 3: Governance Alpha with Chris Ailman and Ashby Monk
Most agree that healthy investment committee governance is table stakes for meeting investment outcomes over the long term and yet, it is probably the least discussed element of the investment management value chain. Why is the pursuit of governance excellence often ignored? Are there models of separation of duties between board and staff that we should be aiming for? Can strong governance actually improve or juice investment returns? Is it a source of alpha that is largely unharvested?
Episode 2: Democratization of Alternatives with Joan Solotar and Fran Kinniry
Democratization is a word loaded with independence, equal access and even Americana, it’s a concept that conjures up a binary and heated debate about fairness and liberty of choice but is democratization always good? Is it the government’s role to restrict individual citizens from what they deem risky assets or should we simply demand standards of transparency and reporting and trust adults with their own money? Listen in to find out more!
Episode 1: Private Market Valuations with Scott Kupor and Andrea Auerbach
Private Markets Valuations…do these quarterly marks properly represent fair value or are they make believe…contrived from the fictional world of GP machinations? Do these interim valuations, as one commentator put it, “not matter;” or as another proclaimed provocatively, are they simply a case of “volatility laundering.” Is the gap or “lag” with public market equivalents relevant…are we anchoring to the right bogey…or arbitrarily comparing objective value to an emotionally manic patient, to paraphrase Warren Buffett? In today’s episode, our inaugural episode of Capital Decanted, we are going to lean in to this divisive and complex topic with some help from Scott and Andrea.