Capital Allocators – Inside the Institutional Investment Industry

Latest Episodes:

[REPLAY] Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) May 17, 2021

Show notes

Dan Ariely is a renowned behavioral economist, author, entrepreneur, and investor. He is the James B. Duke Professor of Psychology and Behavioral Economics at Duke University and a founding member of the Center for Advanced Hindsight. Dan is the author of six books, most of which have the word "Irrationality" in the title and has a weekly column in the The Wall Street Journal called "Ask Ariely." Dan's TED Talks have been downloaded more than 10 million times.

Dan also is a Founding Partner of Irrational Capital, an investment firm that identifies and quantifies the nuanced relationship between companies and their employees, and invests in human capital factors that are linked to long-term stock price performance. Last month, Irrational Capital announced a strategic partnership with Jeff Ubben's ValueAct Capital, a firm that shares their belief in the importance of the impact of corporate culture on long-term enterprise value.

Our conversation starts with Dan's journey studying pain and intuition and turns to applications of his research in the corporate setting. We discuss his research process, measurement of human capital, applying experiments to an investment strategy, employee motivation and compensation schemes as investment factors, and constructing a portfolio of factors based purely on human capital. We close by touching on Dan's projects in government and with start-ups.

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Innovation in Private Markets 3: Sulaiman Alderbas – A Massive Restart at PIFSS (Capital Allocators, EP.194) May 10, 2021

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Sulaiman Alderbas, the Head of Alternative Investments at Kuwait's $130 billion Public Institution of Social Security, or PIFSS. Sulaiman arrived at PIFSS from the Kuwait Fund for Arab Development in 2016, shortly before a scandal erupted when the former head of PIFSS was convicted of corruption and embezzling public funds for thirty years amounting to billions of dollars. Alongside Meshal Al-Othman, who joined to lead PIFSS from the Kuwait Fund, Sulaiman took part in a massive restructuring of the organization and portfolio. Our conversation covers Sulaiman's early experience as an allocator, lessons from investing in thirty hedge fund of funds at the Kuwait Fund, and transition to PIFSS at the inception of the discovery of the scandal. We discuss the restructuring that took place over the last four years that canvassed the people, process and portfolio. Along the way, we touch on competitive advantages of size, knowledge transfer from managers, strategic stakes, and allocator innovation. Learn More Subscribe: Apple | Spotify | Google Follow Ted on Twitter at @tseides or LinkedIn Subscribe Monthly Mailing List Read the Transcript

Innovation in Private Markets 2: Mark Johnson – New Leaders in Private Equity at Astra (Capital Allocators, EP.193) May 06, 2021

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Mark Johnson is the Managing Partner of Astra Capital Management, a mid-market growth buyout firm specializing in the communications and technology services sectors. Mark co-founded Astra after twenty years of experience investing at JH Whitney, Blackstone, and Carlyle. He partnered with seasoned deal and operating executives and brought the best practices from large shops to Astra with an entrepreneurial lens to address a focused strategy in a new way. Our conversation covers Mark's unusually planned life path, lessons from industry giants, and the formation of Astra with a utopian ideal in mind. We discuss the Astra team, thematic sourcing, financial creativity, deal dynamics, value creation within portfolio companies, factors of long-term success, co-investments, and club deals. Learn More Subscribe: Apple | Spotify | Google Follow Ted on Twitter at @tseides or LinkedIn Subscribe Monthly Mailing List Read the Transcript

Innovation in Private Markets 1: Steve Moseley – The Space in Between GPs and LPs at Alaska Permanent Fund (Capital Allocators, EP.192) May 03, 2021

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Steve Moseley is the Head of Alternative Investments at Alaska Permanent Fund, a $70 billion sovereign endowment that supports the citizens of Alaska. Steve leads a small team, based in Juneau, Alaska, that is one of the most active participants in what he calls the space in between General Partners and Limited Partners. Across private equity, venture capital, infrastructure, and private credit, Steve and the fund are considered one of the most innovative investors in private markets. Our conversation covers Steve's path to Alaska, the Permanent Fund's unique pool of capital, the history of its investment strategy, and the development of the private asset portfolio. We then turn to the attributes of fund investments and his focus on adding value beyond fund investments, including co-investments, stakes, and seeding. We touch on perspectives on managing through an expensive pricing environment, secondary transactions, future innovation in the portfolio, and the challenges of talent acquisition and retention. Learn More Subscribe: Apple | Spotify | Google Follow Ted on Twitter at @tseides or LinkedIn Subscribe Monthly Mailing List Read the Transcript

[REPLAY] Daniel Adamson – Innovation from Asset Giants at Capital Constellation (EP.136) May 03, 2021

Show notes

Daniel Adamson is a Senior Managing Director at Wafra and the President of Capital Constellation, a joint venture between mega asset owners in Europe, North America and the Middle East that invests in the next generation of private equity managers.

Our conversation focuses on this innovative joint venture and how a group of large asset owners came together to scale their resources. We touch on a host of issues relating to the formation and implementation of the business, the many possibilities that are arising from this novel setup, and the serious challenges in bringing it to fruition. I suspect we'll see more efforts by asset owners to disintermediate pieces of the investment value chain, although as you'll hear, it's a lot easier said than done.

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Brian Bares – Qualitative Concentration at BCM (Capital Allocators, EP.191) Apr 26, 2021

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Brian Bares is the founder of Bares Capital Management, a $5 billion long only investment boutique that employs independent, qualitative research on growing companies to build highly concentrated portfolios. Our conversation covers Brian's early life investing lessons, bootstrapping an asset management business, and finding product-market fit. We then turn to his investment approach, highlighting target companies across business quality, management, and growth, the research process, position sizing, decision making, and sell discipline. Lastly, we discuss the evolution of BCM's business from a micro cap strategy to three strategies across market capitalizations today. Learn More Subscribe: Apple | Spotify | Google Follow Ted on Twitter at @tseides or LinkedIn Subscribe Monthly Mailing List Read the Transcript

Cade Massey – People Analytics in Investing and the NFL (Capital Allocators, EP.190) Apr 19, 2021

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Cade Massey is a Professor at the Wharton School where his research focuses on judgment under uncertainty, or how, and how well, people predict what will happen in the future. In particular, he studies people analytics, or how to predict who will perform well in the future. Cade is the co-host of the "Wharton Moneyball" podcast and for many years, he's studied talent selection at the NFL draft, which frames our discussion in advance of this year's draft next week. Our conversation starts with Cade's work in the NFL with data, character assessment, and performance measurement. We turn to decision-making lessons, including the importance of independence, understanding objectives, tracking decisions, and overcoming algorithm aversion. Along the way, we touch on stories from his work with Google, Wharton's MBA Admissions, and Teach for America. We close with advice for allocators and insights for this year's NFL draft. Learn More Subscribe: Apple | Spotify | Google Follow Ted on Twitter at @tseides or LinkedIn Subscribe Monthly Mailing List Read the Transcript

a16z Podcast with Linda Xie and Jesse Walden - All About NFTS (Capital Allocators, EP.189) Apr 15, 2021

Show notes

In our continuing exploration of cryptocurrencies and blockchain technologies, headlines of late have turned to NFTs, or non-fungible tokens. From NBA Top Shots to Beeple's artwork, NFTs are the hottest use case in the crypto ecosystem. My friends at a16z recently released an episode on their wildly popular a16z podcast called All About NFTs, featuring Linda Xie from Scalar Capital and Jesse Walden from Variant Fund, interviewed by Sonal Chokshi. Their conversation covers the definition, use cases, myths, and future of NFTs. Each of Linda, Jesse, and Chris Dixon at a16z each recently wrote blogs posts that together provide terrific background and perspectives on the space. You can find those posts alongside this episode at capitalallocators.com/a16znft. With that, it is my pleasure to replay this episode, All About NFTs, available at a16z.com Learn More Subscribe: Apple | Spotify | Google Follow Ted on Twitter at @tseides or LinkedIn Subscribe Monthly Mailing List Read the Transcript

Yen Liow - The Quest for the Right Tail at Aravt Global (Capital Allocators, EP.188) Apr 12, 2021

Show notes

Yen Liow is the founder and Managing Partner of Aravt Global, a fundamental global equity firm based in New York that manages long-short and long only products. Yen founded Aravt after a long stint at famed family office Ziff Brothers Investments, where he was part of the team that managed a market, neutral long-short hedge fund in a culture of framework thinking and continuous improvement. Our conversation covers Yen's background, experience at ZBI, and lessons about process, competitive edge, and training. We then turn to his application of those lessons to Aravt Global. We discuss three right tail strategies for long positions, the challenges in owning compounders, the art of short selling, portfolio construction, game selection, drivers of success, and challenges going forward. For those lovers of learning about the nuance of public equity investment strategies, you're in for a real treat. Learn More Subscribe: Apple | Spotify | Google Follow Ted on Twitter at @tseides or LinkedIn Subscribe Monthly Mailing List Read the Transcript

Dominic Garcia – Risk-based Investing at New Mexico PERA (Capital Allocators, EP.187) Apr 05, 2021

Show notes

Dominic Garcia serves as Chief Investment Officer for the Public Employees Retirement Association of New Mexico (PERA), a $16 billion pension system that serves over 90,000 members and provides over $1.2 billion in annual benefits. Dominic is a native of New Mexico, began his allocator career at New Mexico PERA and returned to re-join the system in 2017 as CIO after nearly a decade at SWIB, the State of Wisconsin Investment Board. Our conversation covers Dominic's path to the helm at PERA, challenges of governance and compensation in public pensions, addressing underfunding with variable liabilities, and his risk-based investment approach that includes the separation of alpha and beta, overlays, and the selection of alpha managers across public equities, hedge funds, and private markets. Dominic has three times been named in the 40 under 40 by industry publications, and you'll soon hear why. Learn More Subscribe: Apple | Spotify | Google Follow Ted on twitter at @tseides or LinkedIn Subscribe Monthly Mailing List Read the Transcript

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