Capital Decanted

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 h...

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...

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...

Welcome back to season 2 of Capital Decanted… well, almost! John Bowman, CFA teases the episode and the “greatest asset in investing” – can you guess what it is? Find out on September 30!

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 cred...

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 anchorin...

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 w...

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 ten...

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 doe...

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 t...

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 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 con...

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 cred...

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 doe...

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 ten...

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 se...

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 w...

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 ar...

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 clas...

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 indust...

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 actuall...

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 t...

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 anchorin...