In June 2009, I was an unemployed ex-athlete with degrees in land economy and
political science. Yet by the grace of one man—Charlie Ruffel—I was given the
opportunity to become the editor and sole full-time employee of a startup
magazine, armed only with his trust and my willingness to ask questions of
We began with four
sponsors—Bridgewater Associates, PanAgora, Northern Trust, and State Street—and
a few friends. I think immediately of Wake Forest’s Jim Dunn, Xerox’s Carol
McFate, and our eventual columnist Angelo Calvello, all who served as informal
advisors as I found my way.
Fifty issues later, my official
qualifications remain unchanged, but our editorial staff (now numbering five),
our support network, our advertising base, what we produce, and our industry
knowledge have expanded exponentially. And if repetition perfects, then I’m at
least on the path: I estimate the number of interviews, formal and informal,
I’ve had the pleasure of conducting over these seven years is nearly
This is what I’ve learned:
• “Protect, perform, provide” was the first investor mantra I ever
came across. I have yet to find anything better.
• That said, too many people assert that “downside protection is
underrated” for it to actually be underrated.
• The NACUBO rankings warp incentives, but they aren’t going away.
• Allocators, like pre-teens, love lists. Especially if they’re on
them—and ranked high up.
• There are few things as unappealing as lobbying for oneself.
• Having a public relations agent lobby on one’s behalf is just as
bad, if not worse. Our willingness to write a story is inversely proportional
to the aggressiveness of the PR person pitching it.
• The industry has an unusual number of groupies; it is both
astounding and depressing. For every true allocator who registers for an event,
two groupies try to sneak in.
• 80% of those who register will actually show up for an investment
conference. 103% of those who register will show up for an awards dinner if
there is free liquor.
• The world does not need another risk parity panel.
• The world does need more panels on institutional investing
talent development. The problem is that asset managers never want to sponsor
those panels because it’s harder to ‘pitch the merch.’
• If you hold a multi-asset or factor-investing panel, you will
have more sponsors than you have chairs.
• ‘Smart beta’ has become as meaningless a term as ‘solutions.’
• ‘Thought leadership’ can be added to that list, too.
• I’ve officially lost my war on ‘solutions.’ I tried.
• I’m not against environmental, social, and governance
investing—it’s just that ESG will never take hold in America until both political parties accept the reality of climate change, and I’m not
holding my breath.
• A small tax increase didn’t destroy America. Neither did raising
the debt ceiling or an extended period of low interest rates. But being wrong
so consistently won’t stop those prognosticators from making doomsday claims
• People predicting the demise of hedge funds sound silly. There
will always be some people who are either good or lucky, and they will be able
to charge approximately 2% management fees and 20% of profits for their work.
• Those people will become extremely rich. Get over it.
• If they do it right, their clients will also
become rich—and it would behoove the Gawkers and David Sirotas (International Business
Times) of the
world to remember that their end clients are often pensioners.
• It may not be the critics who count—but sometimes it sure feels
like they do.
• Billionaires try to control every aspect of their lives—but even
they can’t control markets or media coverage.
• Interviewees who say “off the record” the most often typically
have the least interesting things to say.
• Interviews by email sound canned because they are canned. I vow
to never do one again.
• Every institutional investing argument ends with the word ‘governance.’
• American public funds and governance are like a repentant alcoholic
and his drinking habit: He knows he needs to fix it; he talks about it
constantly—but he can’t ever get around to actually making life changes.
• No one believes American public funds’ return targets—their CIOs
• The coolest stuff is not happening in
America. Smart US CIOs look overseas for peers.
• Far too many people idealize endowments and foundations. They
have problems like everyone else. Just look at Stanford’s revolving door of
• Executive recruiters are the true power brokers of this
industry. There is no CIO I know who won’t pick up a call from Deb Brown, Jane
Marcus, or David Barrett.
• There is still an absurd amount of untapped talent in this
industry. The fact that Sarah Samuels of Massachusetts’ public pension isn’t a
CIO yet is criminal.
• This industry needs more courageous CIOs. Trend following is
• So is a reliance on investment consultants.
• However, in 2009 people were predicting the demise of investment
consultants. They’re still here—and as far as I can tell, no less powerful than
they were seven years ago. I’m betting they’ll be just fine.
• I’m skeptical of consultants charging managers to attend
in-house events. It stinks of pay-to-play. They know who they are.
• Only 75% of asset owners realize that they’re the prettiest
person in the room because of their capital, not their charisma. That is
• Correspondingly, I remember only 75% of the time that people
talk to me because I can help them in some way—awards, coverage, rankings—and
not because of my charm. That is also dangerous.
• Every asset-owner organization should have a designated
skeptic—Her Majesty’s Loyal Opposition, so to speak.
• I have Managing Editor Leanna Orr serving in that role.
• Neither of us understands the yield curve as well as we should.
• While we’re at it: 130/30?
• Strong client service is the rarest of qualities among asset
managers, according to allocators everywhere—yet I’ve never met an asset
manager that wouldn’t rank themself top quartile in this regard.
• Mediocre returns catalyze skepticism. Raging bull markets
catalyze blind faith.
• Allocators would be well served by reversing those
• Returns never were, and never will be, certain.
• I’m just not sure that all this investment doom and gloom is
• One thing we can actually fix is asset management’s gender imbalance.
• There is a vicious competition between Kathy Lutito (CenturyLink) and Robin Diamonte (UTC) to claim the crown of Nicest Person in
• The dark horse in that race is Mark Baumgartner (Institute for Advanced Study).
• Stefan Dunatov (Coal Pension Trustees) will not be a finalist in
that competition. We like him anyway.
• Fifty issues isn’t nearly enough to cover all the characters,
scandals, failures, successes, and mysteries in this industry.
thanks to all our readers, new and old.