Name the most noticeable generational divide in investment style between sub-40-year-old investors and baby boomers.
Much of the talk of a divide between millennials and boomers is quite exaggerated. With respect to investing, boomers have been blessed with the tailwind of falling discount rates and secular bull markets across assets for their entire careers. The under-40 crowd won’t be as lucky. These different experiences may color biases, but divisions will continue to be more philosophical than generational.
Your least favorite part of being an asset owner is...?
Operational and legal due diligence. They’re critical parts of the process and we take them very seriously, but implementation isn’t as much fun as asset allocation and manager selection.
The manager you don’t currently work with whose brain you’d most like to pick for an hour is...?
John Maynard Keynes. I’d like to get his assessment of how widespread adoption of his policies has worked since the financial crisis and see if he would have done anything differently.
... and where would that meeting take place?
In a European summer resort town.
Describe the weirdest interaction you’ve had with an asset manager.
A representative from a manager was drunk at a dinner meeting. He then reached across the table and set his business card on the rim of my neighbor’s wine glass—very awkward.
What asset class or investment troubles you most right now—and why?
Government bonds with negative yields. There’s an implied loss upfront and it is uncertain whether the benefits of duration will materialize if growth disappoints.
Name your favorite food and drink.
Pan pizza from Pequod’s in Chicago and a glass of Barbaresco.
What’s the wildest institutional portfolio you’ve seen?
Mark Baumgartner at the Institute for Advanced Study is running his portfolio with a 100% allocation to alternatives—pretty wild and pretty cool.
Name a cultural aspect of asset management that gets under your skin.
Asset owners’ love affair with illiquid assets. Investors rarely demand enough compensation for illiquidity risk, and it can behave a lot like credit spreads and implied volatilities, so it’s not terribly diversifying.
Donald Trump is ________.
Anger and frustration personified.
Name your four-member investment dream team for your own family office.
Stan Druckenmiller (Duquesne) as CIO; Jim Grant (Grant’s Interest Rate Observer) as head of research; Jamie Dimon (JP Morgan) as chief operating officer; and Larry Page (Google) as chief information officer.
What’s the biggest investment or career misstep you’ve made?
I stayed at my first job—as a hedge fund analyst—longer than I should have. I learned a lot, but towards the end, I was not learning as fast and as much as I could have.
What should be an investment trend, but isn’t (yet)?
Insourcing. I think the marginal return on another person at most asset owners would be very high, either in adding returns or cutting costs.
