Capital Allocators – Inside the Institutional Investment Industry

Bobby Jain is the CEO and CIO of Jain Global, a global multi-strategy hedge fund he launched last year that manages about $6 billion with over 350 employees. Bobby's storied Wall Street career includes spending seven years as the Co-CIO of Millenium and twenty at Credit Suisse in a range of leadership roles spanning proprietary trading, derivatives, and asset management.

Our conversation traces Bobby's path from growing up as the son of immigrants in Queens to the trading floors of O'Connor and Credit Suisse, all of which shaped his thoughtful, framework-driven perspectives on markets. We explore the evolution of prop trading and the migration of risk taking from banks to hedge funds, proprietary trading firms, and private credit.

We then discuss Bobby's ambitious launch, including the principles guiding its design, scale and diversification out of the gate, talent strategy, risk management, portfolio construction, and the many tradeoffs that create the different cultures and complexions of multi-manager hedge funds. We close with Bobby's application of financial innovation to helping others.

Learn more about our Strategic Investments: Ascension.

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Editing and post-production work for this episode was provided by The Podcast Consultant (⁠https://thepodcastconsultant.com⁠)

In a world dominated by short-termism, does it seem odd that private equity holding periods are getting longer? 
 
Private equity professionals don't have different genes than other investors. They face a structural problem: too many portfolio companies cannot find a buyer.  
 
Private equity-owned businesses continue to grow in number and size, but demand from IPOs and strategics has not – and likely will not – keep up. This means that more companies will have to remain within the private equity ecosystem.  
 
The end of the private equity bottleneck is not in sight. Instead, the industry may be heading toward structural change. 
 
In this WTT – Can Private Markets Normalize, I pose the question of whether private equity will ever be able recycle capital fast enough to support successive fundraises without strain.  
 
The answer, I'm afraid, is no. 
Read Ted's blog here.
 
Editing and post-production work for this episode was provided by The Podcast Consultant (⁠https://thepodcastconsultant.com⁠)

Stephen Gilmore is the Chief Investment Officer of CalPERS, which at $600 billion is the largest public pension fund in the U.S. and one of the largest institutional pools of capital in the world. Stephen joined CalPERS eighteen months ago from a career spanning Wall Street, the IMF, and two of the most innovative sovereign wealth funds, where he was Chief Investment Strategist at Australia Future Fund and CIO at New Zealand Super Fund.  

Our conversation dives into the theory and implementation of the Total Portfolio Approach, drawing on Stephen's experience at Australia and New Zealand, and his plans for CalPERS. We cover the TPA mindset, its fostering of sound governance and accountability, comparisons to Strategic Asset Allocation, challenges of implementation, and the adaptation of the model at CalPERS.  

Stephen is one of the most experienced practitioners of TPA in the world. Our discussion pairs well with my recent conversation with Ashby Monk, as more allocators learn and consider this approach to managing assets. 
Learn more about our Strategic Investments: Thema.



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Matt Whineray is the CEO of New Zealand Superannuation Fund or Super Fund, one of the highest performing, most innovative and well-regarded large-scale investment allocators in the world. The New Zealand government created the Super Fund in 2001 to help defray the costs of retirees in the country in the decades to come. Matt joined the organization in 2008 and became the CEO in 2018 and oversees NZ$42 billion.
 
Our conversation starts with Matt's background and the creation and objectives of the Super Fund. We then walk through the Super Fund's investment philosophy, which is guided by four competitive advantages or endowments and nine investment beliefs. From there, we dive into the implementation of the strategy, covering the risk allocation process, reference portfolio or benchmark of liquid assets, long-term risk budget and medium-term tactical targets across five risk baskets. We discuss the difference between these risk allocations and a traditional asset class structure, hybrid structure employing internal and external managers, internal strategic tilting program, structure of the team, current perspectives on asset classes, ESG, scaling activities to support upcoming inflows, and culture.
 
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Raff Arndt is the Chief Investment Officer of Australia's AUZ$145 billion Sovereign Wealth Fund, the Future Fund.  He trained as an engineer and dove into infrastructure policy at the beginning of Australia's privatizations in the late 1990s. After investing in the space for six year, he joined the Future Fund in 2008 to head the infrastructure team. Six years later, Raff became CIO.
 
Our conversation spans all aspects of the management of a next generation institutional portfolio, including a one team, one portfolio philosophy, disaggregating beta and factors from skill in public markets, separating the impact of leverage and timing from skill in private markets, venture capital and co-investment opportunities in a large pool of capital, the option value of flexibility, the team required to make decisions in this format, compensation, fees, views on China, and the current market environment.
 
Australia created the Future Fund only eleven years ago with a mandate to compound capital for 20 years before even contemplating withdrawals. It has been described to me as a pool of capital with the size and transparency of CalPERS and the sophistication of Yale. I'm sure you'll soon understand why.
 
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Editing and post-production work for this episode was provided by The Podcast Consultant (⁠https://thepodcastconsultant.com⁠)