Capital Allocators Monthly - May 2019
Announcements and Gratitudes
* Last month I wrote that I’m looking for my next opportunity to manage capital. I received a few interesting inbounds, along with some questions about specifics. I would like to join or lead a terrific group of people managing capital for a single family office, multi-family office, OCIO, private wealth practice, or institutional investing group. To narrow that filter, I am more focused on the quality of people involved than on the specific underlying asset structure. My ideal seat would have 80% of my time focused on investing, primarily multi-manager with some direct investing and 20% building a brand. Most friends I’ve reached out to have told me they had no idea I was looking, so I’m extending myself to this community to learn about possibilities I may not know about. Please drop me an email (firstname.lastname@example.org) with any ideas, and thanks for the consideration.
* Special thanks to recent sponsors of Capital Allocators, EJF Capital and Commonfund Institute. The ROI for sponsors has been outstanding!.
Reading (Ordered by reading time: tweets first, books last, and blog posts and articles in between)
1. Podcast Guest Dinner Compilation. In April a group of former podcast guests gathered for dinner graciously sponsored by Peter Tiboris at Strongpoint Wealth Advisors. Each attendee had to ante up by answering the question “What have you learned recently that has most stuck with you?”
2. Private Equity Debate:
Pro: Life Can Be Better After 40(%) Maureen Austin, David Thurston, and William Prout from Cambridge Associates wrote this provocative piece, offering a data-driven argument in favor of large allocations to private equity and venture capital.
Con: Private Equity: Overvalued and Overrated Verdad Capital’s Dan Rasmussen wrote this magnum opus poking holes in the private equity thesis. He contends that low prices and high leverage were the drivers of private equity returns in the past, and the current market environment is not conducive to similar success going forward. Verdad promotes leveraged small cap public companies as a better way to go from here.
3. The Algebra of Happiness, by Scott Galloway. Scott is a serial entrepreneur and is currently a professor at NYU. This quick read is a refreshing take on life, full of blunt wisdom about happiness, from a self-professed grump.
4. Bad Blood by John Carryrou. Patrick O’Shaughnessy interviewed author Bethany MacLean last week at Capital Camp. They discussed the thin line between a visionary and a fraudster – where many visionaries ‘fake it til they make it’, and if they don’t, are seen through the lens of history as a fraudster. Thomas Edison’s light bulb only worked at the last possible moment, and its namesake device from Theranos never got there. In this story of fraudster Elizabeth Holmes and Theranos, the degree to which power, money, and storytelling can blind so many to the truth is astounding.
Episode 98: Jon Hirtle – The Pioneer of OCIO
Jon discusses the development of the first OCIO business and the concept of governance alpha.
Episode 99: Michael Mauboussin – Who’s on the Other Side?
Michael comes back on the show to discuss his recent research piece breaking down the concept of an investment edge.
Episode 100: Tim Recker – Concentration at the Irvine Foundation
Tim manages a highly concentrated portfolio of managers and walks through the benefits and drawbacks of doing so.
Lisa Damour on The Rich Roll Podcast. Lisa is a pscyhologist, best-selling author and leading expert on parenting teenage girls. Her research-based work is extraordinarily helpful to understand the “normal” experience of growing up.
Have a good one,