Capital Allocators Monthly Newsletter - March 2023

If something cannot go on forever, it will stop.
Herb Stein

What Ted's Thinking

Short-Term Gain, Long-Term Pain, Part 2. The banking crisis hit shortly after I wrote Part 1, although I had no foresight that the title would turn into a series. My experience at Yale offers some examples of good and bad practices. David Swensen didn't play the game like SVB did, and I think I know how he would've been spending his time to prepare for what comes next.


We’re hiring! We are looking for a Community Engagement Manager to develop deeper connections with our community.

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Capital Allocators University Join the waitlist for our next allocator-only cohort.

Join Waitlist for CAU4

Hot Jobs to Share

American Chemical Society, Investment Manager. Responsible for managing portions of the Society’s more than $2 billion investment portfolio. The selected candidate will work closely with the Chief Investment Officer and the Investment Analyst in all aspects of portfolio management.  

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Colorado Health Foundation, Investment Manager, Private Markets. The Investment Manager, Private Markets works directly with the Chief Investment Officer, and as part of a small team in the oversight and management of the Foundation’s Managed Investment Portfolio, a globally diversified portfolio of public and private investments.

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1. Banking Crisis. The sad and painful failure of SVB is a textbook example of the Prisoner's Dilemma gone wrong. When wild things happen, I turn to Matt Levine to help make sense of it all. Just as Matt Levine is my go-to for anything important in corporate finance., Marc Rubenstein is my go-to for anything tied to financial services. He wrote a great price last week on the crisis and followed up this week with more insights.

Read Matt Levine

Read Marc Rubinstein

2. Risk Management - Known Unknowns with AI.  Over 1,000 thought leaders signed a call for action to pause development of powerful AI systems until we can get a better understanding of the risk to society and humanity. Elon Musk, Steve Wozniak, Yuval Noah Harari, and a long list of leading academics around the world are among the signatories.

Read Article

3. Riots in Europe. In what might have been front-page news any other week of the year, Emmanuel Macron tried to address France's pension dilemma by extending the retirement age (an issue raised in Short-Term Gain, Long-Term Pain.) Chaos ensued.

Read NYT: Macron's Move

Read BBC: Public Response

4. Berkshire Hathaway Annual Report.  When the world feels upside down, Warren's evergreen wisdom makes for a comforting read.

Read Berkshire Annual Report

5. The Short Rebate: A Headwind Becomes a Tailwind, Marquette Associates.  For the first time in a LONG time, the math of long-short investing includes a positive return from the short rebate.

Read 'The Short Rebate'


Capital Allocators Episodes

EP.300 Tom Steyer - Climate activist and Co-founder of Galvanize Climate Solutions, Tom discusses investing to save humanity.

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EP.301 William Orum - Partner at Capricorn Investment Group, William discusses one of the largest and longest-standing mission-aligned investment orgs.

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EP.302 Colin Campbell - Partner and co-head of the Partnership Strategies team, Colin discusses carbon markets.

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EP.304 Adam Rodman - Founder and CIO of Segra Capital Management, Adam discusses opportunities in nuclear power.

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Private Equity Deals Episodes

S.2 EP.02 BlueTriton Brands - Co-Founder and Managing Partner of One Rock Capital, Scott discusses the carve-out of BlueTriton Brands.

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S.2 EP.03 TaylorMade - Co-Founder of KPS Capital, David discusses the acquisition of golf equipment manufacturer, TaylorMade.

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Sponsor Insights

EP.303 David Abrams - Founding Partner of Velocity Capital Management, David discusses investing in the sports ecosystem in this sponsor insight.

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EP.305 Andy Lee - Founder and CIO of Parallaxes Capital, Andy gives a sponsor insight into the niche market of tax assets.

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Word from our Sponsors

Janus Henderson Investors. This month from Janus Henderson’s institutional blog, Portfolio Manager Aneet Chachra evaluates and quantifies the linkage between equity fund flows and simultaneous price moves in the S&P 500.

Read 'Do Fund Flows Affect Market Prices'

Northern Trust. Asset owners are becoming increasingly more complex and powerful in the way they manage their portfolios. EVP and Head of Asset Owners Americas, Melanie Pickett, discusses this complexity, the impacts of trends influencing asset owners, and how Northern Trust is supporting the asset owner community. One of these podcasts should be very familiar!

Listen to Melanie on Faster-Forward

Listen to Melanie on Capital Allocators

Canoe Intelligence. How are private markets investors and allocators navigating continued growth in the asset class? This paper explores the reasons behind the expansion in alternatives, the challenges it has created, and how technology, standardization, and industry expertise can provide a solution.

Download Whitepaper
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