YouSaid · the spoken record

Alex Shahidi

lines on the record: 87
first: 2021-03-01
most recent: 2021-03-01
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“If you have a client or an investor. That sells The lows and change his course. Best thing you can do is pick a strategy and stick with it. And when things are down, you add. And when things are up, you Back into the other things that have done less well.”
2021-03-01 · Capital Allocators · Alex Shahidi and Damien Bisserier – Uncorrelated Return and Balanced Risk at Evoke-ARIS (Capital Allocators, EP.179) · IDENTIFIED FROM THE TRANSCRIPT · source
“And they flip back and forth between those two objectives. And so you can't ignore that and say, oh, that's silly, it doesn't make sense. That's reality. So every client, they react differently to downturns. They react differently to relative underperformance. And so our job is to try to understand that. And we learn from our clients over time by how they react. So we take mental notes of how they did during certain environments and maybe move left or right on that spectrum.”
2021-03-01 · Capital Allocators · Alex Shahidi and Damien Bisserier – Uncorrelated Return and Balanced Risk at Evoke-ARIS (Capital Allocators, EP.179) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it varies by client pretty significantly. And we actually were part psychologists, part asset allocators, because we have to look into the minds of our clients and how they will react during an adverse environment. A lot of what we do and the way we think is about how do people respond during the bad times. And the bad times aren't just the markets going down a lot. It's also relative. And I'm sure you're aware, clients don't want to lose money and they want to make as much money.”
2021-03-01 · Capital Allocators · Alex Shahidi and Damien Bisserier – Uncorrelated Return and Balanced Risk at Evoke-ARIS (Capital Allocators, EP.179) · IDENTIFIED FROM THE TRANSCRIPT · source
“Way to think about this is there's theory and there's practice. And you can think of it along a spectrum. On one end, there is the theory of what's most efficient and the best for investors over the long run, which we think is risk parity. On the other end, you have what everybody else does. And somewhere along that spectrum is the right spot for every client. Because the challenge with being 100% risk parity is you have to ride through the ups and downs. And that can be challenging. Even though the volatility might be less, you're always comparing yourselves to what everybody else is doing. And so risk parity relative to either all equities or 60-40 could go through a couple years of underperformance relative. And that can be hard to live through and that can, as humans are built to succumb to their emotional pushes. They can change course along the way. And if you do that, then you don't get the best.”
2021-03-01 · Capital Allocators · Alex Shahidi and Damien Bisserier – Uncorrelated Return and Balanced Risk at Evoke-ARIS (Capital Allocators, EP.179) · IDENTIFIED FROM THE TRANSCRIPT · source
“Turn to that. I mean, I guess the first question just to clarify, in your public markets bucket, is this all the risk parity approach or are you also layering in traditional public market active management?”
2021-03-01 · Capital Allocators · Alex Shahidi and Damien Bisserier – Uncorrelated Return and Balanced Risk at Evoke-ARIS (Capital Allocators, EP.179) · IDENTIFIED FROM THE TRANSCRIPT · source
“They're actually based on understanding how these assets behave in different environments. So I wanted to address that first. In terms of active management, we don't implement active management in this portfolio. We're really just trying to create a balanced passive mix to risk premium. But we do think it's very complementary, which is why there's a big active component in the rest of our portfolio. And so that's a longer conversation of how do you find quality, reliable active management. But to the degree, you can find it, we think it'll help you build a smoother path at the portfolio level.”
2021-03-01 · Capital Allocators · Alex Shahidi and Damien Bisserier – Uncorrelated Return and Balanced Risk at Evoke-ARIS (Capital Allocators, EP.179) · IDENTIFIED FROM THE TRANSCRIPT · source
“And that comes from a rebalancing benefit that you're consistently buying assets that have fallen in the process of rebalancing and selling assets that have risen. And that adds incremental return at the portfolio level that is in excess of the underlying components. And that's really valuable. So if you're trying to generate a return that's competitive with equities, for instance, which is our goal here, you don't actually have to have all the components generate equity-like returns. It's okay if they generate a little bit lower than equities because you're going to get this incremental rebalancing benefit that we actually are more confident in that than we are in the other components because that's based on those diversification properties, which we've been able to test. Alex did this over 100 years of data. We've looked at across all different environments, wars, and inflationary periods and deflationary periods and crises pandemics. And these diversification properties, they actually work. And because they're based not on statistical artifacts like correlations.”
2021-03-01 · Capital Allocators · Alex Shahidi and Damien Bisserier – Uncorrelated Return and Balanced Risk at Evoke-ARIS (Capital Allocators, EP.179) · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't think I really ever appreciated it at Bridgewater. And this is something that in designing the strategy that we implement within the ETF, I think we've come to appreciate more fully, which is this idea that when you build a great portfolio, so one in which the components are reliably different, so lowly correlated, and of similar magnitude in terms of their impact. So similarly risky. You actually get this incremental portfolio benefit that I think is underappreciated. Certainly I underappreciated it before I went through the exercise, which is that when you look at the return of this index, and so we've looked at this index, we actually created an index at the ETF tracks that goes back to 98, but then we can run that back further with proxies. What we found is that the average portfolio return is about a percent higher than the average returns of the components.”
2021-03-01 · Capital Allocators · Alex Shahidi and Damien Bisserier – Uncorrelated Return and Balanced Risk at Evoke-ARIS (Capital Allocators, EP.179) · IDENTIFIED FROM THE TRANSCRIPT · source
“I would just to directly answer your question, though, in reference to bonds, I would point out that there are historical examples in Japan, for example, where yields have been low for a long time. Returns have actually been quite attractive because you've had persistently steep yield curves. And as you've rolled down the yield curve, you get the yield plus a little bit. And if you add a little bit of leverage, you actually get a return that's not that unattractive. So it's not quite as bad as what you might think if you look at the headline yield of 1.7% on the 30 year or 90 basis points on the 10-year. We tend to hold most of our exposure at the 30-year point. And we think you're likely to do a little bit better than that 1.7%. Then you had a little bit of leverage. And so the return isn't as quite as dire as it sounds, especially if we go into an environment where we start to look more like Japan and Europe. There you can get returns well in excess of the 1.7. And in that environment, you'd really value that diversification because most likely it's a challenging equity environment. So I think that's one aspect. And then another aspect of the portfolio construction, which is something that”
2021-03-01 · Capital Allocators · Alex Shahidi and Damien Bisserier – Uncorrelated Return and Balanced Risk at Evoke-ARIS (Capital Allocators, EP.179) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, the big problem is interest rates are at zero. So if you think about all these assets, they offer a risk premium above cash. So as an investor, you have a choice. You can hold cash, take no risk, and earn the interest rate, or you can part with your cash, invest in assets, and earn a premium. And over time, assets give you four or five percent above cash or something in that ballpark over the long run. That may not be that different going forward. It's just that cash is lower. And so that's one of the challenges with just being a passive investor is you may get low returns for some time. So that moves you into the world of alpha and trying to achieve excess returns on top of cash. And then also private assets where there's other premium. I'm going to let them talk about alpha and how that can be complementary to beta portfolio.”
2021-03-01 · Capital Allocators · Alex Shahidi and Damien Bisserier – Uncorrelated Return and Balanced Risk at Evoke-ARIS (Capital Allocators, EP.179) · IDENTIFIED FROM THE TRANSCRIPT · source
“The other question that calls to mind, and this is you have a couple of different assets where the underlying economics don't look like there are significantly high future returns. So where treasuries are, where break-even inflations are, where equities are priced, commodities harder to know. How do you think about the importance of active management versus just owning these instruments in an environment where the betas don't look like their price to deliver much?”
2021-03-01 · Capital Allocators · Alex Shahidi and Damien Bisserier – Uncorrelated Return and Balanced Risk at Evoke-ARIS (Capital Allocators, EP.179) · IDENTIFIED FROM THE TRANSCRIPT · source
“World looks like five or ten years from now. And so the way we think about those long treasury positions or even the long tips is if you get an environment where rates drop, you're really glad you own them because they'll protect you. This is what happened in Q1 of this year. People thought rates were low in January and they went a lot lower. If rates rise, it's probably because either growth is doing well, in which case those bonds may not do well, but your other assets will do well if you're properly diversified. Or it's because inflation has gone up a lot. in which case if you have inflation hedges so that's what happened in the 1970s inflation went up stocks and treasuries did poorly but commodities and gold and tips didn't exist at the time but they probably would have done well so it's achieving the balance that is the critical goal here as opposed to trying to time which way markets you're going to go”
2021-03-01 · Capital Allocators · Alex Shahidi and Damien Bisserier – Uncorrelated Return and Balanced Risk at Evoke-ARIS (Capital Allocators, EP.179) · IDENTIFIED FROM THE TRANSCRIPT · source
“Interesting interest rates have been falling for 40 years. And I'd say about 10 or 15 years ago is when talks started that rates are the lowest they're going to be and they're going to go up from here. And they're lower now than they were in 08. And if you look around the world, U.S. rates are among the highest of the developed world still. And so you can make a very clear argument that they'll go lower. Now, the point isn't that you're betting on them going lower. The argument is you want to be balanced. And balance, that perspective, if you're approaching a portfolio from the goal of being well diversified and balanced, as opposed to trying to predict what the future holds and then owning the assets that you think will do well in that environment, it leads you down a very different path. And so the way we think about it is you should be balanced all the time and particularly today when the potential range of outcomes in the next five to ten years is extremely wide. I mean, who knows what the”
2021-03-01 · Capital Allocators · Alex Shahidi and Damien Bisserier – Uncorrelated Return and Balanced Risk at Evoke-ARIS (Capital Allocators, EP.179) · IDENTIFIED FROM THE TRANSCRIPT · source
“Do you address the very common critique of risk parity that it's really just a levered bond portfolio that's worked really well in this prolonged period of time when rates have gone from teens to zero over the last few decades?”
2021-03-01 · Capital Allocators · Alex Shahidi and Damien Bisserier – Uncorrelated Return and Balanced Risk at Evoke-ARIS (Capital Allocators, EP.179) · IDENTIFIED FROM THE TRANSCRIPT · source
“Returns and risks for equities and commodities, it actually doesn't require any adjustment. They already have high returns and high risks. But for the bond categories, we make a couple of adjustments. We increase their size as a percentage of the portfolio. We do that through utilizing leverage. So in the context of treasuries, you can do that very efficiently by using futures. You can actually borrow implicitly at repo more or less at zero by using futures to get that incremental treasury exposure. And we also hold longer duration securities. So by utilizing both of those tools, we can actually adjust those bonds to have a much more similar risk and return impact as the other two categories. So after you've gone through that process of adjusting them, holding them in roughly equal size, and identifying what we believe are the asset classes that have reliably different behavior in different environments, you get something that's much more diversified than a more”
2021-03-01 · Capital Allocators · Alex Shahidi and Damien Bisserier – Uncorrelated Return and Balanced Risk at Evoke-ARIS (Capital Allocators, EP.179) · IDENTIFIED FROM THE TRANSCRIPT · source
“So we try to find assets that have differing sensitivities to different growth and inflation outcomes. And so specifically, we've identified four major asset classes, equities, treasuries. So these would be nominal treasury bonds. Inflation protected securities, which are also issued by the Treasury, but have an inflation indexing component. So they pay UCPI over time. And then the fourth category are commodities. So after we've identified what assets we want to hold, we then have to make sure that they have a similar return and risk to one another. That's another critical aspect to unlocking the diversification benefits. If you think about 60-40, yes, you have 40% of your portfolio in bonds, but those are low risk bonds. They don't move much. So really that 60% in equities dominates your outcomes. We want to have a portfolio that has a more similar impact from those four components. So we adjust those four components so that they have some”
2021-03-01 · Capital Allocators · Alex Shahidi and Damien Bisserier – Uncorrelated Return and Balanced Risk at Evoke-ARIS (Capital Allocators, EP.179) · IDENTIFIED FROM THE TRANSCRIPT · source
“Sure, underlying risk parity, there are two aspects. One is what to hold. I think that's an important piece and actually a big difference in terms of how we do it versus how a lot of others do it. Risk parity in our mind is not just holding a bunch of line items at similar risk. Because a simple example is credit is if you hold credit in a leveraged fashion, you could make it have a similar risk level to equities, but it actually performs very similar to equities. There's not a lot of diversification there because the environments in which credit does well And I'm talking about corporate bonds, high yield bonds tends to be very similar to the environments in which equities do well and poorly so we try to identify assets that are reliably different going back to our original point our overarching objective find things that do well in different environments and probably very much informed by my experience at Bridgewater and the book that Alex wrote, we identify the main economic drivers growth and inflation.”
2021-03-01 · Capital Allocators · Alex Shahidi and Damien Bisserier – Uncorrelated Return and Balanced Risk at Evoke-ARIS (Capital Allocators, EP.179) · IDENTIFIED FROM THE TRANSCRIPT · source
“Damien, let's start on the public side. Our par sounds a lot like something you might have learned from your Bridgewater days. Why don't you take me through how you approach public markets the way you do?”
2021-03-01 · Capital Allocators · Alex Shahidi and Damien Bisserier – Uncorrelated Return and Balanced Risk at Evoke-ARIS (Capital Allocators, EP.179) · IDENTIFIED FROM THE TRANSCRIPT · source
“Clients can access those managers. And then on the private side, which is where we spend most of our time trying to uncover these because they kind of come and go at different times, we pool our client capital to get access, get better terms. And sometimes we create feeder vehicles to make it logistically easier for our clients to invest. So we spend a lot of time structuring these.”
2021-03-01 · Capital Allocators · Alex Shahidi and Damien Bisserier – Uncorrelated Return and Balanced Risk at Evoke-ARIS (Capital Allocators, EP.179) · IDENTIFIED FROM THE TRANSCRIPT · source
“Think of it distinctly, meaning there's the public markets and there's a very efficient way to access that. There are the private markets and there's an efficient way to access that and then there's the hedge funds, an efficient way to access that. And in some cases access is the hardest part, is actually getting into those investments. So for each of those, we've created solutions so that all clients can access these managers and strategies. So on the public side, we launched an ETF that is basically a risk parity strategy, RPAR is the symbol, RPAR. And it's a very tax efficient, capital efficient way to get exposure to public markets that give you, we expect something like equities plus a little bit over the long run with a lot less risk. And that we think is fairly unique. It's actually the only one in the US. On the hedge fund side, we created a commingle vehicle where we get access to the largest managers who typically are either closed or have high minimums.”
2021-03-01 · Capital Allocators · Alex Shahidi and Damien Bisserier – Uncorrelated Return and Balanced Risk at Evoke-ARIS (Capital Allocators, EP.179) · IDENTIFIED FROM THE TRANSCRIPT · source
“So before we dive into each of those three buckets, Alex on the other side of these assets, you've been working with mostly private clients, but then also institutions over the years. And I'm curious with these different types of pools of capital, how you think about applying, call it the asset side of the balance sheet in different ways”
2021-03-01 · Capital Allocators · Alex Shahidi and Damien Bisserier – Uncorrelated Return and Balanced Risk at Evoke-ARIS (Capital Allocators, EP.179) · IDENTIFIED FROM THE TRANSCRIPT · source
“Educating and trying to explain things. You take these complicated concepts, explain them in simple to understand terms, which helps clients make better decisions. So that's a big part of who we are, I think”
2021-03-01 · Capital Allocators · Alex Shahidi and Damien Bisserier – Uncorrelated Return and Balanced Risk at Evoke-ARIS (Capital Allocators, EP.179) · IDENTIFIED FROM THE TRANSCRIPT · source
“And Ted, one thing that I would add really quick is the big driver, you know, the thing that really pushes us the most is just this observation that most of the industry is populated by salespeople. It's a business where those who can bring in the clients are the kings of the world. And you can do that by being a really good salesperson. And neither one of us has a sales orientation whatsoever. We don't really have a background in that. And so the way we differentiate ourselves is by providing what we think is really good investment solutions. And the hard part is communicating it in a way that's understandable and digestible by most people. So the thing that the common link between us in terms of how we came together is that appreciation of it's an industry dominated by salespeople less so investment people. I've seen a lot of really smart investors come in and fail miserably because they can't get clients. So that is our common understanding. And we spend a lot of time.”
2021-03-01 · Capital Allocators · Alex Shahidi and Damien Bisserier – Uncorrelated Return and Balanced Risk at Evoke-ARIS (Capital Allocators, EP.179) · IDENTIFIED FROM THE TRANSCRIPT · source
“Within private assets, you have things that are probably more familiar to people like private real estate, private equity, private credit. But there are also a lot of idiosyncratic things, really uncorrelated stuff like life settlements, which are buying life insurance policies from 85-year-olds or healthcare royalties, which are revenues associated with drug sales or reinsurance, which is just premiums for covering catastrophes. And so there's all sorts of things that you can access there that can be reliably uncorrelated to what you do in the other categories. And I think that philosophy has always been one that we've had. It's just evolved over time as we've been able to increase our ability to underwrite these things and understand these things and incorporate them into client portfolios.”
2021-03-01 · Capital Allocators · Alex Shahidi and Damien Bisserier – Uncorrelated Return and Balanced Risk at Evoke-ARIS (Capital Allocators, EP.179) · IDENTIFIED FROM THE TRANSCRIPT · source
“Different from one another. There's basically three categories you can choose from there are the public markets, stocks, bonds, commodities, other types of publicly available assets. There's alpha, which we really refer to as hedge funds that actually hedge. Most hedge funds don't hedge funds give you more like the first category and they charge high fees and they lock you up. We actually think if you're going to give on terms, you have to get something that's unique, that's skill based. So we sort of fish in that pond looking for managers that are primarily delivering skill. And then the third category would be”
2021-03-01 · Capital Allocators · Alex Shahidi and Damien Bisserier – Uncorrelated Return and Balanced Risk at Evoke-ARIS (Capital Allocators, EP.179) · IDENTIFIED FROM THE TRANSCRIPT · source
“build in reliable diversification within client portfolios has always been something we're passionate about. And I think it's evolved a little bit. So initially, I think we thought about the world in alphabeta terms. So beta meaning holding assets, earning a premium for holding different types of assets, long only, passive. That could be stocks, bonds, commodities, et cetera. And then alpha meaning active management. We've evolved that, I think, over time to include private markets as well, which private markets do include both of those components. They are investments in various types of assets. They often include active management. There's a big operational component to those things. We do think that they offer a whole menu of interesting return streams that can complement what we do in the public markets. And so we now break down our portfolios into three categories. So if you think about that challenge of finding good equity-like returns that”
2021-03-01 · Capital Allocators · Alex Shahidi and Damien Bisserier – Uncorrelated Return and Balanced Risk at Evoke-ARIS (Capital Allocators, EP.179) · IDENTIFIED FROM THE TRANSCRIPT · source
“Always had that philosophy of seeking to find individually attractive returns that were reliably different from one another. It sounds like a very simple endeavor, but in practice it's quite hard. If you think about most investment portfolios, they have lots of line items, but those line items are actually very closely related, particularly in really bad environments like 2008 or Q1 of 2020. And so in practice, investors don't have that much diversification. They're all derivatives of the equity and credit markets, which are really dependent on a strong or improving growth environment. And they're susceptible to the opposite. So I think we've always had a connection in terms of our view on that and the importance of finding things that were driven by other factors, whether it's active management or whether it's other economic environments that might be beneficial for a particular asset or strategy, finding ways to”
2021-03-01 · Capital Allocators · Alex Shahidi and Damien Bisserier – Uncorrelated Return and Balanced Risk at Evoke-ARIS (Capital Allocators, EP.179) · IDENTIFIED FROM THE TRANSCRIPT · source
“Cross country could because he was living in Los Angeles, he said, Can I open an office in Los Angeles? And I said, Well, I grew up in Los Angeles. I've been trying to make that case for years. I don't think it's going to happen. He said, well, unfortunately, I won't be able to join you guys, but while we're on the topic, would you consider working with me? And that was maybe 2009. And so over time, we kind of explored this idea of building a business around providing good, objective, investment advice that was based on our own independent research and also leveraging the thinking of the smartest investors out there, the bridgewaters of the world, et cetera. And so ultimately, when my personal life brought me back to California, I ended up coming back to LA to get married, be closer to my family, and raise my own family. Alex and I started the business together in 2014.”
2021-03-01 · Capital Allocators · Alex Shahidi and Damien Bisserier – Uncorrelated Return and Balanced Risk at Evoke-ARIS (Capital Allocators, EP.179) · IDENTIFIED FROM THE TRANSCRIPT · source
“These things independently do your own research. And then after. Basically, analyzing this thing in a very deep way and believing in it then recommending it to clients. So a great example is with the all-weather philosophy at Bridgewater, which was really Bridgewater's thinking about asset allocation, long-term asset allocation. Alex thought it was interesting. And his response was, hmm, let me take some time to figure this out. He ended up writing a book on it. It was the only book at the time on this approach called Balanced Asset Allocation that was published by Wiley. It was interesting. He actually left an impression on Ray as well. Early on, he was meeting with Ray in our office in Westport. And afterwards, Ray grabbed me in the hallway and said, that guy I was talking to, he's got good common sense we should hire him, which is about the most positive thing I've ever heard from Ray after an initial meeting with anyone. And so I called up Alex and I gave him the feedback and I said, this is what Ray had to say. Would you consider coming out here to work for us? And Alex said, well, you know, I'm not going to move my family.”
2021-03-01 · Capital Allocators · Alex Shahidi and Damien Bisserier – Uncorrelated Return and Balanced Risk at Evoke-ARIS (Capital Allocators, EP.179) · IDENTIFIED FROM THE TRANSCRIPT · source
“But in our mind, it's a fantastically interesting problem to attempt to solve. And now is a lot of what I did in my role was working on questions like how to think about asset allocation or hedging your liabilities or building a hedge fund portfolio or thinking about real assets and the importance of inflation protection. And so with Alex, we got to know each other in the mid-2000s. I covered him. He was actually one of our largest clients at Bridgewater by virtue of some of these large multi-billion dollar institutional investors that he covered. And he stood out to me early on. In fact, at Bridgewater, I would say he was one of our most sophisticated investors, including all the sovereign wealth funds and pension plans that we worked with. And what really stood out about Alex was he approached this business of providing investment advice in what I thought was the correct way, which was to actually roll up your sleeves, think about”
2021-03-01 · Capital Allocators · Alex Shahidi and Damien Bisserier – Uncorrelated Return and Balanced Risk at Evoke-ARIS (Capital Allocators, EP.179) · IDENTIFIED FROM THE TRANSCRIPT · source
“So I spent my formative investment years at Bridgewater. I was there for about nine years and started in the research group and then ended up covering clients, worked with a lot of the largest institutional investors across North America. At Bridgewater, we had a different approach to working with clients. We had much more of a consultative approach. We put investment professionals in the seats of covering clients. And we wanted to be a resource to clients beyond just a return stream. So the aspects of my job that I love the most and that I've now focused on 100% were really providing strategic, good objective advice to endowment, pension plan CIOs around those biggest asset allocation challenges. I've always been fascinated with the challenge of building a great portfolio. Alex alluded to the solution. In practice, implementing that solution is actually quite challenging.”
2021-03-01 · Capital Allocators · Alex Shahidi and Damien Bisserier – Uncorrelated Return and Balanced Risk at Evoke-ARIS (Capital Allocators, EP.179) · IDENTIFIED FROM THE TRANSCRIPT · source
“Big part of the way both Damien and I think is independently. We don't necessarily just follow the herd. And I think that's a big differentiator. And so if you just take a step back and forget everything you've learned about investing and you think about ultimately you're trying to achieve an attractive return over the long run with as little risk as possible. And mathematically, the way to do that is to own a bunch of return streams that are different from one another, meaning they go up and down at different times. And the more reliable that differentiation, the better. And if you approach it from that perspective, that surprisingly leads you down a very different path from the way most people invest. And so we spend a lot of time looking for differentiated returns. To me, that's very obvious, but the challenge comes in that most people don't invest that way. So the portfolios end up looking quite different. So it's really just an understanding of the math behind building a portfolio and then approach.”
2021-03-01 · Capital Allocators · Alex Shahidi and Damien Bisserier – Uncorrelated Return and Balanced Risk at Evoke-ARIS (Capital Allocators, EP.179) · IDENTIFIED FROM THE TRANSCRIPT · source
“Buying the dips and do perfectly well. The 2000s we saw much greater challenges, where the stock market was negative for a decade and had 250% declines. And so that was the beginning of the perspective for us that this might be a very challenging environment looking forward. And more tools are needed. So those tools include things like hedge funds that are maybe smaller in size or market neutral or maybe not typically available at the big. We felt that we needed to be more innovative and maybe create investment structures that didn't exist. So we launched an ETF. We could have never done that. And we did that because we felt that clients needed a specific solution. So it's basically the ability to be more innovative and creative.”
2021-03-01 · Capital Allocators · Alex Shahidi and Damien Bisserier – Uncorrelated Return and Balanced Risk at Evoke-ARIS (Capital Allocators, EP.179) · IDENTIFIED FROM THE TRANSCRIPT · source
“Brokerage firm for a long time. And clients were asking me for many years why are you even there? You're not really using it for anything. And so I always think of what's best for the clients. And Merrill gave me a lot of flexibility. I was able to do what I thought made sense for clients. And I did that as long as I could until I got to the point where I felt that clients needed more tools and I was able to provide while at a brokerage firm there are some limits. And so it was at that point where I felt that it made the most sense for clients to leave and effectively broaden our toolkits to give them good performance looking forward. So before we dive into the business, what were those specific tools at that point in time that led you to say, you know what, like we just need to do this on our own? For many years, you can just own stocks and bonds and be fine. So if you think about the 80s and 90s, the great bull market and stock market and the bond market, where you could just be 60, 40 and just hold on forever.”
2021-03-01 · Capital Allocators · Alex Shahidi and Damien Bisserier – Uncorrelated Return and Balanced Risk at Evoke-ARIS (Capital Allocators, EP.179) · IDENTIFIED FROM THE TRANSCRIPT · source
“Learning from them, learning their strengths and their weaknesses. And so I spend a lot of time trying to find the smartest investors out there. And I did that for 15 years at Merrill and in 2014. It was time to leave and start our own firm. And Damon and I did that together. So what was the initial impetus for starting your own firm? When I was at Merrill, I really didn't use much of what they offered. And the reason is because I viewed myself as an independent advisor. Clients hired me to give them the advice that I thought was best fit. And I divorced myself from where I was working in that perspective. And so I would look around the world in terms of the best research and I found really good research outside of the firm. So I didn't really use their research. I found better custodians so I didn't use them for custody. We used them for performance reporting and compliance and that was about it. And so I was effectively an RIA within a”
2021-03-01 · Capital Allocators · Alex Shahidi and Damien Bisserier – Uncorrelated Return and Balanced Risk at Evoke-ARIS (Capital Allocators, EP.179) · IDENTIFIED FROM THE TRANSCRIPT · source
“Alex, Damien, thanks so much for joining me. Pleasure. Thanks for having us. Alex, why don't we start with your background and how you came to forming the business? Well, it goes back to the late 90s at the peak of the internet bubble. I came out of law school and went straight into the investment business, no intention of practice law. And I didn't realize we were at the top of the market. It's always tough starting your career with the market falling 50% in the first three years, but that teaches you certain aspects of the importance of protecting capital. So that was an early lesson. And so that's how it began. I started at Merrill Lynch as a financial advisor. And as you know, when you arrive at a firm like that, they give you a phone and a computer and they say, go get a clients. So I spent a couple of years trying to understand how to invest, how to manage client portfolios properly. And one early lesson was I discovered the importance of surrounding myself with the smartest people.”
2021-03-01 · Capital Allocators · Alex Shahidi and Damien Bisserier – Uncorrelated Return and Balanced Risk at Evoke-ARIS (Capital Allocators, EP.179) · IDENTIFIED FROM THE TRANSCRIPT · source
“My guests on today's show are Alex Shahidi and Damien Bisserrier, the Co-CIOs of Evoke Wealth and Aris Consulting, a $19 billion registered investment advisor they co-founded in 2014. Alex came at the business from a long tenure advising portfolios at Merrill Lynch and Damian joined after nine years at Bridgewater. Our conversation covers the respective backgrounds, shared investment philosophy, and strategy of searching for uncorrelated returns across public markets, alpha strategies, and private markets. We discuss a risk parity approach to public markets, incorporating human behavior when calibrating risk, the sweet spot in hedge funds, uncorrelated private equity return streams, and their investment process.”
2021-03-01 · Capital Allocators · Alex Shahidi and Damien Bisserier – Uncorrelated Return and Balanced Risk at Evoke-ARIS (Capital Allocators, EP.179) · IDENTIFIED FROM THE TRANSCRIPT · source