YouSaid · the spoken record

Ashby Monk

lines on the record: 84
first: 2017-10-23
most recent: 2017-10-23
sittings or episodes: 1
sources: podcast

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“Ever forget who sit at the base of capital markets? And it's the asset owners. And here we are in New York City surrounded by beautiful skyscrapers filled with hedge funds and private equity funds. And every moment of every day there is a temptation to cash it in. And so what I've constantly reminding myself is there's a broader project and find to go build companies, fine, but never forget who you're serving. And I am serving the asset owners.”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“I feel uniquely privileged to be sitting in a seat where for whatever reason this community of pensions and sovereign funds and endowments and foundations seems to trust the words coming out of my mouth as being in their interest. And I don't want to screw that up because I don't see a lot of people out there that are unconflicted in their thinking or remarks. And so I feel whether it's true or not, and I could be a complete windbag, but like when I do get the opportunity to meet with these people, I get the sense like I can have an actual influence on them. And so I think in a weird way the 150-year-old talking to the 41-year-old would say, take that seriously. And if you really do want to transform capital markets, don't forget.”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh, I don't know. I mean, how did it go? I mean, there's all these things that get said in those questions, like, hey, nobody's ever going to regret spending time with their family or nobody's going to say I wish I worked more. But interestingly, why don't I just do the counterfactual?”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“This is totally new. Everything changes once the children come. And it doesn't help that my kids are extremely stubborn. And I don't know where they get it. But, you know That's something I might have liked to have been told.”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“This insane part of your life is coming, and you should sleep in, and you should go to the movies. And you should probably get ready for, you know, do a couple of volunteer gigs. Travel the world a bit more. Do those things. Because getting married doesn't change your life. I didn't find. I mean, I started dating Courtney when I was 20. She was 18. We were Princeton. We lived together for 13 years. We had children. It was like, this is a totally new world.”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“How hard, I mean how hard kids are. So if I had known, I don't know what I might have done differently, but I have two kids that are amazing kids, a seven-year-old boy and a five-year-old girl. And my wife and I both work, so both of us are kind of on. She runs a data science team at a public company. So it's not like I trump her. In many ways, she trumps me. And so it's this constant negotiation and challenge. I think I would have just loved to have known that”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“And at first I hated it, and then obviously I fell in love with it. And so for all those parents out there, they're sort of struggling with unruly teens, which I was. I was like a skater flying off cliffs and skis and things like that. Roweing was this incredible. And oh, by the way, like if you want to row at a high level, you got to go to an amazing school. So it completely reshifts your focus.”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, my parents were incredible role models in the sense that incredible loyalty, honesty, and integrity, you know, I think my dad when I was young would often talk about the higher interest and he would invoke the Steve Jobs quote all the time in our family. You just got to put a dent in the universe. If you really want to have an impact in this world, go out and find something you're good at, but make sure it's socially useful. And so, you know, I think in terms of The thing I'm most grateful for, it is having this broader, longer-term vision and mission that is about building a better society ecosystem, planet, whatever. You know, that comes from my parents. In terms of parenting, when my dad forced me and he forced me, I did not want to go row in college. That was like a black belt parenting move because When you're rowing,”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“If you want to see somebody who takes stakeholder engagement and makes it real, not just like lip service to it, but actually creates value out of engaging with stakeholders and making them feel loved and cherished and not being fake about it is unbelievable. And there's a few other people like that in my life like Gordon Clark at Oxford, who dragged me into the pension fund space and served as a mentor and helped me and my wife get through two PhDs at the same time with relatively little debt. I mean, there are people like that for whom I owe an endless debt of gratitude.”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“Who is my favorite person? I mean, I have, so I'm not one of these people who can easily just be like Steve Jabs is Red. You know, I'm not that type of a person. I think in my life I have people that I respect for different things, and you'll note that I drag them into my lives and don't let go. So like I have a profound respect for Lindsey Holden female CEO of a startup, fintech startup in Silicon Valley, navigating that world and watching her do it with grace and poise and leading the engineering team that is practically all male. And it's incredible to watch, to be in investor meetings with her. And it happens where we're getting into the difficult part. Jagdipashir, I think, is a profoundly unique human being in that he can do things in the context of bureaucracies. Public agencies that I didn't believe possible.”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“To pen looks like Penn's gonna go on. Oh, wait, this just ended. The game is now over. And then they showed the second half. It was a joke, right? But they won 53.52, Princeton at the Pelestra. I mean, I don't think I've ever been that happy. I mean, like children being born, getting married. I'd love to say those were happier moments than that moment, but it was just a different type of pleasure.”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“Penn at the time was our chief rival, and we had traveled from Princeton to Philly, and there was probably about five of us. And at the half we were down, I think it was like thirty-six to twelve. And then about eight minutes into the second half, we were down forty two to eighteen. I was sick. I felt physically ill to the point where I was like, I might just leave. And Courtney, my wife was like, we are not leaving, be a quitter. We're going to stick this out. If we need to suffer, we're going to suffer. And they turned it around. They went on a run like you would not believe. Literally ESPN when they did the highlight that night, they stopped the game with 13 minutes to go in the second half. And they were like, and Princeton is down 28.”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“So I was at the Palestra, which is the University of Pennsylvania basketball stadium, and at the time I was a massive Princeton basketball fan. I met my wife at a Princeton basketball game. That was our first date. In 1998, I traveled with the team to North Carolina, who at the time was the number one ranked team in the country. And I sat in the North Carolina student section painted orange. And at the half we were up by six. So that's the level of commitment.”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“Joy to spend time doing that, didn't even get paid for it. It's projects like that that kind of get me up in the morning. I mean, you know, I think if we had a more holistic and long-term financial services industry, would the country be as fractured and disconnected as it is today? I mean, you know, that's a question that flows through my brain, which is like, imagine the 40% of corporate profit captured by finance was 15%. And that other 25% was simply invested in communities to create actual value for people. Would everybody feel left behind? I don't know if I have the answer, but I know that it's a question worth asking.”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I could only do all of these things if the core thematic, it has to revolve around fixing finance for individuals, for pension funds. It has to be innovation in finance, and the end of that innovation has to be a better deal for the companies and asset owners that rely on the industry. If you look at every single thing I'm doing, Stanford, Long Game, and there's a whole bunch of other companies that I started, which we didn't get into, and then companies I've invested in, sovereign funds and pension funds that I advise, and all of it, it's about fixing finance for them. And so the thing that is first and foremost is like, that's my passion. Like, it's so fun to help, you know, I helped Wafra rail pen and Alaska permanent, like, launch a new private equity seating platform called Constellation.”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“So we were lucky in the sense that we're taking such a unique take on financial preparedness that the big newspapers have written about us. So I don't know if you're familiar with a bunch of companies like Digit or Acorns or some of these other fintech apps. So they're doing a great job, but their model is SEDIT and Forget It or trust us, we'll do it for you. It's not engagement. So that is appealing to people who are busy.”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“My stock options, you know, and you're like, oh, you're not the guy we're talking to. And so the idea here is you have these, you put money in the account, you earn coins in the long game currency. Those coins can be exchanged for games. And we have, I think, six games right now. One of them is a social game. One is like a slot. One is like a card game. And one is a traditional kind of ball lottery game. And they all offer real cash prizes that if you hit, you'll change your life. I think we've had something like 40 or 50 $500 and thousand dollar winners so far. Nobody's hit the million. We're actually rooting for somebody to hit the million because we've insured the prize.”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“The idea is very simple that if your numbers hit, your life will forever be changed through random luck. And that, as we learned from prospect theory and the amazing work of Conomentoversky, is critical for low-income people who see the lottery as literally their only path to wealth. We've done all these focus groups. It's astounding. You talk to these focus groups and you say, okay, I want you all to picture yourselves as millionaires. Picture it. You have the house. You have the car. All right. Got it? Now, how did you get there? Without a doubt. The occasional person will say something other than I won the lottery. But 90% say I won the lottery. Nobody says, I saved my money and invested it wisely. Some people, because we're in Silicon Valley, are like...”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“Savings again. Yeah, so a prizelink savings account is basically the more money you save, the more chances you get to win a prize. And the art here is a never-ever, ever touching the principle. The principle is sacrosanct. You know, we just don't ever play with the principle. And so what we do is we partnered with Blue Ridge Bank in Virginia. They pay our account holders, I think it's 10 basis points for their savings account, which at the time was more than the national average. And I think it is around that national average now. And they pay us a little bit of money. And when we take that money, they pay us and turn it into prizes. And there's a few prizes. One prize is like every week we do a million dollar drawing and we insure that prize. You have a one in 240 million chance of winning, which by the way is better than the state lottery.”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“And if she wanted me to get involved, I would go on leave from Stanford and start the company with her. And I did. And she invited me to join as co-founder. So I went down to 50% time at Stanford. I kept going with my PhD students and master's students, but I was in San Francisco with her three, four days a week making copies and taking out the trash as one does in an early stage startup. And I did that in an incredibly intense way for over a year. And today, you know, we have a mobile app that's on both platforms. We have tens of thousands of people who are saving through the platform.”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“capital to be able to capture the American dream and the average American debt is about seventeen thousand dollars. So what are we going to do? Well, we're not going to mandate them to save because that's not how we operate as a country. Our defined contribution plans aren't working. Our auto enrollment into pension plans through corporate sponsors only work if you work for the kind of company that has a plan. But in the era of the gig economy and lyft and Airbnb and all these things, that doesn't exist. So what are we going to do? And so when Lindsay came to me and was like, I want to do this prize link savings company. And step one is convert lottery money into personal savings. Step two is gamify the process so people don't have to be so afraid of their personal finances that they actually want to engage with their personal finances. I was completely convinced. And so I told Lindsay her idea was brilliant.”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“And I was like, my goodness. So not only do you have this opportunity to reward people with variable prizes for putting some money in a savings account, but like if you just overlay on it a little bit of creativity, you could see how a huge amount of capital could be shifted from state lotteries and casinos and sports betting and beyond into people's personal savings accounts. And having worked at Boston College and seen the tragedy that is the personal finance landscape and the defined contribution pension woes, this was incredibly appealing. 63% of Americans don't have $500 to their name. It's astounding to think that, but you wonder where the American dream has gone. Well, that's where it went. Nobody has any money to invest in themselves.”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“She came to me at Stanford and said, Listen, my next big project is to try to convert the money people are wasting playing the lottery and gambling into a savings account. And I was like, that'd be pretty cool if you could pull that off. And she said, well, there's a way. It's called a Prizelink Savings account. And the Congress just passed something called the American Savings and Promotion Act, Republican-led law signed by Obama that legalizes prizelink savings in America.”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“The most interesting company is a company I started. So I started a company with Lindsay Holden called Longame. And Longame is about trying to help people save money who struggle to save money. We started this company about a year and a half, maybe two years ago. And I met Lindsay. She was the first hire at Formation 8, which was a venture capital fund out in Silicon Valley. I'm friends with the managing partners there, Joe Lonsdale. And Joe introduced me to Lindsay, and we hit it off. And then she left F8 to go build an auction company that used this kind of behavioral trick to capture this GTLD space, which is the top-level domains like. And they did, I don't know what the exact number is, but it was $500 million or a billion dollars in auctions on this platform that she started. And she sold that.”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's innovative. You know, PIF is saying we're long term, we're big, and that's about it right now in terms of technology, in terms of the competitive advantages. And so somebody said, well, shoot, why don't we write a $45 billion check, get great terms, and go out and acquire stakes and all the top companies? My hope is we'll see more experiments like that just by the fact that they're going to have to experiment, but by the fact that we've seen so much just sheer chasing of past returns by LPs and begging for access to top GPs, it's hard to see how this doesn't end poorly. But then again, I know there's company up in Seattle that's doing big data and artificial intelligence for creating and assessing private equity track records, and that's really exciting. The idea that you can”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think private equity is only going to become more important because all of the big institutions around the world have this bogy, this expected return target they're looking at, and they're wondering how in the world am I going to meet that? One of the answers that they get from their trusted consultants is fill your boots full of private equity and maybe hedge funds. And so we are going to see this giant wall of money coming into private equity in the next five years, which is going to be very difficult to manage. I mean, my hope is this leads to the seeding of a whole bunch of new private equity funds. I hope it leads to experiments like the one we're seeing with SoftBank's vision fund. I mean, say what you will about it. You might think it's crazy to put $45 billion if your PIF into a single fund. But at least it's...”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“Quite among I mean, we have 10x engineers in Silicon Valley that are worth 10 times the average engineer because they're creative and you treat them like artists”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“I guess I'm hoping that we're pulling a judo move on the hedge funds in the sense that they are so good at funding research and building unique insight and identifying that insight in all these places around the world that they will in effect now I'm really putting my cards on the table back you know plant the seeds of their own demise by educating and communicating to all these technologists what it means to identify inefficiencies in the marketplace what it means to build a portfolio that is you know perfectly exposed to this idiocosyncratic risk factor I mean we're already seeing it in exotic betas and things like that and then the hedge funds that survive are truly unique and the one or two percent you disagree with me but I think one or two percent probably deserve to be making all the money they're making”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“The hedge funds initially are effectively funding the research of this data science, but maybe when the signal no longer impacts the market, those companies then can take the lessons from it and either bring it to industry or bring it to broader dissemination.”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah. Well, so all these alternative forms of data, and I can probably rattle off a hundred startups doing alternative forms of data, are now flowing through into the hedge funk community in new ways. And I think that's exciting. I think the hedge funds can play a role in building this industry of what I describe as invest tech without being threatened by it. Some will be threatened by it, but the really good ones won't. And so I think those are two places where I'd love to see hedge funds double down, working more closely with entrepreneurs outside of their organization. The problem that I have with hedge funds is they just have so much darn money they can do it themselves.”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“Orbital insight is the company in Silicon Valley that does satellite data of parking lots of oil wells and all those things. It will be profoundly interesting to long-term investors. It will be profoundly interesting to energy companies and governments, but guess who its first clients are?”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“So the first thing is unquarterly returns. The second thing is I have been working with countless entrepreneurs that want to build technology for investing. And the traditional model, if you're a technologist interested in investing, is go start a fund. Why don't you start a fund? You know, the economics are incredible. in pursuit of a business model for technologists that want to focus on investing that is not a two and twenty fund that is maybe not Bloomberg but is something there selling a signal selling a risk management product doing something that just isn't about locking it away in a black box and charging a fee stream and so I want to find a way to have the current hedge fund industry cultivate this industry of entrepreneurs that are using technology to draw new insight out of The world we live in.”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“Huge freaking challenge. Probably won't happen. But the other dream I have is that somebody's going to build a knowledge management platform that can kind of better interact or interface between, you know, the knowledge of the hedge funds and the knowledge of the pension funds. Because, oh, by the way, the pension funds, they are at the center of so much knowledge. They just aren't capturing it.”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“It in two ways for me when I think about what do I want to see hedge funds doing? One, uncorrelated return streams. Very valuable. And especially if the hedge funds and the CIOs can develop working relationships whereby the hedge funds who are spending all this time understanding the sources of uncorrelated return can communicate that back into the long-term investment community in such a way that might affect the way they are allocating their risk buckets. Right, right. So that's very valuable. And frankly”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I mean, I have an interesting love-hate relationship with the hedge fund space because it appalls me that we are dragging some of the best and brightest minds in society, chemists, physicists, mathematicians away from what I would describe as more traditionally value adding activities and into the pursuit of basis points through a black box that is barely socially valuable, if at all. And so we are dragging all these remarkable people into this space and they're not generating value. So, I mean, I think do the institutional investors need hedge funds. Maybe they need it for uncorrelated returns. I don't think they want it necessarily for alpha anymore. So in that sense, I think there is a future for hedge funds.”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so we have one American plan, and it happens to be UC Regents. We have New Zealand Superfund, we have Wellcome Trust, we have CBUS, we have Wafra. I mean, we have like a bunch of OP trust up north, but the reality is you need a little bit of an internal capability”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“Right now, the fiduciary obligation remains with the pension plan. And so the scope of funds that we can work with, they have to have some internal capability.”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“Pension fund saying, I want to invest in those assets. I can't, but I see the potential for my portfolio to generate high returns with cash flow. And then we had the philanthropists who are saying, God, I would love to see these pension funds investing in these darn assets. We've been doing all these research projects trying to figure out how to get that to happen. But all these pension plans shut the door on us when we walk in. And this entity was basically a way to say philanthropists, stop funding research, fund a platform that we can build incredible talent within. And that talent will then bring deal flow to the long-term investors. And so that's what we did. We launched it a year ago. We've got six employees at the AI.”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“They just aren't built for that. And so when I was working with Jagdeep in New Zealand and a few others, we just came to realize that if we could design something from scratch where we could source deals on a no fee basis and almost build this as an extension of the long-term investment teams, we could begin to move a lot more capital into climate solutions, what we call climate infrastructure, wind, water, solar, et cetera. And because we were going to be moving this capital, which is purely commercial and seeking out the highest possible risk return, we could go to the philanthropists that had for mission to catalyze the clean energy capital markets. And so weirdly, it was this really interesting syndicate of partners where we had these pension funds, fiduciary boundaries.”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“We could unlock so much capital for things that are societally beneficial if we simply change the way we intermediated between the capital and the project. So if you take this example of aligned intermediary, which is what I would describe as a kind of a next generation deal sourcing, deal vetting platform for long-term investors, the whole idea was to say, actually these long-term investors, they have deep pockets, they're interested in positioning their portfolios for an energy paradigm in the future that will have the energy inputs into the economy being more clean. Everybody kind of sees the writing on the wall, but they know how to get access to these assets. to see if they're exciting products there, they don't see any because the fee structures are too high for the underlying assets. Those assets won't support a two and twenty structure.”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“Things. I mean, I love to work on projects where we're bringing long-term investors around a kind of an investment thesis and then designing a new investment vehicle to facilitate some unique access point. I mean, I have this hypothesis with this notion that”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, a lot of what you're talking about with New Zealand and Canada is just a different model from the traditional model, in this case asset management and retirement systems. We were talking earlier about your interest in just financial disruption and innovation. I want to talk a little bit about some of the projects you're involved with more broadly. Oh, man.”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“The other is investing in liquids and hoping to get broad diversification and just participate in the global growth. And by the way, global diversification through index funds is a fake diversification. Index funds and ETFs are often calculated on a cap-weighted basis, which is a fundamentally flawed way to calculate indices. And frankly, it's even worse in the emerging markets, where you have single or multiple companies making up a huge portion of the index. So it's not like you're getting an exposure that anybody would describe as representative of the underlying economy.”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, okay. But so in my world, if you can have 100 positions, you are a highly concentrated fund. Like at UC, when we got there three years ago, I think this is all public, but we had about $340 fund relationships. And now Jagdeep and the team has whittled that down to something like 120. And it's about concentrating the bets, having higher conviction. And so like I would push back on you on your question about how do you get global diversification? Who says you need it? Does Norway, who is basically a global index fund, they own 1% of the global stock market? Do they understand all of the underlying assets they own? Of course not. But can it a pension plan, do they understand it? Probably pretty deeply because they're just taking a different model. One is about active management and adding value and investing in liquids.”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, so I don't know what I can speak to in the public domain, but I mean, you'll notice they were holding all this Portuguese debt, which then they had trouble with because of the Portuguese bank defaulted and then the insurance company didn't cover it. So they got a short straw on that. But truth be told, New Zealand did everything right, and they'll probably get their 200 million back. But you'll see if you look at the structure of the deal, which is interesting because you can now go in and look at it. They were getting an exposure to kind of a unique banking asset in Portugal. And how did they source that deal? You know, it probably came through a set of trusted intermediaries, but they owned it directly. And so I think that's part of it.”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think you'll find if you dig in there a lot of the value add that it's generated over time has been based on three, four, five big high conviction bets for which they have spent an ordinate amount of time on and for which they are actively seeking to use their comparative advantages to get to tilt the deck, tilt the table, whatever it is in their interest. So they're extremely good at strategic tilting.”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“They realize they, what was it, four billion dollars in private equity carry was paid to GPs alone over a five-year period. That's one line item of fees. And then, of course, they're going to say, maybe we should just give it all to BlackRock. I mean, I don't know if that's true. I don't have any inside information. But yeah, I think the fee and cost issue, the reason why I go off on this constantly is because it is a way of improving the resourcing at the asset owners. It's not a way of shaming or shutting down the asset management industry. It's about catalyzing boards of directors and trustees and fiduciaries to think of their organization in the broader context of producing a return stream and then resourcing them appropriately.”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“Internally, it was a joke. I mean, here in New York, you had this private equity role of $90,000 a year with a requirement to live in the five boroughs to manage a $7 billion private equity portfolio. I mean, obviously, that's going to sit vacant for three years, which it did. But on the flip side, you know, you're finding out that you're spending billions upon billions funding private equity managers. And you didn't even realize it. And so until you had a sense for what the true cost of producing those returns were, you actually didn't have a decision to either build it internally, make it, or externalize it, buy it, you know, in the Williamson terms, make or buy. And so what the Canadians did is they got transparency around the fees and they said, all right, well, maybe we'll make these returns internally. In America, we're still about to have this fee moment. Cowper's is having it now.”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“Budgets that were being paid to staff, the inevitable question time and time again that came out of the mouths of the board members was, is there another way? Because the fees were so high. And what was even worse? Oh, yeah, external is a joke”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source
“So let me, I'm going to get to that. But let me finish you on the fees. The whole point of me telling the Sovereign Front story was to say, why am I focusing on fees? Well, I focused on sovereign funds for five years and realized that I was not going to get the perfect role models out of there that we needed to change the pension sphere. And so then you're like, all right, well, if we're not going to get these new role models, then you begin to scratch your head and say, how are we going to catalyze change? How are we going to get the boards of directors of these organizations to change the way they invest? And yes, New Zealand, which we'll talk about in a second, helps because they're generating such high performance with an entirely new model that is not purely passive. And it is not purely driven by external managers. And so when I got to the fee and cost argument, I realized that if you could take the fees that were being paid to external managers and present them back to the board alongside the internal”
2017-10-23 · Capital Allocators · Ashby Monk – Asset Giant Futurist (Capital Allocators, EP.29) · IDENTIFIED FROM THE TRANSCRIPT · source