YouSaid · the spoken record

Brad Briner

lines on the record: 79
first: 2024-10-21
most recent: 2024-10-21
sittings or episodes: 1
sources: podcast

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“Move your own goal posts. And it goes a little bit back to the power plant story earlier. So many people find themselves on a path and they don't really mean to be on that path. It's just because it's easy. And if they had talked to their younger self and realized that they'd already kicked the field goal, they would have changed that path. And so don't move your own goalposts is a really important life lesson over time, I think, for everybody.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“And this goes on for a couple weeks. And Pete finally goes to old guy and says, man, I'm doing everything I can. Everyone comes in the door. What do you need? And I go get it for them as fast as I can. How do you do so much better than me? And the old guy looks at him and says, well, the what isn't that important? It's the why and the how. So if you're coming to the hardware store, I want to know why you're here. Well, you may think you need a paintbrush, but you might need a bunch of gallons of paint too. You might need something to clean it up with. So why and how you're going to do it is usually a lot more important than what you want to do. And I always love that piece of advice.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“So I interned at Goldman in the summer of'97 and I was in equity research. And this was when Goldman was still a private partnership. And we got to go to the partners dining room. And we got to hear from a guy named Pete Kiernan, who has become a bit of a media personality these days, but he was partner Goldman back then. And he told this story, and I'll try to abbreviate it. He was a young guy, and he'd get there early and study all the products. And it was commission based. And there was an old guy who would literally just sit on the stool in the hardware store and didn't appear to be putting in much effort. The end of the first day, Old guy had sold 20 times more than people. Just incensed. So he got in even earlier the next day. Of that day, old guy had sold 19 times more than Pete.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“Mark Yusko and Steve Ratner. So Mark hired me out of undergrad, put me on this path, and then Steve made me the CIO for the first time.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“Inauthenticity. And that is an ironic answer, I suppose, going into the political world. But I've got time for people who disagree with me on everything as long as they actually believe what they're saying. I get asked two questions everywhere I go when I'm running for office. One, why'd you leave a great job to do this? And two, if you're a Republican, how do you live in one of the most liberal towns in the United States? And the answer to the second question is they're authentic. It doesn't bother me. I disagree as long as it's coming from a good place. It's fine.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“College sports. So I live right across the street from UNC and deeply involved in the university, sadly involved in the football program right now. But it's more than that. Our neighbors, the tennis coach, the purity, the joy, the peaks and the valleys of college sports, I love. And my family loves, and we do that together.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“It is literally a mock interview. So we're both interviewing for the job and it's pretty humorous. We're asked, what's your experience? And so it just goes from there. But it is a job. This is not making economic policy for North Carolina. This is not economic development. This is managing the pension plan. There is a scoreboard. There is a way to do this better or worse, as the case may be. I think communicating that message as clearly as we can is really important. But admittedly, there's a lot of noise, so it's hard to cut through it.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“With a pretty simple message of qualification. I don't want to run a vitriolic hate-filled race. That is not interesting to me. What is interesting to me is trying to do it on its merits. And so that's what I've been doing. And that's what I'll do in advertising as well. Maybe I'm naive, but I really do think that'll work. I think that's what people actually want from a lot of their political races.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“It is a low information voter race. Most people do not show up at the ballot box knowing either of the treasurer candidates. They know the party affiliation, which drives the supermajority of votes. That is what it is because that breaks evenly in this state at least. And so what you're looking to do is those who are high information voters or persuadable voters just to get your name in front of them. Some people will do their homework and those who do their homework will look at me versus my opponent and say, wait, the job is managing investments and one of you has and one of you hasn't. Okay, that will be 5% of the vote maybe. And then I'm hoping another 10 or 15% of the vote will be people who are just aware. I enjoy a pretty material fundraising advantage to my opponent. A lot of that is people who I've worked with or have made money for over the years who just want to support. And that will allow me to get on TV.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't know how many of the people listening to this in the next couple of weeks are going to be North Carolina voters. But I've always been curious in these types of elections how limited at times turnout is for particularly not the top of the ticket election. So how have you thought about winning where I know the polls are showing your head even though the Democrat top of the ticket is well ahead, that can be super challenging? How do you take it from here to the finish line to try to make sure you get in the seat?”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“How can I help? Because this is not good for anyone in our community. So there are a number of people who've reached out in that way. And some of those conversations have evolved to say, well, gee, you know, I've been this place for 20 years or 10 years, and it's going fine. It's maintenance mode. That's rebuild mode, though. And for a lot of people, that's interesting, particularly at a stage of your career where it's not really about the next dollar, though you need to get paid. It's about leaving a mark and leaving a legacy. And this could be that for our state. We are 50th best performing out of 50. And so there's a lot of desire to help fix that and move it up the curve that is really appealing to certain people. So that on an attracting side in the phase of fixing everything, I think is really interesting to people. Over time, you get to the retaining once we've fixed it. And that is a compensation discussion. Hopefully with governance reform, we'll get...”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think the attracting is actually going to be easier than the retaining. And why I say that? I have been so pleasantly surprised that after it was really the II article came out in February, which goes to our community, so many people reached out to say, I'm in the pension world at XYZ State. I see what's going on in North Carolina.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“They either want to do that in 2025 or 2027, depending on the results of the election. It might be pretty straightforward to do that in 2025 here. I wouldn't want to miss that opportunity because we've looked at this before two treasurers ago. They commissioned a study, recommended moving away from sole fiduciary. It was actually a Democratic treasurer at the time and a Republican governor, probably the opposite of what we've got now. And they concluded that it was the right thing to do. They decided not to do it at the time because performance was fine. That was the only hesitation is, quote unquote, it ain't broke. And I think that's different now. So there's momentum behind it. There's some familiarity with it. I'm hopeful to get that done. But that governance change will take a lot of time and effort over 2025 to hopefully achieve. We'll also begin resuscitating the alternative investment program. So they have been out of the market essentially for a long time. There are things we can do there. It'll be slow because we're not just going to turn on the tap full speed, but we're going to.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“It always begins with team. So November 6th or whenever they'll let me in the treasurer's office, I'll begin sitting down with what the existing team is. There are a number of vacancies on the existing team, so I've got some positions to fill. There are a number of existing investors there, though, who I don't know. So the first is an assessment of what we have. And are these the folks who want on the bus for the journey we're going to take? So far, I've been really impressed, and I'm hopeful. But it will be a pretty different regime under Breiner for Treasurer as opposed to the current guy. And want to make sure that people can make that transition because I'm going to ask more of them. I fully expect that they are capable of living up to that. So assessing the team and understanding the vacancies that we need to fill is job number one. Job number two is to begin changing the governance structure. That is a legislative matter. That is not a trivial legislative matter. We in this state really have every other year where you can get material things done. So it's the odd.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“Let's go to the happy scenario. So, if you're in the seat, you've got this sole fiduciary role, unless you decide to change it. But until then, hopefully you're a good guy, so you can go do this the right way.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“Probably take a day or two off first and assess. I think I can live with whatever result happens as long as I know two things the morning after. One is that I've worked my hardest to make it happen. And two, is that I haven't compromised my principles. And I'm on track on both of those. So that's good. I will be in the investment business in some way, shape, or form. My wife and I talk about it, what can and will happen. I loved being in the family office market. And so I'd be interested in exploring that. But I'd be interested in other pools of capital as well. I just want to be an investor in the long run. I'm happy managing an investment organization or I'm happy actually just being an investor. I'm fortunate enough where I have to manage my own investments already. So I'm kind of already doing it and I'd love to figure out who to do it with going forward in this ad scenario.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“So you're going through this process now. Elections coming up. We're going to release this before the election, so we won't know what's going to happen. And I'd love to walk through your decision tree. Let's say for whatever reason you're running in a democratic site against that, you don't win. What do you do next?”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“The tip of my tongue. I believe it's 2018 So this gives you some sense of the longevity of these pensions and the importance to these states, Illinois being the poster child of how problematic it can become. But for all states, they're struggling with these unfunded liabilities and making sure that they have enough set aside. That is not a four-year problem. That is a 100-plus year problem. So you want it to be permanent. You want the architecture to survive you. 47 other states have gone away from this model. The three that are left are Connecticut, New York, and North Carolina. And as a Republican, you can imagine I tell everyone that's not a club we want to be in. And moreover, those three states, not North Carolina, but Connecticut and New York, have had pension investment scandals over time, where you concentrate this much power in one person with little oversight. And if you get the wrong person, bad things can happen. That doesn't really happen in a committee structure. Yes, committees are slower to make decisions. Yes, there's more bureaucracy. But without Warren Buffett in the sole fiduciary chair for 100 years,”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's because you want it to be permanent. And more to like everybody else. So this portfolio will be around for a long time. Here's a fun fact for you. Do you know when the last Civil War pension check was cashed?”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“He mentioned this sole authority fiduciary governance model. And then you're running and assuming you win, that's you. Why would you want to change that if you were the one empowered to be able to make the investment decisions, which is often the bottleneck that people run into in public pensions?”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“But know that that is true right now. So where's the alpha we're going to get from private equity? How does the math work in a four plus percent U.S. Treasury environment for leveraged buyouts? So those are real questions that I have around adding more to the private equity portfolio right now. I don't know that we need to do it. Over time, I hope, and I think we can build our reputation, our capabilities, our responsiveness in such a way that we will become favored. We'll still be public. We will still disclose a lot of things that people may not want disclosed, and that's always going to be an issue for a public pension plan. But I think there's a lot to do to build our reputation, our capabilities that allow us to overcome some of that.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“Obviously, the SP is close to an all-time high. You have some capability to add to the equity market exposure under the current asset allocation, which I don't think we really want to do. I think you got to be slow and methodical about it, right? I mean, Murphy's law comes into play at some level where just the day you do it is the wrong day to do it. So you always want to average and average out. I think we'll start with it's about $10 billion of cash right now, finding places to deploy that in the single B, double B, or mortgage credit spaces where we can make six and a half, seven and begin to build that portfolio aggressively as we think through what we're going to do with the alternative investment categories. This plan's got plenty of capacity to do more private equity. To be honest, I can't figure out why we would. In part, you got to recognize who you are. Pension plans are not at the top of the wish list for really successful investors generally. And so we've got to be respectful of that and think about how we change that over time.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“How do you think about it when for a long time rates were zero? And now more people are shifting towards credit and fixed income because rates are higher. The timing of when you'd make those asset allocation shifts.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's roughly forty eight percent in aggregate equity exposure, including some private equity, but mostly public equity, and 52% investment grade fixed income. There's some other pieces in that, but largely investment-grade fixed income. There's about 7.5% cash in that 52. So there's just a lot of assets that are not helping us get to 6.5% rate of return, which makes it very hard to do so. One of the other interesting pieces of it is if you want to make six and a half today, it's actually a lot easier than it's been a long time. I was looking at mortgage rates this morning. 6.6% for a conventional 30-year advertising mortgage today. And if we want to make six and a half, that's a pretty good low risk place to do it. Sure, you have refinancing risk and you have other issues in a lower rate environment, but we can figure those out. So that's what I keep articulating to people is let's make six and a half. And here's a low risk way to do it. And that's resonated pretty well. First, let's start with not carrying 9% cash.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“Which it turns out is a really challenging thing politically to explain. So the analogy I always use, which has worked for people, is I've got two daughters who are drivers now, one in 17, one is 16. And the 17-year-old likes to take some risks. So when we were getting on the highway teaching her to drive, she'd love to go 85 miles an hour. That is risky. That is a problem. The 16-year-old, though, when we get on the highway, she'd go 45. And that is a problem too. But in a different way. When you put it that way, I think people begin to understand, oh, yeah, no, going too slow can be a problem. You can create other issues, like not keeping up with inflation, things like that. So I'm out there trying to explain that we've got a strategic problem, but it's hard because largely we're talking to retirees who are dependent on the pension plan. And when they hear or risk or more aggressive investment strategy, then they have no interest in it. And I understand why, but it's important.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“And all of a sudden in 2021 we're by one percent treasuries against a six and a half percent of the time actuarial cost. That is just a good and slow way to go broke. And it's never really been understood for a lot of reasons. Pension math is complicated. Investments are not everyone's cup of tea. I get all of that. But it's been this strategic problem of not taking”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“And this state has never really figured that out. The belief, and we had a treasure for a long time in a different era of interest rates, who still larger than life figure here, he essentially put the entirety of the pension fund in as many treasury bonds as he could. We needed to make 7%, 7.5%, depending on the year, to make the math work. And back then, you could do that in the Treasury market. So there's this belief that, oh, we could just buy treasuries and we'll be fine. The problem is interest rates changed a little bit.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't want to impugn the investment professionals there. This is a strategy problem. This is not a tactics problem so much. There's two different things going on. One, there's basic confusion. When you are wealthy, which our state is, you can manage your investments very, very conservatively if you want. But what you see in history when people do that, they essentially lose their wealth because they are not keeping up. So in fact, a successful investment strategy is important to staying wealthy.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“Don't get a chance much on the podcast to talk about investment organizations that are really not done well. Not a lot of people want to come talk about that. I'd love to hear as you looked at this, you said there are rational decisions about the pension for the state and talk through what does bad investing look like.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's kind of an 18th century role. It's like captain of the ship financially for the state. So anything that touches the finances of the state or the savings of the state, the treasurer runs. And we've got this model called sole fiduciary. So you can do almost whatever you want. And I was just thinking that that's really interesting to me. How do we take what is a model that doesn't make a lot of sense and make it into something that does?”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“The party has organized a year in advance of the filing deadline behind somebody. So all the endorsements are there, the money is there, nine times out of ten, that's your nominee. And that had happened in the Republican primary for treasurer here. But then he decided to run for Congress with eight days left until the filing deadline. So you had this wide open primary. You had me thinking about existential issues. And I got a series of phone calls from people I knew in Raleigh saying, hey, if not now, when that was the compelling logic that got me to do what I'm doing.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“And noodling on that question, when facts and circumstances happened in December of 2023, I had been interested in the state treasurer of North Carolina's job for a long time. A friend of mine reminded me that we wrote a case study in 2006 at Harvard Business School on it. I had forgotten that. I found some old emails about thinking about running in 2015, but that was not the right time in my or my family's life. So I've always been interested in it, in part because it's the state I live in and the state I love. in part because it's so irrationally managed. And I'm fascinated by consistent, irrational behavior. I always want to understand it and have it explained to me. And the truth is it's never been explained to me for North Carolina. I was always interested in it. And then the other thing you learn is most of these down ballot races.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“I had a wonderful 12 years at Willet, and I'm still friends with just about everybody there. And so I do miss them most days. Over time, you develop choices in life, in part because of your financial successes. I was commuting back and forth five days a week for most of those 12 years. And that was fine. That did get a little old. So that's part of the decision. The other part of the decision is you think about what you're doing with your skills in life. If you are maximizing the use of those skills for humanity and where you'd like to see humanity go. Over time, the answer to that question for me changed where I think that I have been ridiculously blessed and financially I have a lot of choices. So I thought to myself, how can I use my skills in a different way to serve maybe a broader swath of humanity than I'm serving right now?”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“Secondaries. Over and over again, you see some kind of non-investment reason for people moving on from different categories. Traditional energy being the most obvious one in the 2021-2022 time period. So all of a sudden you've seen a couple firms now formed to do this energy secondaries. We're on sale. Some of them are trading at 20, 25 cents on the dollar because the owners don't care. They must get rid of them and there are not many natural buyers of them. But I think we all know, and both candidates in the presidential election now espouse, it's going to be an all-above solution on energy. There's really no other way. We can hope for something better, but it's going to take a while. So those type of things where people will wake up at some point and realize that maybe the navs aren't massively overstated and maybe nothing should trade at 20 cents on the dollar if we're just not quite there yet.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“2022 was a great example of this. Private credit by early 2023, a lot of people were talking about it, but not a lot of people were doing things about it. By early 2024, they had. But you had a full year where you could deploy at 11, 12 percent first lien in new buyouts. That number is now probably nine and a half, nine.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“AI is a great example of this. I was talking to a friend of mine who's an investment manager last night, and he was talking about embedding AI in his investment process, has essentially removed the need for analysts. Just think about the evolution of your investment firm if you can outsource to software, which by the way costs him $1,000 a month, what you would pay $125,000 a year for at least one, and you probably have more than one. So as a leader of an investment organization, those are the topics you should be focused on. How do I support my team? How do I give them the tools? How do I make us more efficient? How do I make us quicker ahead of the crowd? One of the things that I've seen over and over in my career, and I try to get better at it each time, is sometimes things are obvious, but it just takes the institutional investment community a little while to get there. So if you can get there faster, then you have a huge competitive advantage. Credit in...”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's largely not an investment job. I think people kind of know that, but I'd take it maybe a degree further. There are many functions that make an investment organization work well, and they are all important. Some of them are important because if you step on that landmine, it blows everything up. Some of them are important because they actually directly create alpha for the portfolio. But all of them need to be managed. And all of them, if you're running a great organization, have great people in them who want your feedback. So if you think about your day-to-day as a CIO, The investing piece should not be a majority of that. Managing your team, managing the other non-investment functions.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“Worse than that at the exact wrong moment. So we're always focused on managing our balance sheet, managing the unfunded commitments, and direct help with that as well, allowed us to get through COVID without a problem, allowed us to get through other kind of downdrafts without a problem. But at some point, scale will be a problem for Willet. I don't think they're there yet, though.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“The direct investment business is a huge compensating item for that. So Andrew largely led that and did a fantastic job of building his team and building out the sourcing capabilities. One of the complications of being a foundation, which will it ultimately is, is you've got this provision called excess business holdings. You can't be more than 19.9% of the equity of any business. So that becomes a big challenge at scale. What it manifested in is more and more transactions, and you needed more and more people to do that. We didn't see diminution in alpha or returns from that. I'm sure there is a point at which you would, but we did not. So it was really scaling the direct investment teams, both private equity but also real assets, to deal with the deployment issues. We're always conscious of our balance sheet. One of the lessons well learned in the GFC, of course, was unfunded commitments have a cost. And they cause you to do things that are economically disadvantageous if not.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“The private markets, how did you address the challenge of more and more dollars coming into Willet from the business and that original endowment model, preferring some of the smaller managers to some of the scale as you get more and more scale in your denominator?”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“If you're going to be passive, I think you must argue that the FTC is feckless, which they have been. If you're going to be active, then you probably argue that they are going to get it right this time or get it different this time at least. It kind of boils down to that in the US at least.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“Was a little bit complicated by the idea that so much of Bloomberg LP's business is the act of management community. So we tried not to have that be a factor, but we certainly couldn't ignore that. Over time, we appreciated passive more and more. We never got to a large allocation there, and I can't speak to what they're doing today, but perhaps they've changed that. It has been a slog to try to create alpha in developed public markets for a long, long time. That is not new. Hope springs eternal. Managers are always coming through to demonstrate their version of Alpha. And so we kept going down that road with largely active. And I think that's proven to be a mistake over time. But what you don't know in the magnificent seven being the obvious example of this is just how quickly that will turn. In the end, you're kind of making a bet on the FTC and what it does.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“Credit was the biggest of all those from a factor perspective that really changed. We had never bought credit before. It wasn't really in our mandate. Will it is a high-risk, high-return investor equity-oriented perpetual life, all those things? And so it didn't really make sense for a lot of years, didn't want to build a new asset category because we didn't think it was a permanent allocation. So we needed to bring the asset class heads in across the board to address that factor. It's still evolving and it will still evolve from a factor versus asset class orientation, but I think you've got to do both. I think you've got to recognize what your team is and what its strengths are and then build the compensating item around it in whatever way you can.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“That was a big topic and remains a big topic of how you get it exactly right. You have a team that is highly asset class oriented. And yet we all know that factors cross those teams. And no more so than when interest rates rose so dramatically in 2022 and everybody needed to take a servit in every asset class. We had a head of portfolio strategy really helped us think this through. And in that director's meeting, we spent a lot of time talking about that and where we wanted the credit factor to show up. And the answer was everywhere. Anywhere we could find it where the first lane was our limit of risk on the credit side at a 10% rate or more. We should talk about that. Will it has a wonderful issue of often too much capital? And so it was never so much that there were pigs at the trough and one was going to get bumped out. It was really, can we deploy enough capital against this theme?”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“The investment side, these investment committees are very important for junior people. But it's not actually where everything happens always. Those sidebar conversations, those individual lunches, there are a lot of things that go on there. So our investment committee got to be essentially the whole firm at one point. And we needed to convene a smaller group to have real question-oriented conversations rather than report-oriented conversations. So what we ended up doing is creating a much smaller group of EMDs at the firm where we'd have actually a proper investment discussion where we could have open-ended questions where we could see how we would help each other, where we could just give a report on what we were thinking that wasn't a fully formed thought. That was really important to what we did on the investment side. Specifically, having those kind of conversations and that group convene on a regular basis. Because these investment committees do become performative at a certain scale, where it's really just this is already a done deal and we're just telling you about it. And that's okay as long as you recognize it. And you create that for.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“Was looking at it over there, and they don't know that that's a real failure for your organization. So, how do you still keep the empowerment of the asset categories while having some sense of cross-silo fertilization across the different portfolios? We did a lot of that. We spent a lot of time trying to break those down, but not too far. We wanted to keep people empowered. And the information systems are a real big part of that.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“One of my colleagues at Morden Creek did an amazing thing for us there by setting up an information system that allowed us to share, not quite in real time, but daily everything that everybody was doing in a way that was very user-friendly. So I have never been above shamelessly stealing from people who have great ideas. And so I did that at Willet. The silo architecture where you have a strong lead in each asset category does have the downside of lack of collaboration across those silos. And so that was a big focus for Andrew and I when we took over as co-CIOs. I borrowed heavily from my former colleagues' architecture and setting up was the engine, but we built our own front end to encourage people to share what was going on. Not that we were trying to second guess them. We were just trying to keep them aware when you have investments that cross categories and one person is looking at over here and the other person.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“And a lot of success for us. But it was part and parcel. The deal was a material piece of the fund. We were just talking about the deal initially, but with the hope that we'd come in the fund and we were encouraged to do so economically, it worked for everybody over and over again.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“The best relationships are really hand in glove in that way, though, where we all understand we're doing more than just this fund and just this deal. There's a longer-term, hopefully multi-decade relationship that's going on here. So framed that way and not short-term transaction oriented is really important to making sure that you get that balance exactly right. We would often do a deal alongside a manager before we'd invest in their fund, set up an economic structure that allowed us the optionality to not go in the fund if we didn't like what we saw. So the economics would stand on their own, and then they would fade away if we did go in the fund. So we had an incentive to come in the fund. That architecture ended up working really well for us, particularly with newer managers, so people raising their second fund or even their first, where they needed money for the deal, they'd like us in the fund. We weren't sure we were ready to do that. That became pretty well worn over the years.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source
“Highly sought after transactions and very important managers to the different vehicles. So you got to be careful there because you wouldn't want to be pennywise and pound foolish as it relates to important investment relationships for your firm.”
2024-10-21 · Capital Allocators · Brad Briner - Family Office to Public Service (EP.413) · IDENTIFIED FROM THE TRANSCRIPT · source