YouSaid · the spoken record

Daniel Adamson

lines on the record: 82
first: 2020-05-04
most recent: 2020-05-04
sittings or episodes: 1
sources: podcast

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“When should I buy it? Where should I buy it? Those sorts of questions. We start with the question who should I trust? Who's excellent in this area? So most of what we do is a bottoms-up approach rather than thematic, and we are looking for truly outstanding investment talent and business building talent who we want to partner with. And in Constellation, yes, we've done four going on six of these partnerships. Prior to that in Wafra, we'd done twelve, so we're now up to about 16 to 18 of these partnerships. They're all going well. So if you remember that senior partner who told me all partnerships failed.”
2020-05-04 · Capital Allocators · Daniel Adamson – Innovation from Asset Giants at Capital Constellation (EP.136) · IDENTIFIED FROM THE TRANSCRIPT · source
“Perplexity around creating that alignment, but in the end we're trying to build a throwback relationship to a simpler era in which GPs and LPs trusted each other in a different way. I was listening to a recent version of your podcast and there was a mention of a company that helps LPs validate the fee and carry that they're paying to GPs. I think to me that was emblematic of a breakdown in trust, which we've seen since the financial crisis. And we wanted to return to simpler way of working together. So to answer your question, I think the core part of what we do as seating is ask most investors start with the question what should I own? What should I pay for it?”
2020-05-04 · Capital Allocators · Daniel Adamson – Innovation from Asset Giants at Capital Constellation (EP.136) · IDENTIFIED FROM THE TRANSCRIPT · source
“First of all I wafra we do sometimes do direct deals, but I think any responsible pension CIO or CEO will tell you if they have the governance to do what the Canadians have done or the Singaporeans have done and really build what you might call a non-for-profit GP in the context of a state plan. Alaska doesn't have that capability. Railpen doesn't have that capability. Sweden and KIA just aren't structurally built to do that. And so in some sense, if you want to say that the Canadian model is the most idealistic, I think it is, our model is a step in that direction, but one in which we recognize that as asset owners we're going to continue to need to work with the most talented GPs. We want better alignment with them so that we're getting better information, access to deal flow. Yes, there's some complaints.”
2020-05-04 · Capital Allocators · Daniel Adamson – Innovation from Asset Giants at Capital Constellation (EP.136) · IDENTIFIED FROM THE TRANSCRIPT · source
“So there's so much to dive into with this. Why don't we start with the selection of the investment opportunity in the sense you mentioned WAFRA was doing this seating, but a lot of what we hear about is this move to get closer to the underlying security, so whether it's co-investments with private equity sponsors, even led investment. So is your forming a new organization, how did you think about where to start on that investment activity if you're building sort of a new team? And why not go all the way to the end and do direct deals?”
2020-05-04 · Capital Allocators · Daniel Adamson – Innovation from Asset Giants at Capital Constellation (EP.136) · IDENTIFIED FROM THE TRANSCRIPT · source
“What can you get out of that distributed brain, that kind of hive mind? I think we're only beginning to see that today. There's been a lot of excitement here in our second year of doing business together. But that was the core idea, which was partnership, and to use that partnership to create better alignment with asset managers.”
2020-05-04 · Capital Allocators · Daniel Adamson – Innovation from Asset Giants at Capital Constellation (EP.136) · IDENTIFIED FROM THE TRANSCRIPT · source
“And in terms of what we would do with constellation as a dedicated pool of discretionary capital, seeding the work that Waffer had been doing since two thousand eleven, backing new managers seemed like a good path to improving knowledge flow, deal flow, expertise across all of our institutions. So the vision early on was if we're seeding three or four new managers a year and doing it in this shared framework, already we've seeded four and we're under exclusivity with two more, so if we keep at that pace, imagine we have ten, fifteen, twenty, thirty.”
2020-05-04 · Capital Allocators · Daniel Adamson – Innovation from Asset Giants at Capital Constellation (EP.136) · IDENTIFIED FROM THE TRANSCRIPT · source
“With three because you add more partners to a mix like this and it just becomes exponentially more difficult. And we spent a year together thinking about what would a new business that's owned pro rata by each of our entities look like. And we called it constellation, as the name suggests, bringing stars together from a vast geographic base.”
2020-05-04 · Capital Allocators · Daniel Adamson – Innovation from Asset Giants at Capital Constellation (EP.136) · IDENTIFIED FROM THE TRANSCRIPT · source
“We're in Juno, we have a small team, we have sixty five billion of AUM, we need to be in private markets in a bigger and bigger way. We have some very talented people, but my sense, and this is Angela talking, is that we need to partner with other institutions to do this right. And so she was already thinking about the positive sum model for sovereign to sovereign pension-to-pension partnership. And then we were fortunate enough, as I mentioned, to meet Paul Bishop from Railpen, which is a venerable UK pension system. And he too had this attitude that we should collaborate. And we had the makings then of a true partnership between three groups on three different continents, each of whom had different deal flow, different internal capabilities, and we decided.”
2020-05-04 · Capital Allocators · Daniel Adamson – Innovation from Asset Giants at Capital Constellation (EP.136) · IDENTIFIED FROM THE TRANSCRIPT · source
“Next to Angela Rodell, the CEO of the Alaska Permanent Fund, and I asked her, what's your five year strategic plan for Alaska? And she said, well, we'd love number one to get more into private markets, to go truly global in our focus across segments of that market from private debt to private equity to infrastructure to real estate.”
2020-05-04 · Capital Allocators · Daniel Adamson – Innovation from Asset Giants at Capital Constellation (EP.136) · IDENTIFIED FROM THE TRANSCRIPT · source
“with a great deal of effort, suffering, long plane rides, conference calls across multiple time zones. So the origin story for Constellation is twofold. First, we had an amazing team at Wafra that had been acquiring stakes in GPs and seeding new GPs, especially in private markets since about 2011. And I won't go into them here, but a lot of household names in terms of the groups that we've partnered with. So a great deal of expertise on the team that predated me in how to innovate in terms of structure. And I think a lot of the greatest innovations in financial markets have come not through technology changes, but through structural changes. So that's one piece of the story. The other piece is I mentioned that trip to New Zealand, which was really memorable because I sat”
2020-05-04 · Capital Allocators · Daniel Adamson – Innovation from Asset Giants at Capital Constellation (EP.136) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah. Well, I mean, that's where we're going to go. You've laid out is a group of large asset owners labeled as such who want to do something together. Talented people and the potential to work together in a different way than sitting all in the same office. So you bring that together and how do you get from there to something actionable?”
2020-05-04 · Capital Allocators · Daniel Adamson – Innovation from Asset Giants at Capital Constellation (EP.136) · IDENTIFIED FROM THE TRANSCRIPT · source
“Years, I would argue not so much in our industry, but elsewhere, whereas in the twentieth century the archetypal business was Kodak, you know, one mainframe, one business card, one brand, one corporate strategy, and say what you will of the big PE shops and asset managers. They're born in that century. That's how they operate. They have a hierarchy that leads up to a single CEO. What we've seen in other industries, and Airbnb is a great example of this, but there are many, many others, is entrepreneurs working together through a kind of virtual company, through tech, through governance enables animal spirits to flourish and creates a kind of framework for in the best scenario, for people to run their own businesses. We haven't seen that in finance. I'll talk about constellation in the context of those three trends. Yeah.”
2020-05-04 · Capital Allocators · Daniel Adamson – Innovation from Asset Giants at Capital Constellation (EP.136) · IDENTIFIED FROM THE TRANSCRIPT · source
“born a generation ago, their founders are still there, and they're all well north of a thousand people at this point. So whereas in the 1950s and 1960s, I think the American dream, if you were a well-educated kid, was to write the great American novel or to work for NASA. In the 80s, a lot of people went to Wall Street. And so you have this amazing brain power that's now possessed by people and training who are in their 50s and sixties, who have the track record, the personal resources, the networks, the credibility, the savvy to do something entrepreneurial if they choose, and at the same time those large institutions are dealing with succession challenges and trying to restructure. And then the third piece is we've seen the birth of a new type of organization in the last 20 years.”
2020-05-04 · Capital Allocators · Daniel Adamson – Innovation from Asset Giants at Capital Constellation (EP.136) · IDENTIFIED FROM THE TRANSCRIPT · source
“later met Paul Bishop, the head of alternatives at Railpen, and it was this first generation of institutions really convened people. And by the time I arrived on the scene in 2016, there was some frustration that that convening hadn't led to concrete formal joint ventures between asset owners on different continents. So there was a real desire to do something. The second mega trend, if you will, that fed into constellation is if you look at where did the smartest, the best minds in the developed world go in the 1980s. It was, so many of them at least went to Wall Street. It was the birth of large alternative investment institutions. If you look at Blackstone, BlackRock, KKR, Carlisle, Apollo, Aries, etc.”
2020-05-04 · Capital Allocators · Daniel Adamson – Innovation from Asset Giants at Capital Constellation (EP.136) · IDENTIFIED FROM THE TRANSCRIPT · source
“To help people figure out what that means, I like to say, look, world gross product is eighty trillion, sixty trillion, depending on who you ask and how you calculate it. So you're talking about more than one year of world gross product saved by institutions. And if you look at the concentration of that capital, you've got twenty or thirty groups that have the ability to move mountains, to move tens of trillions of dollars in a concerted way. And those groups were getting together. So I'll come back to this when we talk about how constellation was started, but I met in New Zealand in 2016 with about $15 trillion of asset owners. We were in that room because of Wafra's affiliation with asset owners in Kuwait. And I was talking to Angela Rodell, the CEO of the Alaska Permanent Fund.”
2020-05-04 · Capital Allocators · Daniel Adamson – Innovation from Asset Giants at Capital Constellation (EP.136) · IDENTIFIED FROM THE TRANSCRIPT · source
“Whether it's the financial crisis or other awakenings within that community of state affiliated pension affiliated asset allocators, a number of institutions were born around 2008, 2009, 2010 that brought together sovereigns and pensions in new ways. You had the International Forum for Sovereign Wealth Funds, the Institutional Investor Round Table, the Fiduciary Investor Roundtable for Cooperation and Partnership. I will not bore you with the acronyms for ten more of these, but the amazing thing is that there's about, let's say, a hundred trillion of institutional.”
2020-05-04 · Capital Allocators · Daniel Adamson – Innovation from Asset Giants at Capital Constellation (EP.136) · IDENTIFIED FROM THE TRANSCRIPT · source
“I'd like to start with three trends that have popped out for me in the last ten years the first ten years ago we weren't talking about asset owners people talked about pensions sovereign wealth funds was becoming a term of art and started to be picked up in the press around a decade ago”
2020-05-04 · Capital Allocators · Daniel Adamson – Innovation from Asset Giants at Capital Constellation (EP.136) · IDENTIFIED FROM THE TRANSCRIPT · source
“Certainly get into specifically what you're doing with constellation. There's been this shift in these asset owners sort of Shifting the way they invest in the markets. We hear about it with the Canadian plans and otherwise. What have you seen as these kind of trends in the seats you've had leading into this, about in particular those pools of capital?”
2020-05-04 · Capital Allocators · Daniel Adamson – Innovation from Asset Giants at Capital Constellation (EP.136) · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm so grateful that Wafra took the chance to hire me when it was absolutely unclear what specific value I was going to add. I think folks thought this is somebody we'd like to work with and let's see what happens which incidentally I think is of the way a lot of great professional relationships begin rather than filling a particular box. I didn't come in with an idea of constellation, nor was Constellation my idea alone, and I want to talk about the collective effort that went into putting it together both with the Wafra team that had already for a decade been doing GP stakes and GP seating, which is something that people should understand in order to understand Constellation. And then the work that our partner asset owners like Alaska and Railpen and Sweden and the Quaid Investment Authority and others contributed.”
2020-05-04 · Capital Allocators · Daniel Adamson – Innovation from Asset Giants at Capital Constellation (EP.136) · IDENTIFIED FROM THE TRANSCRIPT · source
“Alternative finance to private equity, we have a big strategic partnership business, which I'll talk about in the context of constellation. We do liquid alts, hedge funds, et cetera. But we do it in the context of a kind of balance sheet entity that grows its capital on the basis of good ideas. That type of entrepreneurship in the context of a 35-year-old institution with $25 billion is very rare. And it comes from the special relationship that Waffra has with its capital providers. And that was something that we wanted to replicate at a higher scale with multiple partners in constellation.”
2020-05-04 · Capital Allocators · Daniel Adamson – Innovation from Asset Giants at Capital Constellation (EP.136) · IDENTIFIED FROM THE TRANSCRIPT · source
“Sure. So when I joined Wafra, which is a twenty five billion dollars alternatives manager based on Park Avenue with offices around the world but headquartered here in New York, I'll confess that I had not heard of it. I was picking between a couple other professional opportunities, but a good friend of mine who's now the CIO of Wafra when I presented him these other two opportunities said, I have a third idea for you. And why don't you come in and sure enough two weeks later, I'd seen the light. And I'll tell you what I saw, which is going back to that philosophy training, there's this distinction that people make between LP and GP, which has its uses for sure, but has the benefit of being a bit of both. So 25 billion as a GPRA invests in everything from alternative 21st century real estate to”
2020-05-04 · Capital Allocators · Daniel Adamson – Innovation from Asset Giants at Capital Constellation (EP.136) · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh, so from Lehman, I joined Bridgewater up in Connecticut, which was incredibly eye-opening. I worked for Ray, who is amongst the most unique and insightful human beings you could possibly come across. It wasn't for me, as I think many people will say is true for them, and that's by design. So I quit after about a year. So I left Bridgewater very amicably, wound up running my own firm for a few years before joining Aries, where I got to be a head of investor relations and support the firm through the transition from a privately held company to a public company. We went from forty billion in AUM to now, I think it's $150 or thereabouts, so dramatic transformation, which was fascinating to witness. And then from there, I had the great good fortune. We had our kids move back.”
2020-05-04 · Capital Allocators · Daniel Adamson – Innovation from Asset Giants at Capital Constellation (EP.136) · IDENTIFIED FROM THE TRANSCRIPT · source
“that we can build a more enduring form of partnership, so thinking a lot about governance, thinking a lot about how you structure something internationally to create a positive sum game where partners benefit from working together.”
2020-05-04 · Capital Allocators · Daniel Adamson – Innovation from Asset Giants at Capital Constellation (EP.136) · IDENTIFIED FROM THE TRANSCRIPT · source
“Enterprise value creation. So how do they raise money? How do they think about the market for selling GP stakes was really just emerging around 2006, 2007? How do they think about talent? How do they think about their competition? And then, of course, with Lehman itself imploding and creating a slew of problems for the very managers that I was there to advise. As a 29-year-old, I got an incredible education in the challenges of forming any kind of partnership or doing anything entrepreneurial. I remember one of my professional mentors at the time said, Daniel, if I could teach you one thing, it's that all partnerships fail. And I thought, wow, what a grim lesson in life, and I certainly hope that's not the case. And a lot of the work that I've done since has been motivated by that idea that not all partnerships should.”
2020-05-04 · Capital Allocators · Daniel Adamson – Innovation from Asset Giants at Capital Constellation (EP.136) · IDENTIFIED FROM THE TRANSCRIPT · source
“Sure. So with that realization that I wanted to do something entrepreneurial and global coming out of Yale Law School, this is 2003. I joined McKinsey and Company for the reasons anyone should join, get to see the whole world. I thought they were going to send me to Paris and Tokyo. Actually, my first McKinsey assignment was in Rochester, New York, which was lovely. And then my second one was in Rochester, Minnesota. So it wasn't exactly the run of world-class cities that I expected, but I learned a lot. And then from there, I had the wisdom and foresight to join Lehman Brothers in 2006, which, while obviously a disaster in terms of what happened with the business turned out to be invaluable to me personally in my education.”
2020-05-04 · Capital Allocators · Daniel Adamson – Innovation from Asset Giants at Capital Constellation (EP.136) · IDENTIFIED FROM THE TRANSCRIPT · source
“Not necessarily a data driven way, but a rigorous logical way, coming to conclusions that you share with very smart peers and colleagues, and get them to pressure test them for you. That's great training for investment. Quickest way to lose money.”
2020-05-04 · Capital Allocators · Daniel Adamson – Innovation from Asset Giants at Capital Constellation (EP.136) · IDENTIFIED FROM THE TRANSCRIPT · source
“People see my academic background, law school, philosophy graduate school, econ as an undergrad. People assume that, well, law school must be relevant to an investment career, and an econ surely that's relevant. And they almost brush the philosophy degree under the rug as a kind of slightly embarrassing two years of jaunting through the world of ideas rather than anything practical. But actually, that was the most helpful. Because especially the type of philosophy that I studied, which was contemporary analytical philosophy. Studied at Alsols College at Oxford and I had just the most rigorous What you're doing is you're questioning basic assumptions. You're doing it in a”
2020-05-04 · Capital Allocators · Daniel Adamson – Innovation from Asset Giants at Capital Constellation (EP.136) · IDENTIFIED FROM THE TRANSCRIPT · source
“So if you're a philosopher, you get to think about everything through the lens of philosophy. And if you're an investor, you get to think about everything through markets. And while even at 26, 28, when I was at McKinsey, twenty nine when I was at Lehman getting my real education, I still might not have said yet that investing was for me. I was looking for the same kind of thrill that I had in the academic world of getting to see the whole world from my desk.”
2020-05-04 · Capital Allocators · Daniel Adamson – Innovation from Asset Giants at Capital Constellation (EP.136) · IDENTIFIED FROM THE TRANSCRIPT · source
“My folks, as I said, were both academics and very academic academics, if you know what I mean, a history professor and a developmental psychologist. Their friends were academics, their kids were my friends. And so I was in this kind of guild that was focused on the life of the mind, not the life of commerce. And it took me through my early twenties to begin to realize that as much as that was the only life that I'd known, it wasn't really the life that I wanted. I think the commonality between that upbringing world of investing. that both of them are lenses on the”
2020-05-04 · Capital Allocators · Daniel Adamson – Innovation from Asset Giants at Capital Constellation (EP.136) · IDENTIFIED FROM THE TRANSCRIPT · source
“Challenging question because you couldn't imagine a childhood that was further from my current pursuits than the one that I actually had. Had so I was in school until I was twenty six. I'm the child of two academics. I didn't even know what business was. I remember asking my dad growing up. All these nice houses. And he really didn't know either. When both of your parents do the same thing, whether they're doctors or professional athletes, I think you just assume that that's what all adults do. And I was an only child until I was nine”
2020-05-04 · Capital Allocators · Daniel Adamson – Innovation from Asset Giants at Capital Constellation (EP.136) · IDENTIFIED FROM THE TRANSCRIPT · source
“Global travel that you'll soon hear about has turned virtual with the rest of us. Please enjoy my conversation with Daniel Adamson. Daniel, great to see you. Great to see you. Don't we start with where the seeds of your interest in this work began?”
2020-05-04 · Capital Allocators · Daniel Adamson – Innovation from Asset Giants at Capital Constellation (EP.136) · IDENTIFIED FROM THE TRANSCRIPT · source
“My guest on today's show is Daniel Adamson, the Senior Managing Director at Bofra and the president of Capitol Constellation, a joint venture between mega asset owners in Europe, North America and the Middle East that invests in the next generation of private equity managers. Our conversation focuses on this innovative joint venture and how a group of large asset owners came together to scale their resources. We touch on a host of issues relating to the formation and implementation of the business, the many possibilities that are arising from this novel setup, and the serious challenges in bringing it to fruition. I suspect we'll see more efforts by asset owners to disintermediate pieces of the investment value chain. Although as you'll hear, it's a lot easier said than done. We recorded this conversation before the pandemic took hold. Rest assured, Daniel and his colleagues”
2020-05-04 · Capital Allocators · Daniel Adamson – Innovation from Asset Giants at Capital Constellation (EP.136) · IDENTIFIED FROM THE TRANSCRIPT · source