YouSaid · the spoken record

David Druley

lines on the record: 74
first: 2019-08-19
most recent: 2019-08-19
sittings or episodes: 1
sources: podcast

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“Oh, exercise being present when you're with friends and family, you know, just being really mindful of conscious about what you're doing and where you are.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“To deal with stress I wish I had known that from going back to teenage years, but it's really interesting, you know, and it's really, I think about it in the form of yoga and meditation and breath work. But once you learn how to deal with stress, it actually creates a much different life and it allows you to interact with people differently.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“For my mom had learned work ethic. She was a project manager in a hospital and an IT team. And they were rolling up hospitals. And when they rolled them up, they'd do these conversions. And the team would stay up all night for days on end. She did that until she was mid seventies, retired, and they came back to her a couple years later and said, we want you to come back. I mean, that is work ethic. For my dad, it's graciousness and kindness. He practiced it every day and said an example for me. And I think kindness and graciousness are some of the most important things that we could all bring into society and treat each other with.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's the book, you know. I read his essays with Tavirsky, which was a big book essays, but I think thinking fast and slow the book was just a fantastic book because it digested it down into something that a large number of people in our country and in society could actually digest and have time to read. I thought it was fantastic.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“My biggest investment pet fee is when people lack humility. We're going to make investment mistakes. We should be humble about it. We should learn from it and use those mistakes to actually become better investors. We should also be humble about what we don't know so that when we put together portfolios that we're taking risk that's reasonable within the parameters, acknowledging that there are always things we can't know.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“My biggest pet peeve is when people assume they know someone's intent or they assume mal intent. I believe I can't know your intent and you can't know my intent and we should give people the benefit of the doubt. I think it's destructive when we assume intent”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“Almost every day. I practice almost every day around the world unless I'm on an all night flight and go straight into work. I usually practice.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, sure. Yoga and meditation I found that that ability to generate space to reflect actually makes my life much more enjoyable and how I interact with people on a day-to-day basis. And it creates the space to actually be able to going back to Kahneman, think slow so that you can think about things strategically and in complex layers rather than just really tactical fast thinking.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm most excited about in the business is we make a difference in the world. We work with great clients. They're doing medical research or actually funding scholarships or paying pensions. And you know, when I came to Cambridge again, I go back to that, I told you how I ended up at Cambridge and what was attractive. So we get to make a difference in the world. We have a great investment platform. We have good colleagues. We're without conflict. And we recently did an internal study to see what makes Cambridge an attractive place to work other than just compensation packages and things like that, which are important. And it came back very strong on get to work with clients that are doing something really special in the world. Great colleagues and unconflicted. So the making a difference in the world is great. Also, again, I'm competitive. The fact that we're able to work with clients and generate significant value add kind of fulfills that part of me.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, the challenges of the organization are talent. We need to find and retain the best talent. We need to have the broadest net cast for that talent. We need to make sure we're stretching and pushing outside of our networks. If we have the best talent and we keep our infrastructure in place and avoid conflict, I feel very good that we'll be able to generate great returns and be great partners to clients. But it really does come down to talent.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“Continue to do so in the future. In some ways, it may provide us even additional opportunity if you have less people actually pursuing active management. It could make the markets a little less efficient, if you will.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, first. Think the question would be answered two ways. In aggregate of all the people going through the effort, is it worth it? No, because we know that after fees in aggregate, it's going to be a negative return relative to the index, if you will. That said, that doesn't mean it's illogical for us to actually go after this if we can actually generate extra returns for our clients. And how I think about this, the move to Vanguard or ETFs or passive could totally be rational for the majority of institutions or asset owners that are doing it. And it could still be rational for us not to do it with our clients if we're generating significant value add. So my job and the job of my team is to continue to evaluate whether we are and whether we think we can do so in the future. We are and we do believe we can continue.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“We've had this long period of time where, certainly in the public markets, Vanguard's growing like crazy, there's a big move to passive investing. And it's been hard to keep up. Hard to keep up with the S&P, hard to keep up with the 60-40 over the last 10 years. How do you think about that sort of existential question of is all this effort worth it?”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“We're structured, you should go talk to Cambridge Associates too. So our business is really gaining some traction there as the private clients become more institutional, if you will, and start to put in place the infrastructure.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“We're constantly going to be focused on making sure we have the right talent in place to generate great returns for our clients and to be great partners. So five, ten years, that's not going to change. What I think will change is that our footprint in Asia will expand from multiple points. One, because there's just a lot of interesting investment ideas over there. And we already have a good team over there, but that should continue to expand as we continue to look for great ideas, specifically in China venture and growth equity. But also, I think our business will expand in Asia. What's going on in the private wealth market in China today is that the entrepreneurs or the business owners are starting to think about what happens as they age or as the next generation comes into play. They're looking west. They're coming and visiting family offices in Western Europe, the US, and those family offices are saying this is how...”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“Is basically the US and Western Europe. If you go to Asia, the competitors kind of change a little bit as you get over there too. So very, very different.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“It is really interesting. So on the endowment and foundation side is, as I think probably most of our listeners know today, we have significant market share. In most cases, we're 50 sixty percent of the market. And the competitors we have there tend to be boutiques, tends to be the large pension shops that are trying to come in and build some endowment and foundation business. So immerser Aon Towers, or it's the CIOs that have spun out of the endowmenter foundation offices and started their OCIO shops. There's your competition there. On the pension side, it truly is the big three and a few others. It's Aon Towers and Mercer. All these shops have their qualities and their good points. Then private client side is just very fragmented. No one has more than 2% of the market, it's boutiques, it's multifamily offices. It's banks. So it's really interesting that our business, the competition is really different everywhere. And what I've described”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“Data was scarce. And I remember when I got in the business, sometimes you'd have stuff overnighted to get information quicker. I'm swimming in information. Our team's swimming in information now. It's not so much what information you get. It's how you synthesize that information and how you make decisions. It's the edge today. So I just think understanding these dynamics and how the human mind work is really important.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“My biases than I am on my own. And just on that front, I mean, I think the work that is so powerful in grad school, we didn't have a class on behavioral finance. So I went to the head of the department and said, hey, I think this is missing. Let me design my own class and spend a semester as a class studying condominium and Tavirsky's work. And then I'll come back to you and help you understand how the student run investment fund can put in place processes and decision-making bodies that'll work better in proposed criteria for you to use moving in the future. But I just think that's crucially important because 30 years ago,”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“Things we're constantly doing, and one thing I believe in is to evaluate how you make decisions and how you bring people to the table. And it's not like AI or it's not like big data, which we have a lot of big data and we're constantly looking through that data to find edges and help us understand where managers can add value. One of the things we've worked at is making sure that we understand the biases that are in decision making processes, understand how to create an environment where we can hold each other accountable for our biases. And, you know, Daniel Kahneman, who really is one of my intellectual idols, and Kahneman and Tversky, I think were just brilliant, brilliant people. He makes a case often that by understanding we have biases, we can hold ourselves accountable, but that only gets you a little bit of the way there. You have to create an environment where you can hold each other accountable because you're going to have a lot better shot at seeing my biases or helping me.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“You would think that fixed income, well, if you're asking about valuation, fixed income is rich, spreads are a little bit tight, you have to be in some of the more complex instruments to actually find, I think, interesting risk return opportunities. On the value add side for managers, we still find the ability to add managers to add value in high quality fixed income. That said, on our endowment and foundation, clients, our private clients, they're not doing a lot of treasuries or corporate credit. It's more on the pension side for some of the de-risking strategies. But we're thinking about the same way. Valuation-based, what role does it play in the portfolio? Can it be a hedge against deflation or recession? And then can you add any value through manager selection?”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“The managers give performance attribution, so we get attribution from all of our managers what were the big return drivers relative and contributors, some of the strategies are more structural, so clearly no one's going to give us an algorithm, if you will, but they'll help us understand what type of inefficiencies they're trying to isolate, what type of process they have to do that, what type of process they have to refresh the algorithms or bring new models into place to generate the returns. On the fundamental strategies, I mean, we get the book.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“The bottom line is we require transparency so we can understand what's driving returns, how the returns are being generated, is it alpha beta? So if it's ill transparent, we just don't go down the path of investing. Now, we've probably missed some good managers in that case, but that's just kind of one of our foundational beliefs and tenets when we invest capital for clients”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, well, I mean, fair really is fair relative to the value that can be added. If the capacity is difficult in a manager because of their ability to add significant value, then there might be a higher fee structure may be justified. If it's not, then we need to move on. There is a spectrum there. Some of the best performing managers and some of the longest tenured managers that we invest with, we've actually found good partnership in aligning terms and fees with them. So, you know, I think the good partners and the good managers in the world want to be good partners to the asset owners as well.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“When you look at that landscape and pretty common some will say, oh, there's 100 or 200 managers that really add value. Markets are pretty efficient. Markets recount are pretty efficient. And then the other side is, oh, we want to have fair fees. Where does the rubber meet the road when you have the desire to access managers that likely are in demand because there's some demonstration of value add. And then wanting to get a fair deal on fees when the fee is really kind of a matching of that supply and demand.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“Of those ratios of sharing, then we are going to work to get the right fee structure in place or we'll pass or we'll move on to something else. So we've been very proactive. I mean, fair fees and lowering fees is a good way to make sure you get some higher returns. I will say one of the things that's interesting, and we'll see how it plays out, is value investing, especially long short value investing, has been very volatile over this recent period. And it'll be interesting to see is that a permanent shift or is it just part of the cycle like it was back in 98-99, which was, from my recollection, very similar.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“So it's a loaded question because the industry at large has not fulfilled its promise. So I think we could agree to that. What I would say is hedge funds is an asset class, not worth the money. That said, there's $7,000, $8,000 hedge funds. We think there's $100 to $200 that actually do merit institutional capital and continue to merit institutional capital. If you don't have the confidence, you can identify those or access those. I would say you shouldn't have a lot of money in hedge funds. The other thing we're really working on too is in our partnership with these handfuls of managers that we believe capital, we want a fair sharing of the alpha, meaning we think asset owners should get 65 to 75% of the alpha at least, and that it's fine for the manager to have 20 or 30 percent. If the fee structure is in place is not resulting in an output.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“We have significant capital deployed with the managers that are on the cutting edge of the quantitative techniques or AI or the algorithmic trading and investing. So we're very open to that. We're actually doing things inside of our shop to actually help us process information in different ways and help us understand where we might get better either in the screening process or in the evaluation process.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“It actually varies by market. So we would tend to many cases to have a bias towards concentrated high conviction managers. We can diversify out their idiosyncratic risk. And we've had great success in identifying those managers, but there's certain markets where kind of these 130, 30 beta one restricted tracking error constrained tracking error strategies work very, very well. So again, we're open to any type of strategy as long as we can understand what the drivers of value add are. And as long as we are able to continuously monitor and evaluate those managers to understand if their edge is still in place.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, it's interesting. We are still finding the ability to generate significant value add in the liquid markets, specifically the liquid equity markets. There's pockets of those markets which are harder to generate value add, but in the most part, we're still finding the ability to find managers that actually execute very well.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“No, I mean, this is all over the place today. People are doing quite different things, and it ranges from just trying to avoid certain investments to actually proactively putting money into things that they think will have a positive impact on society in the world.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“Basically, what we do, we'd go through an underwriting with the asset owner and help them understand the various paths you can take in implementing an impact or MRI portfolio, the trade-offs, if there are any, and then we would adjust their asset allocation or how you implement that asset allocation to reflect what they're trying to achieve.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“When you're considering the impact portion of that mandate, how do you think about that in the context of what's generally been kind of an asset class driven asset allocation structure across the whole pool?”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“And yeah, you could see how you did Verset Universe. I mean, one of the things, too, is like we'll do it, but certain clients have specific things they're trying to achieve too. So they'll put parameters around what they want to do. They create demand if it's discretionary, we create the demand. One of the criteria impact or MRI. And one of the things we've seen, there's always been a group of foundations and it's been expanding that want their values. And this is an area where we built out a team of 30 plus people to help work with our clients on that. And it's as big as it is in the US, it's even a bigger deal in the UK and Europe. So again, though, they're co-investor. They're going to look for certain things or certain industries that meet their values.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“And when you get granular enough, so it could be that you've figured out this filtering mechanism that works. And it's not an index, but you could say, hey, we're just going to co-invest in all the deals that meet the criteria of the managers we like and what we think is their sweet spot by size and second.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think about this if we're not adding value relative to the funds that we already invested in or we're not able to deploy more capital at higher returns and increase our allocation, then we probably shouldn't be doing this. So we have a lot of information in our database and we'll measure ourselves how did that deal do relative to the deals in the vintage? How did it do relative to funds and things of that nature?”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“Studied, were there pockets of co invested actually worked out well? And what they found out is that when you did co-invest with the managers we like, if you did it in their sweet spot, the sweet spot being either sector or industry expertise or size deal, that co-invest worked out very well. When you did the co-invest outside the sweet spot, you didn't generate hardly any returns with all of a sudden that allowed us to screen this huge volume of potential co-invest we get from managers that we have longstanding relationships with, find things that are attractive. So we built the co-invest team and we're helping our clients actually do co-invest. So again, trying to be creative and finding ways to generate excess return when you've got a lot of headwinds.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“We're still finding a tremendous amount of interesting things to do on the venture capital side of the thing, small and middle market buyout, higher returning infrastructure and real estate, and specifically in China. We are finding very interesting things to do on the early stage venture, both on the IT side and on the healthcare side. We're finding a lot of things to do. The last thing I would say there is we continue to evolve. One of the things that I believe is you constantly have to test how you think about things and how you're operating, and you have to learn from mistakes because an investor you're going to make mistakes. One of the things we used to have a view on was that co-invest didn't make sense. It was pro-cyclical. You're going to do a lot of co-investment at the top of the cycle, like 07. It's going to generate poor returns. It's not going to be good for institutions. Our team on the private side actually did some work.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“The tough thing in these markets today is that we're ten years into a bull run, ten years into an economic expansion. You have pockets of assets that are richly valued. We think US equities, sovereign debt. I mean, I just saw a figure and I can't remember what it was, but it's trillions and trillions of dollars in debt that's paying negative yield. I mean, these are not normal times or normal valuations. So the things we're thinking about is how are we going to generate the returns that our clients need to fulfill their mission or their pension obligations for private clients to fulfill what they're trying to achieve when you have significant pockets of the market that are overvalued? The thing I would say is we continue to redirect more and more energy into the private parts of the market. And I'm not talking about late stage venture or large cap buyout, which tend to be more richly valued.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“The senior people are involved and they could be coming from the OCIO side of the shop or the consulting side or the non-discretionary portfolio management. But everyone has an equal say, everyone has equal access to the information. Everyone has equal ability to deploy capital into the managers.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“and then structurally on that research side you've got OCIO teams I guess you still have the traditional consulting is there any differentiation in who's involved on the research side or does it all come together”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“There could be ten people involved in those, 10 or 15 people. And everyone, I mean, we have an open platform. So this is really a great thing. You want to be involved in that discussion and you're on the scene, you remember the team, you can be involved in the discussion because we are open. We're sharing our notes real time. We're sharing our meetings real time. And again, we think that's a benefit to have more people involved rather than less. I mean, the thing you have to guard against is stuff getting stuck, right? So we work really hard to make sure that stuff doesn't get stuck from process, that it's getting pushed forward. And the senior people that oversee the committees, that's really their job, is to make sure stuff's moving forward, either moving forward and out or forward and into portfolios.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“Experienced people bring it into a dialogue, and then we have a discussion. And you can say, I think this is a good example really of diversity of opinion generates better outcomes, right? Having people that think about things differently or have different experiences will result in different ideas bubbling up, and it'll result in a more rigorous discussion. And then ultimately, we'll come to a decision on whether to move forward with the full manager diligence and whether to put capital with it.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, on the fundamental side, investing is always this mix of art and science. And the science part you could make consistent, you could train across all your teams. There's checklists. You need to get that understanding. When you have so many different experienced people that probably have their own judgment. How do you decide what bubbles up?”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“We think you ought to fix them. And if they do, we'll give them another look. But if you don't have the right infrastructure in place, we're not going to invest money with you.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“Ask managers that, but managers would be they'd be best positioned to answer the question. But what it would probably feel like to them is, you know, we sit down, one of our senior investment people sits down and has a conversation with them about what they're doing. If we find that to be attractive and are a more formal process, there'll be more discussions asking for additional information. That's on the fundamental side, you know, understanding how they invest, where their edge is, what we can expect out of the portfolio. The second part of that is operational due diligence. Do they have the right infrastructure in place? Background checks, understanding who they're partnering with as far as third-party vendors. And that's kind of interesting because on our side, the fundamentals we could think they're going in the right direction, but if the operational due diligence shows red flags, that's it. I mean, we'll walk away. No, we will give the manager feedback and say we have issues with these things.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“And if you're in a talent business, I think you have to be focused on is making sure that our networks are as broad as possible. So one of the things we've done is we've brought in a head of diverse managers to make sure we're expanding our network, to make sure that we're seeing all the best ideas regardless of where they come from. That's on the manager side. We're also doing it on our talent side. Again, if you're going to win, you have to have access to all the best talent, not just to some limited networks or some limited pool of talent. And so we're really pushing the envelope on making sure that our view is broad when we recruit and our view is broad when we go out and find and identify and evaluate managers.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“Right, so if you think about the investment professionals, the network's crucial because you got to look at a lot of ideas. We think about the 10,000 plus managers that are out there. There's a few percent that actually merit any of the capital of our clients and asset owners. So what we do is we go out and source the ideas and then we take them through a very consistent diligence process at Cambridge Associates. And then there's groups of senior people that form committees in our firm that actually vet the ideas for quality of diligence and quality of idea. So every idea that we're putting capital in has gone through that process. Now, a lot of the ideas, because they don't merit capital, fall out of the process very early. And one of the important things of experience is pattern recognition. You can understand early in discussions whether the manager has an edge, whether they're putting the right team on the field, whether they have the right operations in place. The one thing I will say is that I'm very focused on”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“Early to ideas, secure better fees, secure access, and get client money in. The last thing I would say on that is the last two things, what allows us to succeed is the investors work with the client. So you don't get a client service rep or an investor relations rep. The senior teams work with a couple handfuls of clients and create bespoke portfolios for what the client's trying to do. And the last thing I always say is I could still mess that up if I had conflicts in the system, which is why we don't have product. When we sit at the table with a client, with an asset owner, they know that anything we're trying to do is on their behalf. We're not trying to sell them product, the fees we make, or the fees the clients pay us. We don't take any money from managers either, which is somewhat unique in our industry.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source
“Pitch, I would say, is look To generate the best returns, one you need to diversify. You need to be equity oriented. The second is you need to be able to go out and find managers that add value. And we know from 45 years of doing this what it takes to go out and do that. And the first is network. You have to be in the flow of ideas and you have to be in the flow of ideas early. So that's why we have 11 offices across the globe with 275 senior investors that are out there in the flow of ideas. You got to have elbow grease. You got to be able to do the work. The work is labor intensive. Again, that's why we have a senior team of 275 people. And the third is you got to have judgment. So that's why our team of senior people on average has eighteen to twenty years experience. You take these three things and it allows us to go out and do 6,000 meetings a year across the globe, across asset classes.”
2019-08-19 · Capital Allocators · David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106) · IDENTIFIED FROM THE TRANSCRIPT · source