YouSaid · the spoken record

Elizabeth Burton

lines on the record: 85
first: 2023-09-15
most recent: 2023-09-15
sittings or episodes: 1
sources: podcast

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

“That no one knows all the right answers all the time. They all act like they do, but they don't. And if you get it wrong, they've gotten it wrong too.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Two books I think I would encourage them to know the full scope of what jobs you can have investments. You can be a marketing, you can be in communications, we need writers. Everybody needs good writers these days. We need good public speakers. We also need traders. We need PMs. We need leaders. We need HR. We need legal. So it always strikes me how they young people seem to think you're just a banker or you're a trader. Nope, there's a lot of other things.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“It's unbelievable. The Shackleford story really struck me because if you look at the wager, this is not a spoiler, but they're mostly negative in this story. And he is just like continually positive. And it's incredible. It's just, it's a great story in leadership.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“The wager is a shipwreck, actually around the same area, but is a true story of a shipwreck. And similar to the reasons I like the Shackleford story, it's an interesting examination of leadership in crisis. And also, it helps me when I'm running in the morning and I'm tired. I'm like, well, I have eaten and I've had water and I'm not covered in lice. Right. Right.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“And then finally, someone I used to work with is at Hawaii, my deputy CIO. He has 30 more years probably of investment experience than me, but always treated me as an equal, even though I was his boss and gave me wonderful advice. And to this day is a close friend that I can ask anything of.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“For that for Number one would be my dad. We are very close. We have had very similar careers. We look alike. He's my best friend by far. We talk two or three times a day. I've admittedly super codependent. He's awesome. I was joking earlier. I think Goldman believes me more than he does, and I am totally joking. He is wonderful and he's the one person I can trust to give me honest advice. Other than that, I think second grade soccer coach, a guy named Jeff Easter, he actually told me to read this book, Golf is not a game of perfect. But he taught me to like, it was a good lesson for being a trader. He taught me.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“So I don't watch a ton of TV. I will say I am a shark tank addict. I am a huge fan of Kevin O'Leary. I think he's the absolute greatest. But that is really the extent of my TV watching other than, of course, Bloberg.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Or diversifying strategies. People are looking for ways. Investors, I should say, are looking for ways to be protected should this happen again. But one interesting statistic I like to mention is if you think of 22 diversifiers that are typically involved in a sort of crisis portfolio or in that tail hedge, 22. Take 22 of the most common ones. There's a paper that Goldman has done on this, no two in these three periods. So there are no one in these three periods pre-2020 from 2020 through into 2021 and then post-2022 were positive. So, you need more options than you think to kind of hedge the risk there. But more than I've heard probably in the last decade, investors are asking, I would like to put a tail hedge on. How can I do that? What should I be looking at?”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Typically, it's because they're tied up in illiquid investments and they don't want to miss out on a vintage cycle, or they want to see good deals that they want to get done. Another option is that they're... Pension is finite, and so they are not able in certain cases to make the same investments that they used to make, but they see interesting deals and they want to find a way to do them without hurting the liquidity of their structure. And those would be the two biggest cases, but usually it's funding other investments or trying to stay within their policy bounds. The second most asked question I get is around either crisis position, crisis risk offset positions, or tail risk hedging.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“But I think it's going to become increasingly more important. And it might very well, to your point, I believe this is where you get, it might change what you're looking at and what you evaluate in terms of your outcomes. You also probably will see a change in benchmarking. If you think about some of the real asset and infrastructure and real estate investments that were benchmarked, the CPI plus a spread, for example, or even absolute return, that likely was challenged in the last couple years. So you may see portfolios change as a result of benchmarking. I do believe the next couple years will probably start to get more questions on deflation, what that means for portfolios. And that can be very tricky if you haven't figured out your liabilities because that can hurt the liability side of your balance sheet and if your liabilities”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, it's not as popular as one would think, particularly when they're having to worry about that on the back end and their payouts and their liability side.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Right. Interestingly enough, there's only a handful of allocators actually benchmark themselves to real returns. And I think.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Where term premiums might end up off of that number, 150, 200 basis points, you're still looking at a pretty high cost of capital compared to the last 10 years, right? So for firms and for refinancing risk. If you can add a duration where you can and take your pockets, yes, but I still think there's still a risk to the upside there. And so Again, I would reiterate that Goldman's views right now are pretty neutral in equities and bonds the next three to 12 months.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Right. So I do get asked quite a bit when can we start adding duration back to the portfolio? It's probably the third biggest question that I have been getting in 2023. A lot of clients weren't able to shorten their duration. Some were. Some can take advantage of two years, right? And you could get a pretty good return there. But some couldn't. It's not in their investment policy or they didn't want the reinvestment risk, right? So some are still holding on to those long bonds portfolio. But what I would say is I would look to see where you could add duration, but I would be cautious. There's still risks to the upside on rates. And the other part of that I would say that let's say inflation is coming down and it's moderating. It's coming down from a very high level, but it's not coming down to zero, right? So we could see a 3% level for a while. We could see, and that, you know, in the grand scheme of life, grand scheme of history, maybe that's not exorbitant, but it is a higher cost of capital, right? So if you think about”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“The economy's slowing, we should have avoided a recession. And I will say Goldman's opinion on this is that there's a 20% out of a recession in the next 12 months that is still meaningfully higher than the 12% in any given year. Right. But it's not 100%, it's also not zero. But there's still risks that rates could rise, right? There still could be something that happens, we get another rate increase. Our view is that there's not going to be another hike this year and that in the back half of next year, we'll start seeing Fed funds come down.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“But in terms of a higher rate environment, I still think look Goldman would probably say they're aggressively neutral on bonds. I love that phrase. The next three to 12 months because there is still some duration risk. Now the numbers that have been recently coming out that are showing we're likely to”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“So, if we just take the U.S. public pension market and kind of separate it from the corporates and other institutional investors for a moment, 5% is still below most target returns. Most target returns are still around on average, like let's call it 7%. It might be six and three quarters, but it's not five. So, in order to take advantage of some of those, so like agency mortgages may be a good trade right now, right? But you probably want to, even that's what the 30s at 7 plus, right? So you even want to think about that more in like a credit long short context than an outright buy”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“We're seeing improvement, and I think we're about 4 or 5% of could be off on the wage increase number somewhere around there. So we've got stickier inflation still happening in Europe. And in the US, we were starting to see signs of improvement. Who knows what could happen between now and the end of the year? You can't, some events you can't predict, but we're seeing improvement here. But then you've got emerging markets. We're receiving more improvement on the inflation front than you're seeing in the US”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“I think I believe that our US economics team would say that the wage pressures in Europe are part of the reason they still remain greater than.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“But it would have reset. Yeah, but the year was But it also makes it challenging if you're an investor and you decide, well, what do I do about this illiquidity? I'd like to sell part of my privates market book. Well, then where are you pricing it? Because if you go with these inflated asset values and you try to sell them and they know you're a forced seller and they know that the value is likely lower, it actually made it a really tricky environment to kind of close those transactions as well.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“But then you don't have a job necessarily in your private markets bucket. You're in a really tricky position for funding new investments for funding retirement benefits, healthcare benefits, the like. And so they were all kind of in this illiquidity spiral for a little bit of time. And so they actually had to alter a lot of funds altered their investment policy statements, which are never supposed to do, right? These are supposed to be set in stone and reviewed every couple years in order to allow them to have wider bands in the private markets until things sort of reset.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“But the biggest issue that happened with both Europe and the US, and you can look abroad elsewhere, was that when these things drop, when your equity portfolio, which is supposed to be some return generating mainly and your fixed income portfolio, which is supposed to be your liquidity provider.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“If you have your growth bucket draw down, so credit and equity, it feels less bad than if you thought something that was diversifying all of a sudden wasn't diversifying, right? So, I think last year, potentially, we still hadn't quite learned the lesson as we were discussing earlier that these things can all kind of suffer at the same time. And that's true of diversifying strategies too. That's true of alternatives. It's true of CTAs. Unless you have a short-term trend follower, usually in the instant the market drops, you're going to get all those things to kind of drop too. Beauty about alternatives is they're not going to mark. So you might just not notice it for quite a bit of time. So you have some cushion there. And by that time, they may have rebounded, right?”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“To happen in Europe. It's part of the liability matching, right? So if you have an infinitely lived asset or a very long lived asset, you're going to want to match your investments to that. So that's why they had some of these longer-term bonds. U.S. pension funds also had a fair degree of long bond exposure, and they hurt. You know, I think in the 2008 crisis, a lot of pension fund boards struggled with the fact that their equity portfolio and their bond portfolio and credit portfolio all stumbled around the same time. And it's why you saw in 2010, 2011, 2012, a lot of the investment policy statements of pension funds changed from saying equity and fixed income to saying growth risk and diversifying risk. And I don't know that anyone really noticed that in this they were working in it, but that is what changed on a large part because.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think in Europe it was some of what we mentioned earlier with the liability-driven investing. They had rates go up precipitously as well for various reasons twice in a very short amount of time. Because they had leveraged in some cases bond portfolios when rates go up. As you know, prices go down, they had margin calls because they were trading on margin.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“When you find a good manager or you find a good investment, I mean, I think that's one of the best feelings in life. And when it comes to fruition, it's incredible and unique. And you learn so much and you learn so much about the industry you're investing in.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“My money into AI startups, you don't think that's a I think plowing money into anything is usually a good idea. But I mean, to use an example, so I did Kilimanjaro a year ago and I didn't get altitude sickness. And so to do hiking at high elevations when something isn't a challenge for you, but is a challenge for other people, that's not a terrible idea, an experience that you get that's unique, right? And so I think that if there are managers you can find or if you yourself are good at certain parts of these markets, then I do think you, in any investment, if you have an edge, you should lean into that edge, right? And I think that is why, or I believe that's why alternatives, there are people who have edges. There are people who don't, and they raise money, and that's the world, right? Right. But if you can find.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“If that is your edge, and that is the one thing I want to be very clear on, you should not be investing in complex issues that you do not understand. So if you do not understand technology, do not go do a technology co-investment, right?”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“It is to play the discrepancy in value between public equity and private equity, public real estate and private real estate, public infrastructure, private infrastructure. So for those reasons, I just think they're the most interesting place to look. And in terms of hedge funds specifically where I started my career, They invest in every asset class, so if you want to learn about commodities, fixed income, rates, equities, bonds, they're all there, right? And so I think it's a really great proving ground. And it also teaches you to understand relative value and which trades are better relatively speaking, not absolutely speaking, in an environment like today. And probably the next 10 years, relative value is going to be critical.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“They have a complexity component to it, and a lot of that is contract related, and you have to get very, like my favorite class in business school was taxes, I should tell you. I like loopholes and I like figuring out unique ways to structure. It's a puzzle. Right. But for private equity, private credit, private real estate, for me, those make sense. Those are complex deals and there's ways to derive value out of them. And if you can get access to those, I think it's brilliant. If you can't get access to those, the other way, I think it's interesting to play in those markets is to.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“I think that's true across everything. You always want to be in the best possible fun, picking funds is very challenging. I think it is most challenging in the private market space. There's an information gap, which makes it pretty challenging. But I think what I love most about it is, so I think I've always loved credit. And part of that is that I love contracts. I should have been a lawyer. And for me, private equity, private credit, and some other liquid strategies, real estate included.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“So I want to qualify that I don't know that everyone should be invested in alternative investments, and I don't mean you and me. I mean institutions as well. But I have to say I think alternatives are the most fascinating part of the investment landscape to me, and it's why I love them.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“They can ask confidential questions. They can say, Do you think we should sell part of this portfolio? Do you like this private equity fund? Do you like this equity in this country? Do you like emerging markets right now? Do you like local bonds? They can ask me anything. And because I'm not running my portfolio, I can have a more honest position on what I would do if I were them in that environment.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“It is, well, the whole group of the client solutions group is a mix of all different kinds of clients, right? But I mostly step in with the institutional clients. I don't own the client relationships, but I do help advise from the perspective as a former institutional allocator.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, and I thought, you know, why don't I try something different? And if you look at my career and all the next steps, they're all a little different, and in some cases, very different And I think actually all those different careers I had led me to be a really good CIO. So I thought, if I had this in, what does that make me next? I don't know.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, I don't even know if the position itself even came about till very late in the summer, until I started in September and I don't even know that it was fully ironed out much before then. I think for me, though, the opportunity to join the group that I was joining, I have so much respect for this group and to be part of what they wanted to do, which was, you know, reignite their asset management business. I really like to join places that have something they need to get done.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“I think Goldman was the one that said you can keep up with us. You can play on this team. And the amount that they letting me come here and do this interview, the amount that Goldman believes in me every day, I have to tell you, it's like the best feeling in the world to wake up and put on the Goldman jersey. Like, they believe in me. And it's crazy. I think they believe in me more than my family does.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“But to me, it was like joining the Yankees. I had followed their versions of Derek Jeter and I was like, wow, I could go work for these people that I idolized. This would be amazing.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“And I evaluated what I wanted to do next. And I sort of just assumed okay, I'll go be a CIO somewhere else. We'll see what happens. And I was close to taking another role. And when I started thinking about working at Goldman Sachs, I thought this is, again, just like Chicago, this may hurt. This may be really hard. It's going to be a lot of very smart people, but I really, like I said earlier, I missed running at like 160 miles an hour. I wanted a challenge. I was, you know, 40 and I figured I have a couple more moves in me. And I wanted something different. And I thought, let's see if I can do this. And most importantly, like I said before, I loved the team. Some of my favorite investors right now are people that came out of Goldman Sachs. Mostly hedge funds because I love hedge funds.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I decided to leave Hawaii, I believe, in about maybe March, April, May of 2022. And I gave a couple months notice. And I did not have another job lined up. I did not know what I wanted to do.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“No, it was a wonderful place to live. Yes, I would have bet you money. I wouldn't have ended up at Goldman Sachs two years ago.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“It's just not the easiest thing to invest in, and a lot of funds historically were prohibited from investing in alternatives”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Because it's a goofy question. Well, I'm not, I would love to agree with you that it is academia, but academia doesn't always predict the best outcomes. I can say this because my dad's an academic, don't always have the best outcomes in terms of investing. I do think there's some merit in saying that, but I would also point out that risk parity doesn't have a deep history in academia and doesn't have a ton of support. And yet risk parity was historically very popular. And it's done fairly well recently. Right. So I don't know if it's purely academic based. I think part of it is the volatility and part of it is that it is genuinely, unless you're doing it through a hedged vehicle or a hedge fund or a alternative investment, it is hard to get access to commodities typically.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“That's interesting. Yes. And for the most part, this is not ubiquitous. So that was an interesting play. But another question I got in 2023 that I haven't heard in a long time is people asking for information on CTAs trend following importable alpha in order to have diversifiers and try to raise cash in this environment.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“No, but out of the cash allocations at some endowments and foundations at some pensions, there's gold allocations, like outright gold allocations, but they're not.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“It wasn't there. And once you start looking for something when the ship's already sinking, right? It's a little late. So I was what I was most curious about actually in 2022, if when we saw asset liability studies come out in 2023 for pension funds, were we going to see people putting commodities back into their portfolio?”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“So there was at one point right after I think actually the Goldman Sachs commodities index came into existence, commodities actually struggled right after that index came out for a while, right? And also the makeup of that index has changed over time. It used to be, I believe, mostly like cattle futures. Commodities indices. But so a lot of institutional investors got tired of the challenging returns and the volatility in commodities. Also, it can be challenging to invest in something without like that's based on supply and demand and not some sort of intrinsic value. And they took it out of their asset allocation in favor of other strategies. So when the pandemic came, they didn't have that as a diversifier outright. They might have had it through, it's also hard to invest in a”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“Right. And if you look at inflationary environments, a positive correlation between the two is also not uncommon. And I think sitting back in 2020, 2021, I was adamant that inflation was not transitory. Adamant and super public about it. I had many people, super famous people telling me I was completely wrong. It's the one good call I made ever in my entire life. But so I felt confident that I had prepared myself for this type of environment. It's tricky though because one of the things that can help you in this sort of environment is a diversifier. It could be hedge funds. It could be commodities. It could be cash, right? But commodities were often taken out of institutional portfolios a decade or so ago because...”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“No. So Hawaii should have done probably quite well during that time. It depends on your asset allocation. I also don't think you should ever really beat yourself up for sticking to your asset allocation and your beliefs. I also think that was a great learning experience. But more importantly, I have always struggled with why there seems to be some belief that equities and bonds will be negatively correlated throughout time. Oh, it's.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source
“It's challenging, especially because private equity funds are not distributing as much as they used to, because they haven't been as many sales in the market or exits So they're getting hit on sort of both ends.”
2023-09-15 · Masters in Business · Elizabeth Burton on Liquidity in Pension Funds · IDENTIFIED FROM THE TRANSCRIPT · source