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Geoffrey Rubin

lines on the record: 98
first: 2022-11-14
most recent: 2022-11-14
sittings or episodes: 1
sources: podcast

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“Being as clear as we can around the capital and risk we allocate to these teams and the expectations that we have of them. We've moved into a spot of the need to orchestrate and prioritize instead of simply just build out capabilities.”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“Global markets. The lesson learning TED is that, as we've talked about at the outset, doing so requires a real organizational commitment, not just a portfolio commitment. These teams located in our foreign offices, these are large teams now. And there's all of these staffing challenges that you face. There are the cultural connectivity challenges you face. How do you maintain a unified culture for an organization with 10 offices around the globe? It's a big challenge. So I think we have found the demands of a truly global investment footprint to be every bit as much as you might expect. But the payoff in terms of how we're contributing to the portfolio in ways that diversify and get us exposure to growth and create new alpha opportunities, I think has been largely redeemed.”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“Alpha opportunity and the belief that many of these markets into which we are expanding afford us an opportunity to generate outsized returns, largely by virtue of the fact that their markets are still less efficient and are still developing in ways that might provide opportunity along the way. I think Broadly speaking, the thesis of diversification and growth in alpha opportunities has broadly played out in these”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“Now, have I believe nine or ten offices around the world, including large hubs and Hong Kong and Sao Paulo in London? What motivated us to build out that global reach? A few items. The first is diversification and the ability to effectively diversify our portfolio by virtue of getting access to this breadth of investment opportunities. Second motivating reason is exposure to global growth. I think it's hard to conceive of a fund like ours of $500 billion going to a trillion over the next six or seven years or so. It is hard to conceive of us maximizing returns at a particular target level of risk without truly global exposure to sources of prosperity and economic vitality. And the third reason”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“Is as you mentioned a number of times a global aspect to what you're doing. You've built out particularly these internal multiple offices around the world, what have been the strengths and of course the challenges in coordinating all of that activity?”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“We just now have the challenge of making sense of it all and ensuring that we are coordinating and really optimizing that collection of capabilities.”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“Preponderance of which is externally managed within that department. This is what we call external portfolio management or the investments with hedge funds of all type, as well as some risk premium strategies that we're running internally. So taken together. Have an opportunity set that is about as broad as what one would find at any large institutional investor. And that's true of asset class, it's true of geography, it's true of the underlying factor exposures we can get access to. We can get access to almost all of the typical types of exposures that one finds in a portfolio. It is a terrific opportunity set. It is a terrific vantage point from which to see how markets around the world are performing in terms of their relative value prospects and prevailing risk adjusted returns.”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“including on and offshore winds. Real assets is a second set of developed capabilities. A third is our private credit department. Which has a range of global credit strategies. Liquid and illiquid reside within that department. We have an active equities departments. Which is our liquid Public equity alpha oriented strategy. So these are the stock pickers and again spans the globe in terms of location, in terms of styles and approaches combines both fundamental as well as some heavier quantitative approaches to investing. And then the final department is really more quantitative hedge fund type investing.”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, the biggest are Represented by our five different investment departments. So we have an investment department that handles private equity. And that is both internally driven or direct private equity as well as an external funds and secondaries portfolio. We've developed capabilities really across the entirety of the spectrum of private equity investments all the way through growth and even some VC. And VC was a challenging one for us just given our scale and size as to the role of a VC program within that overall portfolio. But we do have that there. So we've private equity is one of our five investment departments. The second department is our real assets department, which is made up of three larger broad capabilities, commercial real estate, an infrastructure program, as well as what we call SEG of the Sustainable Energies Group, which is all of our energy, our energy generation investments, typically renewables.”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“Want a level set on where you got to in terms of these different businesses, say you can circle back three, four years ago, what were these capabilities at the end of that period when you got to, say, 80% act?”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“The horizon over which people feel accountable for the results because they're new to the team or the strategy and others have left. As that shrinks, you're simply shrinking the effective investment horizon over which you can build your strategy. And if the reality is that, you know what, that really has compressed to the point where it's only a year or two and we need to prove results within that window. That's fine, but you can't necessarily claim that Long Horizon is an edge in delivering returns in that area.”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think the simplest has been the look back period on centiff compensation, for example. We try to configure all of our Form is pierced to five year trailing returns. Are there some strategies for which an even longer horizon might be more suitable? Sure, but now you're really testing the limits of Length of career and length of time people are enrolled and what happens when individuals turn over and we're still looking back at strategies that have been updated or modified over that five-year period. These are all challenges. We do our best to maintain that longer perspective, but we just need to be very clear with ourselves as that horizon shrinks, the horizon of evaluation.”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“So alongside of that requirement of that aligned horizon, at the end of the day, we're all human beings, and therefore run into the same challenges when it comes to these periods of underperformance. What are some of the processes that you've put in place to take advantage of that long-term horiz”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“Think that's one of the biggest errors that we can make as investors is believing we have a longer time to prove out an investment approach than we really do. If the answer is you only have a couple of quarters to prove that it makes money, you better make sure your investment thesis is aligned to that particular horizon. So there's an example of where we felt emboldened to build out an active capabilities consistent with those horizons in very careful ways.”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think all too often, even within our organization, scrutiny on performance of investment strategies can arise well within the window of really proving out the thesis. I think when we do commit, we try to do as good a job as we can to ensure that strategies have the time in order to demonstrate performance and in order to deliver what we're expecting over the appropriate horizons. But in cases where that horizon doesn't exist, it's far better not to pursue the strategy than to. And to go for it and find yourself stopped out behaviorally or structurally or otherwise because the performance is just not there. Ted, I.”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“Without getting stopped out by your governance, without getting stopped out by your internal folks, by the press, by interested parties within and beyond the organization who start asking, whoa, wait a second, this strategy has lost money two years in a row. Why are you still running? If we take a look at things like strategic tilting, think of this as akin to the tactical asset allocation. These are strategies which by definition could be a very long horizon. It might take years and years in order to demonstrate and prove out the skill and the edge that you might have in a strategic tilting strategy. Long horizon means is you have the wherewithal and ability to stay invested in that kind of strategy even when it's running against you.”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“Let's talk about the impact of Horizon on performance. We've done quite a bit of work here internally to look at how a long investment horizon can enhance performance. And there's some good external work that is being conducted on this one. At the highest level, I get concerned that Long Horizon is a bit of a platitude, that folks can wave hands to the notion that we're a long horizon investor and all this climate phrase is around that. When in reality, I think an investment rises fundamentally about the length of time one can remain committed to an investment strategy that is broadly performing as expected without getting stopped out. For me, the big value of possessing a long horizon The ability to stay within a strategy, a strategy that might be performing poorly but within the range of expectation you would have for a risky strategy.”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“Great partners, great internal teams in our total portfolio approach. I think those are among some internally developed sources of edge, but I am a big believer that one must be constantly assessing and testing and challenging and sharpening those sources of advantage in all of our active programs. So that was a big support for us having those, possessing those sources of edge, being careful about making that linkage. I think is also something that gave us the confidence to go ahead and build some of those capabilities.”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“With these sources of advantage or edge that we possess. As carefully as possible tried to identify those active strategies in which size Certainty of assets and long horizon might be of particular advantage. We think those can be edged if carefully and appropriately drawn upon. And where we want to build active capabilities, we need to make really sure that those teams, those strategies are appealing to a clear source of edge and advantage.”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“2,000 individuals focused solely on the overall investment process problem that we need to solve. So there was rapid growth there. Starting from those early seeds of let's crawl and let's just get the initial momentum going in terms of these active capabilities and over time progressively meaning more and more into it. That's what has happened here in this organization over the last 15 years. The ability to hire, retain, develop and compete in the talent marketplace has been a really big part of that, as has the overall leadership of the organization, willingness to take the risks both investment risks and organizational risks to build these teams and provide a degree of commitment that falls behind them. I'd say the last point I'd make on this one, Ted, is we've done our best to always reconcile the active capabilities we're building.”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“It was all spear added by some really forward thinking. Long horizon leadership We adopted what we call here internally the Krawl Walk Run model where we would stage everything in a progressive fashion. In a number of these strategies in which we now have active capabilities we started with heavy reliance on funds so heavy reliance on third party managers In a number of these programs we would seed internal employees to go sit with our GPs and making sure that we can learn as much as we can from them and develop those capabilities and over time we would progressively build out internal capabilities. That 80% managed actively I think about 55% is managed internally as opposed to externally now so most of our active capabilities are now built in house as a result we have we have a large organization where over”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“So once you had that in place, you then have this challenge of, oh, there's buy-in to actively manage returns, though at some point in time, some time ago, there was no one in place to actually do that, particularly internally. How did you go about building out, as you say, these businesses in each area? Talent, retaining talent, compensation, everything that goes along with that.”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“Delegated to management the strategic orientation of the types of active strategies we wanted to build, the means by which we would consider whether they are effective or not and how they're contributing to the overall portfolio. That strength of governance is an enormous advantage for the Canadian model and for ourselves. I am very sympathetic to other funds that find themselves in different circumstances. I try not Ted to be in the school of right and wrong. I try to be in the school of difference and I certainly admire the positive characteristics of the governance construct that we have here in Canada but appreciate that other institutions are dealing with different constructs and as a result are solving different problems at some level”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“They were very clear in conveying to management where the boundaries lie and what the expectations and objectives were for that development of active management. What was delegated to management was as important as what was retained by the board in terms of approval with appropriate governance and oversight.”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“It is attributable to the funded construct of the Canada Pension Plan itself. It is not a fully funded plan. It's a partially funded plan, which admits a higher degree of risk appetite. But setting that up in such a clear governance fashion was of great support. Because once established, management had the conviction and confidence to go out and build a portfolio with that level of risk. Not the same composition, so not 85% equities of 15% global fixed income, but one of that same level of risk. And we could do so with real confidence. The governance decision to invest actively Again, it was very clearly a board decision, which they felt they had the support and confidence to do based upon the broader governance construct of the Canada pension plan and the Canada Pension Plan Investment Board for whom we worked.”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“And that is work that we in management spent significant time with the board going through and being very clear as to what that appetite for risk might look like and what the different implications are of those different risk levels. But our targeted risk level was for the base or initial fund itself was a level of risk equal to that of a portfolio comprised of 85% equities and 15% fixed income. That became our targeted level of risk. That's a level of risk which is higher than many other investment funds.”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it was strong clarity as to accountability for the decisions that the organization collectively needed to make. The biggest decision we need to make as an organization is the level of risk that we think is appropriate for our fund. This is what we think is the level of risk beyond which it would be inappropriate or undue to go as an organization. And we had very good clarity as to how our professional boards accountability for establishing that level of risk.”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“In that building phase, before we get to this kind of interesting current challenge of maximizing, there's two things you touched on that are so easy to say and so hard to pull off. So the first is excellent governance. What is that structure like that was put in place such that you've been able to succeed over this decade and a half of shifting from passive to active capabilities?”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“Rather, our job now is to make sure we are coordinating and optimizing among those developed active capabilities in ways where we have to think about trade-offs. We have to think about connections among those different investment strategies. We are now faced with a different challenge, getting the most out of our capabilities and our existing proportion of active investment as opposed to one in which we needed to build and grow those capabilities.”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“We have now transitioned our portfolio to its targeted level of about 80% or so active. Not all private, some of our public programs are also active. But this transition from a broadly passive portfolio to one of active has been fifteen years or so in the making and has been really quite effective but now puts us in a spot where we are in a different place as an organization. Our job is no longer to build active capabilities and ensure we make that transition from passive to active.”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“And in doing so, transition the portfolio from one that was predominantly passive to one that was increasingly active. This phase of building out active capabilities and ensuring we were delivering incremental value along the way really lasted up until It 2018-2019 around that time period. So there was substantial initial liquid capital. There were continuing inflows from the Canada pension plan that needed to be actively deployed. And we were in the process of building these active capabilities. And I think we largely succeeded there. And our investment results Evidence of that, we did deliver very high absolute returns and high returns relative to our benchmark that we set for ourselves by virtue of building these active capabilities, but of critical importance, Ted.”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“But we had not yet built those capabilities. So we started from a spot where we were almost entirely passively invested. Internally, managed, but it was broadly speaking a passive investment portfolio. And this was in the early days when we were perhaps of a size of $150 billion, so a large fund, but almost entirely passive. By virtue of the fact we had not yet built those active capabilities. And that became our most important job as an organization was to progressively transition our portfolio from one that was more passive to one that was actively invested and to build the capabilities, the businesses that we've already talked about. Go build a real estate business. And an infra business and agriculture business and credit business. Go build these capabilities to actively invest.”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“We need to be global and we need to build internal capabilities that allow us to invest in ways that will maximize return. That's the journey that CPPIB has been on since that mid-90s founding. That's a really important place where we started in the context within which we started. I think one of the more fascinating elements of our development and evolution has been starting from a spot where we had aspirations and clear governance and leadership commitment to being active investors.”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“Agreement to set up the CPPIB to invest in exactly that way. I think our We're governing legislation. It is very clear that our duty is to maximize investment returns without the taking of undue risk while maintaining regard for the funding of the Canada pension plan itself. We were set up as investors. And I think that's the heart of the Canadian model is that expectation that we are here to maximize returns. We are not an organization that's seeking to deliver some minimum target level of return at the lowest possible risk. The contrary, there's an expectation that we will be risk takers that will pursue the highest possible return we can, and to do so, we need to be active.”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“For which you're going to show real conviction through cycles and over time. That was really the start of the Canadian model. It started with really terrific governance and included the development of these internal active investment capabilities behind which real conviction lies and willingness to hire and to deploy in ways that are the equal of any other investor in the space. I think teachers' early success was really important and it's probably worth pausing had they not been so successful in terms of the investment returns they generated and the funded status they supported in their plan. There might have been a very different story here in Canada that subsequently followed. So a ton of respect for what they did. But as you note with following upon those early successes of that kind of active investing and in the mid to late 90s there was an”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm fascinated by this history because it's so clear if you hang around in this business long enough, almost every organization, it's an artifact of where they've been historically and the constraints and the aims and the personalities and the hardships. And it's where you are today is typically a product of where you have been historically. I think the Canadian model broadly is one that was, I think, fairly pioneered by Ontario teachers. I think they had the help of some great thinkers here within Toronto and Canada in terms of building the conviction and the appropriate governance to actively invest with internal teams that are empowered to compete against other investors globally on equal footing and have the governance and commitment to do so over longer horizons and ways that you can build up active investing capabilities.”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“So you joined CPBIB 2011 and it had been around for a decade and a half or so when you joined. And why don't we circle back? It is part of this so-called Canadian model. And we'd just love to hear a little bit about the origins and then what does Canadian model mean to you?”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“How you're going to maintain that capability through cycles and over time in a way that is contributing to the portfolio? The analogy just sits so well within our current organization. We have a real estate Business, a team of over 100 professionals around the globe, we need to think very careful about how we scale the exposures in our real estate department up and down so that we can preserve this capability to effectively invest in the way that we do and this active internal way that we invest. That becomes part of the problem you solve, not just how much real estate do I want in my portfolio today.”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“How do we actually originate the mortgages in that kind of business? And to what extent can we scale up or scale back that activity without impairing our ability to go forward in a viable way? This is questions of team and staffing and how you build teams, how fungible are the people on those teams with other businesses that you have internally within the organization. These are all the questions that you need to answer when you're thinking about establishing and resourcing a business as opposed to a collection of positions. If you think about the portfolios one of a page or two on a Bloomberg terminal, you can think about in a very agile and flexible way scaling up and scaling down exposures to respond to both longer term and tactical or conditional risk adjusted pricing. When you're thinking about businesses, you need to do the extra work to anticipate”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“So take a business like mortgage lending. That business has its own set of exposures and sensitivities to things like rates and inflation that need to be anticipated when you're thinking about how you build it into the portfolio as a whole. How is the commercial mortgage business going to respond in environments where the deposit franchise is doing well or doing poorly? How do we want to think about combining those two?”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“Jeffrey, what's an example from those capital one days of seeing a balance sheet that has positions on it, that come from, as you said, a series of businesses that you might think about differently from just looking at the balance sheet in a series of positions.”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“With our collection of investment businesses and the infrastructure and real estate and private equity and private credit and hedge fund teams that we've built, we too have this collection of capabilities, active investment capabilities that needs to be really carefully coordinated and managed at the top of the house and to have that experience from doing it on the commercial banking side, I think translated with really meaningful effect over the pure investment problem that we're working on here at CPPIB.”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“That generate positions for the balance sheet. They had an auto lending business and a card business and a mortgage business and a deposit business, all of which needed to be considered in thinking about how you orchestrate and develop and allocate resources to those different pieces. That was the challenge in managing the capital one balance sheet was ensuring that these businesses were empowered and oriented and aligned with what we were trying to accomplish at the top of the house. And it was that perspective and the subsequent work I did after Capital One, working in a consulting firm that helped some of the large newly minted bank holding companies grapple with some of those same issues, it became very clear that that experience in terms of managing portfolios of franchises and businesses is something that a large institutional investor like CPPIB needs to grapple with.”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it started working for the smallest shop in New York that was focused on commercial real estate, advisory and investing, and taking more quantitative and Data was less prevalent in the kinds of analytics that we could run, I think, were real value adders for commercial real estate investment decisions. And I think that experience really helped ground this evidence-based and analytical approach to investing, which I think I've carried along throughout the career trajectory. From that, it was a move into the commercial banking side. And work with Capital One for a number of years, which was at a terrific point in that organization's development where they were moving from a monoline credit card lender to one that was a full-service commercial bank and required the kind of coordination and orchestration at the top level to ensure that their balance sheet was being used to greatest effect. The amazing thing I learned at Capital One is that it was not as much a portfolio of positions as it was a portfolio of business.”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's fascinating to see, but when in it you realize that the academic environments, while it can be incredibly rewarding in terms of intellectual curiosity and research and doing amazing work, it's unfortunately as freighted with political intrigue and infighting as almost any institution you can find. It really is quite remarkable that there's that much focus on are you in the right spots with the right papers, working with the right colleagues as opposed to a more open-ended consideration of what you might want to do intellectually. Every organization has that to some degree, Ted. I thought academia did so to a degree beyond. So it's finding a spot in an organization where people are all really working together in a way that's trying to build out something special just appeals to me more.”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“Wish it was a cogent and consistent narrative, Ted from beginning to end, but it is probably more about just looking for opportunities to do exciting challenges. Gratifying work along the way. So I kind of through my undergraduate and graduate years, it was economics and culminated in a PhD in economics that I think was intended to lead to academia at the outset. But over the course of spending that much time in that environment, you learn things about yourself and limits. And I certainly found my limit in terms of really being able to stay in that academic environment for too long. So it was pretty clear that it was time for me to build a career outside of academia”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, we've got plenty to dive through, and before we do that, your background before joining CPPIB a dozen years ago or so has a whole bunch of interesting different steps. Why don't you take me through maybe the elevator pitch version of it?”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source
“My guest on today's show is Jeffrey Rubin, the senior managing director and chief investment strategist of the Canadian Pension Plan Investment Board, or CPBIB, which oversees $520 billion Canadian on behalf of tens of millions of its citizens. CPBIB is a prime example of the Canadian model, which features significant internal active management of assets and a thoughtful total fund management approach. Our conversation covers Jeffrey's background and path to CPBIB, the Canadian model, effective governance, and competitive advantage. Resource and capital allocation in the portfolio, compensation, talent retention, collaboration, organic innovation, and putting the model to the test during this year's challenging market conditions.”
2022-11-14 · Capital Allocators · Geoffrey Rubin – The Modern Canadian Model at CPPIB (Capital Allocators, EP.280) · IDENTIFIED FROM THE TRANSCRIPT · source