YouSaid · the spoken record

Jordi Visser

lines on the record: 116
first: 2021-11-08
most recent: 2021-11-08
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

“My father taught me that my mother really taught me patience. Patience is not easy for me. I'm definitely a type A person, love to move around, gives many steps in at a given day. But I think she was a very patient woman being very religious while my father was very atheist, not the easiest thing to say, yes, you're going to church. Why are you taking them to church? So when you have this conflict inside the house, I always say, my mother, who had made a young age, was very patient. And that patience over time really helped me kind of deal with, I'd say, people in general and just being careful not to want things too quickly.”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I have a quote from Ralph Oldo Emerson that I use for my children and my father. It's kind of what I took from him, which is life is a succession of lessons which must be lived to be understood. And that really got in the part of, okay, maybe I didn't enjoy school, but the experiential part and putting yourself out there and taking the risks and then how you come back from them. So going through Mexico in 1994 and processing and realizing it, my best friend growing up, the best man of my wedding died in 9-11. And I remember giving his eulogy. And it was an important part of my life to be grateful for the time that I had with him. And recently my grandmother died at 98. My grandmother was one of the most important people in my life. I gave her eulogy. My mother asked me to do it. And it was special because I was so close to her. But also it gave me the chance to reflect in that type of way about the things that my mother and father did for me.”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“That people will recognize when 5G becomes more of a normal thing and just how the Internet of Things are growing. So I'm going to say the singularity, but I'm going to add one more because I've written a lot, and two years before I met the general, I also started taking some training in meditation. And just an understanding of Buddhism. And, you know, my father is and was an atheist. And so I didn't have a lot of beliefs. And I'm not a religious person, but I do believe in the concept of karma, and I do believe in the concept of doing good and going through it. And I like people who go through it. So reading about Buddhism, reading about meditation, and probably most importantly, neuroscience and just kind of the way your brain works has been a big part.”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“Six years ago, I met a general who was a brigadier general in the Air Force younger than me, and we developed a relationship over our kind of knowledge of China. And he was the first person to suggest to me that I really should start reading on the singularity. And that has lived with me since that day. I believe everybody who's in the business of investing should spend a lot of time reading stuff on the future and what it's going to look like. I say to people regularly, I don't think there'll be bonds and everything will be free in 30 years. I say it not as a fact or as a guess, but it's something I do believe is coming because of my belief in the impact that nano and 3D printing and artificial intelligence and robotics and synthetic biology and all these things are going to have and that there's a math behind it.”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“Anger. I really have a hard time. I'm in New York City a lot. There's a lot of angry people in New York City. There's a lot of horn blowing. There's a lot of construction with people yelling at each other and anger is my biggest pet peeve. All right. How are you?”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“Hiking, skiing, and biking. So over the years as I've become or been forced to be more of an extrovert, I have found the pleasures of meditation and hiking and biking and skiing. I didn't start skiing until I was in my 40s and I found it to be both challenging but a necessary thing to get me into nature in the wintertime. So that would be my favorite”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“For people that go get physicals, you really want the data. The more data you have, the more predictive analytics are going to help you going forward, the better you're going to be of knowing what's the problem. I think for anyone small cap, mid-cap, and the largest pension funds, any transparency you can get is better. But I do believe it's difficult for the smaller places to go. But that's where the OCIO groups kind of come in to hopefully be able to help them navigate through this in a way where they're taking it. But I would emphasize when you're doing your due diligence what the plan is on the transparency side.”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, on this case, I do think you can, and people have done this. If you're going to be small, you're going to have to outsource some things. And the outsource CIO thing has grown in stature. I think there's some merits to it. I think you have to be careful of who you're choosing. I think transparency should be a big part of it so that you have some kind of maybe not the decision making, but some knowledge of what's going on that you're not getting a story. And at the end of the day,”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“And what would you do as your next step if you were not so big that you could have some market power in that negotiation of what you get access to? So you're a mid-sized investor or smaller investor. The future says we might get to a place where you have more transparency. What do you do today?”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“Blanket thing to all investments, but it should be a core component of what you're doing on the hedge fund side, the same way that netting risk is something that people have not spent enough time on. And I think the netting risk component is a really important part. So if you're likewise where we bear the netting risk as a partnership, that was a decision we made to align ourselves with the investors. They should recognize that we're taking that risk out of their portfolio. And it's a big benefit to them. Now, they don't have to have that from all of them, and they shouldn't only invest in multi-strategy funds that bear the netting risk. They should invest in various structures, but they should appreciate the netting risk component. So I think over the course of the next few years, and you got to give it time because I think it was 2016 that the movement of one or 30 and kind of focusing on the fees and the alignment of what you're getting paid matched up, that was good for the industry. I think it was a good decision to make since returns were difficult. I think the next thing is the transparency.”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“Weekly data and we'd like to have monthly holdings and we want you to put them into this system so that we can measure them and have access. I think that's where they could affect change in that way. Now, United States pension funds are very different than Canadian pension funds. And the sophistication level, and I think the ability to do these things is more limited, but I think it has to happen if you're going to invest in the hedge fund space. You don't have to have, and I think this is one of the issues, you don't need to have full transparency in a levered loan book, in a private equity book. Like you're just at the mercy of, these are illiquid things. They're not going to move that much, and you're giving money based on the qualitative stuff of the managers. For an active manager that's in equities, there's no excuse why you can't get the data, because it's very simple to do it. There's tons of ways. It doesn't cost much in this day and age with data to do it. So I think what's going to happen over time is the transparency part should not be a blank.”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, the first thing is when the allocators, especially if they're large, they can affect change. So the easiest thing that will get them more transparency is as opposed to spending so much time on, well, if you take 15 basis point off and we go through this and they're going down a path that's all fee-based, I think if at the same time they say, well, we'll allocate this money.”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“If you are sitting on the other side of the table and you talked about the need for transparency, the desire to only really pay fees for value added, the allocators don't have access to the information that you do. And you've got this whole suite of, oh, let's just say within hedge funds or even within long short equity hedge funds, we had our portfolio, now there's replication as an alternative, there's all this other stuff. What advice do you give when you're sitting down with one of your clients if they ask you that question, well, how should we think about investing in long short equity funds?”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“Company and then one with a financial institution that's interested in asset management. We're trying to expand those more with the consultants, which we think we can help them with more transparency in how we measure it. But I think the collaboration part is really a big part. And those are kind of the four components. Now, I don't think most hedge funds are thinking about those things, and probably they don't need to. So maybe in our case, it was just something. But I think it's taking an empathetic approach in a time where things are just less certain and less unpredictable, but there's a need for it.”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“And I think it's because rates are still low and money has to go to work somewhere. So I still think you're going to get it there. So that whole concept to me of making sure that when you're going out there, you're focused on products that can help people on the other side, insurance companies, pension funds, retirement, retail. So we've tried to focus on that and make sure that we're approaching it from an asset management perspective, but very customizable. And finally, and this one is one of the more important ones that doesn't get enough attention with people. And I think Steve Case wrote a book on this in terms of, I think it was called The Third Wave, where he focused a lot on partnerships. And when you reach this point in the technology side where everyone is being disrupted, every business, every government, and the blockchain's only going to make it worse. Partnerships and collaboration are more important. So we have developed some very strategic relationships over the last three years with one with a pension plan, one with an insurance.”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“Through emphasizing emotional intelligence over the resumes of where they went to school. And I think that was always a thought process here, but I think we really took it to heart that if you're going to embrace technology and you want people to be adaptive, you need them emotionally intelligent and aware of who they are, and that way they can be more adaptive. We wanted the products to be customizable. Every investor has an issue with liabilities versus expected returns. It is not easy to generate the returns that you need. And I've traveled the country the last five years, and I don't think I've yet heard a person say that they think equities will perform more than six percent over the next 10 years. I don't think I've heard anyone say it over the last five years. And we just came out of a period where over a 10-year period, even including last year, I still think it was 14% or something like that. So when people ask me, I'm like, no, I think the next 10 years in the equity markets, the US, and I think globally will be better, but let's just say the US, I still think we'll get 8 to 10%.”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“Alternative beta products that people had jumped into did not perform the way most had hoped. The CTAs, which traditionally have helped during years of big falls like we saw, did not help, particularly in the first quarter and the last quarter. So I think the risk mitigation bucket was just not good. And even long vol portfolios, unless they were very focused on the equity side, fixed income volume lows. So even though you had kind of volatile years, the risk mitigation bucket was not there. What we've hoped and the approach we've taken is kind of focus on four levels. And we started this five years ago. Number one was to make sure the organization as a whole embraced technology, not just at the investment level, but the risk management, the operations, the marketing, everything along those lines, the hiring and firing. The second thing was to make sure that we identified the people that we thought would be best suited for an environment which was less predictable and more uncertain. And that got into”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, clearly, it's been disrupted just like most industries predominantly from technology. Because it has a name which I think everyone would agree doesn't really mean much, meaning hedge funds. So we always make the joke. Are you a hedged fund or are you a hedge fund? And a hedge fund has proven to have a lot of beta, a lot of factor risk. And so their fees are kind of going down. I just think that people have to think in return streams and what they're doing. I think there's liquidity providing hedge funds. There's liquidity taking hedge funds. The industry is going to be disrupted continually by the risk premium side. The hedge fund replicator side. But there's a need for it because interest rates around the globe, you've got negative yield still in very big places. There's a need for risk mitigation. In fact, last year I would say was the worst year for risk mitigation from the hedge fund side.”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“Amazon Web Services really took off. The healthcare industry has really been slow to this stuff. I think we're going to start seeing a lot of the benefits when you combine it with artificial intelligence. We will be solving a lot of problems. And I can't think of a more exciting period than figuring out how to solve cancer and Alzheimer's in a way that gets bigger has huge implications. So you start thinking about what this means for the liabilities we have as countries. And I think I get most excited about the fact that we're going to have a movement towards health from the biology side, from the synthetic biology side, which is going to really give us the hope of living longer lives and more importantly active, healthier, longer lives.”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“Think the technology stuff dominated, so we had more excitement in terms of advancements in technology. And even though that'll continue, I think that was pretty much when the iPhone came in. We've had a good run with technology. I think the next 10 years is going to be about longevity and advances in healthcare. And I think that's going to be the most exciting thing. Obviously, the biotech industry raised a lot of money. It's interesting that if you go look at the biotech industry relative or any of the small cap biotech industries relative to the Nasdaq or relative to the S&P, they've underperformed the Nasdaq. They've underperformed tech the last four or five years. They've basically been a market performer with the S&P the last five years. So they raise a lot of capital, didn't get a lot there. We should be getting through when industries take a lot of capital in and you merge in technology, which really helped with the cloud, which honestly, you know, you're talking 14, 15.”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“So it's not just populism anymore. It's not just quantitative tightening. They didn't believe all this stuff would happen and they thought they'd already been a bit in a better position. So if you go through that Mike Milken article in April of 09, he talks about the fact that capital structure matters when you're betting on what's going to happen in the future. And I think they've just made a bad bet. There's other things that get involved in it. But the reality is I think going forward from here, the market has not adjusted to the fact that these companies are going to have a difficult time and that capital structure, things like covenants, these are going to be a major part of the conversation over the next three to five years. And I don't think people are ready for what that means.”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“And so we have a new part that has transitioned. And that's why when people talk about the trade war with China, the paper was specifically said, this is not about soybeans. This is about sensors in everything. And it's a race to artificial intelligence.”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“in Italy, in France. You can go through across the globe. This is a rising force. And globalization is under pressure. And if globalization is under pressure and you think about these BBB companies, their business is based on globalization. They're big, gigantic companies that benefited the most from globalization. At the same time, we've had this change from the Industrial Revolution to the digital revolution. So they also made a bet that Amazon would need up their business and that the App Store wouldn't have an impact on their business. That was a bad bet. It did have an impact. So whether you're talking about Sears competing with Amazon or you're talking about General Electric competing with Amazon and General Electric competing with everyone else, that's happening. But then also you're getting this trade situation that as technology has increased and as we've now entered the age of the Internet of Things where sensors are in everything, do you want your sensors and whatever you have being put in by your military powers?”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“And when you take long term debt, you're betting that the history of your company and the history of the way the world works is going to look that way someone in the future. And I think when China moved their currency in 2015, when quantitative tightening began, we started seeing yields move higher. The triple-b yields have moved up over 100 basis points. So it's become more challenging for them on an interest expense. And a lot of these companies, when you go through it, their revenues just never really picked up. They made a bet on their businesses getting better, which didn't happen. And I think the bet that it has cost the most and what I wrote about is I believe we're seeing the unwinding of globalization. Populism is having an impact on that. I think a lot of people have written about it. This is coming from the distribution of wealth problem. It's happening in almost all of the developed countries at this point. And depending on whether you focus on Brexit or what's happening in the United States in terms of the movements on politics.”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“So here we are fast forward. That was in 2009. And we've now had quantitative easing, which kept a lot of companies that may not have made it after the great financial crisis alive. That was one of the intents, was to give people the chance to redo their capital structure. A lot of these companies levered up through buybacks and issuing debt, taking advantage of this. And in the end, my view is they made a bet. And the bet was that not only would their businesses be in a position at some point in the future that they'd be able to pay back the debt, they made a bet without thinking about it that the world wouldn't have a dramatic shift.”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“Okay. So I always try to find a theme that I think is playing out that's important. And so to make it quick in terms of the, to bring it into the investment grade world. At the end of the day, Michael wrote a paper, I think in the 60s on capital structure and just the relationship between bonds and stocks. And in April of 2009, near the lows of the Great Financial Crisis, he did, I think it was an op-ed in the Wall Street Journal, but he wrote an article which specifically was titled Why Capital Structure Matters. And within that article, he made, as usual, a lot of very, very insightful comments about how you should think about credit and equities when you've had this kind of a fall in both of the securities.”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“Lowest grade of investment grade in terms of the BBB area, that is where going forward, the paper I just wrote talked about fallen angels, and I think that's going to be a phrase that people are going to learn more about. But I think to credit markets are going to go through a big change. So I don't think the data analytics is going to end up in the same part for that in terms of what's happened with the equity markets.”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's been a challenge, and we've spent a lot of time on it. So let's use the credit markets. We do use the analytics for the commodities markets and the FX markets, but it's very limited and you're not dealing with a lot of different components at the end because the equity market has so many companies and it's so global you're dealing with thousands and thousands of opportunities for alpha and for measuring data. The problem with commodities and effects you don't have it and the problem with credit, which is the place that I thought we'd kind of go down this path, but those views have changed significantly with my belief on what's happening with corporate credit. I just don't think it's ever going to get there because liquidity has dropped off. So the problem is what does it matter from a factor basis if things aren't even trading? And we've entered this point in the credit markets and the debt markets in general where people buy them and they just hold them. So there's not really a lot of trading going on. And I think now that the investment grade market in the US and specifically the”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“Much of this data is easily digestible and understandable in the equity markets. And it seems like as the equity markets have gotten more efficient, the ways of looking at factors and analytics have gotten more efficient. How do you think about applying it outside the equity markets?”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“The number one thing that I care about when it comes to people getting better around the analytics is accountability and responsibility. If you're blaming the market or you're blaming CEOs or you're blaming your analyst or you're blaming your trader, those are the people that I can just tell you I've had the hardest time adapting. They constantly have a blame for someone and they're playing the blame game all the time. And accountability and responsibility combined with analytics makes it a lot easier to kind of go through things because you have the opportunity to get better because you see what happened. And if you take it on your own shoulders and you go through it, it still might be these other people that are not helping the situation. But when you're the leader of a team, you're making the decision on this. So you have to take some accountability and responsibility, even if it's just for hiring the people that are not creating it.”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“They're really good at what they're doing, they want the analytics, they want to get better, they're obsessed with being good and having as much data as they can. They're still going to do what they want to do. But you can take the analytics on me whenever you want. I literally just want to get better when I'm doing. And if I don't know it, I think before we started doing this, you and I were talking about the word denial. And I just think that people that think that they know that they can't get better at something and don't want the analytics, that's kind of giving you an idea of who shouldn't be here. I didn't mention this, but So if you ask me one thing about portfolio managers over the years having worked with not only the ones here, but the option traders at Morgan Stanley.”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“Simple answer that I'm not sure people have appreciated when it comes to analytics. Analytics have a negative connotation and gets into the Big Brothers watching. So at most places they view the wrist team as Big Brother. Go in, telling what to do. They don't know what's happening and they end up blaming them. I will just tell you as a fact, great performers do not care if you're looking at what they're doing.”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“poorly at so that they can improve and what they should spend the time on. So there's this transparency between where they are and what's going on. So it's not this, hey, you had to draw down 5%, you're fired. It's really driven by how you guys are handling the whole situation. And as people come in, I think this codifying is going to be equally as important as the way we measure the teams internally.”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think to date the fact that 17 of the 20 were organically brought up here, it has not been a high percentage yet. To be fair to all the people on the outside, I think because we had organic growth that was probably more than the assets that we had, so we didn't need to bring in people. We've been very selective. I think that process is changing because of the success we've had and just because of a lot of the business plan. We embarked on a very big, as I mentioned at the beginning, a focus as an asset management company rather than a hedge fund. The return stream is the most important part of what we do, but packaging it in other ways has been important. And now I'm meeting a lot more managers. That's why the process is being changed so that we feel we're making better decisions. We do this for the transparency of where the teams fit. So we have a league table which ranks all of the teams here based on 15 different analytical metrics that are pure quantitative. And then there's about three or four qualitative metrics. And this way when they come in for their quarterly reviews and we sit down, we show them where they are in the league table. We show them exactly which things they've done.”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“And what did those numbers look like? I mean, the number of people that could come in as a portfolio management team to interview with you, how many of them sort of get even close to the filters of being aware and being in the right fed, and then you think they have the ability to generate alpha.”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“Everyone right now whose managing money should understand factorists. If they dump this off to their risk team, it's a mistake. You have to embrace it. You have to learn it, and you have to understand it. The same way that when I was trying to know how to talk to the option traders, I read book after book after book. That's the curiosity part. And if they haven't spent the time on it, we're going to teach them on our dime. And I'm just not in, unless they're just an incredible talent that has found ways to make money and they just don't know it. And we think this is going to be additive to them. That's great. But for the most part, I want to see how much they've already figured out how to eliminate factor risk, how important it is. Do they know what the charts look like? Where do they get their data? Who have they met with? Anything along those lines?”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“Data points, you're gonna have more data on this person after they've been here one month in their managing money for you. The other two are equally important to us, and these are the ones that we're spending time now codifying. One is the culture. Are they going to fit inside this firm? It's really important for us that the culture the firm stays the same. We think it's been an edge for us in terms of attracting the best talent because we really try to find people that are going to be collaborative and work together and are independent thinkers so we don't have to worry about groupthink or anything like that. They're going to be additive to the process. So the culture is, I would say, a very big part. The other one, which is the most important to me now and the really one I want to focus on codifying is how well do they already understand factor risk? How much do they get it? The one thing about this part, and I'm going to go back to my own career.”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“We use WebEx to present and we show them the baseball cards. How curious are they? Are they asking good questions? Are they engaged? If they're not engaged, the probability of raising money from them is low, and maybe they're just not ready for us and we'll ask other questions. But are we talking to the risk taker? How long is their process? Where should they be in the queue for us and what time should we be taking? That's been a big part. We decided that travel is important to shake people's hands, but you get a lot more done out of the office if you can do these things on a computer than you can traveling because then we're showing them exactly what's going on. The hiring and firing thought process has just gone, so codifying responses to things to answer really three questions for us. The first one is, do we think this person has an edge and can make money and is it repeatable? So that's the hardest one to get because you don't have enough data on that. You're getting data and the data might be two years. It's monthly. You got 20.”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“and the analyst, we've rolled this out now into the marketing side, so we're now starting to focus on the marketing side for time optimization. So we sit down, we kind of discuss Chuck and I specifically, George gets involved occasionally, but we sat down with the marketing people and said, what's our goal for marketing right now? And we realized, well, time optimization is the most important thing. Are we wasting time trying to go out and tell people about our story that are not ready to hear our story, don't care about it? And I think that's the marketing effort is you want to make sure you're spending time with the right people. And the question is, no one's going to give you the data to say, yeah, this is the right person. So we're entering the age where you have to take qualitative data and turn it into quantitative data. And so I'll just give you a brief thing and then I'll get into the hiring side because it fits in the same way. The number one thing we want for people on what we do, multistrats are complex. I think the approach we've taken is unique. We don't use marketing decks anymore.”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“I do think you can find people that get better fairly quickly once they get tools. And so the hope on the hiring side, and this is something that I think is evolving for us and it's the next big push. In fact, so we did the baseball cards for the investment process.”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“Been something that's been difficult, I would say, even over the last 12 months. So over the last four months, we've closed a few teams. And I would say if I thought they had more time, they might actually have, they were getting better at what they were doing, but it gets into the point of what's the right amount of time to give someone to kind of adapt or go through it. So there is no right answer on this. And if I ever figure it out, I'd be surprised. I don't believe in this as being science. I believe in it as art. And you're constantly making Bayesian decisions. That being said,”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“You mentioned a couple of the PMs having been here a long time and the importance of collecting all the data so you can interpret this. What is the hiring process of bringing teams in and then when teams no longer work having them come out when the longer someone's here, the better the chance you'll have kind of data that's relevant and they can improve?”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“Is the turnover. And that's really to get a final gauge on how married they are to the concept of investing. We want to err on the side as a liquidity provider on trading. So we have a visualization called fossils where we want to see any position that they have in their portfolio that hasn't been meaningfully changed within 10 days. Now that's a very short time period. Now it doesn't have to be completely in or out of the position, but meaningfully change. I think it's about 25%. We just want to know that they've made changes, that they've taken advantage that if we believe that dispersion volatility are going to increase going forward, which we do, and you have a position than the current price is $100 and you're believing it's going to go to $130 over the course of the year, and it goes to $115 in two days because there's been this massive short-covering rally in the space, have you meaningfully adjusted that position and moved to something else? And then if it goes back down to 100, hopefully it goes back up. So that's kind of the four tabs that we use on this.”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“They run anti momentum all the time to give you an idea of their portfolio right now if they had it on the last twelve months would be down probably about 20, 25 percent. So they're in losers versus winners. Value has been working, yet they've made money six years in a row. How can you do that? And so the next tab became the skills and biases. So what are you doing to create the alpha if you're always running anti-momentum? Somehow or another you're switching around on these things. Their portfolio is fundamentally driven like all of them, but there's a sentiment component. And what they've been the best at at the firm is taking their gross up, so there'll be 85% invested. And then after they have a good run and they feel their portfolio has been reverted enough, they will take the entire book down. There'll be 15% invested. Now, a lot of our competitors, they don't want their managers to play around with their gross. They're fully invested all the time. This is an approach that we've taken, which has been differently, and it helps us identify the skills and biases that they have. And then the final part, once you get past the skills and biases,”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's broken up into about four parts. The first one is their performance measures, which is very traditional morning star type stuff. So there's some things that I think are more creative, but that's stuff I always say is the most boring part of kind of going through it. The second part is the factor part. So that really gets into the time series regressions and the holdings-based work, the two of them to show the manager, A, what their factor risk is today, but most importantly, and I think the thing that separates what we do from most vendor-based systems I've seen, but also as PMs have come in, this is what they've appreciated the most, is seeing how static their factor risk is. So how does it change over time? So we can mouse across over the last year and see, well, you have momentum on now, but you were short momentum six months ago. And that means they don't have a complete bias towards momentum. We have other people here that have ridden anti-momentum the whole time. And normally those types of teams wouldn't be here. But the one I'm thinking of, they've been up all six years. They've managed money.”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“As the PMs are very similar people as management, that doesn't happen in most organizations, and that's one of the biggest problems. And so in reality, one of the things that helped the baseball cards, which was really just to help us make better decisions on our teams, was the impact of everyone working together on this project.”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“management I wanted to be heavily involved in the day to day knowledge of what was there and I wanted the managers to be aware so I wanted management to be aware I wanted the portfolio managers to be aware and I wanted the risk people to be aware that way there was a collaborative relationship on this and sometimes the best idea is we get are from the users and that's I think in most cases so this became kind of a beta prototype in terms of rolling it out and then eventually one of the benefits that came and this was about the cloud and just the ability of bringing more visualization. When we launched these in 2015, I recognized that some of the PMs were getting better. They were starting to do different things. They were learning. And the reason that they were learning is because they actually saw the visualization. They wanted to get rid of it and they were being showed how they could get rid of it in a way that was very different than where there's no relationship between them. And I think the collaboration or the ability for the risk people to be very similar people.”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“And management. So let's break it into three parts. You have the risk manager or the risk group who's monitoring the factor risk. Then you've got management, the people that are running the business. And eventually the risk team will bring it to them, but not on a daily basis generally. And then you have the portfolio managers. Now historically, when the portfolio managers get approached on the risk, the risk manager either comes up after they've lost money. I call this autopsy risk management and say, why did you have all this factor risk? Or they do it ahead of time, but they don't tell them where it is. And so now you've left this person with, you have a lot of factor risk, you have to take it down. Where is it? Well, when you take one position out of a portfolio, you have new factor risk. And so this whole thing of it became very confusing. What we wanted to do here and what Chuck and I came in is”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's been up nine years in a row. Why would I pay for that? So we did that analysis, and then I realized that number one, it was taking longer than it should, and that was a reflection of just how much data we have, but also how I was trying to take someone who was not a quote-unquote professional coder and doing some work that was, I could probably use someone with a little bit more robust approach. And that's when I met Chuck in 2013. We brought him in. I explained to him where I wanted to take this. So the first part was let's make sure that we know who we should pay so that when they come in, I don't have stories anymore and we can actually do it. So we extended the analysis to a lot of time series regressions, not on the long term, but now on a daily basis. I wanted to see the factor stuff so I could be more aware of the factor risks that they were taking. So we wanted to see it in a dynamic framework. A lot of people view factor risk or both portfolio managers.”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, the baseball card idea started in twenty eleven, twelve. I asked for a risk manager who had some coding experience to do the first part of them, which was really make sure that we know who we were paying. So the first thing was I said to him, here's a deal. I want to see if I can replicate their returns. So why don't you take all of these factors and take all of their historical returns and see how easy it is to do a time series regression to effectively replicate their returns and just rank them based on how easy it is. So some kind of confidence level. So not that complex of a situation, but the reality of doing it was we're paying our portfolio managers the same amount of money, which is a percentage of what they make after expenses. Why should I pay all of them the same amount if I can replicate what someone's doing with a very high confidence level, even if they've made money every single year, if they've been making money?”
2021-11-08 · Capital Allocators · [REPLAY] - Jordi Visser – Next Generation of Manager Allocation (Capital Allocators, EP.92) · IDENTIFIED FROM THE TRANSCRIPT · source