YouSaid · the spoken record

Mario Therrien

lines on the record: 70
first: 2020-09-28
most recent: 2020-09-28
sittings or episodes: 1
sources: podcast

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“One is about We shouldn't say that all of the standards are easy to agree with the people who are signed on. Each set of standards applied to a particular area takes a lot of work and it's basically volunteer work. So all the managers and the investors or a group of the managers and investors who are interested in the problem volunteer people to sit on a working group and they have some pretty”
2020-09-28 · Capital Allocators · Luke Ellis and Mario Therrien – Best Practices in Alternatives (Capital Allocators, EP.158) · IDENTIFIED FROM THE TRANSCRIPT · source
“Ultimately, Ted, when you look at what Luke has just mentioned, I think that when you look at the core values, transparency, valuation, integrity, good governance, I mean, if you put all of these standards together around these values, this mindset, it brings a better alignment of values. I mean, this is one of our trustees, Bruce Kundick, who's been very vocal about this, the alignment of values. We're talking a lot about alignment of interest, but these standards put together bring a lot of that.”
2020-09-28 · Capital Allocators · Luke Ellis and Mario Therrien – Best Practices in Alternatives (Capital Allocators, EP.158) · IDENTIFIED FROM THE TRANSCRIPT · source
“The fund you shouldn't double dip, but actually let's define that standard, let's define how it is. And if somebody isn't going to comply, they have to explain why they wouldn't comply. And the bar on all of the standards is high so that you've got to have a really good reason to explain. Otherwise, investors are going to look at you going, hang on, why are you telling me it's okay that you're getting paid twice on this piece of business I'm doing with you? Of course it's not. And that type of thing, so we try to get into all of the different areas of documentation, operational process. These are a big one because alignment of interest is this holy grail that we're all looking for.”
2020-09-28 · Capital Allocators · Luke Ellis and Mario Therrien – Best Practices in Alternatives (Capital Allocators, EP.158) · IDENTIFIED FROM THE TRANSCRIPT · source
“So we have quite a long list of standards and they cover everything from what's the right disclosure to provide on fees through to how do you deal with conflicts between investors, through to what should you disclose on what's an appropriate thing you can expect through to the investors, what's not an appropriate thing to expense through. And so we've tried to go through every stage of what an operational due diligence person would look at who's very good. So somebody who's very diligent and go through as many of the different areas as possible and say, okay, is it appropriate that you're charging fees on the fund and you're also charging a fee for putting trades into the fund? Well, no, that's an easy standard to say no, you're getting paid to run.”
2020-09-28 · Capital Allocators · Luke Ellis and Mario Therrien – Best Practices in Alternatives (Capital Allocators, EP.158) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think one of the things that in the original construct I think really the idea was that it would sort of be a pressure that came from the fact that these were the biggest name hedge funds in London. And if they were willing to do it, it was slightly a case of an expectation that that would bully other people into following the standards. They were a good thing to do. It was all the big guys. Therefore, of course, everyone's going to follow. The bit that was transformational is this thing of realizing that what it took was buy-in from investors, agreement about what the standards are, and then investors can encourage their managers, as Mario has just described, to follow the practice. Managers can encourage their investors and say, look, I follow these practices. Shouldn't you look at them for your other holdings? And so you get hopefully what you do.”
2020-09-28 · Capital Allocators · Luke Ellis and Mario Therrien – Best Practices in Alternatives (Capital Allocators, EP.158) · IDENTIFIED FROM THE TRANSCRIPT · source
“Included in our operational due diligence, these standards. So as you know, for us, the ODD portion of our due diligence is very important. So our due diligence team, as included from the get-go, all of these standards. So for us, it was a way to more than socialize, but to include within our own process. And then we said to the managers, you see, it's not so difficult because you're complying to these standards, right? So join us and show leadership. Show leadership to the industry. We've had always had more than 70% of our managers that have been enrolled on SBAIs. And we continue improving and ameliorating the narrative on the why. The why is really important, I think. And I think we're making good strides on that one.”
2020-09-28 · Capital Allocators · Luke Ellis and Mario Therrien – Best Practices in Alternatives (Capital Allocators, EP.158) · IDENTIFIED FROM THE TRANSCRIPT · source
“I joined in 2011 as a trustee and we were still small at that time and was mainly. Eurocentric We got comfortable at CDPQ with these standards, first of all. And clearly they were all part of how long-term we see businesses. And even with our board, with our CEO at the time, they were quite supportive to that effort for some of the reasons that Luke mentioned in terms of how it promotes better behavior in the ecosystem. So from that standpoint, I invested some time with some of my colleagues, obviously Luke and lots of different people around the table just to socialize these standards, have discussions with our peers in Canada, for example. Canada is well represented on the board, but also with the investor chapter. We spend a lot of time on the why. Why should you come with us? Why should you be sitting around that table? So we did a lot of that work. And then we engage with our managers. One way for us to really onboard them on this is that we...”
2020-09-28 · Capital Allocators · Luke Ellis and Mario Therrien – Best Practices in Alternatives (Capital Allocators, EP.158) · IDENTIFIED FROM THE TRANSCRIPT · source
“A lot of discussion to work out what is a sensible, balanced position, you get some investors who say, look, you should never have a management fee on a hedge fund. And I can understand why from an investor's point of view that might feel good, but actually it's not good from the long-term health of the business because if you haven't got management fees, businesses actually become unstable and that's dangerous for the investors. So that willingness to have open conversations, honest conversations, I think when you look back to the early meetings, it took a while till Kimono's got fully open. But there was an intention that it was a good thing to do.”
2020-09-28 · Capital Allocators · Luke Ellis and Mario Therrien – Best Practices in Alternatives (Capital Allocators, EP.158) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think there were certain parts of bad behaviour. Remember, so this all started out in the window of a lot of fun, some of them gating for long periods of time. You had a bunch of managers who were paying themselves very well. Remember back then you had stories of people who had bought a private jet using fund assets and were flying themselves around to go skiing every weekend on investors dime. I think when we all talked about it, you could see a series of behaviors that everybody hated. The managers in the room didn't like the fact other managers were doing that and were things they would never have done, the investors absolutely hated some of those things. There was some easy things to say that's not the right way to behave. And there are some which take”
2020-09-28 · Capital Allocators · Luke Ellis and Mario Therrien – Best Practices in Alternatives (Capital Allocators, EP.158) · IDENTIFIED FROM THE TRANSCRIPT · source
“But that's how it started, and as Marius said over the course of the last ten years or twelve years or it's gone very global and the important thing all the time is that there's been a balance between investors and managers and therefore a willingness to not just fight your own corner but to try to work out what best practices.”
2020-09-28 · Capital Allocators · Luke Ellis and Mario Therrien – Best Practices in Alternatives (Capital Allocators, EP.158) · IDENTIFIED FROM THE TRANSCRIPT · source
“Unless you sit around and discuss it, you have a situation where the investors pay the fees and the managers receive the fees and you can't be perfectly aligned in that world because you've got very different incentives. What the standards board was about was trying to get a place where we could agree here's what good behavior was. It started very much in Europe and really that meant London with a group of it was sponsored in a way by the regulator in the UK, but it was really, it was a group of big managers who knew each other well enough through, if nothing else, the dining circuit in London, to be willing to sit down. And you have to admit what you're good at, what your failings are, what you don't understand to each other, to your competitors and to your clients. It's not everybody's natural starting place.”
2020-09-28 · Capital Allocators · Luke Ellis and Mario Therrien – Best Practices in Alternatives (Capital Allocators, EP.158) · IDENTIFIED FROM THE TRANSCRIPT · source
“Shareholders or their investors during the course of that. And basically it started as a group of hedge fund managers trying to work out how to set some standards for better behavior. Very rapidly was a realization that he didn't work if it was just managers trying to agree good behavior that actually you needed a balance between what worked for managers and what worked for investors and so very quickly investors got involved and you had just a place where people could sit down and go okay I'm faced with this situation this is what I think we're supposed to do do people agree am i it was just a way of working out what best practice was everybody talks about alignment of interest in the alternatives industry but the reality is”
2020-09-28 · Capital Allocators · Luke Ellis and Mario Therrien – Best Practices in Alternatives (Capital Allocators, EP.158) · IDENTIFIED FROM THE TRANSCRIPT · source
“So I think if we're all honest, the hedge fund industry is Did not cover itself in glory and that's being overly polite in two thousand eight. Performance was pretty rubbish across the average hedge fund, but also there was a lot of poor behaviour, and regulators were worrying about it, but actually even more than regulators worrying about it, participants were worrying that you had this situation where for the previous 10 years there'd been a massive imbalance between the amount of managers there were available and the amount of capital that wanted to get in. And so managers had sort of been able to do almost anything they wanted. A lot of documentation was 10, 15, 20 years old, and it was somewhat chaotic, somewhat wild west, and a bunch of people behaved badly, did things which weren't in the interests of their”
2020-09-28 · Capital Allocators · Luke Ellis and Mario Therrien – Best Practices in Alternatives (Capital Allocators, EP.158) · IDENTIFIED FROM THE TRANSCRIPT · source
“We have, in parallel to this working groups, we're working on specific issues to advise the board and to obviously we're surrounding ourselves with industry leaders, institutional investors. This BI also has just about 130 different signatories who have all committed to adhere to the standards. That represents over 1 trillion in AUM worldwide. The investor chapter, which is the balance with the signatories, it's about 80 major investors around the world, and we cover north of 3.5 trillion in assets.”
2020-09-28 · Capital Allocators · Luke Ellis and Mario Therrien – Best Practices in Alternatives (Capital Allocators, EP.158) · IDENTIFIED FROM THE TRANSCRIPT · source
“The SBAI, which was formerly called HFSB, Edge Fund Standard Board, is a neutral standard setting body for the alternative investment industry and more specifically for hedge funds. We're covering a little more than hedge funds, but it's essentially for hedge funds. It's a not-for-profit. We've been active over a decade. It was established in 2008 following the concerns expressed by the G8 over the financial stability of hedge funds. You might recall that period, Ted. It's a board of trustees. We are 15 on the board of trustees. We're really targeting a good balance between managers and investors. We also have a small SBAI team that runs sort of the business. We've also added over the years a regional committees for APAC, EMEA, and North America.”
2020-09-28 · Capital Allocators · Luke Ellis and Mario Therrien – Best Practices in Alternatives (Capital Allocators, EP.158) · IDENTIFIED FROM THE TRANSCRIPT · source
“I wasn't sure what to do next an old friend of mine had started a fund of hedge funds. I said I'd go and help him out for a couple of days and ended up spending ten years there. And then when that stopped being far nae, Retard had a couple of years off. And then an old friend of mine again, same route into things, basically was involved in running GLG and went man. To buy GLG, that seemed like too interesting an opportunity not to get involved in how the turnaround For the firm would be, and so that led me to 10 years of that.”
2020-09-28 · Capital Allocators · Luke Ellis and Mario Therrien – Best Practices in Alternatives (Capital Allocators, EP.158) · IDENTIFIED FROM THE TRANSCRIPT · source
“So I knew from a very early age that I wanted to work in finance, that I've always loved patterns and numbers and Finance fascinated me from an early age. So I basically took the first job I could find in the city. As finance is called in the UK, that basically led me into investment banking because that happened to be where it was and I was lucky enough to drop straight into the swaps business. So I basically spent 10 years as a derivative person. Within banks. Ended up running Morgan's equity room to business for a number of years. but also running an equity prop trading business, which was basically a big hedge fund, hidden within a Trading business, and when that stopped being fun for various reasons.”
2020-09-28 · Capital Allocators · Luke Ellis and Mario Therrien – Best Practices in Alternatives (Capital Allocators, EP.158) · IDENTIFIED FROM THE TRANSCRIPT · source
“Now, Luke, I can't let you off quite that easily since it's the first time. And we did talk about we'll do another one in the future that is more broad about what you're doing at Man. But why don't you just go ahead and dive into your background, even go back to how you first got interested in investing?”
2020-09-28 · Capital Allocators · Luke Ellis and Mario Therrien – Best Practices in Alternatives (Capital Allocators, EP.158) · IDENTIFIED FROM THE TRANSCRIPT · source
“What we've done essentially is, you know, as you remember, I was mainly responsible for external funds in public markets and we just started the strategic partnership effort. This is all still going on. I think that what we've had now is we have reunited under one single roof all of the activities that we do with external managers at CDPQ. So we're covering the whole spectrum of liquidity. So from hedge funds to long only in both equity and fixed income markets to private markets to VC to private debt, everything that we do at CDPQ at our external funds, which covers about $45 billion Canadian, which is about close to 15% of total assets of CDPQ. And that covers about 130 different GPs around the world. It's one group under one External funds doing all of the pre investment and post investment work.”
2020-09-28 · Capital Allocators · Luke Ellis and Mario Therrien – Best Practices in Alternatives (Capital Allocators, EP.158) · IDENTIFIED FROM THE TRANSCRIPT · source
“My guests on today's show are Luke Ellis and Mario Terion, longtime veterans of the hedge fund industry who hold the chairman and deputy chairman seats of the SBAI or Standards Board of Alternative Investments. The SBAI is an industry consortium that brings together managers and investors to set best practices for the alternative investment industry. In their day jobs, Lucas the CEO of Man Group, the largest publicly traded hedge fund company with $120 billion in assets. And Mario is the head of investment funds and external management at Canadian pension fund CDPQ, where he oversees $45 billion of funds managed externally. Our conversation focuses on the activities of the SBAI, including its purpose, origin, members, and evolution. We cover how members of an industry driven by different interests came to agree on anything”
2020-09-28 · Capital Allocators · Luke Ellis and Mario Therrien – Best Practices in Alternatives (Capital Allocators, EP.158) · IDENTIFIED FROM THE TRANSCRIPT · source