YouSaid · the spoken record

Matt Bank

lines on the record: 99
first: 2025-11-10
most recent: 2025-11-10
sittings or episodes: 1
sources: podcast

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“Getting people to ask questions that are not leading, that don't guide somebody to the correct answer is very difficult, actually. You have to ask things in a way and in a manner that gives people across the table from you permission to answer it in the most candid way that they can. That's another art form that I think goes into this that is subtle and we're constantly trying to improve on to make sure that the answers that we get are most instructive in leading us to the truth. Is this person really good? Have they been successful because of the skill that they have? Is that skill durable? And can we underwrite it and back them in the future because of it?”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“There always are. I won't reveal all the secret sauce here, but I think we've tried to take a very multidimensional and multidisciplinary approach to this issue. The team is extraordinary that we have. They are very well experienced in this. We have years of networks and relationships that we can draw on to ask about people and their pasts and what their work style has been. And then we look at other forms of insights. We had someone from an intelligence agency come in years ago and give us a tutorial on how do you detect deception? How do you read body language? It's an interesting insight into other ways to sit across the table from someone and how to glean information. We spent a lot of time on how do you ask questions. It sounds like a very basic thing, but analysts come in and people don't know how to ask questions, particularly questions that are open-ended enough that it leads you to truthful, candid answers.”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“Obvious to manager's good, it's too late. And so you'd better have a relationship early. You'd better have added value in some other way to them. You've better been a good LP along the way. So we just try to make sure that we're crawling, walking, running with people who are building their own firms for the first time.”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“There's typically things you can see for day one launches, and there's things you can't see. The thing you can see often is business analysis, research intensity. You can reference those things with peers and former colleagues and bosses. What you can't see are things like portfolio management and temperament. You spend an inordinate amount of time trying to predict how people will behave and act, but it's always imperfect. There's other things that can creep up that cause challenges too. How is this person going to build a team over time to support them? Oftentimes young managers haven't had to deal with that. We try and lend our expertise in some of those areas to help them through those processes. But again, you don't know ex-ante. Part of it is how you size and how you control the risk within your own portfolio. I think we're always trying to build conviction. One of the things that we do with a lot of relationships is look to secure capacity rights in the future. That tends to be the scarcer resource because once it's”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, to get at more data requires more time. How do you balance your interest in a fund that's been around for a longer time? And therefore, you have more data to assess with something that's earlier in their stage of development.”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“Learn more about our managers in those six months than we had in the prior six years. Because you see how they react to market stresses and stimuli in a different way. Temperament ultimately becomes a key feature in this that you often don't get enough iterations to really see. But some managers that we were watching turtled during that period and didn't turn over their portfolios and others really rose up and traded out of things that had a 20% forward IRR for things that had a 30% forward IRR and were very active. And I think that element is something you just have to get through a lot of monitoring and discussion.”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“Public markets are, in my view, very interesting because you typically have a lot of data. And as a result, you get a chance to look at trading history. You get a chance to look at letters they've written in advance of market moves and understand what was the thesis. How did that play out? We spend a lot of time with managers talking through decisions they've made and why. That's the primary driver of it. You see the data and you ask people what their rationale was for when things transpired, why they transpired in that way. You're always trying to disentangle luck and skill. There have been situations where people are right for the wrong reasons and you ding them for that. And there are times when people are wrong for the right reasons and you try and give them credit for that. And then you try to make sure that you examine that data and those conversations over a long enough period of time that you get different market environments. I always joked after COVID.”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“No edge is ever fully durable. And ideally, it's predictive of better outcomes. In public markets, those things can be an aspect of portfolio strategy. It could be risk management. It could be analysis. It could be temperament that leads you to a view that this person has a chance to be excellent relative to everybody else that's in competition. In private markets, that's sourcing capability. It's oftentimes deal hustle. It's structuring. It could be operational chops depending on the nature of the strategy pursued.”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's varied by the asset type, but I think at a very high level, we're looking for three things. We're looking for skill. We're looking for an attractive market. And we're looking for alignment of interests. So break down each of those in turn. And skill, absolute skill is pretty easy to find these days. Everybody out there is well trained. They've got a great story. Looks really good. The question is, what's the relative skill? This is a Michael Mubson concept, this paradox of skill, that when the aggregate skill level goes up in a universe or a population, luck has a disproportionate effect on the outcomes. The key is finding these games that you can play within these different markets where relative skill is really what's dominating the outcome. We spend a lot of time trying to figure out who's got some kernel of excellence that leads them to have an advantage relative to their peers or competitors. Ideally, it's durable.”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“In this phase 3.0, when you've made these trade offs, you mentioned alpha is going to be super important. You got to get there through manager selection. Let's walk through that process of sourcing and managers.”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“Then maybe some of your equity exposure should be passive or indexed in a manner that's going to reduce your tracking error to underlying benchmarks. And you'll have to make up for the loss of alpha from that somewhere else. So these are all trade-offs that you make over the course of a modeling exercise.”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“You overlay, obviously, the alpha that you think you can generate in each of the opportunity sets that you'll ultimately leverage, how much can you get from private assets, how much can you get from public assets, et cetera, and bolt that on top of what the beta is providing you from a return perspective? But it's a fairly straightforward model. I don't believe that we're trying to win in terms of portfolio construction in the way the assets are assembled. We're mostly trying to win through manager selection within those tools. But the key is making sure the portfolios are arrayed in a manner that's aligned with those goals. So you said there's a range, and there are. Some clients have more equity exposure because they can tolerate more drawdowns and they're seeking a higher return goal over time. Some have lower illiquidity targets because they need more access to variable capital or they need it more frequently. Those two end up being big drivers, passive and active is another component of this conversation. If you have low variance risk,”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“The nice thing about it is each of those risk factors that we talked about, shortfall risk, drawdown risk, illiquidity risk, variance risk, maps pretty cleanly to a form of risk exposure that you might have in the portfolio. You know, as an endowment investor, that your nominal return goal is going to be high enough that you need a very healthy dose of equity in there. It's going to have to be at least half of the portfolio, probably a little bit more than that. And then the question is, what forms of diversification away from that do you need to incorporate the first thing for us is always deflation hedge in the form of interest rate risk. There are also periods of unanticipated inflation beyond that. You use things like commodities and real estate to hedge those particular periods. And you can run all of these factors through your model and figure out what is the optimal mix that gets the client to its goal within the constraints of its risk budget.”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“The end of that enterprise assessment, you can imagine some type of a spectrum of risk tolerance or what they're trying to accomplish. You then have to put that into action. How do you think about what to do now that you've made that enterprise assessment?”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“And the key is understanding what can the institution bear, and then what is the committee trying to accomplish with the assets to help it with its mission?”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“Or provide more scholarships, or whatever it might be, or are they satisfied with just meeting the return goals over time, preserving intergenerational equity and preserving the real value of that corpus? And that becomes a choice that the committee has. There are a lot of institutions, in particular, I think post-COVID, that are going in very different directions. Higher ed is a classic case where you have one college or university closing or merging with another every week now. On top of that, you have an enrollment cliff coming around the pike because people stopped having children in the global financial crisis. And so those kids would be 17 or 18 years old now enrolling in college in theory, but there's going to be 15% fewer of them over the next few years. So there's some real strategic issues that a lot of institutions in that space in particular are facing. And there's similar versions of that if you look at foundations or healthcare systems. They all have their own idiosyncratic business issues to deal with.”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“We look at endowment flows. There are some institutions that have very loyal alumni who give very eagerly on an annual basis, offsetting the draws that come out of the endowment. That is a huge advantage relative to institutions that are spending 4% or 5% out every year. And then the health of the balance sheet, unrestricted versus restricted, how much borrowing capacity might there be? You're trying to get a sense there of if there's some shortfall in endowment draw, what other levers can the institution pull in order to plug that deficit? And what you come out with is not a prescription about how much risk an institution should take, but a sense of the flexibility that institution has to take certain forms of risk if they choose. So then there's the qualitative element of what does the committee care about? Are they trying to grow this resource over time to build a new building or increase the commitment to academic excellence?”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“The first thing for us is to start with what we call an enterprise assessment, which relates to a number of the risk factors we talked about earlier, what you're trying to diagnose is an institutional tolerance to bear certain forms of risk. How do you do that for an institution that has an operating business? Let's just take your typical school endowment. And we look at it in a couple different ways. One is what's the budget reliance? How much of the budget does the draw support? If the draw supports a very small part of the operating budget, all things equal, that makes you a little bit more tuition dependent, which may be a good thing, maybe a bad thing, depending on how confident you are in enrollment demand. We look at the operating condition, our cash flows positive or negative, our margins positive or negative. What are the trends in capital demands out of the institution? That changes your flexibility in terms of how much risk you can take.”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“To the view that our independence is actually critically important in our ability to do the right thing for clients, no shareholder is looking over our shoulder with a revenue target for us. We don't have salespeople running around the world looking for OCIO mandates. We are going to win on investment excellence and our deep integration. Fast forwarding now into phase three. We're in a different environment now. We can all talk about the nature of the market regime that we're in, more inflation volatility likely, higher interest rates for longer likely US stocks have a huge valuation premium relative to the rest of the world. Maybe that persists, but maybe it doesn't. And maybe expected returns going forward are lower. And maybe you need an alpha engine in the future to make sure you can meet your nominal return goals. Our view is that quality of execution and the engagement that you can have with institutions to make sure a portfolio is optimized for their specific set of needs, those are going to be...”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“Psychologically, what it's led people to believe is that OCIO investing total portfolio investing endowment investing, however you want to characterize it, has become commoditized. When things become commoditized and industries mature, they consolidate. And so what you've seen is a lot of consolidation in the space. You've seen wealth aggregators buying up OCIO businesses, bolting them onto their practices, recognizing that geez, I think we need more scale here in order to distribute more products through the pipe. And that will be the key to generating the kinds of profitability that we need as a business. We don't think of ourselves as business people. We view this as a profession rather than as a business per se. Doesn't mean we're blind to the business pressures associated with it, but in general, the philosophy is different. We've resisted those siren calls for consolidation.”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“Cap equity as you owned, the better your portfolio did. And you really didn't need much else. Bonds were sufficiently negatively correlated to equities that in drawdown periods that protected you. Interest rates were zero. Volatility was low. There was very little need for other types of beta, commodities, credit, real estate, et cetera. And the niche strategies that had led endowments to have so much success in phase one weren't really necessary. In fact, there were some pretty stiff headwinds that those strategies faced.”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“Has it's changed even in the six years since I've been at gym? I view it as really three phase shifts, the third of which we're embarking on now. The first phase, really 2002-ish, I would credit Alice Handy with kicking off this trend until about 2015 was really governance driven. It was about a recognition that committees gathering four times a year in a consensus-oriented environment of their peers was not an optimal model for making portfolio decisions. That was turbocharged through the global financial crisis when people realized they didn't have necessarily a terrific handle on the risks in the portfolio and also access to more and more complex and crowded markets. The second phase I like to characterize as the death of diversification in 2015 onwards, which is the more simplistic the portfolio, the better from a returns perspective. The more US large”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“That we can have with clients are much deeper. We are much more integrated. We are intending at all times to effectively be there in-house investment office. A partner at the table with them trying to solve all these various issues and challenges rather than some vendor who flies in quarterly for performance reviews. That's an important piece of it too.”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“On an investment committee. And I have found that to be true in spots, not universally true. The more important things tend to be the soft skills. Is this person a good listener? Is this person open-minded? Do they work well and collaboratively in a group? Those are things, interestingly, that often aren't typical of really successful money managers because they're used to being the sole decision maker. It's everything from committee construction, committee skill set, the way the committee engages, the way we try and help is multidimensional. We share our views on these issues in delicate ways. We write a lot of white papers on what good governance looks like to try and lead horses to water. And then you have to just develop advocacy and relationships over long periods of time. I think that's one of the beauties of JEM in that we have a few dozen clients. We are not trying to be all things to all people. The engagements.”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“First of all, the forms of dysfunction are varied. They can come from a lot of different places. The first step is obviously diagnosing what it is that's going on. Is it political issues related to committees relative to other committees? Is it a weak chair relative to what the needs are for that particular institution? Is it the composition of the committee? Is the construction insufficient to deliver what the institution needs? Charlie Ellis would tell you five to seven committee members is the right number. We see some institutions where they have 14 to 17. That's too many. It's very well understood that after a certain point, the loss of motivation and the loss of coordination of a committee operating that way undermines any of the overarching objectives they might have. The skills and resources that committee members bring to bear is a critical piece too. There's a view that, well, if somebody is any way related to investing, they must be useful.”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“From an investment committee chair to effectively shame the people who don't participate, who show up cold to meetings, who can't follow the material, et cetera. And I think that the large universities obviously had the advantage of really sophisticated alumni bases from which to draw those folks, but they benefited meaningfully from the really deep engagement and love for the institution that those people showed.”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“Governance is one of those things where the best practices are all very well understood, and yet the execution is very inconsistent across institutions. I think what the leading universities figured out was, for one thing, the independent management construct was really, really helpful. You had independent management companies that sat alongside the universities where they had a single client. They were deeply integrated with the needs of the institution. And they understood how to construct the portfolio to meet those ALS built differently from Harvard, built differently from Stanford, built differently from Notre Dame. They all had their own unique approach to that, but it was tied in with the university's specific objectives. You also had a collection of individuals on the boards of these places that were well ensconced in what was expected of them. What we observe at smaller institutions is sometimes inconsistent expectations around committee engagement, what that means, and requires a lot of”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“Relative to consultant led or committee led institutional pools of capital. And also the portfolio sophistication and access that came from having a dedicated team working in these markets all the time. That was a well-trodden path. There were some other firms that had done similar things. Alice Handy at UVIMCO spinning out earlier in the decade to found investor. Mike McCaffrey and the team at Stanford founding McKenna in Palo Alto. There were a couple others as well. But we were the Duke team. The model was really to just bring to bear all of what we'd learned from that experience and that form of engagement with a single client and spread it across a select group of smaller institutions that lacked the institutional scale to do it themselves.”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“Gem was founded in 2007 by the CIO at Duke University's Endowment, Dumac, Thruce Morton, his head of privates, and Stephanie, who at the time was the CIO of the Duke Endowment, which is the Family Foundation in Charlotte. The premise was to deliver the governance model that the leading universities were utilizing.”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“Logical transitions off into the future of leadership roles. And that was really important to me. I wanted to have an impact on something and be able to have real agency over the outcomes. Joining JEM in 2018 was a bit of a leap personally, but professionally it was a very logical next step and gave me a chance at a bigger platform to continue to expound and engage with a wider array of clients.”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“So I had spent, as I said, six years alongside David in Boston, had a great experience there, but I'd also gotten to know Stephanie Lynch, who was one of the co-founders of GEM, and just became very enamored with GEM's business model, its reputation, what a terrific business the founders had built over the 10 years prior. This is around 2017. And she invited me down to Charlotte. I had never lived further south in West 12th Street in Manhattan. My wife had neither. And so we made the trip down to visit the team, see what it was all about, and really just fell in love with the place. It was a perfect setup for me in the sense that the founders had built this terrific business, this terrific reputation, the heritage out of Duke was a real advantage in the marketplace. And you had a ownership group that was very interested in staying independent and perpetuating the business. So there would be”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“Individual committee members, what their preferences are, making sure you understand how the collective fits together. And then obviously what the institutional needs are.”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“And so you have to manage around some of the liquidity constraints. And the last one, which I think is the most delicate, is variance risk, or what I'll call with clients embarrassment risk, which is how far behind benchmarks, peers, whomever are you willing to be at any given time? That one is something that is generally unknowable in advance. It's very hard for people to put a number on how far behind they're willing to be. You have to intuit it from the setup. Is this a donor supported institution? Is there likely a capital campaign in the future? Advancement people hate going to big donors and saying, we're great stewards of your money. Look how far behind the benchmark we are. You have to be sensitive to that. Whereas in certain cases, private foundations where the governance is much tighter and clearer, they may have a much wider embarrassment, risk, tolerance. So that's through candid conversations trying to suss out within.”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“And it also has a behavioral element, which is how much can the committee tolerate? Because everybody has a breaking point and you have to know going in what that is for people. So we try and be very clear with folks what equity tolerance they have because equity is going to be the primary driver of volatility in any of these portfolios. And what that may mean from a path of return standpoint. The third one's liquidity. You not only need to follow a fairly steady path of returns over time, but you need to have access to capital. Some institutions spend four and a half percent like clockwork every December. Some want to spend 15% in some years and three percent in others. And that changes very much your ability to use private assets in the portfolio. If one of those big spending years happens to correlate with a period of market drawdown or the liquid part of the portfolio is experiencing more pain, that's problematic. That becomes very expensive calories.”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's art, science, craft, all the above. I think institutions have four horsemen of risk. There's shortfall risk, which is the probability that over time you will just not meet your liability stream. So you need to have a portfolio that gives you a fighting chance to get there over long periods of time. And that's just a candid conversation about what the purpose of the capital is. What are you trying to do with this? For endowments, it's pretty straightforward. There's typically a real growth element and there's a stable supportive operating budget element. And you can model those out pretty clearly. There's also drawdown risk. So drawdown risk is about the path of returns. Can you live with the volatility that is endemic to markets? That has a practical element, which is you can't have too much volatility of the operating budget. And so you have to be able to control that to make sure that the CFO and the finance team of these institutions can draw a stable amount of capital every year.”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“Others that are looking to find their way into the returns hall of fame. And those are very different sets of incentives. It's very different structures. They look very different. And so making sure you align with folks that want to be partners with you for the long haul, I think, is a really critical feature.”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“One would be risk first in all things. The market offers what the market offers. You cannot will the market to offer you more. What you really need to understand first and foremost is what a client's risk tolerance is across a couple of key dimensions. From there, you can figure out how to deploy capital on their behalf. But without a sense of what they're willing to live with, what types and degrees of risk they're willing to incur in pursuit of their goals, you can't deploy their capital. So that part of the process, let's get structured for success. That aspect of things that happened well before the first dollar was invested in the first asset was a critical part of it. The other one, just in terms of how you go about finding opportunities, was looking for people that were really psychologically aligned with generating good returns. I've come to view the money management world as really being subdivided into firms that are looking to find their way into the AUM Hall of Fame.”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“Of that resource on behalf of an institution, and the idea of handing that responsibility over someone else is momentous. Just the fact that you needed to approach any of these engagements with the utmost candor, integrity, and client-centric mindset, I think was all critical.”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“Manager selection, putting together marketing decks, putting together the trading apparatus, anything you could possibly do I was involved in. And so first off, there was this breadth of exposure that I think was critical in my development. Second of all, David's very much a first principles thinker. It was a great education and curriculum in how to think about deploying capital for perpetual or multi-generational clients. The thing that really struck me most of all through my time there was just a recognition that the trust bar that is required to take discretion over is really, really high. I always say anytime you're trying to be the investment office for an institution or a family, you have to clear the highest trust bar of an asset management. For a family, it's their hard-earned legacy. For an institution, you're often engaging with a committee whose capital it is not. They are temporary stewards.”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“Down from New Hampshire, so he was not in the office. Another colleague was in the process of moving up from Virginia. He was not in the office. And so it was just me and a bunch of computers in an empty office space in Boston. I thought, well, this will either work really well or it'll be some form of calamity. We'll figure that out. And it turned out to be a great experience. So what did you learn over the path of the time you were working with David? So I was involved in every aspect of building the firm as you could gather from the fact that there were really three of us there initially that was assetal.”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“Through serendipity, I met a guy while I was a business school named David Salem, who you had on the podcast not too long ago. I met David for lunch one day and we bonded over David McCullough books and constitutional history and a whole slew of things that had absolutely nothing to do with allocating capital or investing in any way. And it was really my first entree into this liberal arts approach to investing, thinking about organizational design, psychology, some of the history of markets, things that really lent themselves to the curiosity that I had about the space. I hadn't been exposed to the allocator world prior, but David had just left TIFF and he was setting up a small private partnership in Boston at the time. And I decided to join there between my first and second years of business school and see what that was like. It was not without a little bit of peril on my first day there. David was still in the process of moving.”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“With a partner over to the asset management business within Goldman, which was a strategic priority into and around the global financial crisis, and had a terrific experience there, first time really being around people who were as ambitious and driven and committed to excellence as folks were that I got to work with. What led you to moving over to the allocator side of the business? So in 2007, my dad passed away unexpectedly. It was really a shock. He was relatively young. relatively healthy that's one of those moments in life that really sets you on a different course. It causes you to reflect on decisions you've made, things you've done. I was drifting through my experience. Really ruminated on it for a long time and decided I should just go back to business school, pick myself up, figure out what perspective I needed to get on what the future looked like.”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“Matt, great to be with you. Thanks for having me, Ted. Why don't you take me back to your path that led to investing? Well, to say I wasn't well suited for the professional world initially as an understatement. I spent every break in college climbing mountains with friends. We would go to Ecuador, Patagonia, Alaska, Switzerland, Colorado. Never thought I needed to get an internship, never expected to have to do anything. My line of sight ended at graduation, it seems. Beginning of senior year, I ended up getting a little bit spooked by watching all of my friends getting their investment banking jobs and decided, hey, you know what, maybe I should go to New York for a couple years. Decided to work at a law firm, thought that gave me some optionality coming out. And within a year was fortunate enough that a recruiter at Goldman saw enough on my resume to offer me a job there. They had a hole on a principal investing team. I fit the bill, joined that firm in 2005. And really the rest is history. I spent a little bit of time there, eventually moved.”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
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2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
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2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“Capital allocators is brought to you by AlphaCense. Here's something for you. Most AI tools today are very good at sounding right. But can you actually trace it back to a filing, transcript, or specific passage that drove the answer? Or are you just trusting the confidence of the output? For allocators, that's not a minor concern. A missed filing, incorrect source, or context that gets lost somewhere in the retrieval chain aren't edge cases. They're how decisions go wrong. Alpha sense is the AI platform built specifically for this. They own the content over five hundred million curated documents from broker research and expert transcripts to filings and earnings calls. And they own the retrieval layer on top of it. That means every answer can link back.”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“Before we get going, this is a holiday week in the US, and I want to offer everyone celebrating a very happy Thanksgiving. I'm deeply grateful for your engagement with our content and gatherings and for my team that helps bring it all to you. Earlier this week during a strategic discussion with one of our partners, he paused and said, Your job sounds like so much fun. It's a true gift to be able to answer him. Yes, it is. I hope you and your family have a wonderful break, enjoy each other's company, share a great meal, and take time to reflect on what you're most grateful for. Wishing you health and happiness at the beginning of the holiday season, and while you're at it with your family, thanks so much for spreading the word about capital allocators.”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“My guest on today's show is Matt Bank, the Deputy CIO at GEM, an OCIO that manages twelve billion dollars for 40 clients. Jem was founded in 2007 by investment leaders at the Duke Endowment and Duke University Investment Management Company. Our conversation covers Matt's path to investing under recent guest David Salem and lessons learned about risk and governance while under his tutelage. We then turn to Matt's move to GEM and its positioning in the OCIO industry. We cover GEM's approach to asset allocation and manager selection and close with Matt's thoughts on active and passive investing, venture capital, hedge funds, and drivers of success going forward.”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source
“Hello, I'm Ted Sides, and this is Capital Allocators. This show is an open exploration of the people and process behind capital allocation through conversations with leaders in the money game, we learn how these holders of the keys to the kingdom allocate their time and their capital. You can join our mailing list and access premium content at capital allocators.com.”
2025-11-10 · Capital Allocators · [REPLAY] Matt Bank - "GEMs" of Risk, Asset Allocation, and Manager Selection (EP.419) · IDENTIFIED FROM THE TRANSCRIPT · source