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Muthu Muthiah

lines on the record: 85
first: 2023-09-18
most recent: 2023-09-18
sittings or episodes: 1
sources: podcast

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“Yeah, going back to those fundamentals of communication and transparency, a very close connection to the operation so we know what the needs of the hospital are was the main focus. I'd say one difference that I've noticed is that people on the hospital side of things have to react to economic realities a lot quicker given what they do and how complex it is and pushing costs through and reimbursement. The conversations around volatility are a lot different. They inherently understand volatility because they go through operation volatility so much, which was different from the other places that I'd worked. But I think the nature of the capital is pretty similar. So how we put it to work is pretty similar.”
2023-09-18 · Capital Allocators · Muthu Muthiah - Inefficiency and Innovation at CHOA (EP. 339) · IDENTIFIED FROM THE TRANSCRIPT · source
“It was a really, really, really tough decision because working with people that you love, four people work together building something you get really, really close. So it was hard to leave those folks and really hard to leave the mission too. But for me personally, Atlanta was a better fit for me. I spent a lot of my time in the South and had built a network of friends and not from the US. So friends become family. So moving back to the East Coast was a big pull, but also the mission at children's. So I work for an organization whose mission is to make kids better today and helpier tomorrow. And it's also meaningful in terms of doing it in your own community because I take a lot of Ubers from the office when I have local meetings. And so many of the Uber drivers that I jump into when they pick me up at the office tell me about how their child was treated at children's, to have the opportunity to work for a great mission, but a great mission that's in the community you live in.”
2023-09-18 · Capital Allocators · Muthu Muthiah - Inefficiency and Innovation at CHOA (EP. 339) · IDENTIFIED FROM THE TRANSCRIPT · source
“Once you build this out over a couple of years, you've now taken everything you've learned, put it into a portfolio from scratch, and you've built this house. I'm scratching my head on how you ended up not living in it for very long.”
2023-09-18 · Capital Allocators · Muthu Muthiah - Inefficiency and Innovation at CHOA (EP. 339) · IDENTIFIED FROM THE TRANSCRIPT · source
“Was scary because we had to time it all, or at least talk a lot about how we're not timing at all and that we're finding the right investments and putting them to work, we lucked out, I think, in that we were putting the money to work with managers right through the COVID pandemic. So we really benefited from timing. But our biggest worry, I think, Ted was, what is the timing going to look like on this in terms of getting invested?”
2023-09-18 · Capital Allocators · Muthu Muthiah - Inefficiency and Innovation at CHOA (EP. 339) · IDENTIFIED FROM THE TRANSCRIPT · source
“Once you develop that framework in the modern era with lots of pools of capital like yours in different ways and the various places you worked, what was it like taking a fresh pool of cash and putting it to work from scratch?”
2023-09-18 · Capital Allocators · Muthu Muthiah - Inefficiency and Innovation at CHOA (EP. 339) · IDENTIFIED FROM THE TRANSCRIPT · source
“Adjust those as time goes by, but if you think about our allocations broadly, we have a 40% target to privates, so that leaves us 30% in public equities, thirty percent in the more defensive type portfolio. So if we sized each one of our public equity managers, they're about 3%, that's about 10 managers for us steady state. And then on the defensive side, I'll be 3% per managers. And the private's a little harder given AUM. So would have more venture managers given the scale of RAUM and how much we can get per fund. That'll be about 30 or so. We'll circle around the fifty number.”
2023-09-18 · Capital Allocators · Muthu Muthiah - Inefficiency and Innovation at CHOA (EP. 339) · IDENTIFIED FROM THE TRANSCRIPT · source
“It gives us an equity beta target of 0.7, and we allocate that across managers and try to manage it to the 0.7 within public and liquid realms. We look at actual beta, and then within private realm, we look at assumed beta. And we think about assumed beta in the private side of about 1.4. And then measure the beta of our public equity and liquid managers and construct the portfolio that way. Sizing-wise, we look very specifically at what is the risk return profile of each of the strategies that we're putting in the portfolio, what's the liquidity that we're taking on, and where is the firm and its evolution. So we have some pretty broad strokes on where that ends up, Ted. So we generally target about a 50 basis point allocation per fund to venture managers, usually about a 1% allocation per fund for private equity managers, and a 3% to 5% allocation for more liquid managers.”
2023-09-18 · Capital Allocators · Muthu Muthiah - Inefficiency and Innovation at CHOA (EP. 339) · IDENTIFIED FROM THE TRANSCRIPT · source
“You're right. So I think the way we'd express it then in the portfolio is on the public equity side of the market. It is focused on quality, which we might pay a little bit more for, but if we can hang in for longer duration. The private end of things expressing the building of quality through value investments in private equity or growth through venture capital.”
2023-09-18 · Capital Allocators · Muthu Muthiah - Inefficiency and Innovation at CHOA (EP. 339) · IDENTIFIED FROM THE TRANSCRIPT · source
“On the innovation edge, if you've ever read Bucklav Schmill, one of his books he categorizes innovation into four big buckets of tools, machines, materials, and methods. And when we thought about innovation, we thought about it pretty broadly to say that there can also be innovation in method, they can also be innovation in things around the edges. So not just looking for innovation that looks like tech, innovation that looks like business model innovation in China or India, the markets or even companies evolving. AI is tech, but AI right now. So that's how we talk about how innovation fit into the portfolio, but also a way of saying it's about different rates of growth, either tech-enabled, high growth, or better process enabled, lower growth, but growth at the end of the day, and quality for us seemed like moded growth.”
2023-09-18 · Capital Allocators · Muthu Muthiah - Inefficiency and Innovation at CHOA (EP. 339) · IDENTIFIED FROM THE TRANSCRIPT · source
“On the quality piece of it all, the notion is that the end game is quality. So in public markets, we try to align ourselves with managers who we thought could buy quality, either in structurally inefficient markets or doing inefficient windows. And then in the private portfolio, our notion was to align ourselves with managers that, for lack of a better term, manufacture quality”
2023-09-18 · Capital Allocators · Muthu Muthiah - Inefficiency and Innovation at CHOA (EP. 339) · IDENTIFIED FROM THE TRANSCRIPT · source
“Because we knew the nature of our pool of capital, given we can take a whole lot more volatility and more illiquidity and we have longer duration, we want to own long duration, high quality assets that are sourced in inefficient markets and benefit from innovation.”
2023-09-18 · Capital Allocators · Muthu Muthiah - Inefficiency and Innovation at CHOA (EP. 339) · IDENTIFIED FROM THE TRANSCRIPT · source
“Kind of the same thing that we use in children now, and we thought about asset allocation first and about what we're trying to accomplish there and how we're trying to accomplish it. We started off with two large asset class books, but it's equity-like investments. They're the compound capital and then credit fixed income-like investments there to provide you low correlation equities and liquidity. So those are the two buckets that we thought about broadly. And we said, look, if you take away the specific asset class buckets, which all own equity on the equity side of things, but they have different reporting frequencies, valuation methodologies, you're changing the question you ask. So if you think in buckets, it feels like you're asking the question of how to own something. Which is a very valid question and should be answered. But if you take away the bucket's wholesale, you're forced to ask the question of what to own. And that feels like a question we could answer with more clarity.”
2023-09-18 · Capital Allocators · Muthu Muthiah - Inefficiency and Innovation at CHOA (EP. 339) · IDENTIFIED FROM THE TRANSCRIPT · source
“Advice. So when I got to Inatai, I listened a lot and the language was equity and inclusion and representation and all of those things and that the pool of capital is there to provide ammunition for that. We contextualize things in that lens, which was really, really helpful. And then when you think about children's where I am now, it's the language that's spoken is goals and performance and measurement. So when we can provide those things, the conversation goes forward.”
2023-09-18 · Capital Allocators · Muthu Muthiah - Inefficiency and Innovation at CHOA (EP. 339) · IDENTIFIED FROM THE TRANSCRIPT · source
“So where we spent most of our time was communication, communication, communication, transparency, transparency, transparency. In that time that I took off between the two jobs, I was also lucky to get connected with a whole bunch of people that were already CIOs through my friend Rahul Mudgo, who knows everybody in the world apparently. And so he put me in touch with great people, and I was able to just show up and say, hey, I'm doing this for the first time. You've done it before. And I just love to learn about how to think about these things. Jim Donnet Verger, he said, hey, get to know everybody, get to know all the stakeholders. It's not just your investment committee. It's not just your leadership. It's everybody. And that served me really well. And then Jack Mayler at cystic fibrosis foundation said, look, we're all used to speaking a certain language. But what is useful is to listen and figure out what language the organization speaks and then contextualize those things in that language. And that was incredible.”
2023-09-18 · Capital Allocators · Muthu Muthiah - Inefficiency and Innovation at CHOA (EP. 339) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I initially thought it felt like building a house. You need a foundation or you need a framework on top of that to drive things. And foundationally, what you needed was strong governance, really good resources, access to great managers, and aligned investment team. So we thought about building that as the foundation. And we were lucky to recruit some amazing people. So Pong Wang, who is the CIO there now, Charlotte Sangh, Julia Riley, Don Wilson, we all built it together, Ted, but we got the foundation right. And then framework-wise, we kind of step back and said, look, you know, we're here to provide performance, but performance is an outcome and it's an outcome of apt investment philosophy operationalized by a rigorous process. and run by aligned people so that's the framework we hung on top of everything and built from there on those three pillars”
2023-09-18 · Capital Allocators · Muthu Muthiah - Inefficiency and Innovation at CHOA (EP. 339) · IDENTIFIED FROM THE TRANSCRIPT · source
“Capital Allocator Podcast. Took that month off. I read as much as I could, and I would literally take a walk every day and listen to one podcast. And it's just an absolute treasure trove because you get to listen to people like Scott Malpass and Laurie Coachard and just these imminent investors that are just sharing all these treasures with you. And it was amazing. So that made me feel a little bit more confident about the transition. So when I got there, I think I was able to maybe communicate a little bit more clearly on where things needed to go and how we needed to build.”
2023-09-18 · Capital Allocators · Muthu Muthiah - Inefficiency and Innovation at CHOA (EP. 339) · IDENTIFIED FROM THE TRANSCRIPT · source
“Between Emory and In a Tai Foundation, I took about a month off and I remember calling Neil Aronson at Rourke in Atlanta to let Neil know that I was making the move and he was very encouraging. And I said, look, the place I'm going to is a clean slate. There's no team. There's no active portfolio yet. It's liquidity waiting to get invested. And I said, you've built this business and do you have any advice for me as I go into this in terms of how to build something from the ground up? And he gave me really, really good advice. He said, one of my favorite quotes is a Mark Twain quote where he says, if I had more time, I would have written a shorter letter. And he said, I encourage you to take time off if you can, to read a lot, to listen a lot, and then really try to refine what you want to do and how you do it and how you communicate it. And that should serve you. And so I did that and I listened to a lot of...”
2023-09-18 · Capital Allocators · Muthu Muthiah - Inefficiency and Innovation at CHOA (EP. 339) · IDENTIFIED FROM THE TRANSCRIPT · source
“I thought long and hard about that because it's a lot of fun doing those four things at the end of the day, not the governance isn't. But I thought that was an evolution that I wanted to make. So was actively looking for those opportunities. So I landed at what is now called Inatai Foundation, but started life as Group Health Foundation in Seattle, Washington. It was a $2 billion AUM philanthropy focused on health equity.”
2023-09-18 · Capital Allocators · Muthu Muthiah - Inefficiency and Innovation at CHOA (EP. 339) · IDENTIFIED FROM THE TRANSCRIPT · source
“I've thought about it. It feels to me that we do four things fundamentally. Where to invest money, who to invest money with, how much to give them. And we think about risk management on top of all of that. And instead in other terms, asset allocation, badge selection, portfolio construction, risk management. And I thought in the magic selection on who to give money to. And I realized over time that even if I was thinking about giving money to private equity folks, I could make better decisions if I knew about what it takes to give money to other folks. So the first move was to say, hey, I think I could just be better at this if I had more exposure to other things. And that helped me think about the other aspects of what we do, portfolio construction and asset allocation. So it was somewhat of an evolution there. And the final step is do you want to take those four things and be the bridge to governance?”
2023-09-18 · Capital Allocators · Muthu Muthiah - Inefficiency and Innovation at CHOA (EP. 339) · IDENTIFIED FROM THE TRANSCRIPT · source
“Probably a lot more similarities than not in terms of the model was executed the same way, but a little bit larger in terms of manage account than the other places that I dwork”
2023-09-18 · Capital Allocators · Muthu Muthiah - Inefficiency and Innovation at CHOA (EP. 339) · IDENTIFIED FROM THE TRANSCRIPT · source
“It was back to the endowment fold. I got an opportunity to work at Emory for Mary Cahill, who hired me to run private markets there with a two-person team. So that brought me back to Atlanta. And that portfolio was really a joy to work on. We repositioned it back to being a smaller market private equity focus and a little bit more early stage in the venture side too.”
2023-09-18 · Capital Allocators · Muthu Muthiah - Inefficiency and Innovation at CHOA (EP. 339) · IDENTIFIED FROM THE TRANSCRIPT · source
“He can play out in taking less risk than you're supposed to be taking. I don't think that played out at covariance that way. We took the appropriate amount of risk for our clients, but a large part of that was also a big bulk of the AUM was TIA. So there was a lot more stability in the business than that.”
2023-09-18 · Capital Allocators · Muthu Muthiah - Inefficiency and Innovation at CHOA (EP. 339) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think the balance between taking portfolio volatility and business volatility is in the back of your mind or at least as an institution. It's a balance that needs to happen. Translates to a lot of our managers too, how much portfolio vol can you take before clients start to head for the door. And I think that balance was very much at the forefront, what is the appropriate mouth?”
2023-09-18 · Capital Allocators · Muthu Muthiah - Inefficiency and Innovation at CHOA (EP. 339) · IDENTIFIED FROM THE TRANSCRIPT · source
“I went to Houston. I got an opportunity to work with a firm called Covariance Capital that was a subsidiary of TIA Craft and it was an outsourced CIO establishment and that took me to Houston for a little under three years and mostly focused on private markets across all private market strategies.”
2023-09-18 · Capital Allocators · Muthu Muthiah - Inefficiency and Innovation at CHOA (EP. 339) · IDENTIFIED FROM THE TRANSCRIPT · source
“It was personal. I found myself thirty eight at that point single, unmarried, and I wanted to go to a bigger city, was the real answer. And I loved working for Rob and with the team and told people when I got there I had seven colleagues when I left, I had seven friends. And it's hard to leave that. But I wanted to think about my personal life too. So the move precipitated because I wanted to be in a bigger city”
2023-09-18 · Capital Allocators · Muthu Muthiah - Inefficiency and Innovation at CHOA (EP. 339) · IDENTIFIED FROM THE TRANSCRIPT · source
“So I started on the private equity book and then took responsibility for a little bit more venture, a little bit more real estate. And then I really wanted to get cross-asset class journalist type exposure. And so I put my hand up to be the emerging markets analyst. Rob was great and gave me that opportunity. So at the tail end of it, it evolved to all asset classes in emerging markets”
2023-09-18 · Capital Allocators · Muthu Muthiah - Inefficiency and Innovation at CHOA (EP. 339) · IDENTIFIED FROM THE TRANSCRIPT · source
“I was more of a single asset class person, I spent most if not all of my time on private equity and pretty much large market private equity. So it was a very focused thing. And when I got there, it was a smaller team and you had to really think across asset classes even if you were focused on one asset class. Rob and Trinity always did a great job of challenging why making an investment in a certain bucket as opposed to other things that existed there. was my biggest learning to try to think across asset classes.”
2023-09-18 · Capital Allocators · Muthu Muthiah - Inefficiency and Innovation at CHOA (EP. 339) · IDENTIFIED FROM THE TRANSCRIPT · source
“I did want to make my way to the endowment world at some point. And a lot of it being the nature of the capital just so different. It's infinite investment horizon, lower dependence on the pool for operations, variable spend rate, more unconstrained way to invest. So I did at some point want to make my way there. And I was really lucky through my network and ended up speaking to Srini Pulharthy and Rob Blanford at the University of Richmond, better known as spider management, and made my way there and spent seven and a half years there actually, which was the most I've spent in any one place and was able to learn a lot.”
2023-09-18 · Capital Allocators · Muthu Muthiah - Inefficiency and Innovation at CHOA (EP. 339) · IDENTIFIED FROM THE TRANSCRIPT · source
“When we're looking at managers it feels like we're looking for managers with edge at the end of the day. And if you would have broadly say that you have behavioral edge, analytical edge, relationship edge, information edge and execution edge, all of those exist in private markets. You can pull all of those levers. And what I realized was it was about figuring out if people had the tools and the skill sets to be able to consistently pull those levers and seeing, hey, how do you use your behavior ledge to stay invested longer or stay away from things? How do you analyze something better than another private equity firm? How do you really show up in relationships even when you're consummating the transaction and after the transaction? It felt, again, you're going to be partners with somebody for like seven years to build a business. There's a way to transact the front end to that in terms of building the relationship. What do you do with your information and importantly, how do you execute? What is your playbook look like? How's it gotten better over time?”
2023-09-18 · Capital Allocators · Muthu Muthiah - Inefficiency and Innovation at CHOA (EP. 339) · IDENTIFIED FROM THE TRANSCRIPT · source
“Honestly, I had no idea. I think is the answer. There was all this dogma that existed and everything was conceptual, but it was about getting the reps. And in that three-year period, it was such a great platform to see so many things. And I began to crystallize how private equity worked and what we're looking for in general. But over the years, I feel like I've gotten more clarity. I don't know if it's the right kind of clarity, but early on, 27, yeah, I had no clue, honestly.”
2023-09-18 · Capital Allocators · Muthu Muthiah - Inefficiency and Innovation at CHOA (EP. 339) · IDENTIFIED FROM THE TRANSCRIPT · source
“How do I find myself back in this seat? So I graduated, I went out to the west coast and worked for a really small investment bank for about eight, nine months or so, which I think gave me good fundamentals and then Jim called and he was like, hey, we have a slot open, would you be interested in coming back? I just jumped on it. I moved from Southern California back to Tallahassee. I spent three years with Jim. At that point, we'd also gotten more allocation towards private, so we're allocating more capital. I was learning a lot. And it was an incredible amount of fun. And that's how I got back into the asset management world.”
2023-09-18 · Capital Allocators · Muthu Muthiah - Inefficiency and Innovation at CHOA (EP. 339) · IDENTIFIED FROM THE TRANSCRIPT · source
“So I found myself in Florida. And the first year, I wasn't really sure what I wanted to do still. I was exploring my options, but I ended up getting an internship at the state of Florida's pension fund, working for a guy called Jim Trainer who ran the private equity department and just fell in love with it.”
2023-09-18 · Capital Allocators · Muthu Muthiah - Inefficiency and Innovation at CHOA (EP. 339) · IDENTIFIED FROM THE TRANSCRIPT · source
“First, I found myself way outside of hospitality badarins. I graduated. I worked in the hotel business in India for two years, and I really didn't enjoy it. It wasn't what I had expected. So I quit and my parents were very happy about that. And I took a year off and I moved back home and really just traveled a little bit in India, saw friends, but really thought about what I wanted to do next and talk to a lot of people. that time my brother had just graduated with a computer science degree in University of Oregon. And way back when my dad got a master's degree at UNC. Both of them were like, hey, how about if you switch careers, you think about an MBA and think about doing it in the States and graduate degrees for us both are enjoyable thing in the States? I took them up on that, took my GMAT, and ended up getting into a school called Rollins College, a small school in Orlando, Florida. And getting a scholarship was important to me, and they were good with financial aid.”
2023-09-18 · Capital Allocators · Muthu Muthiah - Inefficiency and Innovation at CHOA (EP. 339) · IDENTIFIED FROM THE TRANSCRIPT · source
“I was born in India, and then when I was about three, we moved as a family to Australia and then to Papua New Guinea, and then I moved back to India in grade 11 in 12 and went to college there. I grew up traveling a lot, growing up that way. I think for myself established my biases towards people. I always had to go to a new place and figure out the people and try to fit in and go to a new place again and try to figure out the culture of the people and try to fit in. People became a big bias for me. And that ended up college-wise me doing hospitality management as an undergrad because I was like, I like this people aspect of things. How'd your friendship?”
2023-09-18 · Capital Allocators · Muthu Muthiah - Inefficiency and Innovation at CHOA (EP. 339) · IDENTIFIED FROM THE TRANSCRIPT · source
“My guest on today's show is Muthu Mathaya, the chief investment officer of children's healthcare of Atlanta, one of the largest pediatric clinical care providers in the U.S. Muthuward's Choa's $6 billion long-term pool of capital arriving a year ago after stints across a range of allocator seats over the past 20 years. Our conversation covers Muthu's mobile upbringing, path to finance, and lessons learned working for a range of asset owners. We discuss his first CIO seat at Inatai, where he oversaw a $2 billion portfolio starting with a clean sheet of paper and his new seat at Chowa, including the portfolio framework, team structure, and aspiration to achieve concentration, search for inefficiency, and invest in innovation.”
2023-09-18 · Capital Allocators · Muthu Muthiah - Inefficiency and Innovation at CHOA (EP. 339) · IDENTIFIED FROM THE TRANSCRIPT · source