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Suleiman Alderbas

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65
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2021-05-10
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2021-05-10
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  1. “Sure, so it was back in 2015 when I first got the call from PIFs to come and meet. That was the first time I ever hear of anyone from PIFs. We used to refer managers to PIFs, but there was never a response from PIFs directly to us or to the managers. It always seemed and looked opaque because It was in a very unique situation. So I met and I met the manager of the department at that time. And we just chatted about the markets, about everything happening. And I look at the book and out of 89 items that they showed me, I only knew one. And I was scared.”

    2021-05-10 · Capital Allocators · Innovation in Private Markets 3: Sulaiman Alderbas – A Massive Restart at PIFSS (Capital Allocators, EP.194) · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “Back in the day, and starting off at Quate Fund, I used to be excited when I saw a fund of fund have an allocation to Millennium or Paulson or Ken Griffin, right? But then we realized that, wait a second, there's something wrong. We have indirect exposures to Paulson and Revin and Ken Griffin and all of those guys as if it's a direct allocation. And we're paying a lot of money for that. Then that's when a change in mentality happened in that There has to be a reason for anything that comes in while we trust the manager's construction. There has to be a purpose in bringing that manager to our book. There has to be a marginal benefit. And that's when our philosophy and construction at that time in Kuwait fund really changed.”

    2021-05-10 · Capital Allocators · Innovation in Private Markets 3: Sulaiman Alderbas – A Massive Restart at PIFSS (Capital Allocators, EP.194) · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “Because of the guidelines that we have, be it size and concentration issues is done through our fund of fund partners. Those funder funds became anchors to my book, especially in the absurd term book. And the value add there was that we got complete access to the research portals. So any manager as a direct allocation, even if it's the biggest in the world, has to go through a defined process review process. And that review process means reaching out those funda-fund partners looking at the research papers, but only after we're completely done with our internal review, just to avoid any biases that might develop.”

    2021-05-10 · Capital Allocators · Innovation in Private Markets 3: Sulaiman Alderbas – A Massive Restart at PIFSS (Capital Allocators, EP.194) · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “At the end of the day, you're managing your managers, they have full discretion of managing their own books as much as we wanted to improve that model, we were confined because the previous team that used to manage the hedge fund book at QuateFund had left at market peak in 2007 to join the private sector. And when I joined the oldest member was two years ahead of me and they were dealing with restructuring the book and a clear direction from the IC in that we're only going strictly with funder funds. So you can't really be that much creative, but relating that to PIFs, I strongly believe that there's a role for everything. The first thing I did here at PIFs was instead of going with Commodore Fund of Funds, we went with SMAs. And SMAs with leading alternative asset managers that firstly act as extensions to my team and my book and whatever we can do directly.”

    2021-05-10 · Capital Allocators · Innovation in Private Markets 3: Sulaiman Alderbas – A Massive Restart at PIFSS (Capital Allocators, EP.194) · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “We had different types of funder funds. We had the ones that were focused on the big shops, the ones that focused on small to emerging managers, and we had a lot of line items on a look-through basis. So when we first started, we had roughly 900 individual line items overlap. There was probably 50%. And then we got fixated on understanding the real underlying exposures. And the value add of every single additional investment that comes to the book. And one of the most important key takeaways was that while there's no right model to investment management, the key is both a combination of diversification and concentration and creating this anchor approach and satellites around it to create an on-word program.”

    2021-05-10 · Capital Allocators · Innovation in Private Markets 3: Sulaiman Alderbas – A Massive Restart at PIFSS (Capital Allocators, EP.194) · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “Fix that allocator's dilemma and the GP dilemma of where would this investment sit? You already have those silo departments. My department was hedge funds plus. This is all driven by certainly the vision of the CIO at that time, Michelle Otman. And that certainly created clarity. And with that department, I managed Still, do an absolute book which has a clear purpose, and that is consistent low standard deviation returns or to dampen volatility. And the other book was an equity hedge book, which is this consistent drive of delivering market performance with control of volatility.”

    2021-05-10 · Capital Allocators · Innovation in Private Markets 3: Sulaiman Alderbas – A Massive Restart at PIFSS (Capital Allocators, EP.194) · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “And we were always going through this dilemma of what was our role? Is it absolute on or is it to hedge the book? And from 2010 to 2016, we had an amazing equity rally. And the IC members seriously loved equity performance and cared less about our standard deviation. And we were changing the model a lot. And that created certainty turbulence, but in the midst of it and throughout the whole program we had one single benchmark and it was the HFRI fund of fund benchmark. And we built that benchmark year and year out going to PIFs. The first thing that was different was the name of the department. The name of my department is alternative investments, which is kind of weird because we already have a dedicated private equity, dedicated infrastructure, dedicated real estate department. So why alternatives, right? So the first thing that comes to mind there was that we've”

    2021-05-10 · Capital Allocators · Innovation in Private Markets 3: Sulaiman Alderbas – A Massive Restart at PIFSS (Capital Allocators, EP.194) · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “To learning and investing in the hedge fund space. So why don't you talk about how you did it at the time? We had weirdest approach. We had at any point in time 30 fund of funds. That's a ridiculous number for anyone, especially an outsider. But for us, what was amazing and the lessons that were taken out were that it gave me a real perspective and that most importantly, there's no right single model to being a successful investor. It gave me perspective in that I got the opportunity of looking at 30 different successful funded funds and trying to understand what makes each of them successful. And then those with certainly a key takeaways that were then applied to what we're doing here at PIFs. So what were some of those key lessons and success factors? The first most important thing is knowing your purpose. In Kuwait Fund, we managed the book of 10% and we are called hedge funds.”

    2021-05-10 · Capital Allocators · Innovation in Private Markets 3: Sulaiman Alderbas – A Massive Restart at PIFSS (Capital Allocators, EP.194) · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “And different asset classes. And I fell in love with hedge funds from that moment in time. I knew that I wanted to be an allocator and specifically in hedge funds. That multidisciplinary nature of hedge funds, this pursuit of excellence, of persistent alpha, always got me engaged that RIF or curiosity or intellectual curiosity really triggered me. Straight out of Wafra, I knew that I wanted to be an allocator and I wanted to be specifically in hedge funds. And that's why I joined. In Kuwait, there are basically three institutional investors of scale. Kuwait fund had the smallest ticket. For me, it was an obvious choice because we had an off-fidel policy. And if anyone was going to visit Kuwait, they might as well spend time with us if we had that open door rolling. So I know when we first met and you had become a client of mine back in the day at the Kuwait Fund, you had a very interesting approach.”

    2021-05-10 · Capital Allocators · Innovation in Private Markets 3: Sulaiman Alderbas – A Massive Restart at PIFSS (Capital Allocators, EP.194) · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “And when you live in Purdue, you don't spend much money. You save a lot. And I found myself investing a lot in US markets and traveling a lot. And then after graduation, did a training program at Wolfram in New York at the midst of the financial crisis, which was an amazing experience, and then joined Kuwait Fund six years there as part of the hedge funds team and then have been at PIFs for the last five years. So in those initial forays in WAFRA and the Kuwait Fund, what did you learn about investing that sort of created what you're trying to do at PIFs? I think it all started back in Wafra. My training program there started in January of 2009, coming out of school with all of those economic learnings that we've got and then throwing everything out the door with quantitative easing and what's happening there. What Wafra gave me at that time was I got to rotate across different departments.”

    2021-05-10 · Capital Allocators · Innovation in Private Markets 3: Sulaiman Alderbas – A Massive Restart at PIFSS (Capital Allocators, EP.194) · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “Please enjoy this unique story of a knockdown and rebuild of a massive portfolio in this, the third and final episode of Innovation in Private Markets. Them on. Great to see you. Hey, Ted. Thanks for having me. Great to be here. Why don't we start with your initial foray into investing and how you got interested in the first place? All right. So born and raised in Kuwait, went to school in West Lafayette, Indiana, Purdue specifically, studied accounting and finance.”

    2021-05-10 · Capital Allocators · Innovation in Private Markets 3: Sulaiman Alderbas – A Massive Restart at PIFSS (Capital Allocators, EP.194) · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “My guest on today's show is Suleiman Alderbas, the head of alternative investments at Kuwait's $130 billion public institution of social security or PIFs. Suleiman arrived at PIFs from the Kuwait Fund for Arab Development in 2016. Alongside Mashal al-Athman, who joined to lead PIFs from the Kuwait Fund, Suleiman took part in a massive restructuring of the organization and portfolio. Our conversation covers Suleiman's early experience as an allocator, lessons from investing in 30 hedge fundifunds at the Kuwait Fund, and transition to PIFs. We discussed the restructuring that took place over the last four years that canvassed the people, process, and portfolio. Along the way, we touch on competitive advantages of size, knowledge transfer for managers, strategic stakes, and allocator innovation.”

    2021-05-10 · Capital Allocators · Innovation in Private Markets 3: Sulaiman Alderbas – A Massive Restart at PIFSS (Capital Allocators, EP.194) · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “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 keep up to date by visiting capitalallocators.com.”

    2021-05-10 · Capital Allocators · Innovation in Private Markets 3: Sulaiman Alderbas – A Massive Restart at PIFSS (Capital Allocators, EP.194) · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “To an exact verifiable source because the answer is only as good as what's underneath it, and without the sense you know exactly what that is. See it for yourself. Try a free trial at alpha-sense.com slash capital. That's alphacense.com with a hyphen in the middle slash capital. This three part miniseries, Innovation in Private Markets, looks at the disruptive innovations in the structure of private investing from the perspective of asset owners and managers. The idea was the brainchild of Daniel Adamson at Capitol Constellation, the sponsor of these conversations. Daniel is the president of Capitol Constellation and was a guest on the show last year. That conversation describing the unique consortium of large asset owners is a terrific primer for this miniseries and is replayed in the feed.”

    2021-05-10 · Capital Allocators · Innovation in Private Markets 3: Sulaiman Alderbas – A Massive Restart at PIFSS (Capital Allocators, EP.194) · IDENTIFIED FROM THE TRANSCRIPT · source

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    2021-05-10 · Capital Allocators · Innovation in Private Markets 3: Sulaiman Alderbas – A Massive Restart at PIFSS (Capital Allocators, EP.194) · IDENTIFIED FROM THE TRANSCRIPT · source