Allocator and asset management expert, Ted Seides, conducts in-depth interviews with leaders in the institutional investing industry. Guests include Chief Investment Officers from leading allocators, asset managers, strategists, thought leaders, and many more. Our mission is to learn, share, and help implement the process of premier investors. Learn more and join our community at capitalallocators.com.
Scott Ramsauer, head of private equity funds at the Teacher Retirement System of Texas and board chair of ILPA, outlined the top 10 reasons limited partners are concerned about continuation vehicles (CVs). He noted that while GPs view CVs as an additional exit route, LPs increasingly refer to them as 'conflict vehicles' due to issues like conflicted pricing, dilution of GP mindshare, and potential misalignment.
Scott Ramsauer discussed the growth of the private equity program at the Teacher Retirement System of Texas since he joined 16 years ago. He stated that the team has expanded from 6 to 27 investment professionals, with net asset value growing from approximately $7 billion to $33 billion.
Scott Ramsauer shared that ILPA is currently drafting version 2.0 of its continuation vehicle best practices to address transparency and pricing concerns in secondary transactions. He explained that the framework focuses on four key areas: genuine rationale, competitive auction processes, third-party fairness opinions, and governance and alignment.
Discussing the broader liquidity drought in private equity, Scott Ramsauer highlighted data from a Coller Capital research report. He noted that 54% of LPs expect the number of zombie funds in their portfolios to rise over the next two years, compared to 28% two years prior.
Scott Ramsauer argued that while private equity for retail investors is a sound strategy, the current structures may be mismatched with retail liquidity needs. He drew parallels between retail private equity concerns and continuation vehicle issues, warning that semi-liquid quarterly redemption vehicles erode the long-term horizon inherent to private equity.
Sep 28 · Nancy Zimmerman – People, Process, and Fixed Income Arbitrage at Bracebridge (EP.517)5 stories
Nancy Zimmerman, co-founder of Bracebridge Capital, emphasizes the crucial lessons learned from crises, highlighting the importance of liquidity and flexibility to capitalize on market dislocations. She also stresses the need for rigorous stress testing and understanding the difference between a drawdown and capital impairment.
Nancy Zimmerman co-founded Bracebridge Capital in 1994 with Gabe Sunshine, establishing an alternative asset manager focused on fixed income arbitrage. The firm's initial capital came from David Swensen at Yale, marking a significant early backing for the venture.
Nancy Zimmerman entered the options markets through a summer job at an options arbitrage firm, finding it a captivating mix of news and math puzzles. This experience, occurring in 1983, coincided with the early days of personal computing, which revolutionized the way arbitrage was conducted.
The firm where Nancy Zimmerman began her career, O'Connor and Associates, was intensely focused on the bottom-up, math-driven aspects of pricing options and derivatives. They were uninterested in macroeconomics, prioritizing the distribution of returns and the mechanics of price relationships.
Nancy Zimmerman learned about options by working through a binomial tree with a partner in charge of risk arbitrage at her early firm. This practical, math-driven approach helped her understand the mechanics of options pricing.
Sep 14 · AI in the Investment Office – Abby Barlow, Laura Hill, Brian Sugrue, Jenny Heller, John Lawrence, Matt Bank, Kristin Kallergis Rowland, Jon Webster (EP.515)7 stories
Abby Barlow, CIO of a single-family office, discusses how she has used AI, specifically Claude, to function as her sole investment analyst since starting three years ago. She highlights Claude's 24/7 availability and ability to support her in various tasks, from preparing for fund manager meetings to analyzing complex legal documents.
Abby Barlow explains how she uses AI tools like Claude to build custom software solutions for her investment office, rather than relying on expensive third-party services. She details building a benchmarking tool that previously involved complex Excel spreadsheets with many tabs, which Claude helped her create as an app in about half a day.
Abby Barlow cautions that while AI tools are powerful, they are not infallible, especially when dealing with numbers and complex data. She emphasizes the need for thorough human review, comparing it to a junior analyst's work, and shares an anecdote about Claude double-counting commitments in a pacing model.
Laura Hill, CIO of Advocate Health, outlines their AI strategy with the tagline: 'We will use AI to augment human expertise, accelerate routine work, and improve decision quality while preserving human judgment, confidentiality, and accountability.' She stresses that AI should not be used for core decision-making, such as identifying investment bets, but can assist with formatting and data presentation.
Brian Shagrew, CIO of Shannonbridge Investments, details their AI strategy focusing on three categories: AI embedded in existing vendors, the co-pilot suite, and an internally developed 'investment brain' named General Gist. The private markets team initiated the 'General Gist' project, emphasizing uniform document titling and categorization for a structured data approach.
In discussions about sharing sensitive fund documents with AI, Abby Barlow and Laura Hill report that fund managers generally expect this to happen and assume LPs will handle the data with confidentiality and security. This indicates a growing acceptance within the industry for AI-powered analysis of fund-related materials.
Looking ahead, Abby Barlow and Laura Hill express a desire to continue pushing the boundaries of AI adoption in investment offices. They anticipate that AI will become an indispensable team member, and when hiring, they would prioritize individuals eager to embrace and build with these evolving tools, suggesting a future where AI complements human roles.
Sep 3 · SPECIAL ANNOUNCEMENT: Capital Allocators University Online6 stories
Capital Allocators is launching an online version of its University program, previously an in-person, once-a-year cohort. This new on-demand format aims to make the course more accessible and affordable for a wider audience of investment professionals. The curriculum focuses on disciplines like interviewing, public speaking, decision making, leadership, time management, and modern investment frameworks, which are not typically taught in traditional finance education.
Capital Allocators University's curriculum is designed to teach essential skills for investors and investor relations professionals that are often overlooked in formal education. Modules cover areas such as advanced interviewing techniques, public speaking, decision-making hygiene, leadership and management, time management, and modern investment frameworks. The program aims to bridge the gap for professionals who excel in technical analysis but may lack soft skills needed for career advancement.
Capital Allocators University has found that the ideal participant typically has between five and 15 years of experience in an investment role. This experience level is crucial because the course does not cover investment basics but rather focuses on transferable skills applicable to those already established in the field. While initially inclusive of all levels, the program has refined its target audience to maximize the benefit for participants who are beyond junior analyst roles and preparing for leadership positions.
Beyond the curriculum, a significant benefit of the Capital Allocators University program, particularly its in-person cohorts, has been the networking opportunities it provides. Participants, especially those in the five to 15-year experience range, often have fewer chances to connect with peers compared to senior decision-makers. The program facilitates these connections, fostering a valuable community for industry professionals.
The effectiveness of Capital Allocators University is significantly enhanced when participants actively engage with the material, particularly through completing homework assignments. Ted Sideris emphasizes that simply listening to the content is less impactful than applying the frameworks taught. The program encourages integration of these disciplines into daily work, leading to greater benefits for those who consistently practice the learned material.
The online version of Capital Allocators University was produced in collaboration with Fondu, a team responsible for the video production and the overall look and feel of the masterclass-style content. This partnership aimed to create a high-quality, accessible learning experience, similar to renowned online courses. The modules were recorded in a studio setting, with some sessions incorporating a live audience.
Aug 31 · Best of Negotiations: Daylian Cain3 stories
Yale professor Daylian Cain discussed the crucial role of understanding trade-offs and the willingness to walk away in successful negotiations. He stressed that individuals should quantify their preferences and understand their 'exchange rate' for different issues before entering a negotiation.
Yale professor Daylian Cain highlighted that effective negotiation is akin to thorough investigation. He advised negotiators to dedicate significant time before a meeting to understand the other party's desires, motivations, and priorities.
Daylian Cain argued that while people are hesitant to quantify personal values like work-life balance or commute times, decisions inherently assign values to these intangibles. He stressed the importance of making these assignments consciously through a scorecard approach.
According to the analysis presented, hedge fund disasters consistently arise not from individual risks like leverage, concentration, or illiquidity, but from the fatal combination of at least two of these factors. The show highlights historical examples to illustrate this pattern, including Long-Term Capital Management, Amarinth, Bear Stearns, Archegos, Melvin Capital, and Leopold Aschenbrenner's fund.
The collapse of Bill Hwang's Archegos family office in 2021 serves as a stark example of extreme risk-taking, growing from $1.5 billion to $36 billion in a year through swaps. This rapid growth was fueled by concentrated bets on a few stocks, amplified by significant leverage, which ultimately led to its downfall when banks curtailed lending as the stock prices reversed.
Leopold Aschenbrenner's fund experienced a significant blow-up after achieving over 1,000% returns since its 2024 launch, fueled by concentrated leverage bets on AI stocks and private securities. When sentiment for AI names shifted, prime brokers issued margin calls, forcing the fund to liquidate a $45 billion portfolio to remain solvent.
The discussion emphasizes that leverage, concentration, and illiquidity are essential tools for generating excess returns, not risks to be avoided entirely. Great investors like Warren Buffett leverage concentration, while firms like Millennium and Citadel use significant leverage coupled with robust risk management and diversification.
The analysis suggests that private equity may be the next sector to test the limits of risk by potentially adding leverage through Net Asset Value (NAV) lending. This could amplify existing risks in portfolios already built around concentration and illiquidity.
Jul 27 · Rebuilding the NYU Endowment – Michelle Knudsen (EP.513)5 stories
Michelle Knudsen, CIO of the NYU endowment (valued at $8 billion), discussed her approach to portfolio management, which involves balancing traditional asset allocation with a total portfolio perspective. She emphasized the importance of preparing for "bad case scenarios" and having a plan to manage through them, a lesson learned from starting her career at Goldman Sachs during the 2008 financial crisis.
Michelle Knudsen, CIO of the NYU endowment, detailed her career journey from an initial interest in public policy to finance. After graduating into the 2008 financial crisis, she gained experience at Goldman Sachs before pursuing an MBA and transitioning into asset management consulting, eventually finding her passion in the mission-driven world of endowments.
Michelle Knudsen highlighted the critical role of leveraging one's network for making good decisions, a lesson reinforced during her time at Goldman Sachs. She emphasized that accessing diverse information sources beyond one's immediate environment provides a more comprehensive picture, a practice she found particularly important as she moved to smaller organizations.
Michelle Knudsen, CIO of the NYU endowment, emphasized the importance of diversification as a key lesson learned during her nine years at the Mellon Foundation. She stated that the foundation's diversified portfolio helped mitigate risk and generate strong long-term returns, a principle she has carried forward to NYU.
Michelle Knudsen, leading the NYU endowment's transformation, is focused on building a best-in-class endowment. She highlighted that the endowment's portfolio is approximately $8 billion and has undergone significant changes over the past two years, including incorporating quant and macro strategies, venture capital, and emerging managers. Knudsen also noted the importance of building relationships with both current and next-generation managers.
Jul 16 · Roadmap for Private Credit from Australia – Frank Danieli of MA Financial Group (EP.511)6 stories
Frank Danieli of MA Financial Group explains that Australia's private credit market differs significantly from the US, with a greater emphasis on asset-backed facilities and direct asset lending rather than solely sponsor-backed direct lending. This divergence is attributed to regulatory changes and the evolution of the Australian banking sector.
Frank Danieli highlights the significant role of Australia's superannuation system, which manages approximately $4 trillion AUD, in fueling the growth of private credit. This compulsory pension system provides a large pool of long-term capital seeking fixed-income alternatives.
Frank Danieli of MA Financial Group emphasizes that in the growing private credit market, sourcing quality loans is more critical than fundraising. The firm focuses on building proprietary origination channels through its own lending businesses and strategic partnerships, rather than solely relying on external relationships.
Frank Danieli notes that global investors are increasingly interested in Australia due to its stable political and regulatory environment, strong rule of law, and a unique private credit market that offers opportunities distinct from other global markets. Its proximity to Asia also adds to its appeal.
According to Frank Danieli, the ability to source unique deal flow is the primary determinant of long-term success in the private credit industry. He argues that relying on common deal flow leads to competition on price and terms, a 'race to the bottom.'
Frank Danieli of MA Financial Group emphasizes the critical role of technology and data in their investment process, from sourcing and underwriting to portfolio management and risk assessment. He states that harnessing abundant data effectively is paramount for making informed decisions and maintaining a competitive edge.
Jun 29 · Senior Decision Makers: Nicholas Csicsko, Trinity Wall Street (EP.508)6 stories
Nicholas Csicsko, a managing director at Trinity Wall Street, shared his unconventional path into investment management, which began with studying music composition at Juilliard. He detailed how an initial interest sparked by investing in 2007, navigating the 2008 downturn, and an internship at Juilliard's endowment led him to a career in finance, eventually joining Trinity in 2016 to help build its investment office.
A manager experienced their worst year in 2020, with a drawdown approaching 50%. The podcast host detailed spending extensive time with the manager, who was resilient and focused on earning back investor capital, which ultimately led to a decision to stay invested. This faith was rewarded, as the manager compounded significantly, achieving a 5x return from 2021 to 2026.
Nicholas Csicsko joined Meredith Jenkins, the CIO of Trinity Wall Street, in 2016 to establish the endowment's investment office from its inception. He described the process of building a young endowment within a historic 320-year-old institution. Today, the endowment has successfully grown to exceed $6 billion in assets.
Nicholas Csicsko draws parallels between his background in music and his career in investing, highlighting three key lessons. He emphasizes the importance of relationships with all stakeholders, the balance between melody (horizontal) and harmony (vertical) in portfolios, and the critical role of authenticity in building trust and connecting with others.
Nicholas Csicsko identifies the primary error allocators make as the pursuit of a 'perfect' manager, expecting flawless performance, zero drawdowns, and comprehensive ESG adherence. He argues that such perfection does not exist. Instead, he advises looking for managers with a robust, adaptable process, transparency, and ethical conduct, coupled with a personal gut check of trust.
To build trust with Limited Partners (LPs), managers must prioritize transparency regarding their philosophy, process, and risks. Nicholas Csicsko stresses the importance of being able to handle difficult conversations, especially when performance is poor. He believes that trust is cultivated over time through consistent communication, unwavering honesty about both good and bad performance, and clear explanations of strategies during challenging periods.
