Ted Seides - Investment Industry Paradigms - [Invest Like the Best, EP.390]
Episode publishedPodcast: Invest Like the Best with Patr...Invest Like the Best with Patrick O'Shaughnessy
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I'm excited to announce that we are hiring an editor in chief at Colossus. This will be a critical and central role in our growing media platform and in our quest to find and showcase the best people, businesses, and ideas in the world. This person will work on existing shows like Invest Like the Best and Founders, our soon to be announced print publication, and more. We aim to be the dominant media company exploring business and investing frontiers, so this person needs to be obsessed with these topics and bring serious operational chops. I firmly believe this role can help define someone's c
Patrick O'Shaughnessy is the CEO of Positive Sum. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of Positive Sum. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of positive sum may maintain positions in the securities discussed in this podcast. To learn more, visit psum.vc.
My guest today is Ted Sides. Ted is the host of the Capital Allocators podcast and an investment industry expert. It had been 7 years since Ted and I last talked on the record, and he was one of my very first guests on Invest Like the Best. Now that Ted has a full time focus on all things capital allocators and has stepped away from traditional investing roles, he shares with us the wisdom he has gained from being a neutral third party in the conversations with countless industry experts. We discussed the evolution of the LP and GP relationship, the scale of institutional investing, and the nu
The first is the institutional investing world is just a lot bigger than I realized. That was the big joke when I started. How many of these can you do, and is anyone actually gonna be out there listening? And the last thing I did was to do it for personal branding or anything. I thought I knew everybody in the world. So that's a big thing. And then with that comes different people, different ideas, everyone trying to figure out incrementally how can they be better than what they had learned before. So I don't know that there are, like, these big revolutionary changes now people think about in
Is there anything from the Swenson model that feels now antiquated to you or needs to change?
Yeah. There's one. I think it's incremental more than antiquated, which is the asset allocation model is inexact when it comes to measuring the assets that you're trying to have. So think of risk and return of a mean variance optimization of US equities or private equity. And now with an availability of data, you could have a multi manager portfolio of a 100 managers with much more granular information about what you actually own underneath. You see this in the model called the total portfolio approach, which some of the big sovereign wealth funds, Canadian pension funds, New Zealand Super use
There are some really innovative LPs in terms of how they run their portfolios. Are there any innovative approaches that you've seen become categories? I think of WashU as a great example, as a partner of ours who has this very specific, well honed approach that's very much them. And I think others, they feel like a modern day Swenson or something. Like others are looking to them as an example. But I wouldn't say that we've met, like, a ton of LPs that can do what they do. Do you see any categories emerge that are, like, alternatives to the Swenson model of running the portfolio?
Not much. The WashUs of the world and there are a few other comps, like if I were throwing out Brown or
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