Breaking Down the Multi-Manager Playbook: How This $19B CIO Thinks About Alpha | Sean McGould | The Lighthouse Group
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Japan is a different market than what it was five years ago. So in June 2021, yeah, the corporate governance code was effectively revised. So started to care more about things like return on equity, capital allocation, etcetera. The bottom line, since those changes were enacted is that the Nikkei has outperformed the S and P 500 by about 8% per year. If you look at the average stock in the Nikkei over that time period, it's up about 9% a year. So what's made that difference?
Hello, and welcome to Other People's Money. I'm Max Wheatley, and I'm joined today by Sean Magould, CEO and CIO of The Lighthouse Group and alternatives manager with approximately $19,000,000,000 in assets under management as we record today. And before we get started, I'd like to do a quick disclaimer that the views expressed by Sean are his own. They are as of this date of the recording, and they are subject to change. The discussion is for informational purposes only, does not constitute investment advice, and nothing in this conversation is an offer to sell or a solicitation of an offer to
Thanks, Mix. I really appreciate being on.
Alright. Well, alternatives manager, it's such a broad space these days. Can we narrow it down a little bit? What does Lighthouse specialize in?
Lighthouse specializes in hedge fund strategies. So about two thirds of the risk that we take is, in equities around the globe. About another 25% is in more event driven strategies like merger arbitrage and and specs and those sorts of things. And the final 15% is in macro related strategies, but liquid, no real estate, private equity, venture capital.
All right. So my question would be with all of those different strategies, what's growing? Where is the investor demand right now? Hedge funds for the past decade, people have been talking about the lack of demand, but really over the past few years, hedge fund demand has has very much increased from institutional investors. Are you seeing that in from your seat?
Definitely. There there's more interest in hedge fund strategies now certainly than there was a couple years ago. I think a few things have changed. If you looked at the landscape of alternative investments a couple years ago, probably the top of the list was was private credit. At that time, there have been some headlines around private credit. I think it will continue to be a viable asset class. Not everything is caught up in the software sector in private credit. And I think there's a renewed interest in having some more hedged approaches in portfolios and having them liquid in nature. And
Well, there's liquidity is two things. It's the liquidity of the underlying assets, but there's also the liquidity of of the vehicles. We are seeing gating on hedge funds jump up. Is it not just the investments, but also asset lockups?
Well, yeah. And just to quantify that, we really haven't seen gated lockups on, I would say, hedge funds. There are terms within the hedge fund. There are some offerings within hedge funds that have longer liquidity to them. But I think the most recent lockups in Gates have actually referred to private credit where investors couldn't get their capital out. Those are private loans being made to companies, individuals, whatever it is. The markets that we trade in are generally all listed markets from an equity perspective, a bond perspective, or their currencies, commodities that are traded on e
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