95: CAIA's John Bowman – Alternatives, ESG and TPA

[i3] Institutional Investment Podcast

John Bowman is President of the Chartered Alternative Investment Analyst (CAIA) Association. In this episode we look back at the growth of the alternative investment industry, in particular private equity, discuss ESG and take a look at the upcoming paper on the total portfolio approach Overview of podcast with John Bowman, CAIA 02:00 I got involved in international equity investing through a few Boston wealth managers at SSGA. 6:45 I’m integrated by the power of capital allocation to solve some of the world’s problems 08:00 At the CFA Institute, I often found myself on the same stage as the CAIA executives 10:00 The term ‘alternatives’ is a term that CAIA wants to make extinct 16:00 On the growth of alternatives: We’ve got this ecosystem now where companies can stay private for longer or even permanently now, that investors can take advantage of 17:00 The first generation of private equity relied a lot on leverage, but that is not the case anymore. Investors won’t stand for financial engineering 23:00 Public governance models in the US tend to be pretty hands on…, even meddling if I might say 24:00 CAIA papers: 'Portfolio of the Future', 2022 (https://caia.org/portfolio-for-the-future) and 'The Next Decade of Alternative Investments', 2020 (https://caia.org/next-decade) 24:30 Most practitioners under 40, who analysis investments, have only operated in an environment where there was zero cost of capital, non-existent inflation and double digit capital market returns. But this environment was not normal 26:30 The best kept secret in investing 29:00 Knowledge management and operational alpha 32:30 AI is likely to be the next supercycle, but… 37:00 I don’t think we can outsource our fiduciary responsibilities to the machine just yet 40:00 Do we need to disentangle ESG and look closer at the underlying factors and how they affect clients, because you can’t average out ESG factors? 42:00 Upcoming paper on the total portfolio approach with input from CPPIB, Future Fund, GIC and New Zealand Super 46:00 Launch on 19 March 47:00 TPA changes the role of portfolio managers