Technology – Improving Alpha:

Improving Alpha: Scott Chan on ‘Gearing Up’ a Collaborative Model to Mitigate Risks and Generate Returns

By Improving Alpha | November 4, 2024

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Last year, we were honored to have Chris Ailman as a guest on the Improving Alpha podcast. Fast forward 12 months, and lightning has struck twice for the Improving Alpha team, as we welcome Scott Chan, the current CIO of CalSTRS, to the guest chair.

As the second-largest pension fund in the United States and the premier teacher’s retirement fund globally, CalSTRS manages over $340 billion in assets. Handling a portfolio of this magnitude requires a sophisticated asset allocation strategy that seamlessly integrates cost-saving initiatives, maximizes returns, and enhances risk management on a grand scale. To date, Scott’s innovative strategies have resulted in an impressive $1.6 billion in cost savings.

Tune in to the newest episode of the Improving Alpha podcast and discover the insights Scott reveals on:

how he approaches the ‘reverse pyramid’ structure of his professional career, what he’s inherited from Chris’s tenure at CalSTRS, and the strategic allocation priorities he’s set for the future.
navigating the trending opinions on private credit and fixed income, and how it impacts the team’s total portfolio approach.
the CalSTRS collaboration model, and how the model is assisting the team to do more sophisticated transactions to boost alpha, including co-investments and joint ventures.
ESG and his 3-pronged approach to net zero.
his perspective on investment technology and its power to amplify CalSTRS’ vast reservoirs of data and insights, guiding strategic allocation choices.
the current state of interest rates and inflation and whether this period is our new normal or should we expect a ‘reset’ to occur soon.
investing red flags and the concept of diversity of thought and risk management.
and more.

Resources:

Improving Alpha: Christopher Ailman, CalSTRS on Catching the Big Waves in Institutional Investing

Connect with Scott Chan:

Connect with Michael Oliver Weinberg:

The information covered and posted represents the views and opinions of the guest and does not necessarily represent the views or opinions of Vidrio Financial, and/or our host, Michael Oliver Weinberg. The Content has been made available for informational and educational purposes only. The Content is not intended to be a substitute for professional investing advice. Always seek the advice of your financial advisor or other qualified financial service provider with any questions you may have regarding your investment planning.

The release date may not correspond to the recording date.

Improving Alpha: Chris Wiggins Exploring and Exploiting the Value of Artificial Intelligence

By Improving Alpha | July 8, 2024

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Allocators face a barrage of ideas and debates around the use of artificial intelligence and large language models, better known as LLMs. How can huge amounts of investor data be transformed and enriched to solve challenges in asset allocations and improve an investment team’s strategy? Better yet, have we accumulated enough ‘scar tissue’ in artificial intelligence to understand what AI gets wrong and is easily corrected, versus what is instantaneously correct and becomes actionable intelligence?

In our latest episode of the Improving Alpha podcast, host Michael Oliver Weinberg sits down with Chris H. Wiggins, Chief Data Scientist, The New York Times and Associate Professor of Applied Mathematics, Columbia University, to dive deeper into the fundamentals of data science, dashboarding, and KPIs.

Further highlights from Michael’s discussion with Chris include:

in a crowded field of AI adopters, where does the advantage lie today? With the new disruptors in a given industry or the incumbents?
what are the forces behind data science and how does the framework of descriptive data sets, predictive models, and prescriptive solutions help inform those wishing to leverage AI or LLMs?
when adding a data scientist to an investment team, what should the hiring organization be on the lookout for, before extending an offer?
the ‘shocking’ acceptance of the AI problem.
AI’s impact on the labor force in the next few years.
from an investment play is it better to buy into the AI craze and the deep learning networks, or is the real ‘gold rush’ centered around the requirements necessary to expand artificial intelligence usage via data centers, people who train the models, and the data contained in these models?
Listen now to find out more.

Resources:

The Silo Effect by: Gillian Tett
Algorithms to Live By by: Brian Christian and Tom Griffiths
How Data Happened by: Chris Wiggins and Matthew L. Jones
Data Science in Context by: Alfred Z. Spector, Peter Norvig, Chris Wiggins, and Jeannette M. Wing

Connect with Chris Wiggins:

Connect with Michael Oliver Weinberg:

About Our Guest:

Chris Wiggins is an associate professor of applied mathematics at Columbia University and the Chief Data Scientist at the New York Times. At Columbia he is a founding member of the Department of Systems Biology, the executive committee of the Data Science Institute (http://datascience.columbia.edu/), and the Institute’s education and entrepreneurship committees. He is also an affiliate of Columbia’s Department of Statistics and a founding member of Columbia’s Center for Computational Biology and Bioinformatics (C2B2). He is a co-founder and co-organizer of hackNY (http://hackNY.org), a nonprofit that since 2010 has organized once-a-semester student hackathons and the hackNY Fellows Program, a structured summer internship at NYC startups. Prior to joining the faculty at Columbia he was a Courant Instructor at NYU (1998-2001) and earned his PhD at Princeton University (1993-1998) in theoretical physics. In 2014 he was elected Fellow of the American Physical Society and is a recipient of Columbia’s Avanessians Diversity Award.

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Improving Alpha: Olivier Toubia and the Dark Side of Artificial Intelligence

By Improving Alpha | June 24, 2024

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In an age of artificial intelligence, (AI) many allocators are realizing that humans alone, or software alone, can’t match or exceed the gains that occur when software and human expertise combine. Layer that into the ability of generative AI to do something better, faster, and more cheaply, and investors can begin to see a game-changing impact on business operations.

Join Michael Oliver Weinberg, host of the Improving Alpha: Innovation in Investing ESG, and Technology podcast and Olivier Toubia, Glaubinger Professor of Business Marketing Division, Columbia Business School, for a deep dive into how modern advancements, particularly generative AI, are reshaping the landscape of allocation strategies and more. Olivier shares his journey from early beginnings in math and engineering to the evolution of data science and how new analytical techniques (machine learning, natural language processing, and large language models), can be leveraged to better understand humans and optimize business operations.

Further highlights that Olivier shares:

the +20 years of thought leadership and insight around innovation that went into his Columbia Business School course, Foundations of Innovation.
what are some of the granular applications for artificial intelligence as it relates to Wall Street and other allocators.
the training of artificial intelligence models and the output guardrails that get included in human stereotypes.
can we remove human biases from training data when humans are tagging or labeling data that may be aligned to political affiliations, education, personal experiences, or more?
emerging research of brainstorming with generative artificial intelligence and what is happening with screening or rating of the ideas that are pulled through brainstorming.
And more

Resources:

Connect with Olivier Toubia:

Olivier Toubia is the Glaubinger Professor of Business at Columbia Business School. His research focuses on various aspects of innovation, including preference measurement and idea generation. Specifically, he combines methods from social sciences and data science, to study human processes such as motivation, choice, and creativity. He currently serves as the Editor-in-Chief at the journal Marketing Science. He teaches a course on Foundations of Innovation and the core marketing course. He received his MS in Operations Research and PhD in Marketing from MIT.

Connect with Michael Oliver Weinberg:

The release date may not correspond to the recording date.

Improving Alpha: David Teten on the Future of VC Models, Tools for Improving Alpha and the Portfolio Diversification Game

By Improving Alpha | June 17, 2024

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The portfolio diversification game takes a ton of time, energy, effort, and even during the best of times companies that you might be super bullish about can flame out, just as easily as those that are near death, can suddenly rebound. This is certainly the case in areas of venture capital (VC) or angel investing. In our latest episode of the Improving Alpha podcast, host Michael Oliver Weinberg is joined by David Teten, Venture Partner, Coolwater Capital to discuss thoughts on becoming a serial builder of venture capital firms, how investment tools being used to generate alpha are evolving, and more.

Listen as David shares his journey from the early days as an investment banker to becoming a key player in building and scaling venture capital firms, emphasizing the pivotal role of technology and strategic asset allocation in modern investment practices.

Further highlights:

why strategic allocators give money to investors, and why the answer is not as simple as the generation of alpha.
what is so attractive about alternative VC models and could it be a way for VC investors to get a larger part of the investment pie?
what sort of challenges exist today for VCs in achieving investment goals, and why Warren Buffet quotes like, “You should invest when there’s blood in the water”, don’t paint the full metaphoric picture for this type of investor.
are family offices overestimating their competencies and what is one of the biggest secrets (as David sees it) in institutional investing today?
macro trends in the VC universe and what is the most disruptive theme impacting investing today.
And more.

Resources:

Connect with David Teten:

David Teten is a Venture Partner with Coolwater Capital, known as “Y Combinator for emerging VCs”. Coolwater runs an accelerator for emerging VC fund managers and invests as a limited partner, in general partnerships, in fund management companies, and also directly into startups. He is the Founder of Versatile VC, backing “investment tech” companies which help investors generate alpha and succeed. He is Chair of PEVCTech, a community of private equity and VC funds working to generate alpha by leveraging technology and analytics.

Connect with Michael Oliver Weinberg:

The release date may not correspond to the recording date.

Improving Alpha: Mazen Jabban on the Dangers of Delegating Away Allocator Innovation

By Improving Alpha | April 15, 2024

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Navigating the world of technology innovations as a chief investment officer or portfolio manager is akin to a thrilling game of high-stakes poker or a graceful tango. Your success hinges on your ability to not just welcome incoming innovations but also effectively implement them, enhancing data transparency, boosting portfolio returns, and more.

In this episode of the Improving Alpha podcast, Michael Oliver Weinberg is joined by Mazen Jabban, Chairman & CEO, Vidrio Financial. Mazen details his journey on what led him to create Vidrio Financial, and how allocators should look at the paradigm shifts occurring in innovations across the investment community.

Mazen further highlights:

how the revolutionary impact of artificial intelligence and large language models (LLM) could shape the landscape for institutional investors.
the continued significance of transparency within the GP-LP relationship and the transformative influence of technology on these dialogues.
the investment for allocators to dedicate resources towards purchasing or constructing infrastructure to enhance data management practices..
how can institutional investors successfully implement a comprehensive portfolio strategy when faced with segmented teams spanning private equity, real estate, and hedge funds, each with their unique risk, data, and performance methodologies.
insights on private credit and the transformative potential of technology advancements for this asset class.
And more.

Resources:

The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail by Clayton M. Christensen

Connect with Mazen Jabban:

Mazen Jabban is the Founder, Chairman, and CEO of Vidrio Financial, a New York-based company that provides institutional investors managing alternative investments with investment management solutions on a single platform. He is responsible for setting strategic direction and the firm’s product development roadmap.

As an entrepreneur at heart, with years of experience in investment strategies, IT systems, management consulting, real estate development, and investment he is always looking for new ways to grow.

Connect with Michael Oliver Weinberg:

The release date may not correspond to the recording date.

Improving Alpha: Ciamac Moallemi on the Black Box of Systematic Investing, Bitcoin, and Neural Networks

By Improving Alpha | February 26, 2024

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Is bitcoin a ‘safe-haven’ or still too risky for institutional investors to include as part of a larger portfolio allocation? How is systematic investing changing today with the influence of neural networks and artificial intelligence?

Michael Oliver Weinberg, host of the Improving Alpha: Innovation in Investing ESG, and Technology podcast invites Ciamac Moallemi, William von Mueffling Professor of Business Decision, Risk, and Operations Division, Columbia Business School, to unravel some of the mysteries behind decentralized finance (DeFi) and quantitative investing. Cimac will detail his expertise and how his ‘agnostic’ career interests have led him from early beginnings in science to financial applications in hedge funds, and more.

Ciamac discusses:

the definition of stochastic control, and how it is applied to blockchains and decentralized finance.
how neural networks have changed both in technological computing power and the investment costs to run that power today.
what was the catalyst for writing the paper, “Monopoly without a Monopolist: An Economic Analysis of the Bitcoin Payment System”, and what Cimac believes Bitcoin really is at its core.
the technology perspective of Ethereum and how that is different from the Bitcoin framework. Will one prevail over the other as we move forward?
an academic and practitioner background when it comes to systematic investing today. What are the three main pieces of systematic investing, and why it shouldn’t be thought of as a black box.
And more

Resources:

Monopoly Without a Monopolist Bitcoin

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The release date may not correspond to the recording date.

Improving Alpha: Sandro Salsano exploring synergies in investments, philanthropy and deep value strategies

By Improving Alpha | January 8, 2024

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When it comes to geopolitical risk, company risk, or even balancing the costs of capital with the desire for quick profits, institutional investors are now taking a long-term approach to their future investments. How does this perspective impact the risk-reward dynamic for future returns, and are there sectors that may not be as flashy but offer better opportunities for generating alpha?

To answer these questions and more, Michael Oliver Weinberg, host of the Improving Alpha podcast invited Sandro Salsano, President of the Salsano Group, to get a sense of what he’s seeing in the world of emerging markets, private equity, philanthropy, and more.

Sandro discusses:

the fascinating story behind his family office and Goldman Sachs interactions, and his insights into his innovative global strategies in the realm of private equity, emerging markets, and more.
his core sectors and investment horizon, and how they’re delivering alpha and positive cash flows in this market.
how he views partnerships with larger institutions to assist in putting capital to work for longer periods of time.
his view of the Latin American markets (including Brazil, Mexico, Colombia, and Peru) and how inflation plays a role in his strategic investments across the region.
balancing investments across philanthropic ideas and how these moves led him to a seat on the Board of Trustees at the University of San Diego.
how he applies a measure of psychology to investing, and how being humble in life and investing has led to his overall success.
And more!

Connect with Michael Oliver Weinberg:

Connect with Sandro Salsano:

About Sandro Salsano:

Sandro Salsano has been at the forefront of successful initiatives in investments, philanthropy, and education for more than two decades. Forbes called him the Warren Buffett of Central America on its cover and one of the world’s most iconic visionary and financial titans. The World Economic Forum named him Young Global Leader for his exceptional vision, courage, and influence to drive positive change in the world. In 2014 he formalized his philanthropy by co-founding the Salsano Shahani Foundation to focus on education. He is a Chairman of Global Dignity, a Member of the Judging Academy for the World’s Best School Prize, a Partner of the Tent Partnership for Refugees, a Member of the Academy for Global Teacher Prize, a Steering Committee member of 1640 Society, and pledged his support to TerraCarta. Sandro is President of Salsano Group, a multi-billion dollar private conglomerate holding company investing in private equity, real estate, and technology globally and he is President of Salsano Family Office. Sandro serves as a Trustee for the University of San Diego California and is on the Investment Committee for the Endowment of the University. A graduate of Bocconi University Milan with full grades, he also studied at Harvard, Oxford, and Princeton University. He and his wife Johanna have been married since 2014 and have two children.

The release date may not correspond to the recording date.

Improving Alpha: William J. Kelly, CAIA on disrupting data transparency in the institutional markets

By Improving-Alpha | December 11, 2023

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As institutional investments become increasingly intricate, it is crucial to bring transparency (and perhaps even enlightenment) to both GPs and LPs. Large data sets and the scale of innovative technology shows no signs of decelerating for those seeking alpha. Serving as a cautionary tale for this installment of Improving Alpha, a famous quote by renowned British Economist Ronald H. Coase once said, “ if you torture the data long enough, it will confess to anything”.

Join Michael Oliver Weinberg as he sits down with William (Bill) J. Kelly, CAIA, President & CEO of the CAIA Association, in this captivating episode. In just :40 minutes, Bill shares his insightful perspectives on the ever-increasing regulation of private markets and the importance of data transparency. Dive into the fascinating world of AI and large language models, and explore the latest trends in ESG. Don’t forget to click on the audio play button at the top of this page to uncover even more valuable insights.

Further highlights cover:

a brief overview of CAIA and FDP, explaining their origins and their roles in the alternative investments industry
the critical importance of being able to upskill and cross-skill the cast of characters that define the investment process, and how the process has changed over the last 10 years.
will artificial intelligence ever be able to build a comprehensive mosaic around cash flow, manager letters, and more.
learning what’s on the minds of larger allocators when it comes to increasing regulation by the SEC, and would real opinions be presented better with a ‘truth serum’ cocktail on data transparency.
the huge potential of doing well at one pillar of ESG, while simultaneously nuking another pillar.
And more!

Connect with Michael Oliver Weinberg:

Connect with William (Bill) Kelly:

About William (Bill) Kelly:

William (Bill) J. Kelly, CAIA is the President & CEO of the CAIA Association. Bill has been a frequent industry speaker, writer, and commentator on alternative investment topics around the world since taking the leadership role at the CAIA Association in January 2014. Previously, Bill was the CEO of Boston Partners and one of seven founding partners of the predecessor firm, Boston Partners Asset Management which, prior to a majority interest being sold to Robeco Group in Rotterdam in 2002, was an employee-owned firm. Bill’s career in the institutional asset management space spans over 30 years where he gained extensive managerial experience through successive CFO, COO, and CEO roles. In addition to his current role, Bill is a tireless advocate for shareholder protection and investor education and is currently the Chairman and lead independent director for the Boston Partners Trust Company. He has previously served as an independent director and audit committee chair for ’40 Act Mutual Funds and other financial services firms. He is also currently an Advisory Board Member of the Certified Investment Fund Director Institute which strives to bring the highest levels of professionalism and governance to independent fund directors around the world. A member of the board of the CAIA Association, Bill also represents CAIA in similar capacities via their global partnerships with other associations and global regulators. Bill began his career as an accountant with PwC and is a designated Audit Committee Financial Expert in accordance with SEC rules.

The release date may not correspond to the recording date.

Improving Alpha: Paul C. Sohn on targeting the ‘fat pitch’ in institutional investing

By Improving-Alpha | December 4, 2023

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Mastering the timing of investment markets is a formidable challenge that demands unwavering commitment to a well-defined methodology. It entails navigating through risks, optimizing volatility, and steering clear of managers who adopt a reckless “spray and pray” approach.

Today, allocators must carefully consider the current market cycle, strategically position their incentives, and strike the right balance between liquid and illiquid assets. By embracing this approach, they can shield themselves from the anguish of overallocating in underperforming asset classes.

Join Michael Oliver Weinberg as he engages in a captivating conversation with Paul C. Sohn, Chief Investment Officer at Mont Alto Capital, in the latest episode of the Improving Alpha podcast. Paul provides his front-row insight and expertise on what he has observed over the last 20 years in hedge fund investing, macro portfolio management, and the formation of his family office, Mont Alto Capital. Listen to Paul as he discusses:

his background and what strategies he’s specifically leveraging to capitalize on ‘fat pitches’ in institutional investing.
his thesis on the Greek recovery trade, what Kyriakos Mitsotakis leadership means for the future of the country, and what the US could learn from his examples.
how his family’s timber business influenced Paul’s beliefs on ESG and why ESG in its current form is very similar to child brain thinking.
where is private equity allocations moving now that the wind in the sails has died down in comparison to the last decade of returns.
if commercial real estate will be a ‘whimper’ or a ‘bang’ in the coming years and does that create an opportunity for distressed buyers.
And more!

Connect with Michael Oliver Weinberg:

Connect with Paul C. Sohn:

About Paul Sohn:

Mont Alto Capital is the family office of Paul Sohn. Paul spent 15 years as a portfolio manager at Soros Fund Management, Kingdon Capital Management, and Duquesne Capital Management. Areas of focus included tech, media, consumer, and macro. Mont Alto Capital seeks out proprietary deal flow in early and growth-stage private companies. Basic investment tenets include a search for asymmetric return profiles, a contrarian desire to be active in areas where other pools of capital are not, and an ability to execute a time arbitrage strategy that can focus on long-term returns.

Paul Sohn takes an active role in a variety of investment projects. Vertical areas of focus include tech, media, natural resources, intellectual property, and real estate. The portfolio page includes a sample of projects where Paul Sohn has either a founding, board, investment, or advisory role.

Improving Alpha: Christopher Ailman, CalSTRS on Catching the Big Waves in Institutional Investing

By Improving-Alpha | October 31, 2023

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Since its establishment in 1913, CalSTRS has been fully committed to maximizing the retirement benefits for its extensive network of educators throughout California. With a staggering $310 billion in assets under management through its defined benefit plan, the pension scheme continuously strives to strike a harmonious balance between achieving targeted returns and addressing industry-wide challenges such as diversification, innovation, potential warning signs from managers, global investment prospects, and much more.

Experience the latest episode of the Improving Alpha podcast, where Michael Oliver Weinberg is joined by Christopher J. Ailman, Chief Investment Officer, CalSTRS. With an impressive 40 years of experience in the business, Christopher’s unwavering passion for constant learning in the face of market volatility and seeking alpha strategies shines through. Don’t miss out on this insightful podcast episode – click on the media player above to hear Christopher’s valuable insights on:

what is the true essence of ESG and how will it impact CIOs in the next seven or twenty years? Explore the potential opportunities, risks, and the global CapEx needed so we don’t fry the planet. Discover Christopher’s perspective on whether exclusion or engagement is the preferred approach when navigating these waters.
why governance experiences natural fluctuations and how CIOs can play a crucial role in driving the movement towards enhanced investment board diversity. According to Christopher, it’s the concept of “iron sharpens iron” that fuels this dynamic process.
how is technology being leveraged across CalSTRS portfolio, especially being a division of the state of California, and how is an environment of continual learning helping their investment teams in approaching the next Tesla.
how he navigates the world of venture capital investments in California, where stringent disclosure laws prevail.
the insights into CalSTRS’ perspective on the role of China in institutional investments – friend or foe? .
And more!

Connect with Michael Oliver Weinberg:

Connect with Christopher Ailman:

About Christopher Ailman:

Christopher Ailman has been the chief investment officer of CalSTRS since October 2000. He leads an investment staff of more than 200 and oversees a portfolio valued at $307.9 billion as of September 30, 2023. He has more than 37 years of institutional investment experience.

He has served on several boards and advisory boards in the U.S. and U.K. He represents institutional investors on the MSCI Index Editorial Advisory Board, the PRI Asset Owners Advisory Committee, the Sustainability Accounting Standards Board (SASB) Investor Advisory Group, and the Toigo Foundation. He is the chair of the 300 Club and co-chair of the Milken Global Capital Markets Committee. In 2016, he was part of the first cohort to achieve a Fundamentals of Sustainable Accounting (FSA) credential.

Ailman is recognized as one of the top CIOs both in the U.S. and globally. He has received numerous awards and recognitions: the Institute for Fiduciary Education’s CIO of the Year in 2000, the Richard Stoddard Award for service in the investment of public pensions in 2003, the Distinguished Service Award for Advancement of Latinos in Business from the New American Alliance in 2006, and Institutional Investor magazine’s Large Public Fund Manager of the Year Award in 2011. In 2013, aiCIO magazine named Ailman the No. 3 CIO in the world and Investment Innovator of the Year. In 2017, Ailman received Institutional Investor magazine’s first Lifetime Achievement Award, and in 2018, he was named the top CIO in the world by Chief Investment Officer magazine. He is a regular guest on television and radio and is frequently quoted in major financial publications.