The Exchanges, every show

Q Thank you. It probably makes sense to start with a little bit of a background on each of your seats and how the stock side platform fits into that. Derek, why don't you kick it off?

A Here at the state of Wisconsin, we run about half of our assets internally and then half of our assets externally. I head up the team where we allocate capital to external managers in the public space. We're trying to find managers where we can't manage those assets with either the team or the strategy or the region of the world internally. A lot more of the hedge fund strategies, a lot more of the emerging markets. How Dockside comes into the whole fray is It's a platform for us to be able to be a lot more dynamic about our allocations, to be able to target our risk a lot better, access managers that we might not have been able to access through a traditional GP relationship.

AI assessment note: “How Dockside comes into the whole fray is It's a platform for us”

Q There's a dichotomy that you talked about, a model allowing you to cut off the left tail, moving faster, and then Tony saying, we have average life of ten-year relationships. How have you put those two things together in Dockside?

A We all set up the arrangement on day one. We all know exactly what the rules are. As long as we're all in the rule box, we're not nearly as tight as others out there. Some of the rumors that you hear, you're down two and you're done. We just set up the rules of the road. You can't sell naked options. You're a healthcare trader. You shouldn't be in TMT names. But as long as we're all in the same group, we're looking to grow relationships with these PMs over long periods of time. We started this almost three years ago. Huge chunk of our managers are still with us. We maybe have turnover once or twice a year during higher sigma periods like we're having right now as a volatile period in the first quarter. You get to see the reaction function of some of these managers. If they go outside of those risk targets, you sit down, you have a conversation with them, you come up with a plan. If they can't execute the plan, then it's time to move on. Part of the success of this model is having those risk controls to be able to capture the right side of the distribution, but the manager's coming in fully aware of exactly what the rules of the road are.

AI assessment note: “We all set up the arrangement on day one. We all know exactly what the rules are.”