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Jun 6, 2024 · 47m · capital-allocators

Mo Haghbin - Customizing Solutions from the Top Down at Invesco (EP.390)

Mo Haghbin · 34m spoken Ted Seides · 8m spoken
0:00 / 0:00

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In this episode of Capital Allocators, host Ted Seides interviews Mo Haghbin, Head of Multi-Asset Solutions at Invesco, exploring how his group manages $88 billion through top-down, regime-based asset allocation and dynamic factor modeling. Haghbin shares his personal journey, the quantitative architecture behind modular portfolio customization at scale, and key leadership lessons in institutional investing.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Ted holds 18.5% of the talking time here. How this is scored →

Ted as informed peer 4.8 Guest teaching 3.2 Guest disagreement 0.8 Ted pushing back 1.6
05100:0015:0030:0045:002:53–9:26 · Ted as informed peer 3/10 Mo Haghbin's Early Life and Multi-Asset Career Journey Ted guides Mo through his early life and career trajectory with conversational, open-ended biographical prompts. Mo shares his personal story from moving from Iran to Colorado and starting out at Barclays and BGI without any conflict.9:26–13:58 · Ted as informed peer 4/10 Invesco Solutions Approach and Regime-Based Allocation Framework Ted asks Mo to define the solutions concept and outline Invesco's top-down regime-based investment framework. Mo explains how client needs dictate strategic asset allocation benchmarks before selecting managers.13:58–23:56 · Ted as informed peer 6/10 Dynamic Factor Allocation and Macro Regime Modeling Ted demonstrates solid fluency in quantitative factor investing, asking Mo how Invesco handles tactical tilts and pushing on whether the same macro indicators could be interpreted contrarily. Mo explains their systematic two-model regime framework.23:57–32:48 · Ted as informed peer 6/10 Multi-Asset Implementation, Alternatives, and Manager Selection Dynamics Ted probes into fixed income derivatives, alternative illiquidity, and open-architecture manager selection versus internal Invesco funds. Mo articulates that top-down allocation dominates performance outcomes relative to idiosyncratic manager selection.32:48–42:24 · Ted as informed peer 5/10 Scaling Modular Customization and Navigating Market Opportunities Ted asks about scaling customized solutions through technology, active equity revivals, and private market wrapper innovations. Mo provides nuanced analysis of semi-liquid structures and the structural necessity of taking illiquidity risk.2:53–9:26 · Guest teaching 1/10 Mo Haghbin's Early Life and Multi-Asset Career Journey Ted guides Mo through his early life and career trajectory with conversational, open-ended biographical prompts. Mo shares his personal story from moving from Iran to Colorado and starting out at Barclays and BGI without any conflict.9:26–13:58 · Guest teaching 3/10 Invesco Solutions Approach and Regime-Based Allocation Framework Ted asks Mo to define the solutions concept and outline Invesco's top-down regime-based investment framework. Mo explains how client needs dictate strategic asset allocation benchmarks before selecting managers.13:58–23:56 · Guest teaching 4/10 Dynamic Factor Allocation and Macro Regime Modeling Ted demonstrates solid fluency in quantitative factor investing, asking Mo how Invesco handles tactical tilts and pushing on whether the same macro indicators could be interpreted contrarily. Mo explains their systematic two-model regime framework.23:57–32:48 · Guest teaching 4/10 Multi-Asset Implementation, Alternatives, and Manager Selection Dynamics Ted probes into fixed income derivatives, alternative illiquidity, and open-architecture manager selection versus internal Invesco funds. Mo articulates that top-down allocation dominates performance outcomes relative to idiosyncratic manager selection.32:48–42:24 · Guest teaching 4/10 Scaling Modular Customization and Navigating Market Opportunities Ted asks about scaling customized solutions through technology, active equity revivals, and private market wrapper innovations. Mo provides nuanced analysis of semi-liquid structures and the structural necessity of taking illiquidity risk.2:53–9:26 · Guest disagreement 0/10 Mo Haghbin's Early Life and Multi-Asset Career Journey Ted guides Mo through his early life and career trajectory with conversational, open-ended biographical prompts. Mo shares his personal story from moving from Iran to Colorado and starting out at Barclays and BGI without any conflict.9:26–13:58 · Guest disagreement 1/10 Invesco Solutions Approach and Regime-Based Allocation Framework Ted asks Mo to define the solutions concept and outline Invesco's top-down regime-based investment framework. Mo explains how client needs dictate strategic asset allocation benchmarks before selecting managers.13:58–23:56 · Guest disagreement 1/10 Dynamic Factor Allocation and Macro Regime Modeling Ted demonstrates solid fluency in quantitative factor investing, asking Mo how Invesco handles tactical tilts and pushing on whether the same macro indicators could be interpreted contrarily. Mo explains their systematic two-model regime framework.23:57–32:48 · Guest disagreement 1/10 Multi-Asset Implementation, Alternatives, and Manager Selection Dynamics Ted probes into fixed income derivatives, alternative illiquidity, and open-architecture manager selection versus internal Invesco funds. Mo articulates that top-down allocation dominates performance outcomes relative to idiosyncratic manager selection.32:48–42:24 · Guest disagreement 1/10 Scaling Modular Customization and Navigating Market Opportunities Ted asks about scaling customized solutions through technology, active equity revivals, and private market wrapper innovations. Mo provides nuanced analysis of semi-liquid structures and the structural necessity of taking illiquidity risk.2:53–9:26 · Ted pushing back 0/10 Mo Haghbin's Early Life and Multi-Asset Career Journey Ted guides Mo through his early life and career trajectory with conversational, open-ended biographical prompts. Mo shares his personal story from moving from Iran to Colorado and starting out at Barclays and BGI without any conflict.9:26–13:58 · Ted pushing back 1/10 Invesco Solutions Approach and Regime-Based Allocation Framework Ted asks Mo to define the solutions concept and outline Invesco's top-down regime-based investment framework. Mo explains how client needs dictate strategic asset allocation benchmarks before selecting managers.13:58–23:56 · Ted pushing back 3/10 Dynamic Factor Allocation and Macro Regime Modeling Ted demonstrates solid fluency in quantitative factor investing, asking Mo how Invesco handles tactical tilts and pushing on whether the same macro indicators could be interpreted contrarily. Mo explains their systematic two-model regime framework.23:57–32:48 · Ted pushing back 2/10 Multi-Asset Implementation, Alternatives, and Manager Selection Dynamics Ted probes into fixed income derivatives, alternative illiquidity, and open-architecture manager selection versus internal Invesco funds. Mo articulates that top-down allocation dominates performance outcomes relative to idiosyncratic manager selection.32:48–42:24 · Ted pushing back 2/10 Scaling Modular Customization and Navigating Market Opportunities Ted asks about scaling customized solutions through technology, active equity revivals, and private market wrapper innovations. Mo provides nuanced analysis of semi-liquid structures and the structural necessity of taking illiquidity risk.

speaking balance: gold is Ted, purple is the guest (3 minute bins)

0:00 · Ted 88.7% · guest 11.3%0:00 · Ted 88.7% · guest 11.3%3:00 · Ted 7.3% · guest 92.7%3:00 · Ted 7.3% · guest 92.7%6:00 · Ted 5.6% · guest 94.4%6:00 · Ted 5.6% · guest 94.4%9:00 · Ted 17.9% · guest 82.1%9:00 · Ted 17.9% · guest 82.1%12:00 · Ted 16.1% · guest 83.9%12:00 · Ted 16.1% · guest 83.9%15:00 · Ted 10.2% · guest 89.8%15:00 · Ted 10.2% · guest 89.8%18:00 · Ted 21.5% · guest 78.5%18:00 · Ted 21.5% · guest 78.5%21:00 · Ted 14.9% · guest 85.1%21:00 · Ted 14.9% · guest 85.1%24:00 · Ted 19.4% · guest 80.6%24:00 · Ted 19.4% · guest 80.6%27:00 · Ted 4.7% · guest 95.3%27:00 · Ted 4.7% · guest 95.3%30:00 · Ted 26.4% · guest 73.6%30:00 · Ted 26.4% · guest 73.6%33:00 · Ted 5.1% · guest 94.9%33:00 · Ted 5.1% · guest 94.9%36:00 · Ted 15.2% · guest 84.8%36:00 · Ted 15.2% · guest 84.8%39:00 · Ted 18% · guest 82%39:00 · Ted 18% · guest 82%42:00 · Ted 8.5% · guest 91.5%42:00 · Ted 8.5% · guest 91.5%45:00 · Ted 19.5% · guest 80.5%45:00 · Ted 19.5% · guest 80.5%
Sharpest disagreement ▶ 39:12 No free lunch in private wrappers

Mo firmly rejects the marketing hype around liquid private market products, stating plainly that harvesting an illiquidity premium fundamentally requires accepting illiquidity risk.

 Hardest push from Ted ▶ 20:40 Pushing on contrarian interpretations

Ted challenges Mo's pro-cyclical conclusion by pointing out that other investors viewing the exact same economic data might conclude it is time to turn defensive and contrarian.

 Biggest teaching moment ▶ 26:51 The math of top-down allocation dominance

Mo educates listeners on the math of return attribution, illustrating how an equity underweight overwhelms any possible manager alpha over a multi-decade horizon.

 Ted holds their own ▶ 22:55 Mapping the 2x2 macro matrix

Ted displays deep institutional knowledge of quantitative macro modeling by drilling into the off-diagonal scenarios of economic strength versus market risk appetite.
the scores for every segment, with the reasoning behind each
ChapterTopicTed as informed peerGuest teachingGuest disagreementTed pushing backWhy
Mo Haghbin's Early Life and Multi-Asset Career Journey 3100 Ted guides Mo through his early life and career trajectory with conversational, open-ended biographical prompts. Mo shares his personal story from moving from Iran to Colorado and starting out at Barclays and BGI without any conflict.
Invesco Solutions Approach and Regime-Based Allocation Framework 4311 Ted asks Mo to define the solutions concept and outline Invesco's top-down regime-based investment framework. Mo explains how client needs dictate strategic asset allocation benchmarks before selecting managers.
Dynamic Factor Allocation and Macro Regime Modeling 6413 Ted demonstrates solid fluency in quantitative factor investing, asking Mo how Invesco handles tactical tilts and pushing on whether the same macro indicators could be interpreted contrarily. Mo explains their systematic two-model regime framework.
Multi-Asset Implementation, Alternatives, and Manager Selection Dynamics 6412 Ted probes into fixed income derivatives, alternative illiquidity, and open-architecture manager selection versus internal Invesco funds. Mo articulates that top-down allocation dominates performance outcomes relative to idiosyncratic manager selection.
Scaling Modular Customization and Navigating Market Opportunities 5412 Ted asks about scaling customized solutions through technology, active equity revivals, and private market wrapper innovations. Mo provides nuanced analysis of semi-liquid structures and the structural necessity of taking illiquidity risk.

Statements from this episode (10)

Disclosure
Invesco's Solutions group manages roughly $88 billion across diverse client segments
“Within the solutions group, we manage about eighty eight billion of assets, and that's pretty diverse across client type.”
Mo Haghbin Jun 6, 2024 ▶ 9:36
Insight
Haghbin: Size and value are pro-cyclical, while quality and low-volatility are defensive
“Things like size and value tend to be more pro cyclical. Things like quality and low volatility tend to be counter cyclical. They're more defensive.”
Mo Haghbin Jun 6, 2024 ▶ 16:50
Disclosure
Invesco is positioned pro-cyclically in small/mid-caps and value equities
“If I look at our current positioning, tends to be a bit more pro-cyclical. We tend to favor smaller and middle capitalization companies, value-oriented companies, because what we're seeing from the economy is actually Quite impressive.”
Mo Haghbin Jun 6, 2024 ▶ 19:17
Insight
Haghbin: Asset allocation decisions drive most portfolio returns over bottom-up selection
“So I think as an industry, we spend a lot of time thinking about the bottoms up piece, idiosyncratic piece, but the majority of your return comes from your top down asset allocation decisions.”
Mo Haghbin Jun 6, 2024 ▶ 26:52
Insight
Haghbin: Allocators should be contrarian and invest in managers when struggling
“The best managers will end up being the worst managers, and sometimes you have to almost be a little bit of a contrarian on that. You want to allocate capital maybe at times where managers are struggling rather than delivering really, really good returns.”
Mo Haghbin Jun 6, 2024 ▶ 29:21
Disclosure
Haghbin: Invesco scores internal and external managers using identical criteria
“There's no difference between how we think about the scoring of a manager, whether they're within Invesco or sitting outside of Invesco.”
Mo Haghbin Jun 6, 2024 ▶ 31:26
Insight
Haghbin: Tweaking quantitative investment strategies during underperformance triggers a death spiral
“That's the first step to a death spiral, is if you keep tweaking and moving back and forth based on current market conditions. So I think one of the things I learned early in my career, and I still believe it, is systematic or investment processes that are wel…”
Mo Haghbin Jun 6, 2024 ▶ 35:46
Assertion Supported
Haghbin: $25 trillion sits in cash, representing up to 20% of US wealth
“If you look at bank deposits at 17 trillion, Money market funds at seven trillion. So there's 25 trillion of assets that are sitting in cash. That's almost 15, 20% of all U.S. Wealth sitting in cash.”
Mo Haghbin Jun 6, 2024 ▶ 37:30
Insight
Haghbin: Semi-liquid private fund structures cannot harvest the full illiquidity premium
“To harvest the illiquidity premium, you have to take on the illiquidity risk. There is no free lunch. So these products, I think, are great. They will give you substantially similar exposures, but that liquidity profile is going to lead to slightly different p…”
Mo Haghbin Jun 6, 2024 ▶ 39:39
Opinion
Haghbin argues neurodivergent talent offers an edge in investment management
“I've actually spent a lot of time thinking about how to bring some of that neurodivergent thinking into the workforce, because I actually think it's missing. I think there's an opportunity for us to really expand the way we think about those skill sets, and es…”
Mo Haghbin Jun 6, 2024 ▶ 43:42
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