Sep 13, 2021 · 55m · capital-allocators
Katie Hall – Hall Capital Partners (Capital Allocators, EP.213)
0:00 / 0:00
gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
Hall Capital Partners founder and co-chair Katie Hall joins Ted Seides to discuss building an independent outsourced CIO firm, constructing customized multi-asset portfolios, and maintaining the cultural discipline of harsh objectivity in manager selection.
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 24.2% of the talking time here. How this is scored →
Ted as informed peer 3.4 Guest teaching 3.5 Guest disagreement 0.7 Ted pushing back 0.1
speaking balance: gold is Ted, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 37:17 Critique of conventional ESG terminology
Katie rejects standard industry terminology around ESG and negative screening, arguing that current phrasing causes widespread confusion and defining her own 'full consequence investing' paradigm.
Hardest push from Ted ▶ 31:30 Ted queries managing cyclical manager relationshipsTed challenges how an allocator balances long-term organizational underwriting against strategy-level cyclicality when alpha opportunities temporarily disappear.
Biggest teaching moment ▶ 11:20 Madoff's institutionalization of wealth advisory due diligenceKatie provides a historical overview of how the Madoff fallout forced high-net-worth families to abandon casual peer referrals in favor of rigorous, institutionalized RFP processes.
Ted holds their own ▶ 46:13 Ted references shared background with PRINCO leadershipTed connects his institutional background at Yale alongside Andy Golden to ground the dialogue in the specific operational dynamics of premier university endowment boards.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Ted as informed peer | Guest teaching | Guest disagreement | Ted pushing back | Why |
|---|---|---|---|---|---|---|
| Announcement: Capital Allocators University Cohort | 0 | 0 | 0 | 0 | Ted delivers an introductory housekeeping monologue and sponsor announcement before welcoming Katie Hall to discuss the origin story of Hall Capital and her early career in risk arbitrage. | |
| Building an Independent, Alignment-Focused OCIO Model | 3 | 4 | 1 | 0 | Katie explains the founding philosophy of independent fee alignment and how the Madoff scandal fundamentally transformed client due diligence across the OCIO industry from informal referrals to formal RFPs. | |
| Fostering Broad Firm Ownership and Partnership Culture | 3 | 3 | 0 | 0 | The conversation covers firm ownership structure and partner development. Katie explains how transferring equity to broader leadership creates long-term institutional stability. | |
| Long-Term Investment Horizons and Managing Underperformance | 4 | 4 | 1 | 1 | Ted asks about techniques for coaching clients through short-term underperformance. Katie details the friction between theoretical long-term horizons and real-world benchmark tracking. | |
| Customized Roadmaps and Multi-Asset Portfolio Allocation | 4 | 4 | 1 | 0 | Katie details why Hall Capital avoids standardized model portfolios in favor of individualized roadmaps reflecting liquidity needs, taxable realities, and structural constraints. | |
| Investment Team Organization and Concentrated Equity Philosophy | 4 | 3 | 1 | 0 | Katie outlines team coverage across asset buckets and asserts that high-conviction active management must embrace significant portfolio concentration to justify fees against benchmarks. | |
| Manager Selection Framework and Organizational Underwriting | 4 | 4 | 0 | 0 | Katie walks through manager selection diligence, placing equal emphasis on forward opportunity sets, sustainable repeatable processes, and organizational incentive alignment. | |
| Navigating Alternative Assets and Sizing Cyclical Strategies | 5 | 4 | 1 | 1 | Ted probes the evolving hedge fund opportunity set. Katie notes margin compression across spread-based arbitrage and explains why cyclical strategies require dynamic position sizing rather than permanent allocations. | |
| Private Equity Valuations and Portfolio Trimming Disciplines | 4 | 4 | 1 | 0 | Katie examines private market valuation inflation and discusses the institutional discipline required to continually trim winning sub-strategies instead of binary market-timing exits. | |
| Approach to Cryptocurrency and Decentralized Finance | 4 | 5 | 2 | 0 | Katie explains Hall Capital's measured approach to crypto as curious observers and reframes conventional ESG rhetoric into a rigorous, fundamentals-based 'full consequence investing' framework. | |
| Firm Competitive Advantages and Sustaining Harsh Objectivity | 3 | 4 | 1 | 0 | Katie reflects on maintaining harsh objectivity, highlighting the psychological paradox where deep manager conviction often threatens ongoing objective evaluation. | |
| Governance Insights from Princeton's Investment Committee | 4 | 3 | 0 | 0 | Ted and Katie discuss endowment governance, comparing PRINCO's operating model and the subtle balance between trustee oversight and CIO operational autonomy. | |
| Future Growth Vision and 27-Year Firm Retrospective | 2 | 3 | 0 | 0 | Katie reflects on the firm's 27-year evolution, disciplined client capacity management, and the core challenge of balancing steady asset growth with a close-knit culture. |
Statements from this episode (19)
Hall Capital Exclusively Charges Basis-Point Advisory Fees to Ensure Alignment
“The business model was really one that I was pretty clear about really from the beginning and has more or less stayed consistent throughout, which is rooted in independence and objectivity and basically only being paid one way, which was by our clients. And it…”
Katie Hall: Wealth Advisory Services Are Bought, Not Sold Through Persuasion
“I mean, I always said that we were essentially a business that was absolutely bought, not sold, because I don't believe you can convince somebody about the merits of a diversified portfolio if they don't want a diversified portfolio.”
Katie Hall: 38 of 190 Hall Capital Employees Hold Firm Equity
“Today out of our, I don't know, give or take, 190 employees, 38 are owners in the firm, so we really have worked to continue to have that, build on that sense of partnership and continue to expand that ownership, and we've also done it through a generational t…”
Hall Capital Borrows to Buy Back Founder Equity for Staff Distribution
“And we have, over the years, worked to further that transition of ownership through essentially borrowing and repurchasing parts of my stake, parts of John's stake, parts of our outside owner's stake, and then reallocating that to the senior people and through…”
Hall Capital Treats Client Acquisition as a Firm-Wide Collective Responsibility
“We don't pay people for client acquisition because we view that as something that the entire firm is responsible for”
Katie Hall: Diversify Across Asset Classes, Maximize Concentration Within Them
“Long-term diversified portfolio is the winning hand in most cases, and we believe within asset classes that it makes sense to have as much concentration as is tolerable, that you're really getting the diversification across the asset classes primarily as well …”
Katie Hall: Active Managers Must Be Concentrated to Avoid Closet Indexing
“There's not any one answer, but in general, we think if you're going to be investing in a way that is an active manager, you need to be different than an index. So you don't end up with just an expensive index. And the way that you most frequently get there is…”
Hall Capital Rarely Backs Equity Managers Holding Over 100 Positions
“We invest with managers that on the very limit side, we have invested with managers that own a dozen positions. We also have invested with managers that own 60 plus. I think it's very rare that we've invested with managers that have north of a hundred, unless …”
Hall Capital Received Inbound Materials From Over 1,000 New Funds in 2020
“Just last year alone, we got material from over a thousand different firms slash funds on an incoming basis. That's new stuff.”
Katie Hall: Allocators Should Systematically Trim Winners Over Binary All-Or-Nothing Calls
“And it's really the discipline to keep trimming back as opposed to necessarily feeling these make the all the way in or all the way out call. But maintaining that disability of trimming back is really what you have to do.”
Hall Capital Made Small Commitments to Venture-Oriented Crypto and DeFi Managers
“We have made a couple of small commitments to some venture-oriented crypto players really viewing that as Something that could be significant, particularly in around DeFi and some of the things that we've seen where a lot of that business activity is happening…”
Hall Capital Holds Small Bitcoin and Ethereum Index Positions for Clients
“We also have for where it's appropriate, which get, it's a definitely a subset of our clients, small, but I would call index, quasi index positions, Bitcoin, Ethereum, Positions that we basically are doing it as if an index, but this is way out on the risk rew…”
Katie Hall: ESG-Focused Portfolios Match Broad Market Expected Returns
“Global multi-asset class portfolios that are really We think have the same expected return as a more broad based, if you will.”
Katie Hall: ESG Integration Will Become Standard Across All Active Investing
“I actually think that if you, in the world state that I see, in the end, people will really be incorporating these things fully, and it won't even be something that will be described as something else. It will just be an expected part of a person that's going …”
Hall Capital Halted Private Energy Fund Commitments Around 2017
“We probably stopped investing in making commitments to private energy funds now probably, I don't know, four-ish years ago, and we didn't stop because we thought they were inherently bad, but we stopped because the price deck became so much more uncertain on f…”
Katie Hall: Deep Conviction Naturally Undermines Objective Investment Underwriting
“Once you have deep conviction about something, you almost necessarily are no longer as harshly objective as you need to be, and it's that continual Both development of conviction around the investment decision, which in our case manifests through selection of …”
Katie Hall: Clear Role Definition Is Critical for Investment Committee Success
“I think having a really deep and shared understanding of the role of the committee is critical. And in some cases, those have been, I've been involved in committees where there is a very active involvement in the portfolio composition. In others, it has been t…”