The Exchanges

Q Which two people have had the biggest impact on your professional life?

A George Overstreet was a professor of my undergrad days who, the moment I kind of walked into his classroom and saw the way that he taught finance, And the way he connected with people and the way he found such joy in everything he did, that's kind of what led me into finance. If I'd walked into an astronomy professor's class and they had had what George had, I'd be doing that. It wasn't the subject matter that inspired me. It was George that inspired me. And I ended up working for him and with him for years and years. And he's really the reason why I'm in the field broadly. And he's to this day, really dear friend. And I would say the second person is Don Raymond. Who was one of the first employees here at CPPIB and started up what we now call the total fund management department and the whole approach and is the person who brought me into the organization and really transitioned from that commercial banking side of finance to the investment side of finance. Don is now running or helping run the Qatari sovereign wealth fund, but he is somebody without whom I certainly would not have had a chance to come to CPPIB and really Help this organization over the last decade plus.

AI assessment note: “George Overstreet was a professor... And I would say the second person is Don Raymond.”

Q I want to level set on where you got to in terms of these different businesses. Say, you can circle back three, four years ago. What were these capabilities at the end of that period when you got to, say, 80% active?

A So the biggest are represented by our five different investment departments. So we have an investment department that handles private equity, and that is both internally driven or direct private equity as well as a External funds and secondaries portfolio. We've developed capabilities really across the entirety of the spectrum of private equity investments all the way through growth and even some VC. And VC was a challenging one for us just given our scale and size as to the role of a VC program within that overall portfolio. But we do have that there. So we've, private equity is one of our five investment departments. The second department is our real assets department. Which is made up of three larger, broad capabilities, commercial real estate, an infrastructure program, as well as what we call SCG of the sustainable energies group, which is all of our energy, our energy generation investments, typically renewables, including on and offshore winds. So real assets is a second set of developed capabilities. A third is our private credit departments. Which has a range of global credit strategies, both liquid and illiquid reside within that department. We have an active equities departments, which is our liquid public equity, alpha oriented strategy. So these are the stock pickers and again, spans the globe in terms of location, In terms of styles and approaches combines both fu…

AI assessment note: “So the biggest are represented by our five different investment departments.”

Q So alongside of that requirement of that aligned horizon, at the end of the day, we're all human beings and therefore run into the same challenges when it comes to these periods of underperformance. What are some of the processes that you've put in place to take advantage of that long-term horizon?

A I think the simplest has been the look back period on incentive compensation. For example, we try to configure all of our performance periods to five-year trailing returns. Are there some strategies for which an even longer horizon might be more suitable? Sure. But now you're really testing the limits of length of career and length of time people are in roles and What happens when individuals turn over and we're still looking back at strategies that have been updated or modified over that five-year period? These are all challenges, and we do our best to maintain that longer perspective, but we just need to be very clear with ourselves as that horizon shrinks, the horizon of evaluation, the horizon over which people feel accountable for the results because they're new to the team or the strategy and others have left, As that shrinks, you're simply shrinking the effective investment horizon over which you can build your strategy. And if the reality is, is that, you know what, that really has compressed to the point where it's only a year or two, and we need to prove results within that window, that's, that's fine, but you can't necessarily claim that long horizon is an edge in delivering returns in that area.

AI assessment note: “the simplest has been the look back period on incentive compensation.”

Q So alongside of that requirement of that aligned horizon, at the end of the day, we're all human beings and therefore run into the same challenges when it comes to these periods of underperformance. What are some of the processes that you've put in place to take advantage of that long-term horizon?

A I think the simplest has been the look back period on incentive compensation. For example, we try to configure all of our performance periods to five-year trailing returns. Are there some strategies for which an even longer horizon might be more suitable? Sure. But now you're really testing the limits of length of career and length of time people are in roles and What happens when individuals turn over and we're still looking back at strategies that have been updated or modified over that five-year period? These are all challenges, and we do our best to maintain that longer perspective, but we just need to be very clear with ourselves as that horizon shrinks, the horizon of evaluation, the horizon over which people feel accountable for the results because they're new to the team or the strategy and others have left, As that shrinks, you're simply shrinking the effective investment horizon over which you can build your strategy. And if the reality is, is that, you know what, that really has compressed to the point where it's only a year or two, and we need to prove results within that window, that's, that's fine, but you can't necessarily claim that long horizon is an edge in delivering returns in that area.

AI assessment note: “the simplest has been the look back period on incentive compensation”

Q Which two people have had the biggest impact on your professional life?

A George Overstreet was a professor of my undergrad days who, the moment I kind of walked into his classroom and saw the way that he taught finance, And the way he connected with people and the way he found such joy in everything he did, that's kind of what led me into finance. If I'd walked into an astronomy professor's class and they had had what George had, I'd be doing that. It wasn't the subject matter that inspired me. It was George that inspired me. And I ended up working for him and with him for years and years. And he's really the reason why I'm in the field broadly. And he's to this day, really dear friend. And I would say the second person is Don Raymond. Who was one of the first employees here at CPPIB and started up what we now call the total fund management department and the whole approach and is the person who brought me into the organization and really transitioned from that commercial banking side of finance to the investment side of finance. Don is now running or helping run the Qatari sovereign wealth fund, but he is somebody without whom I certainly would not have had a chance to come to CPPIB and really Help this organization over the last decade plus.

AI assessment note: “George Overstreet was a professor... And I would say the second person is Don Raymond.”

Q I want to level set on where you got to in terms of these different businesses. Say, you can circle back three, four years ago. What were these capabilities at the end of that period when you got to, say, 80% active?

A So the biggest are represented by our five different investment departments. So we have an investment department that handles private equity, and that is both internally driven or direct private equity as well as a External funds and secondaries portfolio. We've developed capabilities really across the entirety of the spectrum of private equity investments all the way through growth and even some VC. And VC was a challenging one for us just given our scale and size as to the role of a VC program within that overall portfolio. But we do have that there. So we've, private equity is one of our five investment departments. The second department is our real assets department. Which is made up of three larger, broad capabilities, commercial real estate, an infrastructure program, as well as what we call SCG of the sustainable energies group, which is all of our energy, our energy generation investments, typically renewables, including on and offshore winds. So real assets is a second set of developed capabilities. A third is our private credit departments. Which has a range of global credit strategies, both liquid and illiquid reside within that department. We have an active equities departments, which is our liquid public equity, alpha oriented strategy. So these are the stock pickers and again, spans the globe in terms of location, In terms of styles and approaches combines both fu…

AI assessment note: “So the biggest are represented by our five different investment departments.”

Q What were those bells and whistles for you that let you know that your academic life would be cut short?

A It's fascinating to see, but when in it, you realize that the academic environments, while it can be incredibly rewarding in terms of intellectual curiosity and, And research and doing amazing work, it's unfortunately as freighted with political intrigue and infighting as almost any institution you can find. It really is quite remarkable that there's that much focus on are you in the right spots with the right papers, working with the right colleagues, as opposed to, you know, a more open-ended consideration of, of what you might want to do intellectually. Every organization has that to some degree, Ted. Thought academia did so to a degree beyond. So it's finding a spot in an organization where people are all really working together in a, in a way that's trying to build out something special just appeals to me more.

AI assessment note: “it's unfortunately as freighted with political intrigue and infighting”

Q So once you had that in place, you then have this challenge of, oh, there's buy-in to actively manage returns, though at some point in time, some time ago, there was no one in place to actually do that, particularly internally. How did you go about building out, as you say, these businesses in each area, acquiring talent, retaining talent, compensation, everything that goes along with that?

A It was all spearheaded by some really forward thinking and long horizon leadership. We adopted what we call here internally the crawl, walk, run model where we would, we would stage everything in a progressive fashion in a number of the strategies in which we now have active capabilities. We started with heavy reliance on funds. So heavy reliance on third party managers. In a number of these programs, we would seed internal employees to go sit with our GPs and making sure that we can learn as much as we can from them and develop those capabilities. And over time, we would progressively build out internal capabilities. That 80% managed actively, I think about 55% is managed internally as opposed to externally now. So most of our active capabilities are now built in-house. As a result, we have We have a large organization where we're over 2000 individuals focused solely on the overall investment process problem that we need to solve. So there was rapid growth there, starting from those early seeds of let's crawl and let's just get the initial momentum going in terms of these active capabilities and over time progressively leaning more and more into it. That's what has happened here in this organization over the last 15 years. The ability to hire, retain, develop, and compete in the talent marketplace has been a really big part of that, as has the overall leadership of the organiz…

AI assessment note: “We adopted what we call here internally the crawl, walk, run model”

Q So over these last couple of years, how have you gone about trying to get the most out of these capabilities around the world across these different businesses?

A By being as clear as we can around the capital and risk we allocate to these teams and the expectations that we have of them. We've moved into a spot of the need to orchestrate and prioritize instead of simply just build out capabilities. I think the Way we've addressed that is by being very clear as to what we expect in terms of deployment in these different areas, what we expect on dispositions, on the management of assets in the existing portfolio, and what kind of return prospects we're looking for. So the first step has really been a clarity of allocation of resource and expectation of returns contributed by each of these different businesses around the That's been the first expectation. I have to emphasize it's all done within the context of very clearly delegated accountability to those teams to make the right investment decisions. This is not about orchestrating investment theses from the top down. This is about orchestrating our capabilities and making sure they are in positions to effectively invest and have the resources they need in ways that are contributing to the total fund. So that's been the, The real focus. I think where we want to go to next is better connecting these capabilities around the globe. While we have a very clear view of how the team in Sao Paulo is investing and what our expectations are of that team in terms of their contributions, we need to do…

AI assessment note: “By being as clear as we can around the capital and risk we allocate”

Q I'd love to pull that thread a little bit on capital allocation and position sizing. So at your level, you're thinking about it across the businesses, but then clearly some time ago you had a five percent position in the pool and the entire pension fund, maybe less so today. How do you draw those lines of where you're playing on the field?

A The first spot is on the basis of total portfolio construction. So we have a team with a terrific capability and means of really understanding how to build a well-diversified portfolio that's exposed to the factors that we think will support the highest performing portfolio over time. I think we do a great job at the total portfolio level thinking about issues like concentration risk and diversification where we want to invest, but there are a number of organizational challenges or impediments to go from that picture of the total portfolio to how people are actually investing. What makes for an outsized concentration risk at the total fund level is going to look very different than outsized concentration risk At the level of a portfolio owned by one particular portfolio manager within our organization. And oftentimes we have these conversations with portfolio managers who say, look, a two billion dollar ticket here is a big, big weight in my local portfolio. And it could induce a degree of volatility or underperformance that would be really difficult for my team to absorb and digest. Even though a two billion or three billion dollar ticket at the total fund level will have very little impact on our concentration risk. Bridging the gap between the two is a challenge, and that too is part of this work we are doing on one fund to try to solve the problems of alignment and orientat…

AI assessment note: “The first spot is on the basis of total portfolio construction.”

Q That sounds like it leads to some type of supersizing capability. You think of a sender book portfolio in the public markets or internal co-invest structure in the private markets. Is that how you've been thinking about it?

A Yeah, we've experimented with a variety of different solutions to that in the past. We previously had a centralized book and And the local team would hold a pro rata piece, but a small piece and the centralized book would hold another piece. To be honest, I don't know if there's any perfect solution to this, but we found some of those fairly dissatisfying really because of accountability and ownership for the position. I think that the top principle when solving these kinds of problems is make sure there's very clear ownership and accountability for performance. So I think the solution that we want to drive towards is one in which the local team does own the position in its entirety. But is given that the comfort and assurance that things like incentive compensation and team reward and ability to continue investing in the ways that they invest for their investment thesis are not unduly affected. So it might include things just like judgmental overrides on the weight of that position. When you think about the overall performance of their portfolio over time, it might include Other adjustments that allow you to take a longer view and perspective towards performance of the team. I think those kinds of solutions are ones that we prefer over the position splitting where you start to lose some direct accountability for the entirety of the position.

AI assessment note: “Yeah, we've experimented with a variety of different solutions to that in the past.”

Q Well, we've got plenty to dive through, and before we do that, your background before joining CPPIB a dozen years ago or so has a whole bunch of interesting different steps. Why don't you take me through maybe the elevator pitch version of it?

A I wish it was a cogent and consistent narrative, Ted, from beginning to end, but it is probably more about just looking for opportunities to do exciting, challenging, Gratifying work along the way. So I kind of, through my undergraduate and graduate years, it was economics and culminated in a PhD in economics that I think was intended to lead to academia at the outset, but over the course of spending that much time in that environment, you learn things and about yourself and limits, and I certainly found my limit in terms of really Being able to stay in that academic environment for too long. So it was pretty clear that it was time for me to, to build a career outside of academia.

AI assessment note: “through my undergraduate and graduate years, it was economics and culminated in a PhD”

Q So Jeffrey, what's an example from those Capital One days of seeing a balance sheet that has positions on it that come from, as you said, a series of businesses that you might think about differently from just looking at the balance sheet in a series of positions?

A So take a business like mortgage lending. That business has its own set of exposures and sensitivities to things like rates and inflation. That need to be anticipated when you're thinking about how you build it into the portfolio as a whole. How is the commercial mortgage business going to respond in environments where the deposit franchise is doing well or doing poorly? How do we want to think about combining those two? How do we actually originate the mortgages in that kind of business? And to what extent can we scale up or scale back that activity without Impairing our ability to go forward in a viable way. This is questions of team and staffing and how you build teams. How fungible are the people on those teams with other businesses that you have internally within the organization? These are all the questions that you need to answer when you're thinking about establishing and resourcing a business as opposed to a collection of positions. If you think about the portfolio as one of A page or two on a Bloomberg terminal, you can think about in a very agile and flexible way, scaling up and scaling down exposures to respond to both longer term and tactical or conditional risk adjusted pricing. When you're thinking about businesses, you need to do the extra work to anticipate how you're going to maintain that capability through cycles and over time in a way that is contributing t…

AI assessment note: “So take a business like mortgage lending. That business has its own set of exposures”

Q Well, we've got plenty to dive through, and before we do that, your background before joining CPPIB a dozen years ago or so has a whole bunch of interesting different steps. Why don't you take me through maybe the elevator pitch version of it?

A I wish it was a cogent and consistent narrative, Ted, from beginning to end, but it is probably more about just looking for opportunities to do exciting, challenging, Gratifying work along the way. So I kind of, through my undergraduate and graduate years, it was economics and culminated in a PhD in economics that I think was intended to lead to academia at the outset, but over the course of spending that much time in that environment, you learn things and about yourself and limits, and I certainly found my limit in terms of really Being able to stay in that academic environment for too long. So it was pretty clear that it was time for me to, to build a career outside of academia.

AI assessment note: “undergraduate and graduate years, it was economics and culminated in a PhD in economics”

Q So Jeffrey, what's an example from those Capital One days of seeing a balance sheet that has positions on it that come from, as you said, a series of businesses that you might think about differently from just looking at the balance sheet in a series of positions?

A So take a business like mortgage lending. That business has its own set of exposures and sensitivities to things like rates and inflation. That need to be anticipated when you're thinking about how you build it into the portfolio as a whole. How is the commercial mortgage business going to respond in environments where the deposit franchise is doing well or doing poorly? How do we want to think about combining those two? How do we actually originate the mortgages in that kind of business? And to what extent can we scale up or scale back that activity without Impairing our ability to go forward in a viable way. This is questions of team and staffing and how you build teams. How fungible are the people on those teams with other businesses that you have internally within the organization? These are all the questions that you need to answer when you're thinking about establishing and resourcing a business as opposed to a collection of positions. If you think about the portfolio as one of A page or two on a Bloomberg terminal, you can think about in a very agile and flexible way, scaling up and scaling down exposures to respond to both longer term and tactical or conditional risk adjusted pricing. When you're thinking about businesses, you need to do the extra work to anticipate how you're going to maintain that capability through cycles and over time in a way that is contributing t…

AI assessment note: “So take a business like mortgage lending. That business has its own set of exposures”

Q So over these last couple of years, how have you gone about trying to get the most out of these capabilities around the world across these different businesses?

A By being as clear as we can around the capital and risk we allocate to these teams and the expectations that we have of them. We've moved into a spot of the need to orchestrate and prioritize instead of simply just build out capabilities. I think the Way we've addressed that is by being very clear as to what we expect in terms of deployment in these different areas, what we expect on dispositions, on the management of assets in the existing portfolio, and what kind of return prospects we're looking for. So the first step has really been a clarity of allocation of resource and expectation of returns contributed by each of these different businesses around the That's been the first expectation. I have to emphasize it's all done within the context of very clearly delegated accountability to those teams to make the right investment decisions. This is not about orchestrating investment theses from the top down. This is about orchestrating our capabilities and making sure they are in positions to effectively invest and have the resources they need in ways that are contributing to the total fund. So that's been the, The real focus. I think where we want to go to next is better connecting these capabilities around the globe. While we have a very clear view of how the team in Sao Paulo is investing and what our expectations are of that team in terms of their contributions, we need to do…

AI assessment note: “By being as clear as we can around the capital and risk we allocate”

Q I'd love to pull that thread a little bit on capital allocation and position sizing. So at your level, you're thinking about it across the businesses, but then clearly some time ago you had a five percent position in the pool and the entire pension fund, maybe less so today. How do you draw those lines of where you're playing on the field?

A The first spot is on the basis of total portfolio construction. So we have a team with a terrific capability and means of really understanding how to build a well-diversified portfolio that's exposed to the factors that we think will support the highest performing portfolio over time. I think we do a great job at the total portfolio level thinking about issues like concentration risk and diversification where we want to invest, but there are a number of organizational challenges or impediments to go from that picture of the total portfolio to how people are actually investing. What makes for an outsized concentration risk at the total fund level is going to look very different than outsized concentration risk At the level of a portfolio owned by one particular portfolio manager within our organization. And oftentimes we have these conversations with portfolio managers who say, look, a two billion dollar ticket here is a big, big weight in my local portfolio. And it could induce a degree of volatility or underperformance that would be really difficult for my team to absorb and digest. Even though a two billion or three billion dollar ticket at the total fund level will have very little impact on our concentration risk. Bridging the gap between the two is a challenge, and that too is part of this work we are doing on one fund to try to solve the problems of alignment and orientat…

AI assessment note: “Bridging the gap between the two is a challenge, and that too is part”

Q That sounds like it leads to some type of supersizing capability. You think of a sender book portfolio in the public markets or internal co-invest structure in the private markets. Is that how you've been thinking about it?

A Yeah, we've experimented with a variety of different solutions to that in the past. We previously had a centralized book and And the local team would hold a pro rata piece, but a small piece and the centralized book would hold another piece. To be honest, I don't know if there's any perfect solution to this, but we found some of those fairly dissatisfying really because of accountability and ownership for the position. I think that the top principle when solving these kinds of problems is make sure there's very clear ownership and accountability for performance. So I think the solution that we want to drive towards is one in which the local team does own the position in its entirety. But is given that the comfort and assurance that things like incentive compensation and team reward and ability to continue investing in the ways that they invest for their investment thesis are not unduly affected. So it might include things just like judgmental overrides on the weight of that position. When you think about the overall performance of their portfolio over time, it might include Other adjustments that allow you to take a longer view and perspective towards performance of the team. I think those kinds of solutions are ones that we prefer over the position splitting where you start to lose some direct accountability for the entirety of the position.

AI assessment note: “we prefer over the position splitting where you start to lose some direct accountability”

Q What were those bells and whistles for you that let you know that your academic life would be cut short?

A It's fascinating to see, but when in it, you realize that the academic environments, while it can be incredibly rewarding in terms of intellectual curiosity and, And research and doing amazing work, it's unfortunately as freighted with political intrigue and infighting as almost any institution you can find. It really is quite remarkable that there's that much focus on are you in the right spots with the right papers, working with the right colleagues, as opposed to, you know, a more open-ended consideration of, of what you might want to do intellectually. Every organization has that to some degree, Ted. Thought academia did so to a degree beyond. So it's finding a spot in an organization where people are all really working together in a, in a way that's trying to build out something special just appeals to me more.

AI assessment note: “freighted with political intrigue and infighting as almost any institution you can find.”

Q What's the output delivery mechanism, particularly if this knowledge group such that it stays top of mind across the organization?

A It's everything from asking questions at investment committee as to how you use that team for the particular memo that you're looking at. So it's about those expectations. It's about culture. It's about a culture of Expectation that those who have been delegated accountability are administering that accountability by first checking internally and working with colleagues to make the best possible decision. It's in the form of reports. We do have the technology system where folks can go in and do searches on in particular sectors or areas or company names and all of the information that we've gathered over the years across the organization is made immediately available. So it's a, through a variety of different measures that we make sure that this This perspective that we have, which should be a real source of edge for us, is actually being used in the investment decisions we make.

AI assessment note: “It's in the form of reports. We do have the technology system”

Q So once you had that in place, you then have this challenge of, oh, there's buy-in to actively manage returns, though at some point in time, some time ago, there was no one in place to actually do that, particularly internally. How did you go about building out, as you say, these businesses in each area, acquiring talent, retaining talent, compensation, everything that goes along with that?

A It was all spearheaded by some really forward thinking and long horizon leadership. We adopted what we call here internally the crawl, walk, run model where we would, we would stage everything in a progressive fashion in a number of the strategies in which we now have active capabilities. We started with heavy reliance on funds. So heavy reliance on third party managers. In a number of these programs, we would seed internal employees to go sit with our GPs and making sure that we can learn as much as we can from them and develop those capabilities. And over time, we would progressively build out internal capabilities. That 80% managed actively, I think about 55% is managed internally as opposed to externally now. So most of our active capabilities are now built in-house. As a result, we have We have a large organization where we're over 2000 individuals focused solely on the overall investment process problem that we need to solve. So there was rapid growth there, starting from those early seeds of let's crawl and let's just get the initial momentum going in terms of these active capabilities and over time progressively leaning more and more into it. That's what has happened here in this organization over the last 15 years. The ability to hire, retain, develop, and compete in the talent marketplace has been a really big part of that, as has the overall leadership of the organiz…

AI assessment note: “We adopted what we call here internally the crawl, walk, run model”

Q What's the output delivery mechanism, particularly if this knowledge group such that it stays top of mind across the organization?

A It's everything from asking questions at investment committee as to how you use that team for the particular memo that you're looking at. So it's about those expectations. It's about culture. It's about a culture of Expectation that those who have been delegated accountability are administering that accountability by first checking internally and working with colleagues to make the best possible decision. It's in the form of reports. We do have the technology system where folks can go in and do searches on in particular sectors or areas or company names and all of the information that we've gathered over the years across the organization is made immediately available. So it's a, through a variety of different measures that we make sure that this This perspective that we have, which should be a real source of edge for us, is actually being used in the investment decisions we make.

AI assessment note: “It's everything from asking questions at investment committee... It's in the form of reports.”

Q As you've evolved these teams, as you said, you've now built it out. You're now in this period of kind of execution and optimization. You then get into the excitement of getting going and hopefully succeeding and to retention and training and internal development. How have you thought about the ongoing improvement and stability of the teams that you've been able to build internally with these capabilities?

A We are going to need to embrace the dynamic you just described. This dynamic of going from one of Really high intensity development and construction of these capabilities and building out teams and recruiting in and getting our foothold into markets that you're absolutely right. That was an exciting proposition and a particularly acute proposition for our team and our employees and our new hires. That's a compelling story. And our story going forward is equally compelling, but different. It's going to be around continuing to deploy and find great investments and to think about How we can most effectively invest, but it will be complimented by equal parts great disposition and selling and thinking about how we, how we add value through our exits as appropriate and asset management. How we make sure the assets that we do have, we're getting the most out of those and the strategies we do have, how we get the most out of those investment strategies for people. I think there's going to be much more circulation of both ideas and people within the organization. I like the notion of the T-shaped professional, somebody who has great depth in one particular area, but a, a broad curiosity and ability to connect with others who have different levels or different areas of expertise and combining T-shaped individuals in ways where you really get both breadth and depth combined in terrific wa…

AI assessment note: “more circulation of both ideas and people within the organization. I like the notion of the T-shaped”

Q As you've evolved these teams, as you said, you've now built it out. You're now in this period of kind of execution and optimization. You then get into the excitement of getting going and hopefully succeeding and to retention and training and internal development. How have you thought about the ongoing improvement and stability of the teams that you've been able to build internally with these capabilities?

A We are going to need to embrace the dynamic you just described. This dynamic of going from one of Really high intensity development and construction of these capabilities and building out teams and recruiting in and getting our foothold into markets that you're absolutely right. That was an exciting proposition and a particularly acute proposition for our team and our employees and our new hires. That's a compelling story. And our story going forward is equally compelling, but different. It's going to be around continuing to deploy and find great investments and to think about How we can most effectively invest, but it will be complimented by equal parts great disposition and selling and thinking about how we, how we add value through our exits as appropriate and asset management. How we make sure the assets that we do have, we're getting the most out of those and the strategies we do have, how we get the most out of those investment strategies for people. I think there's going to be much more circulation of both ideas and people within the organization. I like the notion of the T-shaped professional, somebody who has great depth in one particular area, but a, a broad curiosity and ability to connect with others who have different levels or different areas of expertise and combining T-shaped individuals in ways where you really get both breadth and depth combined in terrific wa…

AI assessment note: “give way to more circulation of people and breadth of experience here within the organization”

Q It all sounds good. So how do you do it?

A You lay in the stock of Red Bull and coffee, and you round up the team, and we know this is going to be a big effort from everyone in the organization. I think our approach will probably harken back to the crawl, walk, run in many ways. It'll harken back to the really strong leadership from the top to be clear that connecting our organization up in this way is the means by which we are going to continue producing outsized returns. Part of our effort on this has been to go out and talk to all the great investors around the world. And it's so enlightening to sit down with people and, and hear their thoughts and you try to steal their best ideas and ignore the worst ones. And it's just great to get out there and connect with folks. But inevitably when we talk about strategy and our approach to strategy, the question arises, what's the burning platform? What's the burning platform? Suggesting that there's not flame under feet, you won't be motivated to do anything. You need, it needs to be urgent and dire. And I don't know that we have a burning platform in that sense, in that our current approaches, I still think are terrific. I still think we have amazing active investing capabilities. It's just that without this prioritization and coordination and integration, the connectivity among them, I worry that the spaces in which we invest will become ever more standardized and commoditi…

AI assessment note: “our approach will probably harken back to the crawl, walk, run in many ways”

Q Could you walk through an example, maybe in one of your businesses of how you see those advantages playing out?

A Let's talk about the impact of Horizon on performance. We've done quite a bit of work here internally. To look at how a long investment horizon can enhance performance, and there's some good external work that has been conducted on this one. At the highest level, I get concerned that long horizon is a bit of a platitude, that folks can wave hands to the notion that we're a long horizon investor, and all these clever phrases around that. When in reality, I think an investment horizon is fundamentally about the length of time one can remain committed To an investment strategy that is broadly performing as expected without getting stopped out. For me, the big value of possessing a long horizon is the ability to stay within a strategy, a strategy that might be performing poorly, but within the range of expectation you would have for a risky strategy without getting stopped out by Your governance without getting stopped out by your internal folks, by the press, by interested parties within and beyond the organization who start asking, well, wait a second. This strategy has lost money two years in a row. Why are you still running it? If we take a look at things like strategic tilting, think of this as akin to the tactical asset allocation. These are Strategy, which by definition can be a very long horizon. It might take years and years in order to demonstrate, prove out the skill and…

AI assessment note: “Let's talk about the impact of Horizon on performance.”

Q Could you walk through an example, maybe in one of your businesses of how you see those advantages playing out?

A Let's talk about the impact of Horizon on performance. We've done quite a bit of work here internally. To look at how a long investment horizon can enhance performance, and there's some good external work that has been conducted on this one. At the highest level, I get concerned that long horizon is a bit of a platitude, that folks can wave hands to the notion that we're a long horizon investor, and all these clever phrases around that. When in reality, I think an investment horizon is fundamentally about the length of time one can remain committed To an investment strategy that is broadly performing as expected without getting stopped out. For me, the big value of possessing a long horizon is the ability to stay within a strategy, a strategy that might be performing poorly, but within the range of expectation you would have for a risky strategy without getting stopped out by Your governance without getting stopped out by your internal folks, by the press, by interested parties within and beyond the organization who start asking, well, wait a second. This strategy has lost money two years in a row. Why are you still running it? If we take a look at things like strategic tilting, think of this as akin to the tactical asset allocation. These are Strategy, which by definition can be a very long horizon. It might take years and years in order to demonstrate, prove out the skill and…

AI assessment note: “If we take a look at things like strategic tilting”

Q It all sounds good. So how do you do it?

A You lay in the stock of Red Bull and coffee, and you round up the team, and we know this is going to be a big effort from everyone in the organization. I think our approach will probably harken back to the crawl, walk, run in many ways. It'll harken back to the really strong leadership from the top to be clear that connecting our organization up in this way is the means by which we are going to continue producing outsized returns. Part of our effort on this has been to go out and talk to all the great investors around the world. And it's so enlightening to sit down with people and, and hear their thoughts and you try to steal their best ideas and ignore the worst ones. And it's just great to get out there and connect with folks. But inevitably when we talk about strategy and our approach to strategy, the question arises, what's the burning platform? What's the burning platform? Suggesting that there's not flame under feet, you won't be motivated to do anything. You need, it needs to be urgent and dire. And I don't know that we have a burning platform in that sense, in that our current approaches, I still think are terrific. I still think we have amazing active investing capabilities. It's just that without this prioritization and coordination and integration, the connectivity among them, I worry that the spaces in which we invest will become ever more standardized and commoditi…

AI assessment note: “when we talk about strategy and our approach to strategy, the question arises, what's the burning platform?”