Kraus: Real-time decision monitoring yields higher allocator conviction than historical track records
Peter Kraus · Peter Kraus - Widening the Aperture on Alpha (First Meeting, EP.14) · Feb 3, 2020 · at 54:19
Peter Kraus, CEO of Aperture Investors and former head of Goldman Sachs IMD, explains why Aperture evaluates manager candidates via live paper portfolios rather than relying strictly on backward-looking track records.
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“When you watch somebody perform, meaning they tell you why they're buying something, what the thesis is, why they're weighting it that way, why they're selling something, then you can actually see, does that play out? And more importantly, you can see when it doesn't, how they react. Do they rationalize the position? Do they say, well, yeah, I said that, but I think this now. That's not very appealing. Or do they say, yep, that's what I thought. I was wrong. I solved it. That's much more appealing. So, you can have those conversations with managers who have experience, and you can ask them those questions, and they will give you those answers, but you're not seeing it real time. When you see it real time, there's a much higher level of conviction that that's a manager that you want to invest in.”
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