Fran Kinniry is a twenty-three year veteran at the Vanguard Group, where he’s led the teams that spearhead Vanguard’s research into new products. Fran helped Vanguard enter the direct advice business, developed Vanguard’s Advisor Alpha concept, started its Investment Strategy Group, and most recently heads Vanguard’s latest initiative investing in private equity. Our conversation covers an overview of Vanguard business, Fran’s three roles over a quarter century at the firm, behavioral coaching, and the firm’s foray into private equity. We discuss the research process leading to the introduction of private equity, potential scale across institutional and retail clients, timing of the decision, fees, and manager selection.  We then close discussing Vanguard’s cooperative ownership model, compensation, and the future of index fund. When the industry’s leading index fund manager known for low-cost investing steps into high-cost private equity after years of research that showed the benefits of the asset class, those calling for the abandonment of active management should take notice. Like all other practitioners in active management, Fran and Vanguard preach outcomes over costs.

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