LPs Should Get Paid More | Ashby Monk | Superclusters | S4E5

“Innovation everywhere, but especially in the land of pensions, endowments, and foundations, is a function of courage and crisis.” – Ashby Monk

Dr. Ashby Monk is currently a Senior Research Engineer, School of Engineering at Stanford University and holds the position of Executive Director of the Stanford Research Initiative on Long-Term Investing.

Ashby has more than 20 years of experience studying and advising investment organizations. He has authored multiple books and published 100s of research papers on institutional investing. His latest book, The Technologized Investor, won the 2021 Silver Medal from the Axiom Business Book Awards in the Business Technology category.

Outside of academia, Ashby has co-founded several companies that help investors make better investment decisions, including Real Capital Innovation (acquired by Addepar), FutureProof, GrowthsphereAI, Long Game Savings (acquired by Truist), NetPurpose, D.A.T.A., SheltonAI, and ThirdAct. He is co-founder and managing partner of KDX, a venture capital firm focused on investment technologies.

He is a member of the CFA Institute’s Future of Finance Advisory Council and was named by CIO Magazine as one of the most influential academics in the institutional investing world. He received his Doctorate in Economic Geography at the University of Oxford, holds a Master’s in International Economics from the Université de Paris I - Pantheon Sorbonne, and has a Bachelor’s in Economics from Princeton University.

You can find Ashby on his socials here: X / Twitter: https://x.com/sovereignfund LinkedIn: https://www.linkedin.com/in/ashby-monk-208a479/

And huge thanks to this episode's sponsor, Alchemist Accelerator: https://alchemistaccelerator.com/superclusters

OUTLINE:

[00:00] Intro

[03:44] "I don't know what to do with my hands"

[04:44] The origin story of Ashby's LinkedIn skills

[09:04] Ashby's obsession with the worst title out there

[12:54] Titles at institutional investment firms

[17:05] Building the right incentives for institutional LPs

[20:54] The decision to buy or build for pension funds

[22:36] What's a smart way to think about the difference of gross and net?

[23:17] When are management fees not justified?

[26:06] When managers charge fees on SPVs

[28:12] When are GPs still grateful for your LP capital?

[29:40] Challenges with the endowment model in PE and VC

[31:14] Why LPs misrepresent what budget fees come out of

[35:28] Compensation structure of a pension fund

[37:59] CalPERS compensation structure

[39:19] The highest paid employees in government jobs

[42:39] Traits of an incredibly talented investor

[47:06] Hire hard, manage light

[51:07] Ashby's journey into the LP space

[56:05] Why should a young professional work at a pension

[1:00:24] Who outside of investments influences the way Ashby thinks about investing?

[1:02:28] What is organic finance?

[1:07:08] The post-credit scene

[1:12:32] Thank you to Alchemist Accelerator for sponsoring

[1:13:33] If you enjoyed the episode, would love if you shared it with one friend who would enjoyed it as well!

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