E32: Ashby Monk, Stanford Professor on How to Become a Billionaire in Private Equity
Jan 11, 2024
auto_awesome
Ashby Monk, Stanford Professor, discusses the role and operation of asset owners like pension funds and endowments. Topics include compensation in these fields, the state of pension funds in the US, and their impact on private equity. They also explore the challenges faced by institutional asset owners, the importance of governance in institutional investing, and the dynamics between unions, pension funds, and hedge funds in the private equity industry. The significance of transparency in investment portfolios and the crucial role of asset owners in the financial ecosystem are also discussed.
The alternatives industry has more billionaires than any other industry.
Asset owners, such as pension funds, have distinct characteristics and operate differently from traditional businesses.
Compensation structures and governance play a crucial role in resourcing pension funds and setting investment strategy.
Deep dives
Focus on the importance of the alternatives industry
The alternatives industry has more billionaires than any other industry, with twice as many asset managers in alternatives as there are technologists.
The role of Stanford Long-Term Investing Research Center
The Stanford Long-Term Investing Research Center focuses on investment decision-making at institutional investors, such as pension funds, sovereign funds, endowments, and foundations. They study asset owners and conduct research projects about investment strategies and decision-making.
The unique characteristics of asset owners
Asset owners, including pension funds, sovereign funds, endowments, and foundations, have distinct characteristics that differentiate them from businesses. They are often driven by social objectives and have long time horizons. They operate differently from traditional businesses and optimize for a range of topics beyond shareholder value.
Compensation and governance in pension funds
Pension funds need to compensate their chief investment officers (CIOs) and management well to attract top talent. However, the compensation structures in pension funds are often more like those of government entities rather than traditional businesses. Governance, including board nomination procedures and delegation frameworks, plays a crucial role in resourcing the organization and setting investment strategy.
The path for venture capital managers
For venture capital managers, the path to success starts with angel investing and building a track record. They can attract family offices and endowments as anchor investors, gradually increasing fund size and securing commitments from pensions for later funds. Success in venture capital often comes from identifying opportunities, adding value, and understanding the unique characteristics of the asset class.
Ashby Monk, Executive and Research Director at Stanford sits down with David Weisburd to discuss the role and operation of asset owners like pension funds, endowments, and more. They delve into compensation in these fields, the state of pension funds in the US, and their impact on private equity. We’re proudly sponsored by Bidav Insurance Group, visit lux-str.com if you’re ready to level up your insurance plans.
The Limited Partner podcast is part of the Turpentine podcast network. Learn more: turpentine.co
(0:00) Introduction and discussion about billionaires in the alternative industry
(2:05) Conversation about studying a $140,000,000,000,000 asset class
(8:23) Conversation about compensation in pension funds and asset management
(15:50) Sponsor: Bedav Insurance Group
(16:16) Differences in pension plan strategies and asset allocation
(24:56) The role of unions in pension plans
(29:10) The journey of starting a private equity fund
(37:11) Celebrating entrepreneurial individuals in institutions and foundations
(40:43) Advice for venture capital managers starting out: From angel investing to fund 1
(50:08) David Weisburd asking about Ashby's tool sold to Atapar
(55:57) David Weisburd thanking Dr. Russell Reed and Ashby Monk for their participation in the podcast
Get the Snipd podcast app
Unlock the knowledge in podcasts with the podcast player of the future.
AI-powered podcast player
Listen to all your favourite podcasts with AI-powered features
Discover highlights
Listen to the best highlights from the podcasts you love and dive into the full episode
Save any moment
Hear something you like? Tap your headphones to save it with AI-generated key takeaways
Share & Export
Send highlights to Twitter, WhatsApp or export them to Notion, Readwise & more
AI-powered podcast player
Listen to all your favourite podcasts with AI-powered features
Discover highlights
Listen to the best highlights from the podcasts you love and dive into the full episode