Capital Allocators – Inside the Institutional Investment Industry

Peter Kraus - Widening the Aperture on Alpha (First Meeting, EP.14)

Feb 3, 2020

Peter Kraus, Chairman and CEO of Aperture Investors, boasts a four-decade career in finance, including leadership roles at Goldman Sachs and AllianceBernstein. He discusses the importance of performance-linked compensation models to build trust with clients. Peter shares insights from his storied career, emphasizing the need for cultural transformation in asset management. He elaborates on his intricate process for selecting portfolio managers, balancing analytical skills with real-time decision-making. The conversation also touches on his passion for contemporary art, drawing parallels with investment strategies.

01:11:18

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Peter Krause

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Episode notes

Intro

5min

Early Investment Insights and Behavioral Finance

2min

Career Pathways and Transformative Changes in Finance

9min

Navigating the Asset Management Landscape

29min

Evaluating Portfolio Managers

20min

The Art of Collecting: Emotions, Impact, and Investment

3min

The Importance of Thoughtful Engagement

6min

Peter Kraus is the Chairman and CEO of Aperture Investors, a $5 billion asset manager he founded after a storied four-decade career on Wall Street, including heading the Investment Management Division at Goldman Sachs and serving as Chairman and CEO of AllianceBernstein. Throughout his career, Peter has been a vocal proponent of pay-for-performance compensation models and the need for trust between active managers and their clients.

He ultimately decided that a successful culture of performance-linked fees that properly aligns the manager and client could only occur in a new firm built from scratch. He teamed up with Italian insurance company Generali to launch Aperture in 2018.

Our conversation covers Peter’s career at Goldman Sachs and AllianceBernstein, the structural problem of incentives in the asset management industry, and Peter’s attempt to disrupt that structure. We then discuss his process for selecting managers on Aperture’s platform, including screening, due diligence, and the nuances in idea generation, track record, value system, and managing teams.

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