Capital Allocators – Inside the Institutional Investment Industry David Druley – Structure into Action at Cambridge Associates (Capital Allocators, EP. 106)
Aug 19, 2019
David Druley, CEO of Cambridge Associates, brings 25 years of investment experience to the table. He shares insights from his journey in value investing and the evolution of Cambridge Associates. The conversation covers key strategies for generating strong investment returns, the importance of manager selection, and the role of innovation in investment philosophy. David also discusses the challenges posed by passive investing and the impact of AI on the industry, while emphasizing the necessity of transparency and client trust in successful investment management.
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Early Career Challenges
- David Druley initially ran a value equity business for private clients in Fort Worth, experiencing challenges during the dot-com boom.
- His value stocks underperformed while tech stocks soared, teaching him a crucial lesson about risk tolerance.
Client Risk Tolerance
- Align your risk tolerance with your client's, not just your own or the time horizon.
- Clients may not withstand underperformance, even if the strategy is sound, potentially leading to them firing you at the wrong time.
Tech Bubble Burst
- Druley recalls a moment in Las Vegas during March Madness 2000, noticing the Russell 2000 Value Index performing strongly while the NASDAQ declined.
- He recognized this as the end of the tech bubble, marking a turning point for value stocks.
