The Next Alpha Frontier.

How will we generate returns to meet important spending needs in an increasingly unforgiving world?

One thing's for sure.

The hardest day to invest is always today.

And today, investment success feels as elusive as ever.

Geopolitical, macroeconomic, and domestic concerns all present ominous risks to investments at some

point in the future. Even without these likely hiccups at the macro level, competition has intensified both for

managers extracting returns and allocators finding the best among them.

When I started my career, just knowing that hedge funds existed and having a roll

decks with manager names led to investment success. The same was true for venture capital and private equity.

Private credit wasn't even a thing. Thirty years later, it's a whole different ballgame.

Traditional stocks and bonds don't appear price to generate sufficient returns to meet long-term

spending needs. Private equity, venture capital,

and hedge funds may not either. As Jeremy Grantham said on a past episode of the podcast,

the market doesn't care that you don't have any easy or safe investments to make. Beta isn't

likely to get you where you need to go. Alpha isn't easy to find either.

Managers battle Michael Mobison's paradox of skill. They're more knowledgeable, better resourced, and more

equipped with data than ever before. However, their improvement in skill is offset by the narrowing of skills relative to each

other when it comes to generating returns. The allocator community also has blossomed in

breadth and sophistication since my early days working for David Swenson. A playbook that once commonly

resulted in beating return hurdles, a thoughtful investment

policy, diversification beyond traditional asset classes, manager selection in less efficient

...