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"chris brightman" Discussed on The Meb Faber Show

The Meb Faber Show

05:47 min | 7 months ago

"chris brightman" Discussed on The Meb Faber Show

"It's interest interest rates are fixed if you have a high inflation of a big rise in inflation. Their top line sales increase while they're big chunk of interest expense. This is fixed their margins improve. So this is the explanation for the empirical observation. That high yield bonds tend to do quite well in inflationary. Mary Environment Another group of assets would be all manner of emerging markets the currencies bonds local currency bonds and emerging market equities for the rather obvious reason that emerging markets tend to be much more influenced the commodity cycle and largely service oriented post-industrial economies characterize. The developed markets were cautioned and not every company or even every country in the emerging markets is heavily dependent upon commodities prices. So this is not foolproof nonetheless. Taken as whole all the emerging market asset class much more commodity sensitive and likely to do relatively well in I inflation environment relative to develop the market accountable. So I think that's sort of a structural opportunity do reposition portfolios towards better diversification and away from The mainstream stocks and bonds to the provocative such fabulous returns over the past several decades. It's funny you mentioned some of these asset classes. Investors are probably their queasy thinking about some of these because like commodities. I mean if you go back ten years maybe twelve years ago in. So how many of these were Kinda hot products where a lot of people are rushing into him at the time. When oil was peeking up around one hundred twenty eight hundred and fifty and everyone was was super worried about inflation? Of course and then you don't have much over the past ten years. I mean bank loans. That was such a hot category for years. And it's funny to think about. We often think about. We say what's going to cause people a lot of pain often it's environments where most of the money managers have an experienced financial crisis. I think was in many ways difficult call for a lot of investors because the most similar market in my mind was similar to the nineteen thirties. In you start to have at this point twenty coming around and twenty twenty. We starting to lose a lot of the investors retiring. Or whatever they're doing that were around in the seventies that experience that and their career and for the better part of forty years you no. It's been a story of disinflation or outright low inflation and be curious to see how many people are prepared for that for sort of environment so stay on policy a little bit longer before going full Canon ball into the investment world. Lot Of em-empty ideas and a lot of the ideas getting had abandoned about seemingly similarly come from the brainwork or foundation of inequality based on all sorts of different stuff and unionize paper a couple of years ago. But I think it's still relevant elven today on public policy profits populism and already the first sentence or two and then let you run with it but you said public policy. Prioritization of economic stability that it's coincided with slower new business formation fewer and larger publicly traded companies increase monopoly pricing power ballooning or promises sharp decline the cost capital and stagnating wages. Refocusing Policy Way from inhibiting change toward fostering growth through creative destruction would reduce polluted. Monopoly profits raise wages and increase yields on investment securities. Kerr's highly organized special inches profit handsomely from today's status quo stand in the way implementation of such healthy reform may fail POPs. Reaction could dramatically increase the cost capital and their are by raise the Labor share. Talk to me a little bit about this. This is as the new elections. Come down the pipe not too far down. The road gives your thoughts on this paper for and with a look towards the future. Let me talk a little bit about what I read. And how I come to this understanding and then relate that to the present environment in a little more colorful terms. I think I read a fantastic book. Several years ago by Edmund Phelps for those listeners you might be a little younger than me or not as frequent and reader of economic textbooks. Edmund Phelps is a Nobel Prize Win Economist. Missed who after his work that he won the Nobel prize he then went to when after the wall style and became an advisor. Eiser too many East European governments trying to help them make the transition from communism to capitalism and since returned and written his terrific book called called mass flourishing amass flourishing by Edmund Phelps and. He describes the problem that we have drifted into in many Of the most advanced economies in the world including much of Europe Japan and the United States and the US the current buzzword. What we've got is more crony capitalism than free markets? There's just a huge amount of time and attention applied by the world's world's largest companies to manipulate the system and the regulatory environment in their favor. And we have a set of governments events that knowingly or unknowingly and I think there's some of both collaborate and facilitate the capture of policy by large corporations. Sometimes sometimes it's completely just really unconscious. I would say for example Tim Geithner believing that bailing out all of the banks and all of the bankers were part of his social and professional circle since probably before he.

Edmund Phelps Nobel Prize twenty twenty Tim Geithner United States Europe Kerr Japan advisor
"chris brightman" Discussed on The Meb Faber Show

The Meb Faber Show

14:14 min | 7 months ago

"chris brightman" Discussed on The Meb Faber Show

"CIO. He leads the investment teams and supervisors research and Development Activities Provision of index strategies management of client portfolios with rob. He's also the CO portfolio manager of the Pimco all asset all authority funds before joining research visits and. This is sort of complicated because he used to be. Virginia the attack Hokey he was also the CEO of the University of Virginia Investment Management Company endowment as well as the strategic investment group. Today's episode we get in the evolution. Asian of economic thought and some deal and the philosophy behind modern monetary theory. We discussed research affiliates expectations of low returns going forward for US stocks and the outright bargains that exist in emerging market equities. We also talk about portfolio implementation and research that suggests investors engage in performance chasing and the idea that they'd be better off they were adopt a low cost. Buy and hold approach. Welcome the show Chris Brightman pleasure to be with you Chris. We have to address this because I was just back in Virginia and you went to school down the road at Virginia Tech. Where you an engineer Undergrad business? What story I was a finance Undergrad? Well I figure we get started. You do a lot of awesome writing. We'll post some of the PDF's to the website but interesting times we live in as the year comes to a close the decade. Kate comes to a close. And you've been writing about some of this over the years but I'd love to walk back because one of your papers does a pretty nice job of talking a little bit about. The changes is an economic and monetary theory. And how they've changed over the past few decades. I'd love for you to take us back to when you were Virginia. Tech and what what. They were teaching in the classroom. Then maybe a little bit different than what the finance textbooks teach today probably not a lot about negative interest rates but would love to hear a little bit and we can kind of walk through a little bit about your m. t. ideas and everything else. Sure I I was in school which started very late. Nineteen seventies and into early nineteen nineteen eighties. The core economic problem of the time was that glacier we had very high and volatile interest rates and rates of inflation coexisting with a series of rather nasty recessions and the dominant school of economic thought. At least as was taught to me in macroeconomics at Virginia Tech was Monitor them and too greatly oversimplify. You can explain it as a simple equation The MVP goals t q money. Times the velocity lots of money. How many times each dollars spent in ear is equal to p q the price level times the quantity of goods and services produced and sold in the economy with the insight that is approximately a constant people tend to have whatever behavior they have for turning over money and in the short run Q. is subject to all sorts of Constraints Q.? Meaning the aggregate aggregate output up the economy. You can't simply call into the existence a bunch of new factories and produce a bunch of new goods and services simply by I creating money so if m increases rapidly increases rapidly the money supply determines the price level or to rapid growth in money causes inflation and that was the problem that was bedeviling not just the US but in many of the world's developed economies at the time. And ever. Since then and I would say through until today that has been in received wisdom that monetary authorities should make sure not to increase. The supply of money at an irresponsible pays because the result will be a terrible inflation problem and that inflation problem can co-exist with and probably causes or worsens worsens real economic problems. But I think what's rather fascinating about today's environment is that there's a a heterodox school Economists who promote M MT modern monetary theory suggesting that that there really is no limit to the amount of money that a central bank can create and provide directly to the government so that the government is no longer constrained by the collection of tax revenues or the sale of bonds. He's in its provision of government services and to the public and if this were just a a collection of out of mainstream economists perhaps with a small following of smoothly out of the mainstream screen politicians. It would be nothing more perhaps than curiosity. But what got me so interested in this subject such such that. I spent a lot of time reading about it over the well. Basically in the spring was that a lot of mainstream extreme economists really well respected people like Larry Summers and perhaps more controversially Paul Krugman. We're starting to take these. He's crackpot theories more seriously and commenting on them. They're commentary was overwhelmingly negative but nonetheless the fact that mainstream economists are paying attention to guests that there's something that we should perhaps look into now. I think it's even more fascinating because we have much more respectable people. Thoughtful analysts advocating policy. That sounds awfully similar to M. T.. You probably are aware that I would be speaking. Ray Delios monetary policy eighty three. And even more interesting to me is the paper written by Stan Fischer published with a couple of economists. Economists blackrock advocating the creation of some sort of fiscal facility under the control of central banks to print money and directly injected into the economy when the circumstances warranted now. I'm sure that in fact the very paper for that was co authored. By Stem Fisher emphasized the differences between the emergency use of a fiscal facility and and the seemingly less constrained advocation of money printing to fund permit services and goods despite the economic environment. Yet I still see an awful concerned about the loss of the taboo of using money reprinting and sort of a good cessation of the collective memory of how bad the outcome gets when you start using money. Printing sprinting to fund government expenditures. Having said that given where we are in the economic cycle I don't think this is imminent. Inflation is not about to go zooming up next year. Still dominance yeah. I mean you mentioned in your paper you say you talk a little bit about historical experience with policies similar to MTV has resulted in kind of periods of of higher in volatile inflation. Maybe talk a little bit like. How do you guys think about that possibility? How do you think about preparing what to do about it? Do you SORTA discount the probability of it which thoughts well the prospect of high and volatile inflation nations. And I wanted to explain why linked to I've studied periods of high inflation and everywhere that I can find. Data data high inflation coincides with very volatile inflation. It doesn't seem to exist such a thing as high and stable inflation. You could imagine. Imagine I suppose theoretically if you had an economy with lots of indexation than predictability you could adjust and define nine running an economy with twenty five percent a year annual inflation. But the reality is that we never ever see high and stable inflation. Inflation inflation is always accompanied by high volatility and that volatility is not just in inflation but also obviously in interest straights as well but also in other dimensions like the economy and stock markets. And so while some might say that stocks are real assets and therefore over the long run. You don't need to be concerned with inflation. There may be some truth to that. But there's there's also truth in kings observation that in the long run we're all dead in the intermediate run when you get a huge increase in volatility of interest rates inflation the economy The stock market stock prices don't like volatility. And besides which I think when you you see that kind of environment with high inviolable inflation I dunno Argentina and Venezuela come to mind. It's generally a thermometer telling L. ing you that you have a very sick not just economy but probably sick society and it's just a horrible environment for the performance of Capital markets stocks do terribly along with bonds and we are cognizant that that may and likely will occur again and perhaps in the reasonably foreseeable future. What we take away from? That is that investors. I should think through how they invest in the context of that kind of a scenario and not look over. Just the short horizon of the disinflationary environment that exists. Since I graduated and went to work I went to work. And my first the job in the investment management industry was nineteen eighty two in Chicago and basically from then till today. We've been in this huge disinflationary. Mary environment that is greatly flattered the returns of traditional stocks and bonds. And it's very very difficult for most people to imagine that what has has been normal during their entire professional career isn't normal trends of always climbing interest rates it's not just low interest rates but always declining interest rates is not a perpetual environment and profits rising faster than the economy economy is not a perpetual environment. Either and these are deeply related and when this reverses and I'm sure it will reverse US you won't want to be in the sort of instruments that did so well during the disinflationary boom so what can can you do to better diversify your portfolio. There there are a number of traditional inflation protecting asset classes. Perhaps the most obvious and least east risky would be kept problem with tips. In today's environment of courses zero real yields we also offer a nice liquid tradable able real asset in the short run highly correlated with the US stock market. And for that reason. They're probably pretty pricey in today's environment as well. And then lastly I would say probably commodities as another liquid publicly traded asset class that provides a measure of inflation protection we also find other asset classes that are not typically thought of as inflation protection but empirically do provide considerable inflation protection for example high yield Oh bonds and bank loans bank loans because they're floating rate so obviously any kind of fixed income security that adjusts up with increases in interest rates and inflation rates is going to provide a considerable protection high yield bonds. You might scratch your head you would say well are nominal bonds. They have duration interest rates. Go up they. They ought to perform poorly. And that's true. But they have some interesting differences from say government bonds. One is that or in government bonds and high-grade right bonds. One is that the capital markets are not willing to extend credit for as long as maternity to investment grade borrowers as they are investment. mcbrayer borrowers so the high yield market tends to be at Max a ten year new issue and the average duration accordingly as much lower so you have lower duration than in in investment grade corporate or government bonds and to the higher yields themselves further reduce the duration but the most interesting phenomenon that create some protection from high yield bonds. Is that the companies that issue those high yield bonds are highly indebted companies and the reason that governments choose to pursue an inflation. Mary policy is to inflate away. The value of debt sometimes we refer to this as financial repression and highly debt indebted companies like Highly Indebted countries are able to reduce the real value of their debts through the high inflation rate. Or another way to think of it is they have instead of balance sheet terms arms which I was just describing. We could think of cash flow terms company issues. A lot of fixed rate.

Virginia US University of Virginia Investm Chris Brightman Virginia Tech CO Pimco CIO. finance Undergrad engineer Undergrad business Stan Fischer
"chris brightman" Discussed on WAFS Biz 1190

WAFS Biz 1190

09:01 min | 1 year ago

"chris brightman" Discussed on WAFS Biz 1190

"With the. And words coming up the afternoon, Marianna were very will make old timers day debut at the stadium and the president will go for a four-game sweep of the Astros, their teams heading in opposite directions. The of one eight in a row. Wow. Houston dropped seven in a row, the Yanks getting by the stroz seven five Saturday night in the Bronx, Giancarlo Stanton collecting his first Rb is of his injury plagued season Stanton. Drove in four runs on a couple of go ahead, two run singles, the second one breaking five all time, the seventh inning GO or Sheila and Austin role mind both homered for the bombers Massieu Tanaka taking notice after pitching six innings of two on ball. It was after noon delight for the Mets at Wrigley field. They crush the cubs ten to Pete Alonzo Todd Frazier and Wilson romo's all homering for New York Alonzo, belting is twenty six of the season, tying him Daryl strawberry for the franchise rookie record of buzz around it. So I kinda just would see kind of other people. I mean, if, if other people didn't tell me that I have no idea. But I was just trying to put a go to put together a really good at bat to start off the game and set the tone Jack Wheeler to win seven innings for the win. The Mets have won two in a row. College hoops. It looks like Yukon is heading back to the big east in two thousand twenty the school had moved to the American athletic conference in two thousand thirteen no word on the future of yukons football program as the biggest does not have football. And it's unlikely that you con- will remain in the American with just a football team. I to highlight of day to the NHL draft at least on the local front, a trade made by the devils in Nashville predators. New Jersey acquired all star defenceman PK sue ban and exchange for defensemen. Steven Santini prospect, Jeremy Davies and a pair of second round picks Gallup Chaz review is six shot lead after three rounds at the travelers championship in Cromwell, Connecticut. That's a Bloomberg sports update. I'm Paul Edwards. These masters in business with Barry ritholtz on Bloomberg radio. My special guest today is Chris Brightman. He is the chief investment officer of research affiliates, whose investment strategies currently manage over two hundred billion dollars. Previously, he was the board chair at the investment fund for foundations he was the CIO of the strategic investment group, and director of global equity strategy at UBS asset management, Chris Brightman. Welcome to Bloomberg. Thank you for having me. So that's a really interesting resume. You've worked at some very storied places. What I attracted you to the field of investment management. I arrived at my university, Virginia Tech having been accepted into the liberal arts school, and after listening to the dean of the liberal arts, school address the auditorium of new students. Explaining why you've made the right choice. I approached the podium and said, I think I'm in the wrong place. I want to go to the school of business and without missing a beat or even seeming to notice, the irony. The dean said, oh, yeah. Well, you walk down three buildings over to that way. And, and I changed before I even began classes to the business program, mostly because I figured you have to understand this is the seventy s I wanted a job when I graduated, and I felt like majoring in business would would be more likely to lead to a job than liberal arts. I don't know if that was right. But that's, that's what I did. And then I clearly worked right and finance because it was more interesting than accounting. And for some of our younger listeners the nineteen seventies was a period of stagflation, high inflation, and high unemployment. What was it like coming out of school into that? Environment. The I graduated in the early eighties. And the early eighties were an awful time, there was a nasty recession, and I was really lucky. Yeah. Right. Eight hundred eighty two was horrible. Eighty three was a little better. And I was lucky to graduate in eighty three eighty four eighty five was boomtime great. But, but I graduated in eighty three and. I think really got me into the investment management industry was an internship that I had with First Chicago in one thousand nine hundred two over the summer and my internship, was with the institutional trust department at First Chicago, which later became First Chicago investment advisers, which later became Brinson partners. And Gary Brinson, the founder of Brinson partners was one was really my first mentor in the business beginning in nineteen eighty two. So you were working on the endowment side of the street. How does the endowment side differ from working with retail investors and people with money as with 4._0._1._K's in IRAs, etc? I've had about a three and a half decade career thirty five years in the business of which I took a rather brief five year detour into the nonprofit area managing the university of Virginia endowment, and it differs in a number of ways probably the. Most interesting to an outsider is the access that one gains to elite investment managers how big was the endowment at the time. Over five billion. Okay. So that's real money. I think interestingly, though, it's less challenging it's an easier job. I'm so surprised you say that and maybe this projecting. But I would imagine that running endowment and my frame reference. References all the craziness we've seen with the Harvard endowment over the past twenty years, and what recently happened with the Ellen dominant Swenson. I would imagine there are so many political constituencies to deal with, it would be a huge distraction or at Jinnah tackle. We not seeing that sort of Cambridge craziness. It's a point of clarification. I was the CIO at the university of Virginia though. My alma mater, is Virginia Tech shit. So let's serve on the investment committee at Virginia Tech as well. So there's and I had one daughter that went to and one daughter, the Virginia Tech, so I have loyalties with both schools so so to clarify I clearly misspoke. You were the CIO at the Virginia. University of Virginia endowment and that covered what school or schools UVA. This just one endowment, five billion dollars actually fascinating enough. It's much more complicated than that. The university of Virginia has dozens of nonprofit organizations. All of whom have their own fundraising staff their own endowments and the university of Virginia investment management company, may five one three, c nonprofit creation with its own board in its own audit its own charter, etc. Serves as an investment advisor to those various pools of money. So in many ways, while I was there, I did have to address many different clients, and it is very political. You're quite correct about that. Do they all invest the same way or just each of them have different investment philosophy in different set of goals, and therefore a different portfolio? Look, you've the university of Virginia investment management company pools, the money and invested in one fashion that said all of the different pools of money don't have to invest with the university of Virginia investment management company. They can if they choose or they cannot, or they can invest part of the money for many years, the law school, wasn't convinced that it wanted all of its money in the in the pool. So just part of the law school endowment was invested in you, then co coming up. We continue. You are conversation with Chris Brightman CEO of research affiliates, discussing smart beta. You're listening to masters in business with Barry ritholtz on Bloomberg radio. You're a small business owner.

university of Virginia Virginia Tech Bloomberg Chris Brightman university of Virginia endowme Barry ritholtz Mets CIO chief investment officer dean Pete Alonzo Todd Frazier Brinson partners Giancarlo Stanton Gary Brinson Daryl strawberry school of business Virginia Chicago
"chris brightman" Discussed on Bloomberg Radio New York

Bloomberg Radio New York

09:49 min | 1 year ago

"chris brightman" Discussed on Bloomberg Radio New York

"The boy scouts of America has announced new efforts to prevent child sex abuse in the program in April shocking allegations announced of more than twelve thousand instances of known allegations of sex abuse within the boy scouts at the hands of allegedly some seventy eight hundred adults in the program. Survivor advocate Brady Farrell says the boy scouts hid the alleged abuse in so-called perversion file for years. Data starts in nineteen forty four now scouting has announced a series of animated videos aimed at cub scouts just five to eleven informing them about how to recognize potential abusive behavior and what to do about it, Jim Roope, Los Angeles, New Mexico's Catholic Santa Fe, diocese, stunned parishioners last year when it filed for chapter eleven reorganization joining nearly two dozen other dioceses struggling with fallout from clergy sex abuse scandals. Now nearly four hundred claims have been filed against the diocese as part of the pending bankruptcy case ahead of June. Seventeenth deadline. I'm Evan Haning. Dame Susanna Palmer from Bloomberg world headquarters, the drumbeat for a Federal Reserve interest rate cut is getting louder with one policymaker calling for a fifty basis point reduction, Minneapolis fed president Neel Kashkari said yesterday that he'd pushed for such a move at the central banks June eighteenth and nineteenth meeting, where officials ended up leaving rates unchanged comments from other policy-makers reinforced expectations that the fed is, on course to cut rates, perhaps, as soon as the July meeting, rich Clarita is Federal Reserve vice chair, we really have uncertainty in the sense that there's always some geopolitical uncertainty. But there's also uncertainty about how the global economy, navigates that a point you know, you have negative interest rates in the year zone and in Japan. And I think that is a factor as, as well, cleared a spoken and exclusive interview with Bloomberg radio and television, top Trump administration officials will attend Tuesday's regional. Economic investment summit in Bahrain, the first leg of the long-awaited Middle East peace plan being led by Jared Kushner, president, Donald Trump's son-in-law and senior adviser speakers will include business leaders, including Stephen Schwarzman, chairman of Blackstone group. Randall Stevenson, chairman of AT, and T, and Tom barrack, chairman of colony capital, World Bank, president, David Malpass, and I am managing director Christine Lagarde are also scheduled to speak, the UK's Boris Johnson pitched his bid for prime minister to members of his conservative party today recent turmoil in his private life didn't trip him up at all. You drew cheers when he dodged questions about a spat with his partner that brought the police to his London home front runner Johnson and his opponent. Jeremy hunt both made their opening appeals today. Global news twenty four hours a day on air, and it ticked up on Twitter, powered by more than twenty seven hundred journalists and analysts in more than one hundred twenty countries. I'm Susanna Palmer. This is Bloomberg. These these masters in business with Barry ritholtz on Bloomberg radio. My special guest today is Chris Brightman. He is the chief investment officer of research affiliates, whose investment strategies currently manage over two hundred billion dollars. He's previously, he was the board chair at the investment fund for foundations he was the CIO of the strategic investment group, and director of global equity strategy at UBS asset management, Chris Brightman, welcome to Bloomberg Bank. You for having me. So that's a really interesting resume. You've worked at some very storied places. What I attracted you to the field of investment management. I arrived at my university, Virginia Tech having been accepted into the liberal arts school, and after listening to the dean of the liberal arts, school address the auditorium of new students. Explaining why you'd made the right choice. I approached the podium and said, I think I'm in the wrong place. I want to go to the school of business and without missing a beat or even seeming to notice, the irony. The dean said, oh, yeah. Well, you walk down three buildings over to that way. And, and I changed before I even begin classes to the business program, mostly, because I figured you have to understand this is the seventies, I wanted a job when I graduated, and I felt like majoring in business would would be more likely to lead to a job than liberal arts. I don't know if that was right. But that's, that's what I did. And then I killed clearly works, right? As finance because it was more interesting than accounting. And for some of our younger listeners the nineteen seventies was a period of stagflation, high inflation, and high unemployment. What was it like coming out of school into that? Environment. The I graduated in the early eighties. And the early eighties were an awful time, there was a nasty recession, and I was really lucky. Yeah. Right. Eight hundred eighty who was horrible eighty three was a little better. And I was lucky to graduate in eighty eighty four eighty five with boomtime great. But, but I graduated in eighty three and. What I think really got me into the investment management industry was an internship that I had with I carbo in one thousand nine hundred eighty two over the summer and my internship was with the institutional. Trust department at First Chicago, which later became First Chicago investment advisers later became Brinson partners. And Gary Brinson, the founder of Brinson partners was one was really my first mentor in the business beginning in nineteen eighty two. So you were working on the endowment side of the street. How does the endowment side differ from working with retail investors and people with money is with 4._0._1._K's in IRAs, etc. I've had about a three and a half decade career thirty five years in the business of which I took a rather brief five year detour into the nonprofit area managing the university of Virginia endowment, and it differs in a number of ways probably the. Most interesting to an outsider is the access that one gains to elite investment managers how big was the endowment at the time. Over five billion. Okay. So that's real money. I think interestingly, though, it's less challenging it's an easier job. I'm so surprised you say that, and maybe this is me projecting. But I would imagine that running endowment, and my frame of reference is all the craziness, we've seen with the Harvard endowment over the past twenty years, and what recently happened with the Ellen dominant. Swanson. I would imagine there are so many political constituencies to deal with, it would be a huge distraction or at Virginia Tech away. Not seeing that sort of Cambridge craziness. So. Point of clarification, I was the CIO at the university of Virginia though. My alma mater, is Virginia Tech shit. So let's serve on the investment committee, Virginia Tech as well. So there's an had one daughter that went to one daughter, the Virginia Tech, so I have loyalties with both schools so so to clarify site. Clearly misspoke, you were the CIO at the Virginia university of Virginia endowment, and that covered what school or schools UVA. This is just one endowment five billion dollars. Actually fascinating enough. It's much more complicated than that. The university of Virginia has dozens of nonprofit organizations, all of whom have their own fundraising staff, their own endowments, and the university of Virginia investment management company, may five oh, one three c nonprofit creation with its own board in its own audit its own charter, etc. Serves as an investment advisor to those various pools of money. So in many ways, while I was there, I did have to address many different clients, and it is very political. You're quite correct about that. Do they all invest the same way or just each of them have different investment philosophy? And in a different set of goals, and therefore a different portfolio. Look, you've the university of Virginia investment management company pools, the money and invested in one fashion that said all of the different pools of money don't have to invest with the university of Virginia investment management company. They can if they choose or they cannot, or they can invest part of the money for many years, the law school, wasn't convinced that it wanted all of its money in the in the pool. So just part of the law school endowment was invested in you. Coming up, we continue. You are conversation with Chris Brightman CIO of research affiliates, discussing smart beta. You're.

Virginia Tech university of Virginia CIO Bloomberg Chris Brightman Virginia university of Virgini university of Virginia endowme Susanna Palmer president fed chief investment officer Bloomberg radio chairman Brinson partners Bloomberg world Brady Farrell America Evan Haning Neel Kashkari
"chris brightman" Discussed on Bloomberg Radio New York

Bloomberg Radio New York

03:16 min | 1 year ago

"chris brightman" Discussed on Bloomberg Radio New York

"A second, many do need additional income, but some are looking for more experience and some just want to dip Atto into a different interest on Jan Johnson groundbreaking African American tennis player. Arthur Ashe's hometown of Richmond, Virginia has renamed a major thoroughfare after him thousands of people attended the ceremony today to celebrate the formal education of Arthur Ashe boulevard, as was the only black man to ever win the singles title at the US open and Wimbledon. I'm Ann Cates. Dame Susanna Palmer from Bloomberg world headquarters, the UK's Boris Johnson pitched, his bid for prime minister to members of his conservative party today, recent turmoil in his private life, didn't trip up at all drew cheers, when he dodged questions about a spat with his partner that brought the police to his London home front runner Johnson and his opponent. Jeremy hunt both made their opening appeals today. Bloomberg has learned top officials in the Trump administration will attend Tuesday's regional economic investment summit in Bahrain, that's the first leg of a long-awaited Middle East peace plan being led by president Donald Trump's son-in-law, and it senior adviser Jared Kushner today, the White House unveiled a fifty billion dollar economic investment proposal to be the centerpiece of the Bahrain meeting and the peace plan Palestinian officials plan to skip the event and have criticized the economy, I approach put forward by the US Canada's oil producers limited by pipeline capacity. Can expect a bit of relief starting in the second half of the year even without a new pipeline and bridge operator of the country's biggest export pipeline network. Plans to add one hundred thirty five thousand barrels a day of extra capacity to it system by early next year all that according to and bridge. CEO L, Monaco speaking at the Morgan energy conference in New York this week. Opec is poised to extend oil output cuts for the rest of the year when its members meet next month to assess supply and demand for crude more on that from Charlie Pellett, Saudi Arabia Iraq, and the United Arab Emirates groups, three biggest members all want to keep restraining production in a bid to buttress crude amid signs of faltering demand, the organization of Petroleum Exporting Countries, and is now look likely to roll over the cuts when they gather on July. First and second in Vienna. Global news twenty four hours a day on air and ticked up on Twitter, powered by more than twenty seven hundred journalists and analysts in one hundred twenty countries. I'm Susanna Palmer. This is Bloomberg. Busiess masters in business with Barry ritholtz on Bloomberg radio. My special guest today is Chris Brightman. He is the chief investment officer of research affiliates, whose investment strategies currently manage over two hundred billion dollars. Previously, he was the board chair at the investment fund for foundations he was the CIO of the strategic investment group, and director of global equity strategy at UBS asset management, Chris Brightman, welcome to Bloomberg bake you for having me. So that's a really interesting resume. You've worked at some very storied places..

chief investment officer Bloomberg Arthur Ashe Susanna Palmer Jan Johnson US Arthur Ashe boulevard Bloomberg world Boris Johnson Donald Trump Virginia Ann Cates Barry ritholtz Richmond Bahrain Jared Kushner Opec
"chris brightman" Discussed on Bloomberg Radio New York

Bloomberg Radio New York

08:42 min | 1 year ago

"chris brightman" Discussed on Bloomberg Radio New York

"Now this Bloomberg sports update on the baseball scoreboard and the American League. The key is win their seventh straight defeating Houston four two one two run homers from Gary Sanchez and labor, Torres, the Astros Avella six in a row. Jason kipness at a time. Breaking triple in the evening. Sending the Indians to his seven six win over the Tigers Lorenzo beat the Blue Jays intending seventy-five Christian Vasquez with the game winning two run. Homer, also tendons, the white socks over Texas five to four the twin slipped by Kansas City eight two seven Oakland Athletics pitcher Frankie mandis has been suspended eighty games by major league baseball after testing positive for performance enhancing substance. Montas was nine and two. The two point seven hour, run average in the National League, Jeff McNeil homered and drove in three runs making his first career start in right field and the Mets edge the cubs five to four Dallas conical made his Braves debut copping of three nothing. Lean is the national, it's come from behind. To defeat Atlanta for two three Marlins starter Sunday, Elkin Tara pitched into the eighth inning. And Brian holiday. Homered and Miami's two one win over the Phillies Joe grove allowing one run on five hits over seven innings pitching, the pirates to two one win over the Padres interleague action Albert who holds played his first game in sT Louis eight seasons and signing with the angels who holds singled and walked in three plate appearances as the angels, fall to Saint Louis five to one at the NHL draft in Vancouver. The New Jersey Devils selected American Center. Jack us with the first pick in the draft. And the Rangers are making finish wing. Capo Cocco, the second overall pick Jerry Kelly shot, a seven under sixty five on Friday to take the first round lead in his hometown. American family insurance, championship, classic in Madison, Wisconsin, college baseball, Michigan is reached the finals of the college World Series, after eliminating Texas, Tech with a fifteen to three victory. The best of three championship gets underway Monday when the wolverines take on. Underbilled will the Bloomberg sports update. I'm Tom Rogers. Is masters in business with Barry ritholtz on Bloomberg radio. My special guest today is Chris Brightman. He is the chief investment officer of research affiliates, whose investment strategies currently manage over two hundred billion dollars. He's previously, he was the board chair at the investment fund for foundations he was the CIO of the strategic investment group, and director of global equity strategy at UBS asset management, Chris Brightman. Welcome to Bloomberg. Thank you for having me. So that's a really interesting resume. You've worked at some very storied places. What I attracted you to the field of investment management. I arrived at my university, Virginia Tech having been accepted into the liberal arts school, and after listening to the dean of the liberal arts, school address the auditorium of new students. Explaining why you'd made the right choice. I approached the podium and said, I think I'm in the wrong place, I'm gonna go to the school of business and without missing a beat or even seeming to notice, the irony. The, the dean said, oh, yeah. Well, you walk down three buildings over to that way. And, and I changed before I even began classes to the business program, mostly because I figured you have to understand this is the seventies, I wanted a job when I graduated, and I felt like majoring in business would would be more likely to lead to a job than liberal arts. I don't know if that was right. But that's, that's what I did. And then I killed clearly works. Right. And I chose finance because it was more interesting than accounting. And for some of our younger listeners the nineteen seventies was a period of stagflation, high inflation, and high unemployment. What was it like coming out of school into that? Environment. The I graduated in the early eighties. And the early eighties were an awful time, there was a nasty recession, and I was really lucky. Yeah. Right. Eight hundred eighty two was horrible. Eighty three was a little better. And I was lucky to graduate in eighty three eighty four and eighty five with boomtime, right? Great. But, but I graduated in eighty three and. What I think really got me into the investment management industry was an internship that I had with First Chicago in one thousand nine hundred eighty two over the summer and my internship, was with the institutional trust department at First Chicago, which later became First Chicago investment advisers later became Brinson partners. And Gary Brinson, the founder of Brinson partners, was one of my was really my first mentor in the business beginning in nineteen eighty two. So you will working on the endowment side of the St. how does the endowment side differ from working with retail investors, and people that money is with 4._0._1._K's IRAs, etc. I've had about a three and a half decade career thirty-five years in the business of which I took a rather brief five year detour into the nonprofit area managing the university of Virginia endowment, and it differs in a number of ways probably the. Most interesting to an outsider is the access that one gains to elite investment managers how big was the endowment at the time. Over five billion. Okay. So that's real money. I think interestingly, though, it's less challenging it's an easier job. I'm so surprised you say that, and maybe this is me projecting. But I would imagine that running endowment and my frame, references all the craziness, we've seen with the Harvard endowment over the past twenty years, and what recently happened with the Ellen dominance. Swanson, I would imagine there are so many political constituencies to deal with it would be a huge distraction or at Jinnah Teke. We not seeing that sort of Cambridge craziness. So. Point of clarification, I was the CIO at the university of Virginia though. My alma mater, is Virginia Tech shares. So let's serve on the investment committee at Virginia Tech as well. So there's an had one daughter that went to UVA and one daughter, the Virginia Tech, so I have loyalties with both schools so so to clarify Cy clearly missed both, you were the CIO at the Virginia university of Virginia endowment and that covered what school or schools UVA. This is just one endowment five billion dollars. Actually fascinating Lee enough. It's much more complicated than that. The university of Virginia has dozens of nonprofit organizations. All of whom have their own fundraising staff their own endowments and the university of Virginia investment management company, may five oh, one three c nonprofit Craciun with its own board and its own audit its own charter, etc. Serves as an investment advisor to those various pools of money. So in many ways, while I was there, I did have to address many different clients, and it is very political. You're quite correct about that. Do they all invest the same way or just each of them have different investment philosophy in different set of goals, and therefore a different portfolio? Look, you've the university of Virginia investment management company pools, the money and invested in one fashion that said all of the different pools of money don't have to invest with the university of Virginia investment management company. They can if they choose or they cannot, or they can invest part of the money for many years, the law school, wasn't convinced that it wanted all of its money in the in the pool. So just part of the.

university of Virginia Bloomberg Virginia Tech university of Virginia endowme CIO chief investment officer baseball dean Brinson partners Jason kipness Virginia university of Virgini American League Chris Brightman Gary Brinson Chicago National League Christian Vasquez Houston
"chris brightman" Discussed on Masters in Business

Masters in Business

02:53 min | 1 year ago

"chris brightman" Discussed on Masters in Business

"She wanted to she switched to psychology and one of the things that Amy found is that she had taken a full raft of stats classes, freakonomics. And then when she switched to psychology they said, oh, no, no. Those are econ stats classes, you need psych stats classes. So she had to take a double load of statistics. Amy started a digital advertising agency here in New York. And when she was talking to her younger, sibling, my son, John when he was entering college. She said, you know what? You really need to take stats that's been the most helpful thing for me in my career in digital advertising in it's equally. True, I think in the investment management industry, become numerous take statistics. The, the, the world has become the, the professional world puts a premium on numeracy. I think that's great advice, and our final question. What is it that, you know, about the world of investing today that you wish you knew thirty five years ago when you first started humility is enormously important to professional development can say, disagree with that any particular reason that led you to that, and you're not the first person who has mentioned it, but as I've advanced in my career it. Has become more and more important to inspire other people to build a team to nurture and help other people grow and one can't do that affectively without a humility. I for me to succeed. I have to lead a group of people all of whom at least many of whom are smarter, better educated and more productive than I am. And, and one can't do that without a considerable, a degree of humility quite quite fascinating. We have been speaking with Chris Brightman. He is the chief investment officer of research affiliates if you enjoy this conversation. Well, look up an introduction an inch on apple I tunes or Stitcher overcast wherever you're finally podcasts are sold and you can. See any of the other two hundred fifty such conversations. We've had over the previous five or so years, we love you comments feedback, and suggestions. Write to us at 'em IB podcast at Bloomberg dot net. I would be remiss if I did not, thank the crack staff who helps put together this conversation each week.

Amy chief investment officer Bloomberg dot John apple New York thirty five years
"chris brightman" Discussed on Masters in Business

Masters in Business

05:09 min | 1 year ago

"chris brightman" Discussed on Masters in Business

"But I had some friends at the top of that door organization that were interested in exploring getting into the asset management industry and market neutral in ninety nine two thousand should've done not too bad, right? It would have been a wonderful time, but as the environment turned less conducive to risk taking or perhaps, I was just not as persuasive as had been the year before they decided to pull the plug on that endeavor. But I learned a lot in that a period of time. I'll give you a lesson about. Marriage and a, a lesson about the structure of the quantitative investment management, distri after I determined, I was going to be unsuccessful in starting that business. I just hung around the house for a while. I helped coach, my son soccer team, and I got a lot of cycling in and I just spent a lot of time around the house, and my wife explained to me, you know, Chris for better or worse, but not for lunch. You need to go back and. Better or worse, but not for lunch. That's great one of the fascinating discoveries as I was recruiting people to join my never to be quantitative equity market neutral global hedge fund was how many of the best staff I was recruiting. How many people I was interviewing didn't work at what you and I think of as an investment management organization, but worked at family offices right here in Manhattan, and family offices of former prop traders, people that would leave Goldman Sachs prop desk or Leman brothers or Morgan Stanley with enough money that they didn't need to manage money for anybody else. And they would hire these incredibly gifted clots from India are from China, and I think people. Don't realize that most of the money that is made by arbitraging inefficiencies in the capital markets. These days is not in funds that are invested investing, the, the money of Harvard University or the state of California's pension fund. It's mostly private money, and, and that's where those those prophets go. There's an enormous amount of professional investment expertise supplied to the management of individual family money, not investable to the public not investable to the public. They're not even they're not even registered investment management, companies. They're just Friday office, and they don't want to track detention mutt. My favorite part of the renaissance. Technology story with Jim Simon's was at a certain point. They realized their ability to generate alpha was limited and only scaled up, so large, and when their own investments at that point, they told their outside investors. Hey, thanks so much for coming by, but we, we don't want your capital anymore. We we're gonna take this ourselves. And that's a well known example, what I found is that there are dozens, perhaps hundreds of similar outfits here in New York City, that never took private money, ever, never took outside money, and these aren't giant multi-billion necessarily giant multi-billion family offices. These are fifty a hundred two hundred fifty million dollars in my ballpark. I don't think we know they don't have to tell us that that's quite fascinating. You mentioned cycling. What do you what do you do for fun? What do you do to relax? What do you do to, to stay trim and fit? I one of the benefits of living in Newport Beach in southern California, is that I can cycle all year round. So I both get out on my road bike and a spend time on my mountain bike. And then I go to the gym a few times each week because I have to keep fit so that I can I can cycle and I can ski and I can hike the that southern California last. I'll sounds increasingly attractive. So a millennial or recent college grad comes up to you and says, I'm thinking about going into finances, a career, what sort of advice, would you give them? Here's some advice my daughter Amy when she was growing up. She wanted to be in fashion merchandising, but then she went to college and decided, you know, maybe I should be a little more practical. And she started her major in economics after a few years in economic, she decided that, that wasn't really where she wanted to go..

Amy California Chris Goldman Sachs Harvard University soccer New York City Jim Simon Newport Beach Manhattan India Leman Morgan Stanley China hundred two hundred fifty mill
"chris brightman" Discussed on Masters in Business

Masters in Business

04:01 min | 1 year ago

"chris brightman" Discussed on Masters in Business

"What other books, do you think are essential reading? Or what are you just like to read, if you wanna relax? By the way, this is everybody's favorite question. People want reading suggestions more than anything. They don't know which of the three hundred thousand books that come out each year to read, so they take these very seriously. Yeah. Sure. If you want to understand the future of markets, and the intersection of public policy and markets, the three books that I just mentioned are the ones of the dozens that I've read over the last few years, that I think are most important, Phelps Wu. And what's the third one Jonathan Tepper? Oh, okay. It's the myth of capitalism. When I want to escape, I don't read about economics and policy. I read a science fiction Matz ablest, so nothing wrong with that. What do you like under Sifi? I guess under fantasy instead of sci-fi. I loved the game of thrones. And I loved it so much that after watching the series, I then read all of the books, and then I went back and rewatch the all of the series. I also read one of one of my favorite sell though. You're seeing less get published, as in a sort of sub-genre called cyberpunk are you a Neil Stevenson fan? Absolutely. I just got haven't read it yet, but I, I have sitting on my desktop seven Eve's. That's what is literally sitting on my night table. I read it. It's fab. Really? And then also on my list, I, I'm going to throw you books that people have recommended me that I haven't gotten to yet the three body problem, people have raved about that trilogy from the author out of China and really fascinated by by your list. So what are you most excited about right now? What, what is the part of the industry that has you really enthusiastic? I am very enthusiastic about the opportunity to use twenty-first-century technology and part of it is financial technology. Part of it is financial modelling and predicting what's going to happen. But importantly, a lot of it is communication technology, what we're doing right now to help educate investors to achieve a better outcomes, and I am very pleased to see the costs being a reduced in the industry. The provision of investment strategies. At couple of basis points. Right. It used to be a hundred basis points, one hundred and fifty basis points was the cost of investment strategy. Now it's twenty basis points or ten basis points or five basis points, and providing the average investor the ability to compound wealth, for their retirement without intermediaries gobbling up, so much of the, the, the returns, tell us about a time you failed and what you learn from the experience, I left UBS, so a Brinson partners where I kind of got my start we sold ourselves. I was a partner of the firm. I made a little money on that sale to UBS, and I learned after a time there that, that was not the place for me. I'm better off in smaller employee owned investment management firms than large institution. Scott God, love the people that thrive in large. Petitions because the world appears to need them, but it's not a good fit for me. And I tried to start a quantitative equity market neutral hedge fund in nineteen ninety nine to two thousand with some backing from a firm called Greenwich capital grant, listen around anymore..

UBS Scott God Jonathan Tepper Phelps Wu Greenwich capital Neil Stevenson partner Eve China Brinson partners
"chris brightman" Discussed on Masters in Business

Masters in Business

04:05 min | 1 year ago

"chris brightman" Discussed on Masters in Business

"And while I was the Charrette tiff, I had the privilege of working with a fascinating individual named David Salem probably less known than some of these others, but nonetheless, a fascinating figure in the nonprofit investment world. And now, finally, rob are not who quite well known. So if I really had the privilege of getting to know a lot of fantastic investors. Welcome to the podcast. Chris, thank you so much for doing this. We met some time ago. And I've been looking forward to having this conversation. I know rob are not the founder of RAFI for a long time. He's a fascinating guy. Must be fun to work with urine a you here hero. You Newport Beach located in Newport Beach. Yeah. That's quite that, that might be one of the most beautiful places in America to, to go to work every day. I joke with people, I ask them. Do you know why were headquartered in new? Beach because you can that's right. For for those listeners who may not have ever been to that part about an hour, south of LA, maybe the little less depending on traffic. It's just this Balboa island right over there. It's just this gorgeous part of Southern Cal everything you imagine. Southern California is. But nicer. I mean it really is kind of ridiculous. Everything's wonderful, except for the traffic. No. They traffic is almost non-existent in Newport. If you live in Newport Beach, and work in Newport Beach, wonder the problems are the price of real estate and the taxes price of real estate. So funny, say that a friend who I won't mention was having a conversation with rob about, you know, if you move to Nevada you live in Las Vegas, you won't have to pay state taxes, and his answer was hip. But then I have to live in the vodka and he goes, I'm in what might be the most beautiful place in the world. I'm going to have to pay the, the Vig first thing. There you know, I spent a decade in Chicago, and I have a lot of friends in the business in Chicago. And I was there not too long ago saying. Boy, higher taxes are in your future. I I've been paying attention to what's going on with the pension problems, Nagin and Illinois for sure, and the only in the places. So you're going to get California like taxes in your future to fill this hole in the pension. Vanity says, you know, we can't do that Chris as I we have to thirteen percent state income tax in, in California. It's that high thirteen percent. Wow. That's a lot. And he says you don't understand you can raise the taxes to, you know, ten fifteen percent, California, and nobody they're not going to move to Nevada. Right. Some people, of course, do moved in oughta by, but there's a magnet to the west coast and -fornia. He said. Illinois doesn't have that people will move to anywhere Wisconsin. They'll move to Indiana. We can't take taxes up to, to that love Chicago happens to be a very reasonable city. It's a reasonable. It's big enough that it has whatever you want, but it's not as big as New York's where it's completely overwhelming. And their prices are much more reasonable than the coasts. The problem is your weather is much nicer when you have southern California weather, you could charge thirteen percent. And in Chicago, if they in Illinois they raise it at a certain point say, all right. I'm going on. This is this tau high taxes, plus terrible winters equals. I'm out and that's been the shift southward across the whole country. People have been making the argument. It's political, but I really think it's weather based. I think it's both. I think taxes, I think it's regulatory environment and I think it's the weather, so let's talk about you mentioned some books, you mentioned Tim Wu and Edmund Phelps books..

Newport Beach California rob Chicago Chris Illinois Newport Nevada David Salem Balboa island LA Tim Wu RAFI America founder Indiana Edmund Phelps Nagin Wisconsin
"chris brightman" Discussed on Masters in Business

Masters in Business

04:36 min | 1 year ago

"chris brightman" Discussed on Masters in Business

"None of the big, well, no names or performing as well as they did. Previously, same with a lot of the hedge fund guys that used to shoot the lights out. They seem to be struggling, what is it about this past decade? That's been so difficult for so many different styles of investment investing. Well, there's a couple of things one, we've had just a stupendous roaring bull market. And so it just is. It is easy to comprehend from first logical principles that a strategy that is one hundred percent long. Stocks is going to outperform a strategy that is both long and short stocks during a monumental bull market. So that basically explains the difficult performance environment for hedge funds. What has worked what kind of alternative investment if you want to use that label has worked over the last ten years, well, private equity, why? Well, because they don't just go one hundred percent long. They go hundred percent long with some leverage, so that works pretty well in a roaring bull market. I would guess if I had to put my money on who outperforms over the next ten years, it would be on the hedge funds rather than the private equity funds because markets. Don't always go in straight lines up. A lot of your research, in commentary that I find quite fascinating. You're very good at at crafting a headline that is intriguing. And I want to just throw a few of them at you. And, and see what you what you have to say about that. One of them was are we at peak profits? And I have to ask the question because people have been saying were peak profits for, I don't know four or five six years. This whole run-up we've been hearing people say that are we at peak profits. We discussed all of the monopoly rents, and the other issues. With crony capitalism earlier, organically, speaking, have we hit the point where profitability can't go higher or commits trend continue for the foreseeable future. Until policy changes, the trend will continue, and I see no evidence of policy change coming out of the divided government. We presently have in Washington. However. Markets are forward discounting the amount of the value of the S and P, five hundred or any given stock in the s and p five hundred. That is the dividends that are going to be paid over the next two or three years is trivial. Most of the value is discounting future cash flows over the decades. And I believe that we are seeing an increasing likelihood of a very significant change in policy, perhaps, as soon as the twenty twenty one new administration, I would expect and this is an interesting forecast. I if you wanna if you wanna handicap who's going to be our next president, take a look at who seems like a twenty-first-century teddy Roosevelt. Meaning. Trust buster. Correct. Someone who's gonna come in and say, hey, you know ninety three percent of the search being with Google who I'm okay welcoming goule as our new overlords. But I understand the antitrust argument against it or half of all online retail transactions being with Amazon, that's an immense concentration of power in a very small number of hands. There's been almost no appetite for antitrust enforcement. There's been no appetite for preventing these giant mergers, the when was the last time somebody other than CNN, and I forgot who was even the, the merger was with that the president was unhappy with, because he doesn't like the CNN coverage, but that whole Time Warner CNN whatever the last broadband merger. Other than that, one political example, has really been much in the way of stopping big companies from becoming giant companies in order to preserve a fair and competitive landscape..

CNN president Amazon teddy Roosevelt Google Washington one hundred percent ten years ninety three percent hundred percent five six years three years
"chris brightman" Discussed on Masters in Business

Masters in Business

02:13 min | 1 year ago

"chris brightman" Discussed on Masters in Business

"It's zero sum. So for everyone, or there's a loser are the institutions winning at the expense of the retail investors, or is there, a, a win and loss. Component between different endowments some dwell some do poorly, but on average they get as you said market returns. Well, there's a cyclical in a secular time horizon on the secular time horizon. I think we find nonprofits, particularly large university endowments tend to get the best results pension funds public pension funds. Get as I said, just a moment ago about the market return after their fees and expenses. And retail investors lose about two percent a year that two percent a year is mostly paid to a professional investors and value investors. Now that gets to the cyclical component if we evaluated the performance of the endowments up until the global financial crisis. There were many books written about their remarkable decades of outperformance, we've been in a cycle, a ten year horizon, where growth is outperformed value. And to over simplify most endowments are going to be value, investors. So I think you've seen a period where value investors have struggled, and it's been a difficult time for the value Oreo. Rented endowment model, but I think is it twenty five years from now looking back, you'll still see the success of that model so I'm going to ask you to go a little outside of your comfort zone using that same secular versus cyclical time period, the pre-crisis era. We saw a lot of investments in venture capital and private equity and hedge funds that actually had done pretty well and since the mid two thousands in venture capital has lost a little bit of it's shine..

two percent twenty five years ten year
"chris brightman" Discussed on Masters in Business

Masters in Business

01:46 min | 1 year ago

"chris brightman" Discussed on Masters in Business

"When just the right elements. Come together ideas with technology data with inspiration investors with solutions. This is what Invesco does every day because they believe the possibilities of life, and investing are greater when we come together from ETF's to mutual funds to alternatives. Let's invest in greater possibilities together Invesco. To learn more, visit Invesco dot com slash together. After fees and expenses, generally get about market returns. If you look at the returns before their fees expensive and costs they beat the market. But most of that is absorbed by the fees expenses and costs, the staff, the investment management fees that absorbs most if not all of the outperformance, but that's two percent better than the retail investor. And I think that's from superior governance structures that prevent the worst mistakes. So now there have been a number of studies that have come out about both retail and institutional. I recently saw something out of NYU stern school of business of 'bout the underperformance of foundations and endowments versus a simple, sixty forty portfolio and according to. To that research. The institutions are barely doing a whole lot better than individuals. At least at these nonprofit foundations endowments at cetera. So cost is clearly a factor. What else is the driving factor? You brought up.

Invesco NYU stern school of business two percent
"chris brightman" Discussed on Masters in Business

Masters in Business

02:30 min | 1 year ago

"chris brightman" Discussed on Masters in Business

"What I can say is that the dispersion between the pricing of value and growth stocks. Reached in the last year or two extremes that we almost never see not quite to the extreme of the tech bubble. But about as significant as we see, that's perhaps an indicator that the cycles about to turn. And then, of course, we've seen a lot of market turmoil suggestive of an inflection point. So I, I wouldn't confidently predict that the cycle has turned value is going to go on a along tear of outperformance. But the environment does seem to suggest that, that's a distinct possibility. And, and last smart beta question, some folks have said the advantage of smart beta, and fundamental indexing. Is that the outperformance comes from taking additional risk Burton, Malcolm, other folks like that of said that? What, what are your thoughts on that? I find the debate about whether factor returns, and of course, the most the largest, most persistent and longest discovered factor is value or. Generated by risk or generated by behavior and inefficiency the truth of the matter is, it's both. They're intertwined. There's feedback the a real world is much more interesting than these dry, theories and models. And I guess I would say there is a risk component, and we should be thankful that there's a risk component to the value factor returned because it means that it can't be in won't be arbitrage away. So let's talk a little bit about institutional and retail investors. You've worked with both. You've alluded that there are some differences, previously. What is the most consequential difference between how institutional investors operate and how mom and pop retail investors think institutional investors operate in a? A governance structure in.

Burton Malcolm
"chris brightman" Discussed on Masters in Business

Masters in Business

05:18 min | 1 year ago

"chris brightman" Discussed on Masters in Business

"You're listening to masters in business with Barry ritholtz on Bloomberg radio this week on the podcast I have a special guest and his name is Chris Brightman. He is the chief investment officer of research affiliates, better known as RAFI the firm, which is one of the prime drivers behind the trend toward smart beta or fundamental indexing as it is more accurately called a we go off into the weeds about portfolio construction what drives returns what are the best ways to approach. Constructing a portfolio a research affiliates their models. Run about two hundred billion dollars worth of offerings. This is quite a fascinating conversation. And I think you'll find it very intriguing. So with no further ado. My conversation with Chris Brightman of research affiliates. This is masters in business with Barry ritholtz on Bloomberg radio. My special guest today is Chris Brightman. He is the chief investment officer of research affiliates, whose investment strategies currently manage over two hundred billion dollars. He's previously, he was the board chair at the investment fund for foundations he was the CIO of the strategic investment group, and director of global equity strategy at UBS asset management, Chris Brightman. Welcome to Bloomberg. Thank you for having me. So that's a really interesting resume. You've worked at some very storied places. What I attracted you to the field of investment management. I arrived at my university for Jin tech having been accepted into the liberal arts school and after listening to. The dean of the liberal arts, school address the auditorium of new students explaining why you'd made the right choice. I approached the podium and said, I think I'm in the wrong place. I want to go to the school of business and without missing a beat or even seeming to notice, the irony. The, the dean said, oh, yeah. Well, you walk down three know buildings over that way. And, and I changed before I even began classes to the business program, mostly because I figured you have to understand this is the seventy s I wanted a job when I graduated, and I felt like majoring in business would would be more likely to lead to a job than liberal art that was right. But that's, that's what I did. And then I killed clearly works, right? Those finance because it was more interesting than accounting. And for some of our younger listeners, the nineteen seventies was a period of stagflation. High inflation and high unemployment. What was it like coming out of school into that environment? The I graduated in the early eighties. And the early eighties were an awful time, there was a nasty recession, and I was really lucky session. Yeah. Right. Eight hundred eighty two was horrible eighty three was a little better. And I was lucky to graduate in eighty eighty four and eighty five was boomtime great. But, but I graduated in eighty three and. What I think really got me into the investment management industry was an internship that I had with first ACOG. Oh, in nineteen eighty-two over the summer and my internship was with the institutional trust department at First Chicago, which later became First Chicago investment advisers, which later became Brinson partners. And Gary Brinson, the founder of Brinson partners, was one of my was really my first mentor in the business beginning in nineteen eighty two. So you will working on the endowment side of the St. how does the endowment side differ from working with retail investors and people with money as with 4._0._1._K's in IRAs, etc. I've had about a three and a half decade career thirty five years in the business of which I took a rather brief five year detour into the nonprofit area managing the university of Virginia endowment, and it differs in a number of ways, probably the most interesting to an outsider is the access that one gains two elite investment managers, how big was the endowment at the time. Little over five billion. Okay. So that's real money. I think interestingly, though, it's less challenging it's an easier job. I'm so surprised you say that. And maybe this is me projecting. But I would imagine that running endowment and my frame of references all the craziness, we've seen with the Harvard endowment over the past twenty years, and what recently happened with the Ellen dominance..

chief investment officer Bloomberg Barry ritholtz university of Virginia endowme Brinson partners dean Gary Brinson school of business Harvard UBS Chicago Ellen director founder two hundred billion dollars thirty five years twenty years five year
"chris brightman" Discussed on Bloomberg Radio New York

Bloomberg Radio New York

06:39 min | 1 year ago

"chris brightman" Discussed on Bloomberg Radio New York

"Masters in business with Barry ritholtz on Bloomberg radio. My special guest today is Chris Brightman. He is the chief investment officer of research affiliates, whose investment strategies currently manage over two hundred billion dollars. He's previously, he was the board chair at the investment fund for foundations he was the CIO of the strategic investment group, and director of global equity strategy at UBS asset management, Chris Brightman. Welcome to Bloomberg. Thank you for having me. So that's a really interesting resume. You've worked at some very storied places. What I attracted you to the field of investment management. I arrived at my university, Virginia Tech having been accepted into the liberal arts school, and after listening to the dean of the liberal arts, school address the auditorium of new students. Explaining why you'd made the right choice. I approached the podium and said, I think I'm in the wrong place, I'm gonna go to the school of business and without missing a beat or even seeming to notice, the irony. The dean said, oh, yeah. Well, you walk down three buildings over to that way. And, and a change before I even began classes to the business program, mostly because I figured you have to understand this is the seventies, I wanted a job when I graduated, and I felt like majoring in business would would be more likely to lead to a job than liberal arts. I don't know if that was right. But that's, that's what I did. And then I killed clearly works right finance, because it was more interesting than accounting. And for some of our younger listeners the nineteen seventies was a period of stagflation, high inflation, and high unemployment. What was it like coming out of school into that? Environment. The I graduated in the early eighties. And the early eighties were an awful time, there was a nasty recession, and I was really lucky. Yeah. Right. Eight hundred eighty two was horrible eighty three was a little better. And I was lucky to graduate in eighty eighty four eighty five with boomtime, right? Great. But, but I graduated in eighty three and. What I think really got me into the investment management industry was an internship that I had with First Chicago in one thousand nine hundred two over the summer and my internship, was with the institutional trust department at First Chicago, which later became First Chicago investment advisers, which later became Brinson partners. And Gary Brinson, the founder of Brinson partners was one was really my first mentor in the business beginning in nineteen eighty two. So you will working on the endowment side of the St. how does the endowment side differ from working with retail investors and people with money is with 4._0._1._K's in IRAs, etc. I've had about a three and a half decade career thirty five years in the business of which I took a rather brief five year detour into the nonprofit area managing the university of Virginia endowment, and it differs in a number of ways probably the. Most interesting to an outsider is the access that one gains to elite investment managers how big was the endowment at the time. Over five billion. Okay. So that's real money. I think interestingly, though, it's less challenging it's an easier job. I'm so surprised you say that, and maybe this is me projecting. But I would imagine that running an endowment, and my frame of reference is all the craziness, we've seen with the Harvard endowment over the past twenty years, and what recently happened with the Ellen dominant Swanson. I would imagine there are so many political constituencies to deal with, it would be a huge distraction or at Jinnah Teke. We not seeing that sort of Cambridge craziness. So. Point of clarification, I was the CIO at the university of Virginia though. My alma mater, is Virginia Tech shit so serve on the investment committee at Virginia Tech as well. So there's an had one daughter that went to UVA one daughter, the Virginia Tech, so I have loyalties with both schools so so to clarify aside. Clearly misspoke. You were the CIO at the Virginia. University of Virginia endowment and that covered what school or schools UVA. This is just one endowment five billion dollars. Actually fascinating Lee enough. It's much more complicated than that. The university of Virginia has dozens of nonprofit organizations, all of whom have their own fundraising staff, their own endowments, and the university of Virginia investment management company, may five oh, one three c nonprofit Craciun with its own board and its own audit its own charter at cetera. Serves as an investment advisor to those various pools of money. So in many ways, while I was there, I did have to address many different clients, and it is very political. You're quite correct about that. Do they all invest the same way or just each of them have different investment philosophy in an a different set of goals, and therefore a different portfolio? Look, you've the university of Virginia investment management company pools, the money and invested in one fashion that said all of the different pools of money don't have to invest with the university of Virginia investment management company. They can if they choose or they cannot, or they can invest part of the money for many years, the law school, wasn't convinced that it wanted all of its money in the in the pool. So just part of the.

Virginia Tech university of Virginia university of Virginia endowme CIO chief investment officer Brinson partners Chris Brightman Virginia Bloomberg dean Barry ritholtz Gary Brinson liberal arts school school of business Chicago UBS Jinnah Teke director
"chris brightman" Discussed on Bloomberg Radio New York

Bloomberg Radio New York

02:05 min | 2 years ago

"chris brightman" Discussed on Bloomberg Radio New York

"The restructuring noble plans to file for bankruptcy well it is shaping up to be a very busy week for us financial markets we get more from bloomberg's charlie pellett in this wall street preview wall street will be keeping an eye on trade and geopolitics as we start dissecting a flood of earnings reports as for markets and trade chris brightman is chief investment officer at research affiliates and he says you've got to keep it in perspective it's easy to get caught up in the latest tweet storm but the truth of the matter is trade is actually a very small part of both the us economy and the chinese economy if you sort countries by trade to gdp you find that small trading nations like singapore ireland rank at the top of the league tables and write down at the bottom are countries like the us and china lots of earnings reports this week including goldman sachs bank of america morgan stanley american express net flicks ibm united continental proctor and gamble and honeywell in new york charlie pellett bloomberg daybreak asia all right it's thirty three minutes past the hour it's time to get an update on regional markets looking here at the asia pacific ecorse that's the focus of our show doug krizner here doug what are you looking at a little bit of risk on tone i want to begin in the crude oil space because if you accept this idea that us military response to syria was kind of a one and done event and the market may be breathing somewhat of a sigh of relief i mean look at crude oil now down eight tenths of one percent sixty six eighty nine crude was up nearly nine percent for the entirety of last week just on the uneasiness about the situation in syria and that was before us action late friday wti again sixty six eighty nine to get to tokyo bring in bloomberg's jeff sutherland because we're seeing a little bit of weakness in the end higher stocks in japan good morning jeff it's been a bit of a slow start but it's starting to pick up here with the nikkei higher now stocks in japan have been gaining strength lately at the yen has been weakening unique the nikkei has been up for three straight weeks.

syria jeff it japan tokyo asia pacific new york china singapore chris brightman jeff sutherland doug krizner asia honeywell ibm goldman sachs bank us chief investment officer charlie pellett