SPECIAL ANNOUNCEMENT: Capital Allocators University Online

We're excited to share something we've been working on for a while: we're bringing Capital Allocators University online. For years, CAU has been an in-person, once-a-year cohort of 25 or 30 professionals, built around a set of disciplines that matter enormously for investors and investor relations professionals but rarely get taught explicitly. We put together a brief conversation to share more on what the course covers, who it's for, what we learned from the past five years, and why we decided to move it online. Full details here https://www.capitalallocators.com/capital-allocators-university/. We look forward to welcoming you as a member. Special thanks to our production partner, Fondu https://www.fondu.co/investors?utm_source=capitalallocators.com.

• 0:06Speaker 00

  I'm Ted Seides and this is Capital Allocators. I'm excited to share something we've been working on for a while. We're bringing Capital Allocators University online. For years, CAU has been an in-person, once-a-year cohort of 25 or 30 professionals, built around a set of disciplines that matter enormously for investors and investor relations professionals, but rarely get taught explicitly. Hank and I put together a brief conversation to share more on what the course covers, who it's for, what we learned from the past five years, and why we decided to move it on demand.

• 0:48Speaker 00

  If you want the full details, the modules, the pricing, and how to sign up, there's a link in the show notes, or you can head to capitalallocators.com and look for "university." We look forward to having you involved and hope you enjoy this brief special announcement on our new online Capital Allocators University.

• 1:09Speaker 01

  Ted, these special announcements are always fun to do because it means we've been busy. Before we set the stage and give the background on Capital Allocators University, why don't you explain what we're doing as to not bury the lead?

• 1:23Speaker 00

  Yeah, we're moving Capital Allocators University online. The course up until now has been an in-person, once-a-year cohort. It was usually 25 or 30 people. We decided to bring it on-demand alongside of an attached annual gathering so that people can access it when they want and get the benefits of coming together.

• 1:48Speaker 01

  What is Capital Allocators University and how did it come to be?

• 1:52Speaker 00

  The course itself is a series of disciplines that I think are incredibly important for improving investment results, but are not the things you learn in an MBA course or the CFA. They're things that I started picking up from doing podcast interviews, but weren't things I'd been exposed to in my 20 years investing. You could think about things like interviewing techniques, something I've had to spend a lot of time thinking about the last nine years, and a bunch of other things like that where they might be disciplines taught in most businesses, but they're not taught in investing.

• 2:29Speaker 01

  A lot of learning on the job from these types of disciplines.

• 2:32Speaker 00

  If it happens at all, in most cases, it generally doesn't happen because they're not necessarily well-known of the track, the classic Peter Principle, that someone gets promoted to the point of their incompetence. A great investment analyst becomes a portfolio manager, becomes someone who's a chief investment officer, that doesn't mean they've learned how to lead people and manage people. It's not part of the skill set that they got brought up in, so some of the people have never been exposed to it.

• 2:58Speaker 01

  To give a frame of reference, what are the six modules of Capital Allocators University?

• 3:03Speaker 00

  There's interviewing techniques, public speaking, decision-making, leadership and management, time management, and there's one on modern investment frameworks.

• 3:16Speaker 01

  When we originally put the cohort and the curriculum together, who was it intended for?

• 3:23Speaker 00

  We started doing it during COVID. It was virtual, and as soon as we could move to in-person, we did, and we didn't know it first. In fact, our first cohorts had everyone from a CIO down to someone just getting into the business. So we had the range of people, and what we honed in on the right person was someone with several years' experience in the seat, because we weren't teaching the investment basics. And some of these things, you can't apply until you're in a position where you've learned a few things. You're not going to lead people and manage people as a junior analyst, as an example. We've had several CIOs come through it and get a lot out of it, so it does go all the way up. What we found was it was somewhere between five and 15 or 20 years of experience was

• 4:07Speaker 00

  the right range on the allocator side.

• 4:10Speaker 01

  Within each of these disciplines, how did we put together the curriculum for these disciplines that you've outlined?

• 4:18Speaker 00

  In any liberal arts education, there's a certain set of fundamental principles that if you dive in and learn them, they become a body of knowledge. I always love that phrase, the CFA uses that, for the body of knowledge of investing. The CFA course teaches all the basics of investing. Some of these are things that I picked up from other people, some of them I picked up from practice, and some of them I connected the dots, and you start hearing the same thing over and over, and you realize that's a discipline. So as an example, decision-making practice, good decision-making hygiene is a relatively new body of knowledge. For the last 15, 20 years, people became familiar with behavioral biases, all the

• 5:00Speaker 00

  Kahneman and Tversky work, but most of that just prescribed the problem, didn't tell you what to do about it. The first time I saw anybody take that and say, "Here are some tools you might use to get better." By the way, no one's going to be good at this, we're hardwired to get it wrong, was Annie Duke's Thinking in Bets. That was influential to me. I became friends with Annie, had her on the show several times, in learning how do you try to make better decisions, both as an individual and with a team? So that's a great example of something that started with Annie's work and then trying to learn more about it. People like Michael Mobison are great at curating a lot of knowledge about that as well. Different example, interviewing.

• 5:45Speaker 00

  I suppose I'd been interviewing managers for 20 years before I started the podcast, but I tell people I didn't think about, was I doing well as an interviewer? The podcast and the feedback loop that came from editing and having it go out forced me to listen to myself asking questions. I started to realize, well, that was a bad question, or why did I ask this question at this point in time? So I've had now nine years of several hundred reps of a very specific type of interviewing, and from that, learned certain techniques that work and don't. And then I went and tried to study other great interviewers, like Charlie Rose, Larry King, Tim Ferriss, and you start to learn people have different styles.

• 6:27Speaker 00

  A journalist has a different style from a podcast interviewer, and you find your own style, but in each style, there are certain common disciplines, so to share what those are. And some of those are just connecting the dots.

• 6:39Speaker 01

  And folks who are in an allocator's seat aren't listening to themselves hundreds of times over interviewing a manager?

• 6:47Speaker 00

  There's a big part of this that you start to realize that people ask you the same questions over and over. The first time I experienced that was when I was leaving investing in small hedge funds, and a new startup hedge fund manager would come in and literally ask the same questions that I'd been answering for 10 years. And so I decided I didn't want to do that anymore, but I'd put it together in a book so people could read about it, and it's the same stuff that applies today. And I think that's right. When you're really busy and you're in it in investing, you don't have time to take a step back and try to study these disciplines, try to make sure what works. The nice thing about doing the podcast is I'm not in it. I don't have to spend time doing due diligence, and mercifully, I don't.

• 7:28Speaker 00

  But that gives me some time to be able to study other things that are very relevant for investors.

• 7:34Speaker 01

  What were some of the main takeaways from the folks that participated in the cohort?

• 7:39Speaker 00

  There were two, one expected and one unexpected. The expected was that the course material was incredibly rich and dense. In any one of these 20-minute modules, there might be 15 different takeaways, hard to digest all at once. The second, which I suppose we could have anticipated but didn't realize and appreciate the power, is that cohort, that people that are five to 15 years of experience, don't have as many networking opportunities as CIOs or senior decision-makers that are regularly going to annual meetings and meeting their peers. So it was very valuable for those people to be able to get together, meet each other, and have people to talk to in the industry.

• 8:20Speaker 00

  Each of those went into taking what we were doing and trying to make it more broadly available.

• 8:27Speaker 01

  Can you speak a little bit to the application of these frameworks? What we heard and what we found about taking all of these learnings that we'd throw at people in a single day and how they apply it to their actual job and their actual teams?

• 8:41Speaker 00

  There are two aspects of that. The first is the most important thing was doing it. We'll teach a bunch of frameworks, and then we learn to give homework. Hey, make this like a class. And the people who did the homework consistently would come back to us and say they got more out of Capital Allocators University than the ones who hadn't. You can't just listen to, "Hey, I'm telling you, this is a good thing to try to do. Go do it." And if you integrate it piece by piece, that was the first. And the second is there's a lot of stuff. Hearing it once wasn't as valuable for the people. We'd record them and then put them on our website for the people who came to the course. And the ones who went back and said, "Oh, I listened to it again, and I pulled another

• 9:25Speaker 00

  thread, and I pulled another thread," got more out of it than the people who just showed up and listened once.

• 9:30Speaker 01

  All of what you've described and the disciplines you've outlined were originally intended for the asset allocator. Where did we pick up the idea to do a cohort for investor relations along the way?

• 9:42Speaker 00

  That started with our partner Rahul Udgal, who's in that seat, and kept saying over and over, "We need to do this for IR people." They don't have that network of peers, and there's a lot that they don't understand about how allocators think. We put together a course two years ago, decidedly for investor relations and business development professionals, to help them understand how allocators think, help them get a whole bunch of different tips from different people who are great in the seat. And we've done that twice in-person as well.

• 10:17Speaker 01

  One of the things we learned too by doing that course that was so fascinating was how applicable some of the frameworks and disciplines we'd put together for allocators were to the investor relations professional. The public speaking techniques, even the interviewing techniques, being on the receiving end of an allocator interview, it was really useful context and training for them to have from those respective disciplines.

• 10:40Speaker 00

  One of the things you hear when you listen is that the best investor relations people, the best salespeople are far more listeners and question askers than the stereotype would tell you that they are. The whole idea of interviewing is not only applicable, it's essential for someone who's in that seat to thrive. So yeah, some of those disciplines are equally valuable across both.

• 11:07Speaker 01

  So what then prompted the decision to move this curriculum to an online, on-demand format?

• 11:14Speaker 00

  There are three aspects of it, only two that matter. One was the value that people got from repeatedly hearing the module. You know, I'm going to listen to it 10 times, but when I do a podcast, I end up listening to it three times. I do the actual interview, I'm involved in the editing, I listen when it comes out, and I can internalize more of the lessons from that by more than a multiple of three. But sometimes it takes a little bit of repetition. To make it available, so it's easy for someone to go in and listen when it's valuable to them, was better than you have to come to New York this day, once a year. We wanted to make it more broadly available, because we had a lot of people that were interested in coming, but couldn't come that one time. And they're like, okay,

• 11:57Speaker 00

  well, now you have to wait till the next year. That was the first. The second part was that networking piece, which is so valuable to those people, doesn't have to be attached to sitting down and listening to a whole set of modules over the course of the day. So we could bring those two together. And as a part of that, we'd bring this cohort of people together, and they'd get together once. We all know, if you have a cohort of people, if you get to see them more than once, you build the relationships better. So we said, if we make it so that everyone who's come to the course can come to a gathering each year, that becomes a more powerful network. And the third, which might not be relevant to some, was by bringing it online, we could significantly reduce the price point and make

• 12:41Speaker 00

  it more available. When we were doing it in person, to put it on, to rent a place, it costs more money. It became a corporate expense. It was hard for it to be an individual expense. By bringing it online and being able to lower the price point, it could be either. People can go and get it paid for by their company, but they also can do it individually. And we thought that would make it available to more people.

• 13:03Speaker 01

  Why don't you give a sense of how that ultimately came together? How did we create what is now this Capital Allocators University online?

• 13:10Speaker 00

  We spent a day in the studio with a team called Fondue, who did incredible work with us. We recorded these modules, one by one. We had an audience for half of it. I sat in front of a teleprompter for half of it. I didn't use the teleprompter, but I was in front of it. It was very strange. Then we worked with Fondue to make them into what feels like a high-quality masterclass, very much like the Masterclass series.

• 13:35Speaker 01

  If I could expand on that further, Fondue was a thought partner in creating what is the content that you'll ultimately consume from the online module. They were responsible for the video production, but also what the final output ultimately ended up looking like and feeling like. They did a phenomenal job. So for those who are interested in getting involved, how can they do so?

• 13:58Speaker 00

  Hop on our website, capitalallocators.com, look for university, and sign up. You'll immediately get access to all the online courses whenever you want. Then, once a year, we'll bring everybody together. Really looking forward to doing that.

• 14:10Speaker 01

  I think what's exciting is this is an initiative that directly ties to our mission of compounding knowledge and relationships for institutional asset owners and investment firms. It is compounding knowledge with the curriculum of these disciplines that you've put together and relationships by getting one together once a year.

• 14:31Speaker 00

  Hank, that's spot on. We're excited to bring this to more people, which is the real rationale for bringing it online.

• 14:38Speaker 01

  Excellent. Well, Ted, it's good to give this context. We're excited for this new project, and we look forward to having you involved.

• 14:47Speaker 00

  Thanks for listening to the show. If you like what you heard, hop on our website at capitalallocators.com, where you can access past shows, join our mailing list, and sign up for premium content. Have a good one, and see you next time.

• 15:02Speaker 02

  All opinions expressed by TED and podcast guests are solely their own opinions and do not reflect the opinion of Capital Allocators or their firms. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of Capital Allocators or podcast guests may maintain positions in securities discussed on this podcast.