Alex Ambroz

The biggest thing for the allocator is, you know, the risk that they're taking in the portfolio and their understanding of the managers is so much deeper because they're in the markets every day.

They're seeing what's going on in the news and they're making investments that they think in the decision that they're making are the best ones from a fund perspective, from an allocation perspective, from the asset class perspective.

But from the institution side, the institution is forever.

And so if there is incentive compensation involved,

then there might be an incentive to have great performance this year or for the next couple of years.

But if the incentive performance compensation is based upon relative performance, not realized relative performance, then there can be an incentive to make lots of illiquid private investment decisions that may not pan out at the end of the day.

It's tough, though, because everyone I've met, at least in my career, from an allocator's perspective, and almost all of the funds that I've met with, are sincere, hardworking, dedicated investment professionals doing their absolute best.

It is rare.

It is rare, especially today.

So you might meet some sketchy or shady people or interesting people back in the early 2000s.

But post Bernie Madoff, post Amaranth, post Bayou, post Galleon,

post all of the frauds and the blowups that we saw in the 2000 to 2010s, they are much, much more rare today.

Something like what happened with Ken Leach at WAMCO is almost unbelievable because so many processes and procedures have been put in place to prevent any bad actors.

So for the most part, the LPs are trying to work in the best interest of the institution.

The investment office, the team themselves are trying to work in the best interest of the institution itself.

Yeah, I thought it was a great quote.

One fun fact.

almost no one who has joined the mass prim team has ever left, which speaks to the quality of the work and the quality of the people that they work with.

But his quote about AI tools and outsourcing thinking, you know, we can outsource a lot of work.

So AI tools, I'll give you a few examples of where we see allocators using them.