Blackstone's King of Hedge Funds on Alt Investing Right Now

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Odd Lots 49 min 7 speakers 5 chapters transcribed 1 month ago
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Why did college endowments shift heavily into alternative investments?

Unknown 0:01
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Scarlett Fu 0:37
Bloomberg Audio Studios, Podcasts, Radio News.
Tracy Alloway 0:53
Hello and welcome to another episode of the All Thoughts Podcast. I'm Tracy Alloway.
Joe Weisenthal 0:57
And I'm Joe Weisenthal.
Tracy Alloway 0:58
So, Joe, you know what I realized? Two months ago, just two months ago, we were still getting a bunch of headlines about how private credit was the hot new thing on Wall Street and how multi-strategy hedge funds pod shops were huge and growing. And we've done quite a few episodes on these respective topics, but you know, just a couple months later, the headlines are starting to look very different.
Bruno Satin 1:26
Yeah.
Tracy Alloway 1:26
Yeah. And there's concern that if we get a substantial economic slowdown, you're gonna get some sort of big blow up in private assets and things like private credit, private equity. You know, a lot of people have been predicting that might happen for a while. And then when it comes to multi-strats, we've already seen a lot of a lot of talk about pain at the pod shops, uh, given all the recent market volatility. So everything is feeling a Little different right now.
Joe Weisenthal 1:53
Well, we were recording this on uh April twenty second and we got a headline. This has been in the news for a few days, but I guess it's just been confirmed. So speaking of, you know, the a asset allocators, where's the real like real money come in from, right? And they're like wealthy families and wealthy and but the real big money is in these huge pots of money, whether we're talking about Teachers, which, if those in the know the uh Ontario Teachers Pension or of course university endowments, we got a headline today. Again, it's been out in the news for a few days. Yale considering uh selling in the secondary market some of its private equity stakes. So these huge pools of money that are really upstream from the private credits of the world and upstream from the hedge fund multistrats of
Joe Weisenthal 2:38
of the world. They're in a new era for all kinds of uh different reasons. And so to even understand these various alts, we have to understand how the people who fund the alts are thinking right now.
Tracy Alloway 2:50
I am so glad that you mentioned all of that because that was a perfect intro, but also Yale specifically, because we all know that the the emphasis on alts was pioneered by David Swenson over at Yale. And since then, you know, alts have been a big thing, not just in university endowments, but in lots of different types of institutional investing. So I am very pleased to say that we do, in fact, have the perfect guest to talk about all of this. We're going to be speaking with Joe Dowling, Blackstone's global head of multi-asset investing. He previously ran Brown University's endowment, and this was one of the best performing endowments at that time. He did that for a decade before he joined Blackstone about four years ago.
Tracy Alloway 3:36
He's been called the king of hedge funds. funds in some of our own Bloomberg coverage. So really, who better to talk about things like alternative investing, university endowments, and what's going on right now in private assets than Joe? So Joe, Joe D, welcome to the show.
Joe Dowling 3:54
Thank you, Tracy and Joe. Thanks for having me.
Joe Weisenthal 3:56
Can we make this a four hour episode? I already have so many questions. Anyway, go, Tracy.
Tracy Alloway 4:01
Uh um, okay, so first off, I'm gonna have to be very careful in how I address each Joe respectively. Um, but other than that, okay, so one of the things, you know, Joe and I have kind of nibbled at the edges of the university endowment model. And one of the things that we know for sure right now is that they are very large pools of capital. you know, worth billions and billions of dollars.

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