Capital Allocators – Inside the Institutional Investment Industry Peter Kraus - Widening the Aperture on Alpha (First Meeting, EP.14)
Feb 3, 2020
Peter Kraus, Chairman and CEO of Aperture Investors, boasts a four-decade career in finance, including leadership roles at Goldman Sachs and AllianceBernstein. He discusses the importance of performance-linked compensation models to build trust with clients. Peter shares insights from his storied career, emphasizing the need for cultural transformation in asset management. He elaborates on his intricate process for selecting portfolio managers, balancing analytical skills with real-time decision-making. The conversation also touches on his passion for contemporary art, drawing parallels with investment strategies.
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Market Dysfunctions and Passive Investing
- Kraus's analysis at AllianceBernstein showed the impact of passive investing and market dysfunctions on active management.
- He advocated for a level playing field for active managers to compete with passive strategies.
Aperture's Philosophy
- Aperture's core philosophy emphasizes manager-controlled capacity, risk management, and separating beta from alpha.
- This approach aims to align manager incentives with client goals by focusing on true performance-based fees.
Aperture's Fee Structure
- Aperture charges clients the ETF rate for beta exposure and only charges performance fees for exceeding the index.
- This aligns incentives and ensures clients only pay for outperformance.
