Sustainable Investing 3: Bob Litterman – Pricing Climate Risk (Capital Allocators, EP.141)
Capital Allocators – Inside the Institutional Investment Industry
Ted Seides – Allocator and Asset Management Expert
4.7 • 841 Ratings
🗓️ 15 June 2020
⏱️ 56 minutes
🧾️ Download transcript
Summary
Bob Litterman is a founding partner and Chairman of the Risk Committee at Kepos Capital. Prior to Kepos, he spent 23 years at Goldman Sachs, where his roles included heading the firm-wide risk function and the Quantitative Investment Strategies Group at GSAM. Bob was one of the original inductees into Risk Magazine's Risk Management Hall of Fame and is well known for co-developing the Black-Litterman Global Asset Allocation model with the late Fisher Black.
After leaving Goldman in 2009, he became fascinated by the risk management problem posed by climate change, and that is the focus of this 3rd episode in Sustainable Investing, the Next Frontier.
Our conversation covers Bob's background in quantitative research, applying risk management principles to address climate change, modeling the price of carbon emissions, and concluding that we must slam on the brakes immediately to address global warming. We then turn to his work on policy to implement his conviction and his activity in the public markets across the World Wildlife Fund's stranded asset swap and research at Kepos to play a rapid adoption theme from the lens of a quant investor.
Transcript
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| 0:00.0 | Capital Allocators is brought to you by Ten East, an investment platform for sophisticated investors to access private markets. |
| 0:10.5 | Ten East brings benefits of having your own family office without the cost and headaches of doing so. |
| 0:16.8 | It's founded and led by Michael LaFelle, former deputy executive managing member of Davidson Kempner. |
| 0:24.2 | Michael and his investment team offer members the opportunity to co-invest by offering at their |
| 0:29.1 | discretion. Michael and his team source, diligence, and commit material personal capital to each |
| 0:35.3 | investment. The opportunities shared on the Ten East platform |
| 0:38.9 | offer exposure to private credit, real estate, niche venture and private equity, and other |
| 0:44.5 | idiosyncratic investments that typically aren't available through traditional channels. |
| 0:49.2 | The principles have over a decade track record of investing in these types of exposures |
| 0:53.5 | across more than 350 |
| 0:55.7 | transactions. Post-investment, the Tennis team conducts ongoing monitoring and reporting, |
| 1:01.8 | just as you'd expect from an institutional investment organization. I've known Michael for about a |
| 1:07.0 | decade, and after becoming impressed by the quality of 10 East offerings, its research |
| 1:11.6 | process, and high-quality investment team, I became an advisor to the organization, an investor |
| 1:17.1 | in multiple offerings. You can learn more and join me as a member at 10east.com. That's the number 10, |
| 1:25.4 | east.co. |
| 1:30.9 | My That's the number 10, east. C.O. My special thanks go out to Wellington Management for sponsoring this mini-series, Sustainable |
| 1:36.8 | Investing, The Next Frontier. |
| 1:39.5 | Wellington Management serves as an asset manager and trusted advisor to clients |
| 1:44.0 | representing more than |
| 1:45.1 | $1 trillion in assets worldwide. Wellington has explored long-term sustainability issues |
| 1:51.7 | since the 1970s and continues this practice today through internal research, engagement, |
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