How have you been a change agent at
your organization? What have you done
that you’re particularly proud of?
Through my willingness to question the dogmas of our industry. Throughout my career,
I have had the privilege of learning from and
working with some truly impressive investment minds. The person and investor I am
today is a direct result of being influenced by
these great innovators. They showed me the
powerful results which come about when one
is willing to challenge the status quo.
What is the asset class or investment
that keeps you up at night, and why?
No single asset class, instead it’s the under-appreciation of risk that is currently baked
into the market’s psyche. In my career, I have
witnessed two bubbles form and then pop,
both with the same narrative, “The good
times will never end.” It does end, 100%
of the time, and badly for the Bulls. I think
about: What will break the existing narrative?
How is my portfolio positioned for the various forms the broken narrative can materialize through? And are there unintended risks
sitting in my portfolio? I am by no means
attempting to time the market, I just don’t
want to forget the lessons of the past.
What methodologies have you adopted
within your institution?
I try to focus on convexity—maybe because
it’s a big word that makes me sound smart in
meetings. Plus, our goal is to efficiently compound returns. A convex profile helps.
Where do you fall in the passive vs.
Is today Wednesday? Then I’m with the
Actives… check back again tomorrow. Either
way, it’s asset allocation that explains the vast
majority of a portfolio’s return.
What are some changes you’d like to see
the institutional investing community
make in 10 years?
I would like the industry to be less focused on
short-term and peer-performance metrics,
and stop being so asset-only focused (
asset-only returns do not consider the risks within
or purpose of the investment being made).
My biggest hope is to see increased collaboration among investment teams (within internal silos and across organizations). We are
long-term investors, our ability to meet our
objectives is not limited if others understand
our strategic decisions/thought process/
investment rationale. In fact, collaboration
will hopefully lead to an improved process,
for the ultimate benefit of our stakeholders.
Who is a manager you don’t currently
work with whose brain you’d like to pick?
Ideally, where would that meeting take
Well, if time travel was allowed for the last
answer, I think I would enjoy seeing the
future. Maybe Mr. Graham will meet for
coffee in 2150… Will they still be drinking
coffee in the future?
What is the software investment tool
that helps you most?
Good old Excel. I focus considerable time
on the sensitivity of outcomes to tweaks in
Paul Benjamin, CFA
Director of Investments, Alcoa
(New York, NY)
A contrarian investor with a macro tilt, comfortable
with his skills and career positioning. This allows
him to focus on what is truly best for his constituents.
assumptions. While I do use multiple third-party software products, I like the ability to
understand the assumptions driving my outcomes. I have found that many off-the-shelf
tools, while quite robust in their construction,
leave users with a false sense of precision.
What would improve the relationship
between you and managers?
They are too busy pushing products. The
ones I have the best relationships with spent
time learning my investment goals, before
helping me work to achieve them. They are
not selling me a product, but a solution.
Why did you choose your current path?
I really enjoy what I do and I worked very
hard to get to where I am. But I feel like “my
path” was not of pre-design but the result of
many small decisions made throughout my
life (some good and some bad).