Early-Stage Opportunities with Chris Winiarz of Stable Asset Management

Robert Morier: Welcome to the Dakota Live! podcast.I am your host, Robert Morier. The goal of this podcast is to help you better know the people behind investment decisions. We introduce you to chief investment officers, manager research professionals, sales leaders, and other important players in the industry who will help you sell in between the lines and better understand the investment sales ecosystem. If you're not familiar with Dakota and their Dakota live content, please check out dakota.com to learn more about their services. Before we get started, I need to read a brief disclosure. This content is provided for informational purposes and should not be relied upon as recommendations or advice about investing insecurities. All investments involve risk and may lose money. Dakota does not guarantee the accuracy of any of the information provided by the speaker who is not affiliated with Dakota, not a solicitation testimonial, or an endorsement by Dakota or its affiliates. Nothing herein is intended to indicate approval, support, or recommendation of the investment advisor, or its supervised persons by Dakota. This episode is sponsored by Dakota Studios. Looking to take your marketing to the next level. Look no further than Dakota Studios. The premier video production studio located in the heart of Philadelphia. At Dakota Studios, we take the pain out of marketing and video production. You don't have to worry about traveling to a studio or not knowing what to say. Our experienced investment team knows just the right questions to ask to bring your story to life. We specialize in creating high quality, engaging video content that captures your brand's unique voice and message, and with our state-of-the-art studio. Cutting edge equipment and an experienced team of professionals. We ensure that your videos are always up to date and effective. Don't settle for less when it comes to your brand's marketing Partner with Dakota Studios and experience the power of great video content. Visit our website today at dakota.com/dakota-studios to learn more and book your session. All right. With that outta the way I am very happy to introduce our audience to Chris Winiarz, Chief Investment Officer of Stable Asset Management. Nice to, nice to see you, Chris. 

Chris Winiarz: Rob, thanks for having me. 

Robert Morier: Yeah, thanks for being here. So you're officially on the road?

Chris Winiarz: I am, yeah. Covid is… Covid is done. Two little kids at home that are now beyond the newborn stage.And so we're getting out there. We were through town on some research trips and it’s great to have… great to be here. Great to pop in.

Robert Morier: Well, I'm glad you're healthy. If you've got two little ones at home, usually it's a 50 50 shot. I have a three-year-old and a six-year-old, so most of my, most of my years spent unwell. So I'm glad you're here and healthy. 

Chris Winiarz: Thank you. Thank you. 

Robert Morier: Well, we have a lot of questions to ask Chris. But before we do, I want to quickly share your background with the audience. Chris joined Stable in August of 2021 and is the firm's Chief Investment Officer as a member of the leadership team and reporting to the firm's CEO. Chris contributes to business strategy, deal sourcing, underwriting, and research and negotiating. He is also working in structuring investments across all asset classes on the Stable platform. Stable Asset Management is an investment firm focused on building strategic partnerships with top performing investment managers. Stable back's top performing investment talent to build next generation asset management firms. Stable oversees over $3 billion in assets under management, with over $12 billion of aggregate AUM across Stable partnerships. Stable is among the most experienced and largest strategic partners in the asset management space with offices in New York and London. Since its inception, stable has built 27 strategic partnerships across the liquidity spectrum. Stable provides asset management firms with initial investment capital as well as hands-on operational and distribution support to ensure business institutionalization and growth. In return, Stable investors receive minority ownership economics in each firm that backs Stable. Investors also receive several strategic benefits including discounted fee structures, capacity reserve. And first look. Co-investment rights as stable investors include sovereign wealth funds, US endowments, global asset managers, pension funds, family offices, private banks, and wealth managers. Prior to joining Stable, Chris was the Chief Investment Officer for Lakeview Capital Management, a single family office in Chicago. He focused on emerging managers and seated alternative asset managers in both public and private markets. He previously served as an investment officer focused on opportunistic equity for the University of California's pension and endowment assets, and his extensive. And manager research, asset allocation and security selection. Chris has led research across all asset classes, including traditional investments, alternatives, real assets, and niche investments. Chris earned his BVA in finance and economics from Loyola, Loyola University Chicago, and an MBA from the Kellogg School of Management at Northwestern University. Chris also serves as the chairman of the investment committee for the Roman Catholic Diocese of Oakland. He previously served as an investment committee member for Holy Names University on the alumni board for the John Felice Rome Center of Loyola University Chicago, and as an adjunct professor at the University of San Francisco. Chris now calls Florida home where he lives with his wife and his family. Chris, thanks for joining us today. 

Chris Winiarz: Thank you. 

Robert Morier: Congratulations on all your success.

Chris Winiarz: Thank you. That's, that's a mouthful. I didn't realize all that I kind of just thought of myself as an investor. I just kinda left it at that.

Robert Morier: Yeah. Believe it. Yeah, well that's… I think that's what makes these podcasts so interesting is that a lot of times, you know, when sales professionals, most of Dakota's audience calls on people like yourself they call for the title. And, and not the person. So one of the goals of this podcast was to get, you know, the… the people who tune into this show to better understand who you are, how you think, what your background and experience is. So it's a more fruitful discussion, a conversation. So there's more listening involved. It's something that we… we don't get enough of, I think, these days. So this long form content, almost this radio-like forum has made a comeback, and I think it's for reasons like this.

Chris Winiarz: It,, it has, I think there's a lot of very thoughtful people in this industry and we don't always have exposure to 'em. So appreciate you having me on. 

Robert Morier: Yeah. Well, thanks for being here. You're in Philadelphia, in our Philadelphia studio. One of your colleagues is here with us as well. So we're very appreciative of… of you both being here. 

Chris Winiarz: Of course. Yeah. We were in town for some research and appreciate the invite. So great to pop in.

Robert Morier: No, I like it. Well, when we first met you were building the University of California's opportunistic equity strategy and you I think it was about a decade ago, I, I admired the fact that you were effectively building this kind of small startup within a much larger organization. Take us back to how that mandate came to be and you know, how you first thought about, you know, University of California in regard to this new opportunistic allocation that the university was taking? 

Chris Winiarz: Sure, sure. Yeah, I mean, I, I give a lot of credit to the prior leadership. At the time there was a CIO and a head of public markets Marie and Bill, who I, I think knew that they… they needed to do something different. Didn't know quite what different meant, but at an institution with 60 investment professionals, a hundred plus billion across all asset classes, you roll all that up and you basically look like the index. So how do you be different? And so it was a little bit of their brainchild to create opportunistic equity. I joined to launch that effort. And really it was a clean sheet of paper. So they said, write your own investment policy statement. We did that. But to be fair, I didn't really know much about the endowment world. I had not spent time in that institutional landscape before. And so, like any novice, I went out and called a bunch of buddies and did a bunch of cold calls and, and tried to learn what does it mean to be an endowment investor. And I think time and time again, everyone pointed to quote the Yale model, the Swenson model, and they said, go read his book. And they'd give me these quotes of like, oh, I, you know, we, we espouse the principles of Charlie Munger and and, and invest in the endowment model. And I think through that experience, what I realized is, David Swanson actually wrote two books. Everyone only references one. And many people quoted someone, who quoted someone, who maybe read a Bloomberg article on it, but very few actually read 'em cover to cover. And so the endowment model actually meant very different things to different people. My takeaway from that though was a real focus on inefficient markets. If you're gonna put a dollar of risk capital to work, focus on the pockets where there's a greater probability of success. So that was kind of one of the hallmarks with… within the opportunistic equity program. And so we looked for inefficient markets globally. I think that maybe led to our initial discussion back in the day looking at, at some stuff in Asia together.

Robert Morier: It did, exactly. 

Chris Winiarz: But there were a couple other learnings from that. I, I think the second one was really plain to what is our strategic advantage when I met with these top 20 endowments and the University of California also runs some, some pension money as well. You're not bumping up against sovereign wealth funds and, you know, OSI Supers and Asian sovereigns and, and the Canadian model and, everyone's flushed with capital, right? How are you gonna be different? What is your strategic advantage? And for us at the time, it was okay leveraging the UC brand, but playing into scale. Because on one hand that can be a challenge. On the other hand it could be an advantage. So we used that a lot and ultimately got to what we believed was the best version of someone's product. So a lot of structuring work, a lot of crafting different strategies, a lot of separate accounts that sort of thing to use our leverage as a leverage is the, probably the wrong choice words, but our scale and advantage, to building something, you know, more sustainable and a, and a better investment product. 

Robert Morier: It's so interesting because if you think about that Yale model that was applied to so many endowments over the years, how many of those endowments are now outsourced CIO? So you've seen this huge transition in the endowment world and foundations, you know, towards outsourced CIO trying to replicate something that was exactly as you said, not in, not in apples to apples fit.

Chris Winiarz: Yeah, I, I mean, they all have different models too, right? You know, some of the Yale Cubs focus a lot on the partnership. You know, some, like the… the DUMACs of the world focus on really early stage emerging stuff. Focus on separate account work, there's the UC model, which really focuses now on partnership with the, with the new leadership, with Jug Deep. You know, university Toronto, I think, has an interesting model. They've codified that they can't have more than X number of line items in their portfolio. So forcing people to think about things differently in leveraging your scale and what is your strategic advantage? It's just different for everyone.

Robert Morier: Well, you had a, you had a clean sheet of paper. It sounds like you were writing a syllabus, and you have some… you have some experience in teaching. You taught for a little while at the University of San San Francisco as an adjunct. What was that experience like and what did you learn from it as an investor?

Chris Winiarz: Wow, uh, that was humbling. I will say probably one of the more difficult things I've done in my career. I absolutely loved it. So I… I taught the graduate students portfolio management at the University of San Francisco . And I will say I don't give enough credit, or I have not given enough credit to my prior professors, undergrad, business school. What they do is amazing. So I think that they deserve so much more credit than I can imagine. But it… it was, it was fun. I really enjoy mentoring students, teammates, and I think that plays a lot into, kind of, what we do here at Stable as well. So just from a team perspective, a lot of mentorship is… has kind of been my focus as CIO. And then just our business model itself you know, we're… we're mentoring and, and helping others. More of a, a teacher man or woman to fish approach. So I, I'd actually be curious on your experience, cause I know you have some… you do some work at Drexel and the, and the, the venture program there. What's it been like working with the students from your perspective?

Robert Morier: The same. Humbling, hardest thing I've ever done. I, I didn't think it would be, and for exactly the same reasons as you said, I, I, I just… I did not appreciate how difficult it was building a curriculum and a syllabus. I'm building one now for the next term. You know, I… I think. More than anything. I… I teach within the School of Entrepreneurship and there are a lot of these schools that are popping up because they want to keep students who wanna start their own businesses. So the founder… they wanna keep them on campus. So keeping the founder in, I, I guess you could call it almost a, a safe and a stable ecosystem.

So they get the mentorship, they get the guidance, they get the expert network, and you help them along. So, they don't give up or, you know, they don't move too quickly. You know, you kind of build in patience. As part of the, you know, the expectation. I… I think there are a lot of questions about whether entrepreneurship can be taught. Is it something that's innate in people or, you know, is it something that you can, you can build out over time? I… I tend to be of the philosophy that it can be built out over time. It just needs to be surfaced, you know. Sometimes it's just below, so you need to kind of, you know, just maybe heat it up, get people excited, a little bit of mentoring, a little bit of an example, maybe another founder who went through the same hardships. But it's you know, I think for these students and, and I'm, I'm sure it is for your asset management partners as well, it's a very lonely business, being an entrepreneur. Sometimes you feel like you're the only one there and you know, you've gotta recognize that you're not alone. So I think a lot of what I teach is, is community that, you know, we're kind of all in this together. If you're in the school of entrepreneurship, you're building a business as your peers are building a business. So kind of building that type of, it's almost like an accelerator in, in a sense. I, I, I, we're gonna talk more about this and I'm really excited because I, I think um, the last time we spoke, you know, at length, we were talking about that venture model, you know, advising, mentoring founders as they're trying to build up their businesses. Because it's, it's incredibly stressful. So it's trying to get them ready for it.

Chris Winiarz: Yeah, absolutely, and, and I think, you know, at a personal level, I… someone gave me feedback a while ago. They said I was an intrapreneur. And it was really this concept of, you know, thinking creatively, thinking different but doing it within my organization. And then it wasn't really actually, you know, till I, till I joined Stable and, and partnered with Eric, our CEO. Yeah, he… he's a great entrepreneur and I think I've definitely learned a ton from him and we bounce ideas off of each other and just the recognition that building companies is, is not easy. Right? It's a lot of sweat equity. It's… it's a rocky, rocky ride. But we're in the boat together. And so it's been a ton of fun. But I, I'll admit, I… I definitely lean on Eric a ton for that, that entrepreneurial spirit, he… he keeps me, keeps me in line and, and shows me the path. 

Robert Morier: Well, we’re gonna get to what the next stage of growth looks like for Stable, because obviously you're a part of that, having joined, you know, about, about two years ago or so, a year and a half ago. So I'm excited to learn more about that. But just getting back to the year progression and, and in terms of your career, you know, you went from the endowment to the family office model, which again, equally can be incredibly different. Office to office, family to family, depending on whose name is on the door, or it could be a multi-family, family office model. Can… can you talk about the dynamics of working within a family office relative to, to the endowment model and you know, what'd you take away from that experience? 

Chris Winiarz: Yeah, I think so. I think it all does come down to governance, really. Whether it's a… a big asset owner or a small family office, governance really drives the results. And I think in, in my instance at Lakeview Capital Management, I served the Eldon family patriarch, and the wealth creator was a gentleman named Dick Eldon, who founded Grosvenor Capital Management in, in ‘71. But it was really an opportunity to work with a great family and a great board who understood this industry. So it wasn't just Dick, who subsequently has passed away, but his son Tom, has built a, you know, a multi-billion dollar secondaries business and a super sharp investor, very opportunistic in his own right. The board with Frank, he'd built a, I don't know, $12 billion asset manager, sold it to the main group.He's probably better, well known for seeding can Citadel and taking the GP steak. And Tim,  who… who built the… the McKinsey Investment Office, MIO partners. And so collectively, it's a great family. It was a great board and so I had good governance and that was really the opportunity for me to go work for people who could push me to be a great investor someday. They've probably forgotten more than I know. And I, I'd still like to call them friends and mentors today. So it was a great experience, but it really does come down to governance, whether you're a big asset owner or a small one.

Robert Morier: I… I think that's great. Governance drives results. I… I couldn't agree more. I think particularly as you're structuring these types of businesses, whether it's a family office, an endowment, even within public pension plans, we've interviewed a few CIOs of public plans as well, and it's amazing how often it comes down to the G.

Chris Winiarz: Oh, for sure, for sure. And I think at Lakeview is, it was even more interesting because, you know… the, it was a collection of… of leaders who know our industry as well as anyone. They've built asset managers. They've, they've picked asset managers. They were asset managers themselves. And so all that kind of knowledge and experience led to becoming ultimately their strategic advantage. Right? They didn't make their money in widgets or SaaS technology or a med device company, it was knowing this space. And so, the… the ability to leverage their insights was, was a great experience for sure.

Robert Morier: Well, you've used one formally opportunistic, as part of your role with University of California, and then you use the word again with Lakeview. It seems like you've built a reputation as being someone who thinks about investments from an opportunistic perspective and quite innovative. So when I think about… you know, emerging managers who are out there looking to build a business. And… and when I get calls, it's amazing to me how often they've either called you already or they've been recommended to call you by another allocator. So you've built this reputation as being someone to call early on in this seed staging process, which arguably has become a sector within itself, our emerging managers. How did… how did that come to be for you?  

Chris Winiarz: Yeah, you know, a little bit is just passion. So I think, first off, the experience that I… that I've been lucky enough to have at University of California where, you know, the mandate was go do something creative and unique, and opportunistic equity, it didn't fit in a box. It was… go take the risk that no one else wanted to take. So it gave me the flexibility to go do something interesting. And then I think at… at Lakeview, they've literally invested in everything under the sun, you know, literally starting the hedge fund business back in ‘71 before the term hedge fund even existed. And so if I didn't bring them something interesting you know, it… it wasn't worth the time. And so it's always kind of forced me to, to look out on the curve and what's next and what the next iteration is. So I think the first iteration back at University of California was this ability to structure, you know, today everyone carves off a long, only from a long short vehicle. But 10 years ago that was different or unique. You know, creating drawdown structures, fully invested, dissecting returns to long only return on invested capital, short return on invested capital, the net exposure management, the gross exposure management, and then taking those four levers and creating a custom vehicle to pick and choose which levers you want. I think today that's par for the course. Everyone's doing that. They're doing it through separate account platforms, and you've seen the rise in that, but 10 years ago that was different. I said, well, I have the scale to do it, so let's go for it. And then, you know, taking that… that thread through again, at Lakeview they gave me the opportunity to, to go do something different. And so the next [00:20:00] iteration was, well, let's think about alignment and fees. And, I didn't have the same scale to negotiate off rack rate. And so how did I, you know, how was I gonna be creative and, and, you know, leverage a strategic advantage? And it was, well, I've got a board who's done this a thousand times. There's strategic advice there. It's a… a pretty well-known family office. It's a good pedigree. We can be a real strategic partner to those businesses. And that's when we started to take a little bit more of… of stakes in these… these asset management firms. Really to start was just to kind of align my fee model. And I realized I… I really enjoy it. I'm passionate about it. I love it. And so now, then joining the stable team, but this is all we do. It's… it's been a good transition. 

Robert Morier: Let’s talk a little bit about that. So this, this stable business, you know, emerging, it wasn't even called the emerging manager universe, I think when you started making those investments at the University of California, it's, it's developed, as I mentioned, over time, it's almost become its own sector. So how, how do you see Stable playing a role in that world? What's the, what are the goals of the, of the organization as it relates to, to building those partnerships? 

Chris Winiarz: Sure. So I think a couple things. We, as a business… so, we manage about $3 billion capital, 17 people, half New York, half London, and we are designed as a strategic partner to provide capital to new emerging managers, founders in the investment space across all asset classes. We roll out a bit of an old school operating partner model, similar to what you referenced in the vc space. You know, we help on the ops and the distribution side to grow and scale them, and, and ultimately sharing the economics. And I think there's two ways to look at that. One is owning asset management businesses is quite lucrative. You know, if you look at the Ford's 400 list, you know, a solid third of them are investment asset management professionals. So it's a great business model. Sticky client base, great margins, scalable, asset light, all the things that you would look for in, in buying and owning long-term businesses. But the other framework is they're providing investment flow and there's capacity around that that could be utilized. And so half of our client… more than half of our client base, the vast majority actually are these very large institutions that are looking for capacity in high quality institutions. But, for a variety of reasons, typically governance, budget, resources, they don't have the, the, the time to go build these companies themselves. And that's where we come in. So helping these founders day one, and whether it's day zero, one, or two. Zero, think, incubation, warehousing, day one, literally first dollar capital where we're helping to stand up the business, or day two, a little bit more acceleration in the first year or two. We're pretty hands on in helping to grow those companies. And that part is fun, right? It's… it's not just picking managers, it's building companies. 

Robert Morier: Yeah. Building for success for sure. Interesting. Well take, take us through what that process looks like. So how do you source these managers, and then taking that through the, you know, the underwriting process. How does someone, you know, get in touch with you? And once you have established a… a rapport with a manager, what does the process look like? 

Chris Winiarz: Sure. So how do they get in touch with us – 

Robert Morier: Other than… other than your email address which I promise I will not show. 

Chris Winiarz: I'm sure you can find the website out there. If not there's a lot of industry participants who… who can put us in touch. But I think to start, how does our research work? You know, at the core of it, we're really looking for two things. I think it's that combination of investor on one hand, and entrepreneur. And when those two circles start to overlap, we get really excited. And that's tough to find. That's, that's a real unicorn. So most of the time we're trying to compliment in some way to help bring those circles closer together, whether that's a team, an infrastructure, whatever, whatever the requirement might be. And so starting with that lens of finding that great entrepreneur and investor all in one, it then kind of runs through a little bit of a lens for us as we think about cognitive diversity. So I know a lot of people talk about diversity. We have a… a slightly different framework. So I think in building these companies, you know, at the core of it, we're really looking for two things. It's that mix of investor, on one hand, an entrepreneur on the other. And those two things are really, it's a unicorn to find both. And so most of the time we're helping to augment one and bring those two concentric circles, you know, more overlapping. And the next layer down though, is trying to identify what characteristics actually drive successful investors and successful entrepreneurs. And so we actually use a lens called cognitive diversity. A little bit different than your traditional diversity metrics on gender, race, and we think about it more broadly, whether it's sexual orientation, socioeconomic background, losing a parent early, all things that lead to kind of two characteristics that are highly correlated to successful investors and successful entrepreneurs. One is the ability to think differently. So as an investor, you typically need some sort of contrarian view, otherwise it's priced into the market. And so the ability to think differently and also be comfortable thinking differently, really leads to great investors. That happens to be a characteristic that we find through cognitive diversity. The second is really overcoming adversity. So being an entrepreneur is the ability to run through walls and… and when you're told no, ask time and time again. And that's… that's a characteristic trait that we find through this cognitive diversity lens. And so that's kind of the first layer for us. The next layer down is really just a more standard underwriting process where we have three legs of the stool, investment management, due diligence, operational due diligence, but [00:26:00] also commercial due diligence. Because at the end of the day, we are building companies. So I think in my prior, you know, my, a former life when I was an asset owner, asset allocator, you pick a manager, you can date them for a year, decide whether you like it or not. Here we're, we're condensing that research process. Really into… to months, weeks, sometimes. And so that investment process is really focused on what's the key differentiation? Let's prove it. Let's test it out, let's reference check this a ton and let's move forward. Then you have the operational due diligence, the commercial due diligence, and so that's a little bit of our framework and that can take anywhere from, you know, a month to 12 months, typically sweet spots around four to six months.

Robert Morier: That's interesting. I think we could do a whole episode on how you approach cognitive diversity. That sounds very interesting. Is it a questionnaire or is it just as part of the con, like a podcast? Is it just part of the conversation process?

Chris Winiarz: All of the above. So we do have formal questionnaires that we walk through. We've got certain kinds of tests that we walk through. There's a lot of research that… that is out there that you can use to measure these sorts of things. But it's also a lot of unstructured social time, meeting with their spouses and their significant others, their family members. I mean, I think of a founder we… we're working with right now. You know, we know what his wife is doing and why she's traveling to Europe and what her business does. 

Robert Morier: It's kind of like this all-in mentality where you are all in with your investment because entrepreneurship is an all-in mentality.

Chris Winiarz: Sure. 

Robert Morier: You know, there, you know, I can't even tell you how many of the faculty members, you know, wanna talk about the, the home life versus the business life and what that's like as well, teaching our young entrepreneurs what it's like to speak to family friends about what they have to give up or feel like they're giving up relative to, you know, the, the work life balance. So it's, it's good getting to know everybody that's part of that equation. Yeah. I think it's very thoughtful. 

Chris Winiarz: So… so how do we measure that cognitive diversity? You know, it is social, unstructured time. It's formal questionnaires. There's a lot of research and tests that are available out there to help measure this sort of thing. But in that social, unstructured time, it's understanding what their spouses and significant others are doing. Understanding what's driving their motivations. You know, I think of one of our partners right now, we know why his wife is traveling to Europe for her business. We know that he drives an old beat up pickup truck and, you know, doesn't lock the doors, which his wife hates, but, you know, he's a different thinker. But all that sort of unstructured social time helps us get very comfortable with who we're backing as an entrepreneur and as an investor.

Robert Morier: That's fascinating. Very interesting. I, I, I think it's interesting too, the… the… the condensed underwriting cycle that it is a little bit shorter. I, I, I think that probably poses its own challenges. I, I guess I just think about it from, as we're thinking about this kind of obsession, at least in private markets now for shorter term, shorter term gains relative to what was traditionally the longer term expectation of the five to seven years locking the income, it seems like that there's more pressure these days of the reward expectations versus the risk that's being taken. So how do you balance that with… the underwriting cycle is relatively short, but I'm assuming, I shouldn't assume, I'll ask if there is… are there different expectations about what your expectations are of these managers? 

Chris Winiarz: Sure. So I think on the underwriting side, it might sound short. But it's no different than a lot of other asset owners that are underwriting. We're just crossing off all the… the wasted resources. So, you know, I think of my a lot of my brethren institutional asset owners, it may take a year because they've got a quarterly board cycle that they need to prep things for. You know they… they need a certain amount of data before they can make a decision. There's not enough time on the… the calendar so the CIO can't get to it this quarter. So if you give them a year, they'll stretch the research out to a year. In our instance, There's not a ton more information you're gonna get, particularly pre-launch. Right? So coming to that conclusion, we can do that fairly quickly and condense the underwriting cycle and just carve off all the fat in the process and really just stick to the facts and the research and the attribution work. So I don't think we're, you know condensing it down and losing anything. I think we're just getting rid of all the fat and the process around making decisions. And the other piece to the process is we only have to make five to 10 investments a year. So it's not as if we have to cover every single asset class and manage, you know, monitor 30 portfolio managers just to be on top of the industry. We're making five to 10 bets and we're gonna focus in on those.

Robert Morier: That's great. That makes a lot actually… that was leading me to my next question. I didn't hear you talk about asset classes. I didn't hear you talk about sector, but that makes a lot of sense now based on the way you described it. Well, you must see a lot of trends though. Because if you are getting calls from emerging managers, startups, you asked me about what it's like to be a professor in the school of entrepreneurship. I see the tr… I have had the opportunity, I should say, to see the trends of different businesses over the last, let's just say, one to seven years. At first it was all about social media, you know, and then it's all about something else. Now it's all about chat, GPT and open AI. So what are some of the trends that you're seeing with the… the managers that are, that're calling on you now? 

Chris Winiarz: Sure. I… I think we probably see two themes more broadly and… and themes may be from… more from an investment perspective. One is the rise of the multi strats, right? They're eating the lunch of the OCIO businesses. It's a great mouse trap. I don't think it's unique or novel. Everyone wants to do it, but those businesses are well resourced. You need the governance model. You need the resources, the time and skillset. And most of the time that's pretty costly to build the right research, excuse me, the right risk engine behind it. Cause you know, the core of these multis Strats is to have an amazing risk system that you can add some leverage on top of and make sure you're funneling great talent through the… through the platform. But at the core of it, it's, you need a risk system. Those are pricey. Those take time and attention to manage. And so if you're an asset owner, that's a big ask to go to your CIO and say, hey, I need a budget for this. I wanna build out a… a team of five and all these, these systems. So it's just easier to, to outsource it to these multi strats and, and it's a more effective mouse trap. So I think the first trend we see is definitely the rise in multi strats. And that's also a little polarizing because most of 'em have a pass through model. And… and we hear a lot that asset owners are sensitive to fees. Like that's not a surprise. But how's that dollar being spent and… and does it make sense is really a question. I think the second trend we see, which is a little bit more of a theme this year for us, is being a liquidity solutions provider. So being a little bit more patient with our capital, saying where can we step in and… and provide liquidity when… when others really need it the most. And I don't know if that's being a value investor, being a patient investor, some version thereof. We just think it's smart investing. And so that funnels through to a bunch of different research projects. Could be GP or LP-led secondaries, late stage venture financing you know, finding financing founders shares, certain pockets of royalties. So there's just a lot of opportunity there, being a patient liquidity provider, and particularly in this, in this market, with rates where they are, that's gonna funnel through to a lot of people's balance sheets when they're, they're not used to paying, you know, four to 8% on, on their debt. 

Robert Morier: And it's smart. It sounds like you've, you've solved for the long term structural decline of fees, is that you can get clever with your management partners in terms of some of the ways that you've, you've described.

Chris Winiarz: Yeah, the… the alignment piece is really the… the focus for us. I mean, that's the core to our business model and really why when most of our clients come to us is to help realign the fee model within our industry. I don't think it's a surprise to anyone to… to know that the GP return is always better than the LP return, right? Sometimes that spread is wider depending on the asset class, but as asset owners have gotten smarter about this, and more, and… and there's more transparent fee disclosure, they're realizing they'd rather be aligned with the gp. And that's really what our model is designed to do, is align it from a fee perspective. You know, hopefully at some point turn that… that reduced fee drag to more of an accretive value add which is… is ultimately how our, our clients are incentivized with us or how we are incentivized with our clients. So it's really a focus on alignment. That's the core of our business. 

Robert Morier: So when it's all said and done, emerging managers historically have had a… a challenging success rate. It's a tough business, you know, as you mentioned, for a lot of the reasons that you've, you know…you know, you underscored. So what in your opinion, makes for a successful emerging manager. What are the core attributes? Besides cognitive diversity, which I… I think, is, as I said before, just really interesting and a unique way to think about it. But we have a lot of emerging managers that tune into this program. So as they’re listening and really looking for some advice, you, the sage that you are, Chris, 

Chris Winiarz: I don't know about that. 

Robert Morier: Everyone's calling you. 

Chris Winiarz: I know, I'm… I'm just copying smarter people. I think, from an investment perspective, right. We're always looking for passionate people. I think that really separates out the good from the great, you know, the… the person who's… who absolutely loves what they do and they're gonna do this regardless of… of the economics. You know, waking up one hour earlier to eke out one more basis point, get one more piece of news, whatever it might be. So I think passion for sure, if you're not passionate about this, the asset owner community is gonna sniff through that pretty quickly. But I think, more broadly, it's an understanding that this is now a business. And so, if you think that you can be the chief investment officer and the chief marketing officer, and the CFO and the head of product, all these sorts of things, no different than, you know, we turn it back to them as an investor. Would you ever invest in a company where the CEO is also the CFO, who's also the… the, you know, chief marketing officer? Like, just not gonna happen. People are thinking about it, your business, in the same way. So for us, we use kind of a three-legged stool approach, investment management capabilities, operational infrastructure and distribution. And you really need to think… be thinking about it as an equal legged stool. And so invest in those other pieces of the business just as much as you're investing on… on the investment side. And so fast forward to today, I mean, you're seeing that rise where the bigger are getting bigger and the smaller are getting smaller. It's because it's more costly to have the institutional operational infrastructure from day one. Hopefully our… our platform helps solve for that and helps institutionalize these firms early on in their life cycle. But it's an expensive endeavor. So I would really encourage the… the new emerging managers out there to think about their investment platform as a business, not just as a fund.

Robert Morier: It's interesting you talk about that. I, I think at least in my experience, one thing I've seen as emerging managers grow the portfolio manager or the CIO as they grow, have to become people managers, and then all of a sudden the job changes. You know, you've got analysts who are asking for their names in the book, or a larger cut of the allocation, whatever it is. And I… I've found at least a couple times in my career that that can get pretty challenging. So it goes back to what you had said originally. You know, the investor and the entrepreneur, finding both can be very challenging. What the entrepreneur effectively is, is a business manager, someone who can take it forward while growing. 

Chris Winiarz: Absolutely. And… and at some point it becomes a… a very team-oriented approach. It's not just about a star pm I'm actually reading this book right now called Trillion Dollar Coach about Bill Campbell, I don’t know if you know the name, but he's now subsequently passed away, but he's been basically an executive coach to some of the largest, most successful entrepreneurs in the Bay Area. From Google to Facebook to Steve Jobs, all, all, you know Bill Gurley, all, all, all the big venture capitalists. He's been a, you know, a player-coach helping them as, as you know, their executive coach. And it's really about servant leadership, and a team oriented approach. So it's not just about coaching the individual, but coaching the team how to, how to really work together. And so what you're touching on is this, as that business grows, it's not just the star pm, it's how do you bring all these thoughtful, intellectual people together to really build an organization. It's a great book. I recommend it.

Robert Morier: Yeah, I'll check it out. Yeah. It's so interesting. I, I think, again, going back to venture, you know, some of the things that you're pulling from that Venture Model, we offer executive coaching to our students and their student founders because, You know, it's, it's good to get some help, and a lot of times the coaching side of it is very important. Chris, thank you so much. It was wonderful to have you here in Philadelphia. It was wonderful to have your colleague as well, Maura, who sat quietly and patiently in the background. So, thank you so much for being here as well. We really appreciate it. It was a pleasure to speak with you. We wish you nothing but success and on this continued journey of yours. If you wanna learn more about Chris and Stable Asset Management, please visit their website at www.stableam.com. You can find this episode and past episodes on Spotify, Apple, Google, or your favorite podcast platform. We are also available on YouTube if you prefer to watch while you listen. Finally, if you would like to catch up on past episodes, take a look at our website at dakota.com. And again, thank you for joining us.

Chris Winiarz: Thank you Rob. This was awesome. Appreciate it. 

Robert Morier: It's awesome for you to be here. Good to see you. We'll see you next week.