Capital Allocators – Inside the Institutional Investment Industry

Last week was one of the most volatile in market history. In the last twenty-five years, it’s likely matched only by the pandemic and Global Financial Crisis in the breadth of potential outcomes for the future. In a change from our typical market-insensitive conversations, I was fortunate to gather three of the most insightful thinkers on global macroeconomics and geopolitics on Friday to share their assessment of the changing landscape.

My guests on today’s show are James Aitken, Marko Papic, and Louis-Vincent Gave. James is the founder of Aitken Advisors, Marko is the Macro-Geopolitical Chief Strategist at BCA Research, and Louis is the Co-Founder of Gavekal Research. Each are past guests on the show, and their first appearances are replayed in the feed.

Our conversation explores the shifting landscape of global markets and geopolitics, highlighting their shared belief in the end of U.S. exceptionalism. We dive into the conditions leading into Liberation Day, the motivations of the U.S. and China, and the likely outcome of the tariff wars. 

We then turn to the markets, covering the weakening U.S. dollar, rise of non-aligned nations, opportunities emerging in Latin America, Europe, and Asia, U.S. Treasuries and the yield curve, and private markets. We close with thoughts on potential winners and losers while unpacking how allocators can navigate this period of profound change.

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Marko Papic is the Chief Strategist at Clocktower Group, where he provides research on geopolitics, macroeconomics, and markets. Marko recently published Geopolitical Alpha: An Investment Framework for Predicting the Future, an imminently readable book with colorful examples of political analysis. Marko’s approach is akin to Moneyball for politics, challenging the orthodoxy of how others traditionally make investment decisions.

Our conversation covers Marko’s upbringing, the flaws of most political analysis, and his constraints-based framework. We then turn to the obvious political topic at hand – next week’s U.S. Presidential election. We discuss his views of different possible outcomes on the U.S. equity market, rates, tech stocks, China, private equity, ESG, Europe, and emerging markets.

Australian James Aitken is the Founder and Managing Partner of Aitken Advisors, a one-man macroeconomic consultancy based in Wimbledon, England that works with approximately one hundred of the most influential pools of capital in the world. James started his career in 1992 as a foreign exchange trader, moved to London in May 1999, and in March 2002 joined the infamous AIG Financial Products team in London.

In August 2006 he joined UBS, where he deployed his knowledge of the inner workings of the financial system to help his institutional investor clients successfully navigate their portfolios through 2007 and 2008. At the urging of his clients, James established his own firm in June 2009.

Our conversation covers James' perspective on the Global Financial Crisis from his seat at its epicenter, the Eurozone crisis in 2011, subsequent process-driven opportunities in Greece, views on Central Banks in the US, China, & Europe, some brief observations on India, positioning for the current environment, and what makes a great macro manager.

Howard Marks is a renowned investment thinker and the co-founder and co-chairman of Oaktree Capital Management, a leading global investment firm overseeing $200 billion primarily in credit investments that is majority owned by Brookfield Asset Management.

Our conversation covers Howard's journey from his early days in finance to his current insights on the evolving credit landscape. We dive into themes from his latest Memo, Gimme Credit, exploring the pendulum swings in investor sentiment, the rise of private credit, and implications for investors. We also discuss the changing dynamics of private equity, the trend of asset manager M&A, and life as a public company. Throughout our conversation, Howard shares his timeless wisdom on risk management, market cycles, and the enduring principles of successful investing.

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