Chapters:
00:00 - Intro
00:35 - 18 years experience as a multi-asset class allocator.
04:25 - The low hanging fruit in alpha creation is through asset allocation but few people focus on that.
08:08 - Machine Learning is the future of investing and has high efficacy in global macro i
nvesting, particularly with augmentation and assistance.
13:08 - Bodhi Tree is well capitalised with working capital and strong operational capabilities.
14:49 - “Fantastic experience” setting up shop in Miami. Deep talent pool of undiscovered, young, ambitious finance professionals who both live here and want to live here.
16:38 - Bodhi Tree: a different type of emerging manager.
Shalin Madan is a veteran multi-asset class allocator. During the past two decades, he has witnessed a precipitous decline in alpha in liquid (and illiquid) markets due to the commoditization of skill-sets and pedigrees, technological innovation, and in recent years, the rise of ‘smart’ exchange traded products (ETPs). He believes that the asset management industry is at the beginning stages of massive disruption – going forward all investors will need to use technology to innovate and survive.
The decline in traditional sources of alpha has placed greater importance on the correct asset allocation as the primary means for generating excess returns above traditional benchmarks. Madan says that the low hanging fruit in alpha creation is through asset allocation, but for a number of reasons, few people actually focus on it.
Bodhi Tree’s tactical allocation approach can be a valuable tool to take advantage of factor cyclicality within larger multi-asset class portfolios. The key to long-term compounding is extreme loss prevention. This can be achieved by pre-emptive de-risking and re-risking of exposures, but this is difficult to do in the traditional allocation model that relies on illiquidity premia, manager relationships or is bound by institutional constraints. The ability to be nimble and tactical in order to protect bear market downside, while taking advantage of cyclical bull markets, will be a necessary component of every multi-asset portfolio in a low return world. Systematic approaches to asset allocation that utilize Quantamental analysis and artificial intelligence are pivotal in achieving these goals.
Hear Shalin Madan also speak about:
* Machine Learning is the future of investing and has high efficacy in global macro investing, particularly with augmentation and assistance
* Pure quant approaches may pose a danger to markets given their footprint today
* The role of data and significance of domain expertise. Why Machine Learning is not a panacea.
* The benefits of staying liquid
* Advantages to setting up shop in Miami, including the ability to disconnect from the ‘group-think’ concentrated in major financial centers
Bodhi Tree has been well capitalized by a group of sophisticated family offices and hedge fund peers. The business and its strategies are highly scalable thanks to a focus on broad asset allocation, liquid investments and utilization of technology.
Shalin Madan is the Founder and Chief Investment Officer of Bodhi Tree Asset Management. He was formerly a Managing Director at Strenta Investment Management, an SEC registered investment adviser for a major family office, where he was responsible for all aspects of investment and portfolio management in a multi-asset class portfolio. Prior to that, Shalin was a Vice-President at Ivy Asset Management, where as a Portfolio Manager he oversaw the firm’s flagship multi-manager hedge fund portfolios. He began his alternative assets career in 2000 at Dome Capital Management, a hedge fund advisory firm for European institutional and super high net worth investors. Shalin holds an MBA in Finance from the Stern School of Business at New York University and a BA in Economics from the University of California at Berkeley.
Bodhi Tree co-founder’s are RJ Joshi and Gregory Joseph. RJ Joshi serves as Chief Operating Officer. He is an experienced entrepreneur and business builder in the technology space with two successful exits. Gregory Joseph serves as Chief Strategy Officer, advising the team on business development. He is a 40 year veteran of the financial services industry with Investment Banking roles at Salomon Brothers and Morgan Stanley, as well as direct involvement in the hedge fund industry since the early 1990s.
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