Listen when the universe calls

When the universe is calling you, you need to listen.  Opportunities will present themselves.  That’s how it was when I decided to accept the offer to be the new Executive Director of the ULISSES Project.  James was leaving the University of Utah to commercialize the “complex information processing” tools he’d developed, and we needed someone to keep the project moving forward and consolidate what remained into a revitalized mission.   I was excited about the opportunity to both integrate the work James and team did in the past, and to pull in new partners and forge a new future, something I thought more important than ever with Covid waning and a new Pension Crisis looming.

The Canadian Plan

When I asked James for advice, he said “surprise us, it’s yours now…I’d suggest starting with your strengths…things you can do uniquely well.”  That made me think.  James and Hal are an amazing team, able to sling code with the best, but rather than a codebase, I thought about a community.  A community built around set of tools that facilitate proper communication among members, a true exchange of ideas and best practices, some of those enshrined in code, others not.  In order to fully explain, I should go back to my former role at MSCI and my consequential support of the ULISSES Project.

Part of my role on MSCI’s Analytics business strategy team was to look for ways to nurture and grow relationships that would ultimately develop into future opportunities.  I had responsibility for America’s Asset Owner (AO) segment (think pension funds, sovereign wealth, endowments and foundations) and knowing how underfunded many of the U.S. pensions were at the time, I looked to provide solutions more than just tools or data. Obviously, the way out of the Pension Crisis was either more income (better returns) or less expenses, and the most efficient way to lower expenses was to my follow the in-housing of the so-called Canadian model.  My support of the ULISSSES Project was born of this simple idea, to help AO’s to cut costs via the Canadian model.  That is precisely why one of the first groups I called was AIMCO. I had long known James (who also happens to be Canadian) and we’d spoken about his focus on solving the Pension Crisis.  As someone close to Barr Rosenberg (the “Barr” of Barra, “a” is for associates), James wanted to ensure that Barra was part of the solution.  In retrospect it was funny that I was at MSCI and it was James that advocated MSCI’s role as so important, and it was me who promoted the Canadian Plan to the Canadian (James was born in Vancouver).  That’s precisely why we need the right people together in the ULISSES community—we sometimes don’t see what’s closest to us.

Education Born out in Practical and Working Computer Code

As we worked on the problem, the markets continued to rush forward, causing the Pension Crisis to temporarily abate, especially for those following the Canadian Plan, and then the Covid pivot presented the opportunity to James and his team that they are currently pursuing.  James and Hal didn’t want to leave all the good that had been done to go to waste and we spoke about this and I had a suggestion. 

When at MSCI I had introduced James to a top firm doing risk and portfolio management education and James had done analysis of their codebase and he found that a full 80% of it either didn’t function or was simply irrelevant.  I thought it would be a good partner for him, after doing his analysis he said, “it just wasn’t possible…we’d have to fix all their mistakes, which would take forever.”   Pursing this line, I proposed to James that he then systematize his teaching material and that could be an alternative.  He and Hal just didn’t’ have time to “package it” until Covid.  He then turned around and gave the ULISSES Project a license in perpetuity to it as a parting gift.  It is that gift in which I see the future.

Not that long ago, before he turned over the codebase to me, James showed it to a top Ivy League business school professor who also teaches in one of the highest regarded Executive Education programs in the world.  He told James that they would be willing to build a multiple course Executive Education program around the material.   While James demurred and referred it to me, I believe that it showed a way forward…a focus solely on practical education “at an Ivy League Level.” Even without a Crisis, there was still and absolute good that good be achieved by helping pension funds become more informed and giving them a practical codebase.  This said, I had nagging idea.   Was the Crisis truly gone? That said, as we spoke it was clear that the Pension Crisis was not gone, just temporarily abated

The Coming Pension Crisis and the Need for Applied Education

As we spoke about it, James and I both concluded that while the markets were temporarily flush and pension funds were “fully funded,” we felt there would be a reversion and that would bring us back to troubled territory in the future. Therefore, we decided that the ULISSES Project at its core would continue to facilitate the insourcing of investment management tasks by asset owners, we’d just do it in a slightly different way—with a much more explicit focus on education.  From my perspective, pre-emptive action is the best way to deal with future crises. That idea was prescient, as we are now seeing with soaring inflation and tumbling markets bearing out the conditions that will breed the future Pension Crisis. 

Several generations, during the Great Depression, the world was beset by terrible problems in banking.  The solution was a mix of things such as new regulation, new agencies, and very importantly a new banking institute that could educate bank leaders as to the tools and methods that they needed to use.  This institute is the Pacific Coast Banking School, located in the West near Seattle (and formerly affiliated with the University of Washington).  This was done specifically so that the “frontier” could bring new ideas to the old East Coast establishment.  To this day it is still where the top bankers go.   My hope is that the ULISSES Project can transform into something like PCBS, but for the pension industry.

Adding My Own to Spin to the ULISSES Project

As I thought of ways to address applied education and the coming Crisis, “democratization” was on my mind, and for me this means three things.

First, “democratization” means using open-source applications in our endeavors. James always believed in this, but I want to take it further.  As a result, I asked James and the departing team to consolidate all the statistical tools together in a set of Jupyter notebooks.  Over the summer, we hit our first milestone since my arrival with the completion of the curriculum for basic and advanced econometric methods in Python . Trading, portfolio management, and attribution frameworks will come next, working with the best companies in the world like Gurobi.

Second, at its origin, ULISSES was founded to give asset owners the ability to manage their investments on their own instead of hiring external investment firms. We must do more to reach out and facilitate an ever-broader community.  We’ve already found many of the grads from our program at the University of Utah going into pensions as far afield as Texas and acting as incubators to the ideas.  In the future, I would like to focus on members educating and mentoring other members and building a stronger community.  I plan on doing this more with technology, and more on that soon.

Third and finally, the ULISSES Project of today will combine the earlier principles of student and asset owner engagement and the needs to promote diversity, equity & inclusion (DEI) while closing the investment literacy gap with a focus on members of marginalized communities.  The new thesis is by leveraging the “learning by doing” discipline and aligning it with asset owners who represent these marginalized populations, we marry the investment institutions’ focus on diversity with that of managing more financial assets internally. This program will be called ULISSES Project Fellows.  Again, more on this in the future, but I’ve already started a few conversations in this area that looks like could bear fruit.

I am currently researching how the “Ulisses Project Fellows” will be added as an extension to our Core efforts…more to come on this in the near future.

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