Mark Baumgartner – Luck, Risk and Uncertainty at the Institute for Advanced Study (EP.77)

Mark Baumgartner – Luck, Risk and Uncertainty at the Institute for Advanced Study (EP.77)

Mark Baumgartner is the CIO of the Institute for Advanced Study, where he oversees a $1 billion portfolio that seeks to achieve just median returns but with significantly less risk.  Prior to joining IAS, Mark had stints at the Ford Foundation overseeing risk, at Morgan Stanley’s Alternative Investment Partners, at both quantitative and qualitative hedge funds, and as a management consultant.  Oh, and he studied to be a rocket scientist before that.

Our conversation covers Mark’s path to IAS and the principles of luck, risk, and uncertainty on that path. We discuss the IAS portfolio, one catered to achieve a low risk profile, and how he has stayed the course when that structure hasn’t been rewarded by markets.  We talk about identifying managers that fit into his approach and different metrics of defining risk at both the manager and portfolio levels.

Book Links

Hamilton Helmer, 7 Powers: The Foundations of Business Strategy

Richard Grinold and Ronald Kahn, Active Portfolio Management: A Quantitative Approach for Producing Superior Returns and Controlling Risk

Abraham Flexner, The Usefulness of Useless Knowledge

Richard Bookstaber, The End of Theory: Financial Crises, the Failure of Economics, and the Sweep of Human Interaction

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