How Investor Bias Affects Capital Allocation & Returns with Daryn Dodson of Illumen Capital

Investor bias isn't just a philosophical concern, but a measurable drag on portfolio performance.   Daryn Dodson, Founder and Managing Partner of Illumen Capital and faculty member at Stanford Graduate School of Business, joins Georges Dyer to discuss how systematic bias causes institutional allocators to pass over high-performing managers, what peer-reviewed research reveals about how this dynamic intensifies at higher performance levels, and how Illumen Capital's decade-long bias-reduction curriculum is designed to surface overlooked alpha and drive systems-level change in capital markets. Key themes covered: How bias causes institutional allocators to leave measurable returns on the table — and why the problem compounds as manager performance increases The architecture of Illumen Capital's fund-of-funds model: bias reduction training across three operational areas (deal sourcing, talent, and board selection) sustained over a full 10-year fund cycle Evaluating first-time fund managers across investing, fundraising, and operations — and the structural barriers that affect managers from underrepresented backgrounds The case for diversity in financial ecosystems: why a more representative asset management industry is a systemic performance question, not simply a political one Daryn's foundational research, conducted with Professor Jennifer Eberhardt and the Stanford SPARQ Center, was published in the Proceedings of the National Academy of Sciences and ranks in the top 1% of papers in its publication period.   – Resources Mentioned: Illumen Capital: https://www.illumencapital.com Research Paper — "Race Influences Professional Investors' Financial Judgments" (PNAS): https://www.pnas.org/doi/10.1073/pnas.1822052116 Impact Experience: https://www.impact-experience.com/ Stanford SPARQ Center https://sparq.stanford.edu Book: Enlightened Bottom Line by Jenna Nicholas https://www.jenna-nicholas.com/book   –   General Timestamps:   00:00 Introduction & US SIF Forum 2026 Announcement 02:45 Illumen Capital: Fund-of-Funds Model and Founding Thesis 07:10 Stanford SPARQ Research: How Bias Affects Allocator Decision-Making 13:20 Bias Reduction in Practice: The 3 Operational Areas 19:50 First-Time Fund Managers: Evaluating Investing, Fundraising & Operations 26:15 Why a Fund-of-Funds Structure Fits a Systemic Problem 31:40 Stanford Business School: Teaching Impact Business Models 36:55 Political Polarization, External Stressors & Investor Decision-Making 41:30 CFA Research Policy Council & Institutional Education 44:50 Impact Experience: Sustained Behavior Change Through Environment 52:10 Retro Analysis, Backcasting & the Long-Term Vision for Capital Markets   –   Daryn Dodson Bio:   Daryn Dodson is Managing Director at Illumen Capital, the world's first private equity firm dedicated to addressing bias across financial markets to unlock returns and impact.  Illumen Capital invests in the world’s top impact fund managers and applies research-based interventions in partnership with Stanford University to help fund managers to see past bias to add value.   Daryn previously led the Special Equities Program, as the Private Equity and Venture consultant to the Calvert Funds, the $45 billion pioneer of the impact investing field. Through this vehicle, Calvert maintains a portfolio of more than 40 funds on five continents, representing over 350 underlying portfolio companies across a range of themes including renewable energy, biotech, education technology and microfinance.   Daryn currently serves on the Board of Directors for Ben and Jerry’s, The National Advisory Board of Haas Center for Public Service at Stanford University, and The National Theater in Washington, DC. Daryn is a lecturer in General Management at Stanford Graduate School of Business, where he earned his M.B.A., after receiving an A.B. in Public Policy from Duke University.   – The Future of Finance podcast is produced by the Intentional Endowments Network. New episodes explore how institutional capital can be deployed to build more resilient, prosperous, and sustainable financial systems. –   *Disclaimer* The information presented in this episode reflects the views and opinions of the guest and does not constitute investment, legal, or regulatory advice. The Intentional Endowments Network does not endorse any specific products, services, or organizations referenced herein.