🎥 Morningstar's Kunal Kapoor - live from the Morningstar Investment Conference

Welcome back to the Alt Goes Mainstream podcast. Today’s podcast was a conversation that was recorded live at Morningstar’s Investment Conference in Chicago earlier this year. Morningstar CEO Kunal Kapoor took time out of his packed schedule at the event to sit down with me for a thought-provoking conversation that dove into the nuances of many of the trends that are shaping private markets today. Morningstar and Kunal have quite an interesting perch in the market. They occupy a critically important function in the market: helping investors understand the data, structures, and trends in public and private markets. They provide fund ratings, investment analysis, and market data to both individual and institutional investors. As public and private markets experience increasing convergence, Morningstar finds itself at the intersection of markets that are undergoing rapid evolutions across product structures, asset allocation frameworks, and weighty questions around conceptual frameworks of liquidity, risk, volatility, concentration that are on the minds of many. Amongst the wide range of topics Kunal and I covered, one stood out: Morningstar is fiercely on the side of the investor. If there’s anyone who has a deep understanding of Morningstar’s DNA, it’s Kunal. Kunal started at Morningstar in 1997 as a data analyst, holding a variety of roles at the firm, including leadership positions in research and innovation. He served as director of mutual fund research and was part of the team that launched Morningstar Investment Services, Inc., before moving on to other roles including director of business strategy for international operations, and later, president and chief investment officer of Morningstar Investment Services. During his tenure, he has also led Morningstar.com® and the firm’s data business as well as its global products and client solutions group. Kunal and I had a fascinating and lively conversation. We covered a number of the most pressing topics in private markets today: the convergence of public and private, liquidity vs illiquidity, investor education, the importance of transparency, and the why, what, and how behind evergreen funds. Thanks Kunal for coming on the show to share your wisdom, expertise, and passion for public and private markets. Thanks for reading Alt Goes Mainstream! Subscribe for free to receive new posts and support my work. Clip #1: Is Wall Street smarter than Main Street? Clip #2: What it means to fight on behalf of the investor. Clip #3: When should people start to think about working with a financial advisor? A word from AGM podcast sponsor, Ultimus Fund Solutions This episode of Alt Goes Mainstream is brought to you by Ultimus Fund Solutions, a leading full-service fund administrator for asset managers in private and public markets. As private markets continue to move into the mainstream, the industry requires infrastructure solutions that help funds and investors keep pace. In an increasingly sophisticated financial marketplace, investment managers must navigate a growing array of challenges: elaborate fund structures, specialized strategies, evolving compliance requirements, a growing need for sophisticated reporting, and intensifying demands for transparency. 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Visit www.ultimusfundsolutions.com to learn more about Ultimus’ technology enhanced services and solutions or contact Ultimus Executive Vice President of Business Development Gary Harris on email at [email protected]. We thank Ultimus for their support of alts going mainstream. Show Notes 00:00 Ultimus Sponsor Message 01:18 Welcome to Alt Goes Mainstream 01:55 Welcome to the Morningstar Investment Conference 02:33 Convergence of Public and Private Markets 03:15 Challenges in Transitioning to Private Markets 03:32 Morningstar's Evolution and Impact 04:29 Generating Alpha in Private Markets 04:43 Importance of Time Horizon in Investments 06:51 Morningstar's Role in Investor Empowerment 07:15 Cost Reduction and Ownership in Mutual Funds 08:34 Evergreen Funds and Transparency 09:07 Challenges in Private Market Accessibility 09:41 Liquidity and Fee Structures in Private Markets 17:00 Role of SEC in Standardizing Documentation 19:06 Investor Education and Common Language 19:50 Data Availability and Analysis 20:44 Evaluating Different Investment Structures 21:32 Public-Private Partnerships in Investment 22:21 Philosophical Questions on Private Markets 23:43 Behavioral Aspects of Illiquidity 24:26 Evergreen Funds as Buy and Hold Vehicles 25:01 Asset Allocation and Evergreen Structures 26:07 Investor Behavior and Portfolio Construction 26:22 Comparing Individual Investors and Advisors 27:20 Stability of Retail Assets 27:57 Crypto Trading: 24/7 Market Dynamics 28:09 Impact of Social Media on Young Investors 28:31 Comfort with High-Risk Ventures 28:49 Market Resilience and Drawdowns 29:13 Future of Financial Advisors 29:52 Investor Behavior Across Age Groups 31:03 Validation and Information Overload 31:48 Morningstar's Independent Voice 33:02 Transparency in Private Markets 33:24 PitchBook's Role in Market Data 33:51 Challenges in Data Transparency 34:30 Tipping Point in Transparency 35:12 Flywheel Effect in Market Data 35:42 Private Market Indices 36:44 Challenges in Benchmarking Private Markets 37:37 Evolution of Market Structure 38:25 Public vs. Private Market Dynamics 38:58 Future of Private Market Investments 39:54 Fee Structures and Competition 40:51 Operational Burdens in Private Markets 42:11 Pre-Trade Market Structure 42:28 Access to Private Markets 49:01 Brand vs. Performance in Investments 49:18 Morningstar's Role in Investor Education 51:06 Future of Alternative Investments Editing and post-production work for this episode was provided by The Podcast Consultant. Join over 13,000 Substack subscribers & followers who are thought leaders and executives from top private markets firms and wealth management like Blackstone, Apollo, Ares, KKR, EQT, Carlyle, Blue Owl, CVC, TPG, Brookfield Oaktree, Vista, Goldman Sachs, J.P. Morgan, BlackRock, Fidelity, iCapital, Franklin Templeton, Nuveen, Hg, Permira, Stonepeak, Hightower, Focus Financial, Cerity Partners, and more. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit altgoesmainstream.substack.com