Earlier this year we formed a Strategic Advisory Board made up of experienced technology and investment professionals in the private markets. In this new series, we’ll get to know each one a little bit better.
John Ritter is the Managing Director of Real Assets at the University of California, where he manages a team of investment professionals focused on real estate, infrastructure, and energy. Previously he was the Director of Energy and Natural Resources for the Teacher Retirement System of Texas, where he underwrote over $5 billion in private equity investments.
Why did you decide to pursue a career in investment management and more specifically the private markets?
First of all, I always had a natural instinct for finance and economics so a choice of investments was easy and interesting to me. The process of ending in private real assets was a long road with many jobs and had to do with two factors more than anything else: runway and personality. From a personality perspective, private markets is much more of a long-term game, investments are made for years not months. Public markets are much more of a short-term game. The liquidity of public markets and daily performance measurement make stock picking a tough gig in the short term. I like to think and ponder and take my time in making investment decisions, a quality that is not well suited for public markets which demand constant attention and often quick action due to rapidly changing market dynamics. So private markets fit me well. From a runway perspective, Real Assets was an emerging asset class with few knowledgeable investors and a growing opportunity set. Lots of runway. Even to this day I am extraordinarily passionate about investing and specifically real assets.
What are LPs looking for in terms of data management capabilities at private market asset managers today?
We are looking for evidence that they are not stuck in the past. If they view their business without a need for technology evolution, how are they viewing the portfolio companies that are often faced directly with technological obsolescence and competitive substitution? In today’s world one can not sit idly by. You have to be proactive in moving forward. LPs want data and information from our GPs for many portfolio management activities such as risk management, manager evaluation, and portfolio construction. We want it easy, fast, and reliable. The more directly you can deliver the data to us the better. Sending us a pdf with our data and information is already outdated. We have to take this information and digitize it. Why not just skip the intermediate step? Make our lives and yours easier. If you are not doing this you will be left behind. Finally, don’t just do it for the LPs, your asset and fund managers will also appreciate the transparency and timely information. As you know, it is critical to stay on top of what is driving your performance and returns and why.
What advice would you give to an asset manager that is just beginning to embark on finding a data management solution?
Be thoughtful about the cradle to grave solution. Do not just pick a best in class solution that solves part of the problem, but creates further problems down the line when further integration is required.
“Data as a competitive edge” is a great soundbite. From your experience, what are the tangible benefits to better data management, and why does this matter?
Happier employees, happier management, better results, and thus happier LPS.
You need fewer employees to pull together and process reports.
It will not take a week for your staff to gather and analyze the data to show you what is actually happening.
What’s your favorite thing to do when you’re not working?
I like to read science fiction and fantasy novels, play video games, and spend time with my family.