Allocator10x - The $600Bn Perspective: What Institutions Get Wrong About Risk, Diversification & AI - Jeffrey Blazek, co-CIO of Multi-Asset, Neuberger Berman ($600B+ AUM)

And I think too many institutions are too conservative. I think that they can embrace a higher equity orientation and risk profile than they understand, and don't obsess over daily returns or monthly returns. Really step back and try to make investments with a long-term perspective in mind.

Investors could rely on falling rates, globalization, and stable geopolitics. Which of those assumption do you think are permanently broken today?

I would choose globalization. At Neuberger, we've talked a lot about de-globalization as one of the four Ds, along with demographics and digitization and others. And the tone, the rhetoric, trade behavior, onshoring, general belief that supply chain vulnerabilities can hurt you, the post-COVID experience, and just general political motivations is causing a, a pretty big private and public approach to de-globalize.

What is a non-consensus asset class strategy or market today where the risk-reward looks significantly better than the market appreciates?

Catastrophe bonds. So these are bonds that help provide reinsurance capital to the market around catastrophes. They are capable of generating ten to 15% returns. They have literally zero correlation to the equity market because they're not driven at all by equity risk or interest rate risk. It is purely driven by the fact of whether there are adequate insurance proceeds to cover catastrophes and perils like, uh, wildfires and hurricanes.

Are we having the internet moment all over again?

No, I don't think so. I-

Hey everyone, this is Prashant, and I'll be host for the VC 10X podcast, and today we have Jeffrey Blazek with us. Jeffrey is the co-CIO of Multi Asset at Neuberger Berman, a $600 billion global asset management firm with over 700 investment professionals across 30 plus offices worldwide. Jeffrey has managed capital across institutions of every scale, from college endowments to New York Presbyterian's $8 billion investment pool, to the Texas Teachers Retirement System, which now exceeds $200 billion. In this conversation, we get into the macro assumptions that are permanently broken today, why most institutions are managing the wrong risk entirely, the non-consensus asset class generating 10 to 15% returns with zero correlation to equities. We also discuss the bear case for AI and what the private market's miscalibration of the last decade means for allocators right now. So without wasting any time, let's dive straight in. This episode is brought to you by Podcast NX, my podcasting agency for VCs. We help VCs start and run branded podcasts that can serve as their entire content engine. Turn the conversations you're already having into a machine. One recording becomes your presence on LinkedIn, Spotify, YouTube, and email. Don't just build another VC firm, build a firm that can stand out to LPs and one that founders can brag about having you on their cap table. Check out our services at podcastnx.com. I'll put the link in the description below. Now, enjoy the episode. Hey Jeff, so good to have you on the VC 10X podcast. How are you doing?

I'm doing great. How are you?

Very well, thank you. Uh, it's a pleasure having you on. Uh, to start things off, uh, you know,