Episode summary
Episode 26: Examining the 60/40 Portfolio with Guest Brian Ullsperger, Andersen
Alternative Allocations
· · Hosts: Tony Davidow · Guests: Brian Ullsperger
Summary
Brian Ullsperger argues that the traditional 60/40 portfolio is no longer enough on its own and should be revised with alternatives such as private credit, real assets, managed futures, and private equity. He says the goal is to diversify portfolios, add return, reduce correlation to stocks and bonds, and smooth the ride for clients, especially when markets are more volatile.
He says his team now typically places 10% to 20% in alternatives and about 5% to 10% in private equity, with allocations driven by time horizon, goals, objectives, liquidity needs, and required return. For many high-net-worth clients, he uses a 40/40/20 mix and treats private equity as patient capital that should be added to consistently through different vintages.
A major theme is communication. Brian says advisers need to explain in advance why a strategy belongs in the portfolio, when it should help, and why illiquidity is a feature rather than a flaw. He cites 2022 as an example of how alternatives helped preserve capital when both stocks and bonds were down, and he says easier-to-explain sleeves like farmland, timber, real estate, and infrastructure can help clients understand the broader case for alternatives.
Key takeaways
- Brian Ullsperger says 60/40 is an incomplete toolbox and wants 10% to 20% of portfolios in alternatives.
- He uses private equity as patient capital, typically sizing it at 5% to 10% and adding to it year after year.
- Brian says alternatives mattered most in 2022, when stocks and bonds fell and alternatives helped protect and preserve assets.
- He frames illiquidity as a feature that can help private credit and private real estate deliver less volatility and potentially higher returns.
- Brian says advisers should start with relatable exposures like farmland, timber, or real estate before introducing more complex strategies.
Notable quotes
“it is really important to bring in alternative investments however they're defined”
“we've taken the traditional 60/40 and brought in anywhere between depending on how aggressive our clients want to be or how conservative anywhere between 10 to 20%”
“we want it there when we need it there”
“that's when we want it there”
“The bucket that added the most value was alternatives and it allowed our clients to protect and preserve more of their assets”
How the episode opens
This is Alternative Allocations by Franklin Templeton, a monthly podcast where we share practical, relatable advice and discuss new investment ideas with leaders in the field. Please subscribe on Apple, Spotify, or wherever you get your podcast to make sure you don't miss an episode. Here is your host, Tony Davidau. Welcome to the latest episode of the alternative allocation podcast series. I'm thrilled to be joined today by my good friend Brian Olsberger. Brian, welcome.
Tony, great to be here. Look forward to the conversation. We've been talking about doing this for a while.
I think you and I maybe more than most have had this investment discussion for years and years and debating the merits and candidly it's evolved. It's evolved because we now have more tools at our disposal. So, let's start in the beginning.
talk a little bit about your career and how it informed the way you think about allocating capital and maybe specifically what are you doing today with your team?
Sure. Now, as I sit back and think 30 years in this business, my mentality about this has evolved because when I first started, you're trying to get clients of all different shapes and sizes and you're starting with really small clients that you're working with through 30 years because their portfolios have grown and because of the fact that I've been able to engage with higher net worth individuals, families, endowments, institutions, etc. my thought about a traditional asset allocation mix which as you and I have talked about a long time I am a huge believer in asset allocation but I have seen the light maybe from some of our conversations and maybe other things I've just studied over the years that it is really important to bring in alternative investments however they're defined and different practices define them differently but it is something that I think is critically important to diversify portfolios to add return to smooth out the ride and really to generate alpha.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- 60/40 portfolio
- private equity
- private credit
- managed futures
- client communication
Companies and tickers mentioned
- SCHW
- BEN
- Andersen
- Capital Fiduciary Advisors
- Charles Schwab
- Franklin Templeton
- Investments & Wealth Institute
Watch the episode
Watch “Episode 26: Examining the 60/40 Portfolio with Guest Brian Ullsperger, Andersen” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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