Episode summary
Episode 33: Alternative Manager Research: Building a Robust Platform with Guest Paul Jodice, Morg...
Alternative Allocations
· · Hosts: Tony Davidow, Christine Gaze · Guests: Paul Jodice
Summary
Paul Jodice argues that alternatives have moved from niche to mainstream because advisers need incremental alpha, differentiated yield, and diversification in a volatile higher-rate environment where 60/40 has struggled. He says Morgan Stanley’s alternative research platform is built to support that shift across hedge funds, private credit, private equity, real assets, and direct/co-investment work, with education doing much of the heavy lifting for adoption.
A major theme is that advisers need help not just choosing alternatives, but constructing them: getting the right blend across strategies, then the right mix within private markets. Jodice says evergreen structures are becoming the dominant conversation because they reduce operational friction, offer lower minimums and immediate diversification, and can make alternatives easier to use in advisory portfolios. He still sees a role for drawdown funds, especially where certain strategies do not yet fit evergreen formats.
The episode also highlights areas where Jodice sees opportunity: secondaries as a liquidity provider, infrastructure tied to AI-driven power demand and inflation hedging, and opportunistic credit amid stressed capital structures. He says the next step for the industry is more model-portfolios and plug-and-play solutions that can help move alternatives from a 5%-6% industry allocation toward 10% and beyond.
Key takeaways
- Paul Jodice says advisers are turning to alternatives for incremental alpha, differentiated yield, and uncorrelated returns as 60/40 has struggled in recent markets.
- Jodice says advisor education is critical because alternatives are typically only a mid-single-digit allocation and require both asset-allocation and substrategy guidance.
- Jodice says evergreen funds are now the most common topic, because they can offer lower minimums, immediate diversification, and easier adoption than drawdowns.
- Jodice sees secondaries as a lasting liquidity provider, not a temporary trade, and says they help kickstart portfolios with vintage diversification.
- Jodice says infrastructure, especially tied to AI power demand, and opportunistic credit are attractive areas given inflation pressure and higher rates.
- Jodice expects model portfolios for alternatives to be a natural next step that could help raise industry adoption over time.
Notable quotes
“Advisers are saying, "Hey, how do I find that incremental alpha in my portfolio, the differentiated yield, some element of enhanced diversification to the traditional markets”
“Advisor education is critical to adoption of alternatives in the portfolio”
“evergreen is the the word of the day. It's most conversations I feel like I have is around is around evergreens”
“Secondaries have been an area of focus because secondaries are becoming even more so a liquidity provider in an otherwise illquid market”
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 Allocations podcast. I'm thrilled to be joined today by Paul Jodis from Morgan Stanley. Paul, what a great opportunity to talk about all the great things that are happening on Morgan Stanley, the robustness of your platform, the quality the managers are bringing on board.
Maybe if you can just for our listeners, give us a little bit of your background and your role.
Yeah, absolutely. And thank you so much for inviting me here today. I'm really glad we have this opportunity to do the podcast.
heard a lot about you in these and so just a pleasure to ask to join you and thank you for the great relationship we have between the two firms. When you look at so part of Morgan Stanley wealth management I've been there for coming on 9 years now and before that I've spent pretty much most of my entire career in the alternative asset space and got into it right out of college. Didn't even know what venture capital and private equity was and look where it is today quite mainstream more than ever before and just having that alternative asset background throughout most of my career.
I've also had the opportunity to do that and work and live in not just the US but also in Abu Dhabi and Singapore and really had an opportunity to broaden that compass but also being ingrained in seeing help other people throughout the world look at alternative investments as well.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- alternative manager research
- manager due diligence
- portfolio construction
- advisor adoption of alternatives
- private equity
Companies and tickers mentioned
- MS
- BAC
- BEN
- FTNT
- Morgan Stanley
- Cambridge Associates
- Merrill Lynch
- Bank of America
- Franklin Templeton
- Babson College
- The Podcast Consultant
- Invest AD
- Abu Dhabi Investment Company
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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Alternative Allocations, this episode and its artwork belong to Franklin Templeton. Octagon is not affiliated with the show; this page is an independent summary.
