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 says advisor demand for alternatives is being driven by a difficult backdrop: stickier inflation, slower growth, higher rates, and the failure of the 60/40 portfolio in 2022. He argues advisers are increasingly looking for incremental alpha, differentiated yield, lower volatility, and true diversification, and that alternatives have moved from niche to more mainstream as products have become easier to use.
At Morgan Stanley, Paul leads the global investment manager analysis group’s alternatives research across hedge funds, private credit, private equity, and real assets. He says advisor education is essential because alternatives usually start as a mid-single-digit allocation, and the real work is choosing the right strategy mix and then the right sub-strategies inside each sleeve. He and Tony both stressed that better education, access to high-quality managers, and simpler implementation are central to broader adoption.
The conversation also focused on product structure. Paul said evergreen funds are now the “word of the day” because they reduce cap calls, offer 1099 simplicity, and give immediate diversification, while drawdown funds still matter for strategies not yet suited to evergreen wrappers. They also discussed secondaries, infrastructure, real estate, and opportunistic credit as areas with strong appeal given liquidity needs, AI-related power demand, valuation dislocations, and continuing portfolio rebalancing.
Key takeaways
- Paul Jodice says advisers are turning to alternatives because the 60/40 portfolio has struggled and clients want incremental alpha, differentiated yield, and diversification.
- Paul says advisor education matters because alternatives usually begin as a mid-single-digit allocation and require careful sleeve and sub-strategy selection.
- Paul says evergreen funds are driving adoption because they reduce cap calls, provide 1099 ease, and deliver immediate diversification.
- Paul says secondaries remain attractive as a liquidity provider, especially when institutions need cash to redeploy into newer vintages.
- Paul says infrastructure, especially power-linked assets, offers both AI-driven growth exposure and an inflation hedge.
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”
“I mean, evergreen is the the word of the day”
“Secondaries have been an area of focus because secondaries are becoming even more so a liquidity provider in an otherwise illquid market”
“what will it take to see the industry allocation go from that 5 to 10% to the 10 to 15%”
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 selection
- portfolio construction
- advisor adoption
- incremental alpha
Companies and tickers mentioned
- MS
- BAC
- BEN
- Morgan Stanley
- Cambridge Associates
- Merrill Lynch
- Abu Dhabi Investment Company - Invest AD
- Bank of America Merrill Lynch
- Babson College
- Franklin Templeton
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.
