Episode summary
Why Family Offices Should Avoid 60/40 Portfolios
How I Invest With David Weisburd
· · 30 min · Hosts: David Weisburd · Guests: Damien Bisserier
Summary
Damien Bisserier argues that the best portfolio for ultra-high-net-worth families is built for consistency, not for a single big bet on US stocks. He says most investors are too concentrated in one return stream, while better results come from combining public markets with other uncorrelated sources such as fixed income, credit, commodities, hedge strategies, private equity, private credit, and private real estate.
A major theme is taxes. Bisserier says advisers should evaluate each line item on an after-tax basis, not just on gross return, and he uses K-1s to test tax leakage. He also warns that some private credit structures can create unfavorable tax treatment, and he expects more vehicles and more detailed reporting as taxable capital flows into alternatives.
On venture, he is more cautious. He says the asset class has huge upside but weak median outcomes, heavy vintage dependence, and a strong relationship component, so access to top managers matters more than broad exposure. He also stresses GP alignment, disciplined capacity limits, and the idea that portfolio design must fit the client’s temperament, liquidity needs, and ability to stay invested through losses.
Key takeaways
- Bisserier says portfolio consistency comes from multiple return streams, not a large concentration in US equities.
- He evaluates alternatives on after-tax return and asks managers for K-1s to measure tax leakage.
- He says private credit is expanding through interval funds and private BDCs, but redemptions may soon test those vehicles.
- He views venture as an access-driven asset class where relationships, manager selection, and vintage matter more than brand names.
- He says the best managers usually invest alongside clients, close strategies at capacity, and can clearly explain their edge.
Notable quotes
“Ultimately, I think of the objective of a great portfolio is to deliver your desired rate of return as consistently as you can”
“you can use that in your diligence. So part of our diligence when we're looking at a strategy is to say what is the tax leakage in this strategy”
“Venture is a funny asset class because it's it has this tremendous potential right the the potential to be tax efficient the potential for incredible returns”
“The private markets are one area where a lot of family offices that want to compound at higher rates of return will allocate more of their assets”
“People overemphasize return and they underappreciate the the need to protect on the downside”
How the episode opens
Forbes recently ranked you number one Raia four years in a row. You're at $65 billion in AUM after your recent merger. How do you still generate alpha at size?
Ultimately, I think of the objective of a great portfolio is to deliver your desired rate of return as consistently as you can. And so if you're going to try to earn high returns, the way to do that more consistently is not to put most of your portfolio in one line item. And effectively that's what most investors do.
they have a large concentration in US stocks. And sure, you can maybe find somebody to add a little bit of alpha to that by picking the right US stocks, but that's not going to make that much of a difference ultimately in your results. Ultimately, your consistency is going to come from having lots of return streams in your portfolio beyond just US stocks that can offer you a similar return, but be different.
So, zig and zag at different times from how the US equity market is zigging and zagging. And that that requires you to augment your perspective and incorporate things within public markets that are different, whether that's diff different types of fixed income or credit or commodities, other inflation hedges, or to incorporate thoughtfully alternative return streams. Could be hedge strategies in in the hedge fund world.
It could be private assets, private real estate, private equity, private credit, things that are uncorrelated like healthcare royalties or life settlements. And the last thing I would say is that most adviserss don't spend that much time thinking about taxes. You can after you've designed that portfolio do a lot to enhance it after tax outcomes.
What are the first principles that comes to building a taxable investor portfolio — Whether you're taxable or not taxable?
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- after-tax returns
- private markets
- venture capital
- behavioral portfolio management
- downside risk
Companies and tickers mentioned
- Evoke Advisors
- Bridgewater Associates
Watch the episode
Watch “Why Family Offices Should Avoid 60/40 Portfolios” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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How I Invest With David Weisburd, this episode and its artwork belong to David Weisburd. Octagon is not affiliated with the show; this page is an independent summary.
