Episode summary
ALTSLA 2026: Darren Chappell of Capstone Partners Spoke to Courtney McQuade
Summary
Darren Chappell of Capstone Partners argued that the main job in alternatives is to focus on outcomes, not just strategic asset allocation. He said portfolios should be built around what clients want to achieve, whether that is retirement income, excess returns, or growth, and that behavioral finance matters because many portfolios still reflect the last 12 months instead of the next 10 years.
Private credit was the central risk discussion. Chappell said the asset class is undergoing a sentiment- and liquidity-driven stress test as public BDCs trade at discounts and some evergreen vehicles hit gates. He emphasized that the risk has moved from traditional institutions to the private wealth and retail channel, making liquidity expectations and manager selection critical. He said there is no alchemy in private credit: two-, three-, and four-year loans are now being wrapped in quarterly liquidity, so position sizing matters more than entry price.
On AI, Chappell said there are multiple ways to get exposure, including venture, private equity, and public-market concentration in the Magnificent Seven. Capstone is tailoring the exposure to client objectives, while also looking at inflation protection, real assets, real estate, international stocks, and small caps to improve diversification.
Key takeaways
- Chappell said private credit is passing a liquidity stress test for now, but prolonged economic weakness could change that.
- He said the biggest private-credit risk is mismatched liquidity expectations in quarterly vehicles holding inherently illiquid loans.
- Capstone is prioritizing outcomes over static asset allocation and trying to build portfolios around retirement income, excess return, and growth.
- He said AI exposure can come through venture, private equity, or the concentrated public-market leaders.
- Chappell said real assets, real estate, international stocks, and small caps are part of Capstone’s current diversification work.
Notable quotes
“private credit are making two, three, four year loans and it's now in a quarterly rapper”
“There's no alchemy here. You know, private credit are making two, three, four year loans and it's now in a quarterly rapper”
“the asset class in general is undergoing a sentiment and a liquiditydriven stress test right now”
“position sizing is arguably a little bit more important than your entry price”
“We spend a lot of time discussing how you move from strategic asset allocation as a point in time to really thinking about outcomes”
How the episode opens
Hi, I'm Courtney McUade with Markets Group here at our 11th ALTS LA. With me is Darren Chapel, chief investment officer of Capstone Partners. Darren, great to see you. — Lovely to see you, too. Thanks for having me. — Absolutely. So, you just came off a panel talking about allocations to the best outcomes. What were some of the hot takes on that panel?
Yeah, absolutely. It was a a lively panel and uh I was very uh privileged to be asked to be part of it. We spend a lot of time discussing how you move from strategic asset allocation as a point in time to really thinking about outcomes. Outcomes, what you drive off the back of the portfolio, whether it's a comfortable retirement, additional income, excess returns. Really thinking about outcomes versus just the the strategic asset allocation.
Fantastic. And I'm sure was AI part of the conversation because it's been such a hot topic at this event. Yes, we were fortunate to have the ARC invest uh futurist on our panel.
So, bringing it back to the outcomes, we were talking about a lot about behavioral finance, how a lot of portfolios often reflect the last 12 months as opposed to the next 10 years and how you introduce forward-looking asset classes like venture, uh some parts of the public markets to get that innovation and growth exposure. Absolutely. But AI was undoubtedly a big part of the uh a part of the panel.
Uh and everyone, you know, had their unique take on it.
What about private credit? That's also been a very hot topic, especially with what's been happening over the last few months. — Yes, I've been been fortunate to be allocating to private credit over the last, you know, half a decade to a decade.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- private credit risk
- liquidity mismatch
- position sizing
- ai exposure in alts
- private credit stress test
Companies and tickers mentioned
- Capstone Partners
- ARK Investment Management LLC
Watch the episode
Watch “ALTSLA 2026: Darren Chappell of Capstone Partners Spoke to Courtney McQuade” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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