Multi-Manager Due Diligence, Active ETFs, and Why Commodities Matter with Kristof Gleich
Kristof Gleich, President and CIO of Harbor Capital Advisors, explains the multi-manager model: partnering with specialist boutiques instead of building in-house. Due diligence goes beyond pitch decks—walk the halls, talk to junior staff, verify alignment between words and culture. Red flags appear in unscripted moments: managers day-trading during site visits, tension in office dynamics, lack of personal capital invested.
Active ETFs have evolved from index-tracking wrappers to vehicles for specialized strategies. The 2019 SEC rule unlocked regulatory framework; tax efficiency comes from thoughtful use of creation-redemption mechanics, not automatic structural advantages. Kristof's journey from Goldman Sachs institutional work to wealth management reflects converging sophistication—RIAs now discuss factor loadings and attribution analysis that were "Geek Town" conversations 15 years ago.
The biggest psychological trap: performance chasing. Money-weighted returns trail time-weighted returns across every Morningstar category because investors buy what just worked, just in time for disappointment. US large cap dominated post-crisis, but law of large numbers makes continuation difficult. Commodities tend to be underrepresented precisely because they disappointed in the 2010s. Yet 26% cumulative inflation since 2020, sovereign debt levels, and central bank independence under attack suggest physical asset backing matters again. Risk calibration should help prevent "I didn't sign up for this" moments when psychology trumps rationality.
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What We Cover in This Conversation
Multi-manager model mechanics and specialist boutique selection
Due diligence beyond pitch books: cultural tells and red flags
Active ETFs: Evolution from index vehicles to alternative strategy wrappers
Tax efficiency reality: Creation-redemption mechanics require skill, not automatic
Convergence of institutional and wealth management sophistication
Factor analysis democratization and what qualifies as genuine alpha
Performance chasing trap: Money-weighted vs. time-weighted returns
Commodities case: Physical asset backing in inflationary regime
Mean reversion death and factor strategy commoditization
Risk calibration: Preventing irrational decision moments
Key Takeaways
Due diligence happens in unscripted moments. Walk the halls, talk to junior staff, observe culture. Managers day-trading during your visit or lacking personal capital invested are hard nos. Verify alignment between presentation and reality.
Active ETFs require operational skill for tax efficiency. Creation-redemption mechanics enable tax advantages, but you need infrastructure and knowledge to execute. Not all ETFs deliver—some produce unnecessary taxable gains.
Performance chasing is universal and destructive. Money-weighted returns trail time-weighted across every category. Investors buy what worked, sell what didn't, perfectly timing losses. "Past performance is no guarantee" is true because we all ignore it.
Commodities address physical backing in fiat currency crisis. 26% cumulative inflation since 2020, unsustainable sovereign debt, central banks under attack. Physical assets (oil, agricultural products, gold) may protect wealth when cash devalues. Underrepresented because they disappointed in 2010s—classic performance chase error.
Timestamps
00:00 - Introduction: Multi-manager model and specialist boutique approach
03:00 - Due diligence red flags and the day-trading renewables manager
06:00 - Cultural tells: Unscripted conversations in hallways
08:00 - White hat vs. black hat firms: Character under stress
11:00 - ETF evolution: From passive index to active alternatives
13:00 - Active ETF regulatory change (2019 SEC rule) and tax efficiency mechanics
16:00 - Journey from institutional to wealth management
18:00 - Sophistication convergence: Factor analysis goes mainstream
19:00 - Defining genuine alpha net of factor exposures
23:00 - Performance chasing psychology: Money-weighted vs. time-weighted returns
25:00 - Commodities underrepresentation and 2020s inflation regime
27:00 - Fiat currency crisis: Sovereign debt and central bank independence
28:00 - Physical asset backing as inflation protection
31:00 - Cash holdings and mean reversion death
33:00 - Risk calibration: Preventing "I didn't sign up for this" moments
34:00 - Rapid-fire questions: Creativity, tea, Crystal Palace
About Kristof Gleich
Kristof Gleich is President and Chief Investment Officer of Harbor Capital Advisors, where he leads the multi-manager platform partnering with specialist investment boutiques globally. He previously worked in manager research and selection at JP Morgan in New York and Goldman Sachs Asset Management's Global Manager Strategies Group in London. Kristof holds a degree in physics from the University of Bristol and is a CFA charterholder.
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Disclaimer
The content of "Treussard Talks" is for informational and educational purposes only and should not be considered financial advice. The views expressed are those of the host and guests and do not necessarily reflect the opinions of Treussard Capital Management or its affiliates. Consult your own financial advisor before making any investment decisions. For full disclosures, visit treussard.com.