Jane Buchan on Alternatives, Diversification, and Investor Agency
This TREUSSARD TALKS interview with Jane Buchan examines "alternatives" by mechanics rather than labels. We talk about private equity as levered equity, private credit as floating-rate credit with still-evolving default and workout paths, and hedge fund strategies as instruments that change exposure, correlation, and payoff shape through long/short construction and constraints.
Globalization has raised cross-market correlations, which makes category labels less informative. We focus on where diversification still adds value: payoff shape and correlation management.
We also get specific about first-order risk controls. Separate accounts limit manager discretion and reduce commingling risk. Clear custody and trade execution reduce operational failure modes. The aim is a repeatable process that remains "roughly right" across cycles rather than a forecast that must be exactly right once.
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What We Cover in This Conversation
Defining "alternatives" by mechanics, not labels
Private equity vs. hedge funds: leverage, long/short construction, capacity
Private credit and direct lending: floating rates and default plumbing
Global correlations and where diversification still helps
Due diligence that preserves control: separate accounts, custody, fees
Narrative risk, capacity limits, and liquidity discipline
Key Takeaways
Size by economic exposure. Private equity = levered equity. Private credit = floating-rate credit with evolving workouts. Understanding the underlying mechanics matters more than the label.
Structure is a risk control. Separate accounts, clear custody, and transparent execution protect agency and reduce operational and counterparty risks.
Diversification still works. Correlation and payoff shape matter more than asset class labels. Focus on where diversification adds real value.
Process beats prediction. Aim to be roughly right across cycles rather than requiring perfect forecasts. Build portfolios that work in multiple scenarios.
Timestamps
00:00 - Welcome and introduction
03:30 - Defining alternatives and the frontier-to-mainstream lifecycle
08:00 - Correlations and diversification's role
12:30 - Private equity vs. hedge funds: mechanics and capacity
18:00 - Private credit, floating rates, and default "plumbing"
23:00 - Narrative risk and avoiding magical thinking
27:00 - Separate accounts, custody, execution transparency
30:00 - Careers, curiosity, asking better questions
32:30 - Rapid-fire Q&A and close
About Jane Buchan
Jane Buchan is CEO of Martlet Asset Management, co-founder of PAAMCO (which grew to $32B AUM), former Dartmouth finance professor, and a longtime leader at CAIA. She serves on multiple boards and is recognized for advancing alternatives education and investor advocacy.
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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.