Investology: Investment Management Intelligence
00:00:00 · Andrea Carnelli Dompé, Andrea Carnelli Dompé, George Aliferis
[00:00:00] S0: the family offices I tend to deal with, they're incredibly sophisticated, institutionalized investors. Ultimately, NLP has to do certain mission-critical activities. [00:00:11] S1: We basically automate everything that has to do with data and workloads so that our [00:00:17] S0: clients can focus on the actually interesting side of investing. We reduce the amount of labor. We reduce the risks of missed data or incorrectly extracted data. We make data more available, more quickly, more accurately. We hyper train these agents to the private markets use case. When it comes to democratizing private markets, products are being pushed onto people who should really have it in their portfolios. [00:00:49] S1: This episode is a rare opportunity to see how two of the most important themes in [00:00:55] S2: financial markets interact. On one hand is the access to private markets. On the other hand is the use of AI and data. [00:01:03] S1: And I'll be talking to Andrea Carnelli Dompe, whose company deals exactly with that. Their tagline is that they create AI agents for 10 times smarted limited partner operations. [00:01:19] S2: So before I go into that, [00:01:21] S1: I want to understand Andrea's background and how he came up with this idea. My background is in quant finance, AI, machine learning, all those things put together. [00:01:31] S0: It started off as a PhD in quantitative finance,
00:01:31 · Andrea Carnelli Dompé, Andrea Carnelli Dompé, George Aliferis
[00:01:31] S0: It started off as a PhD in quantitative finance, [00:01:34] S1: which is where I learned how to torture the data and extract interesting insights. I then got recruited by a large fund of funds business that was focused on private markets. The challenge there was to use all the data we were collecting to help our clients [00:01:50] S0: and investment teams make better investment decisions. [00:01:54] S1: And that was an incredible opportunity for me to learn about private markets, [00:01:57] S0: how they work, what the challenges are. [00:02:00] S1: And that's what led me to Tamarix, which is the company you just introduced. [00:02:02] S0: So at Tamarix, we help limited partners, allocators that invest in private market funds, such as private equity, venture capital, private debt, and so on and so forth. We help them make their operations 10 times more efficient, thanks to the use of AI and AI agents. [00:02:19] S2: So we're talking about an audience of LPs. So those are limited partners. But I would like to understand who are the people, who are the organization, from your perspective, that hide behind the acronym? [00:02:35] S0: Yes, [00:02:36] S1: LPs is a very sort of broad term when you actually look at the institutions that [00:02:40] S0: lie behind it. Maybe let's go with the traditional LPs. [00:02:43] S1: These would be institutional investors that have been in private markets for decades. [00:02:48] S0: So think of pension funds, especially defined benefit pension funds, endowments and foundations, you know, the
00:02:48 · Andrea Carnelli Dompé, Andrea Carnelli Dompé, George Aliferis
[00:02:48] S0: So think of pension funds, especially defined benefit pension funds, endowments and foundations, you know, the [00:02:56] S1: endowments of universities or charitable foundations, you have fund of funds. So investors that are professional asset managers investing in the asset class. But increasingly you also have family offices that could be multi-family offices or [00:03:12] S0: single family offices. And increasingly you also have ultra high net worth individuals. [00:03:17] S1: It's part of the democratization trend in private markets that participate in the [00:03:22] S0: asset class as well. So it's a broad range. [00:03:26] S2: So if we split this up between the institutional and the private wealth, [00:03:30] S1: can you tell us more about who are the players in this private wealth market? I think family offices occupy a self-standing category that is probably closer to [00:03:43] S0: endowments and foundations. [00:03:44] S1: So at least the family offices I tend to deal with, they're incredibly sophisticated. [00:03:51] S0: institutionalized investors. [00:03:53] S1: And by that, I mean they have very sizable allocation as a percentage of market markets.
00:03:53 · Andrea Carnelli Dompé, Andrea Carnelli Dompé, George Aliferis
[00:03:53] S1: And by that, I mean they have very sizable allocation as a percentage of market markets. [00:03:59] S0: they tend to write very large tickets. They do that directly with direct commitments to profit market funds. They might have been in the asset class for decades as well, and therefore have built very strong relationships with leading GPs, and in some cases have also started doing secondaries or co-investments, just like any institutional investor might have. So I think family offices tend to be very institutionalized. The retail end is more... you know, [00:04:29] S1: ultra high net worth individuals that might purchase private market products [00:04:34] S0: through their banks, through their wealth managers. [00:04:36] S1: So you bank with Bank X and Bank X would probably sell you a feeder to invest in [00:04:41] S0: private markets, but it's all very much intermediated by the bank, all the way from reporting to the capital calls. [00:04:49] S1: And it tends to be a very small portion of the universe that is being offered [00:04:53] S0: to these high net worth individuals. That's what I kind of think more of as being retail. [00:05:00] S1: So we understand that lines can be blurred and that an LP may also one day [00:05:05] S2: participate in a Finder fund, [00:05:06] S1: but there's still a change between being an LP and I think that someone or an organization like leans in more and is a lot more active than being just a high net worth investor who has been advised by his financial advisor to put some money in.
00:05:06 · Andrea Carnelli Dompé, George Aliferis, Andrea Carnelli Dompé
[00:05:06] S1: but there's still a change between being an LP and I think that someone or an organization like leans in more and is a lot more active than being just a high net worth investor who has been advised by his financial advisor to put some money in. [00:05:24] S2: into a perpetual or feeder fund. [00:05:26] S1: Can we now discuss about the operational issues they face and how do you help them [00:05:31] S2: solve that with Tamarix? [00:05:33] S0: I think ultimately an LP has to do certain mission-critical activities, that is accounting, reporting, monitoring, making sure the GPs are doing their job, portfolio construction, [00:05:47] S1: So making sure you are managing the commitments in a way that manages your risk of [00:05:52] S0: liquidity and also achieves your portfolio construction goals. [00:05:56] S1: So all these things can be done if you have data from your underlying managers that [00:06:03] S0: is correctly collected, normalized, and processed. And this is where Tamarix comes in. [00:06:09] S1: We basically automate everything that has to do with data and workloads so that our [00:06:15] S0: clients can focus on the actually interesting side of investing in global markets. [00:06:21] S2: So how does it work in practice? Let's say I've invested in different funds from different providers, different strategies, how I get information from the vendors, what type of information do I get in what format and how do I process it? [00:06:36] S0: So suppose you have made 20 fund investments.
00:06:36 · Andrea Carnelli Dompé, Andrea Carnelli Dompé
[00:06:36] S0: So suppose you have made 20 fund investments. [00:06:39] S1: Every manager will have their own reports being shared through their own channels. So effectively what happens after making those investments is that every day you [00:06:47] S0: open your mailbox and you see a bunch of notifications. some capital posts, some capital distributions, a new capital account statement, a new quarter report, a new K1. You have loads of documents being sent. Now, these documents hit your mailbox as a notification, but not necessarily do you find those documents as an attachment. [00:07:06] S1: So you typically then have to somehow recover the logins to the manager's portal, [00:07:12] S0: log into the portal, do the MFA, get the code on the phone, retrieve the document. And that's only to get the document itself. And yes, that document is a PDF. And that PDF will always be following different templates. Everybody reports differently. So you will download that PDF, look at it, and work out what kind of information you need to extract. Oh, is it a capital call? So I need to make sure I understand how much to wire by when. Oh, is it a capital account statement? [00:07:40] S1: Let me take the NFV and shoot it to my reporting system so I can value the funds at [00:07:44] S0: the end of the month.