Lori Santikian:        ... and welcome to UCLA Anderson. My name is Lori Santikian. I'm the faculty director of the UCLA Fink Center for Finance, and a professor of finance and strategy here at Anderson. On behalf of the Fink Center, the UCLA Anderson Master's in Financial Engineering, and the entire UCLA Anderson family, I'm thrilled to welcome you to this very special event. The UCLA Fink Center for Finance aims to cultivate and translate innovation at the frontiers of Finance. We do this by supporting and disseminating cutting edge research, connecting academia with industry and policy, and training leaders along their professional journey.

Lori Santikian:        Today, we are privileged to partner with Women Investing In Security and Education to bring to our community insights from some of the most impressive individuals in finance, who just coincidentally happen to be women. This event would not be possible without the dedication and commitment of Women Investing In Security and Education, so I'd like to introduce Angela Dailey, Co-president of WISE to introduce our program.

Angela Dailey:        Hi. Hello, everyone. Thank you, Lori, for the kind words and that great introduction. We are so excited to be partnering with UCLA, and the Anderson School, and the Fink Center on what promises to be a fun, fascinating, and very educational meeting tonight. In 1997, a group of women met in Orange County to put on an investing conference for women. They were amazed that 500 women signed up for this event, so they knew they were on for something. Fast forward, 25 years or just about 25 years, and we're still faithful to our mission of financial education for females of all ages and all socioeconomic backgrounds because we believe that managing your finances better leads to better outcomes, more options, and the ability to fulfill your dreams. In the past year, WISE hosted or participated in about 20 workshops and events reaching about 1,500 women. Actually, now across the country thanks to our virtual format, we work with organizations such as Girl Scouts, Girls Inc., and universities such as UCLA.

Angela Dailey:        Tonight's program is part of our groundbreaking, Tearing Down the Pink Wall series, whose mission is both education and inspiration. We gather the best and the brightest in financial services to inspire all of us to achieve our full potential. And the best and the brightest are exactly what we have tonight. We have an extraordinary panel. We have Jane Buchan, CEO at Martlet Asset Management. We have Katy Sherrerd, CEO Research Affiliates. And Andrea Eisfeldt a professor of finance here at UCLA's Anderson School. All these women have impeccable credentials. But they're also very committed and passionate about financial literacy, and also advancing women and minorities in the workplace.

Angela Dailey:        According to Morningstar, only about 11% of portfolio managers are females. And this has nothing to do with performance because they perform as well or better than their peers. And what's really disturbing about this number is it hasn't moved in the past decade. In fact, some surveys show it's going the wrong way. In the C-suite, the numbers are even more disturbing. 3% of CEOs in financial services are female. So we have a long way to go. Tonight we have a two-part program. First we're going to hear market insights, and then we're going to hear about the career journeys of our panelists, and how they got into the C-suite and this rarefied position that they are in.

Angela Dailey:        But first I want to introduce our moderator. Consuelo Mack, the host and founder of PBS's WealthTrack. Consuelo and I go back a very long way. We met when we were both starting our careers in New York City, she in financial journalism and me on the dark side in public relations for a large and controversial investment bank. So our paths would cross many times over the years, sometimes not happily for me. But we became very close friends and we remain close friends. Consuelo is recognized as a pioneer in financial journalism. She was an anchor on CNBC, and now hosts her own show on PBS WealthTrack, whose mission is to help all Americans both build and preserve their wealth.

Angela Dailey:        She's a big advocate of women and minorities in the workplace, especially in financial services. So with that, please join me in welcoming Consuelo, our distinguished panel. And two bits of housekeeping, please put your questions in the Q&A box, not the chat box, we're going to get to them at the end of the meeting. And if you want to join the networking event at 5:30, even if you didn't register the link will be in the chat box. So with that, Consuelo, show time.

Consuelo Mack:        Thank you, Angela. It is a treat to be with you, as always, and the view from the top, and influential women in finance, you are definitely one of them. So I'm just delighted to be here. And I want to thank UCLA, Anderson School of Management. I also want to thank WISE, I didn't realize it has been since 1997. I've certainly been involved from the very beginning as well. And also this Tearing Down the Pink Wall series, because we're all here together to make sure that everybody succeeds, and that women especially succeed in the financial services industry. And I am really honored to be here.

Consuelo Mack:        And as I said with these influential women in finance, and we are definitely going to get their views from the top. And we are here with a common mission, which is financial literacy, which is what WISE is all about, what the Anderson School of Management is all about as well, and what WISE does in preparing women as well, and both of them for leadership positions in this incredible industry. And I just have to say it's what the three panelists represent. And it's not just for women, it's for everyone. And I come from the financial services industry. I was a broker at one point and a minor portfolio manager and an analyst.

Consuelo Mack:        And financial security is key to success. It's a critical component of both personal and also professional success, so it's a very important mission that we all share. And leadership in the financial services industry, well, despite the numbers that that Angela just read you which are disheartening. But my feeling is, and we'll ask our panelists, I think things are changing. And quite honestly, that was my experience in the early, early years, that the financial services industry is incredibly dynamic, it's changing rapidly, and it's basically opening up on to... It's being much more inclusive, and if you've got basically the talent, and the ambition, and if you can deliver results, it presents tremendous opportunities, which is why the discussion tonight is so important.

Consuelo Mack:        So let's get started and meet the panelists. And as Angela said, it is a two parter. We're going to talk about the macro outlook first, and the hard economic reality, and the market realities that we're facing. And then, the second part of the discussion is going to be about the careers, is basically how our panelists got where they are, and the decisions they made along the way, and some advice that they can give to the rest of us. So you saw their bios in the video that was rolling before we started this officially. But I just want to give you some highlights, especially if you missed it.

Consuelo Mack:        So I'm going to take a quick introduction of each of our panelists. First with Jane Buchan, who as Angela says, the CEO of Martlet Asset Management. It's an independent investment firm that she founded in 2018. And prior to that, Jane was the CEO of PAAMCO, which is a fund of hedge funds. And she started in 2000, and under her leadership, by the time that she left PAAMCO its assets had grown to 32 billion. And so, it was quite a success story. Jane is involved in numerous activities supporting financial literacy, and supporting women in finance. She is the chairwoman of the board for the Chartered Alternative Investment Analyst Associations. She has that designation herself, it's CAIA. And she's also on the advisory board for a master of financial engineering program at UCLA Anderson. And she got a PhD in finance at Harvard. She taught finance as well at the Amos Tuck School. That's the business school at Dartmouth. And what I especially want to highlight is that she has been named two years in a row one of Barron's 100 Most Influential Women in Finance.

Consuelo Mack:        Andrea Eisfeldt, who I've... And I've known Jane before. I've talked to her on other panels, but I'm delighted to introduce Andrea Eisfeldt who I just got to know, and I'm looking forward to talking to her a lot more in the future. She is the Laurence D. and Lori W. Fink Endowed Chair, the professor endowed chair of finance where she is professor of finance at UCLA, Anderson. And I mentioned that chair which is endowed by the Finks because Larry Fink, of course, you might not know this is the head of BlackRock, which is the largest asset management, and is driving a lot of important issues, which we will discuss as well in corporate governance and ESG social responsible investing. So that is one of the topics that we're going to discuss.

Consuelo Mack:        And she has won several prizes for her academic papers in the Journal of Finance and other places. She's on the board of the American Finance Association. He spent nine years in asset management consulting. One of which was at AQR, which is a very famous, huge investment firm run by a celebrity financier Cliff Asness. And she was advising them on both equity and fixed income strategies, again, something we'll talk about. She was also the chief economist for a hedge fund. Her educational background is PhD in economics at the University of Chicago. And she's also advising firms on FinTech, financial technology, which is a big disruptive force in this industry. Again, another topic that we need to get to.

Consuelo Mack:        Finally Katy Sherrerd, partner and CEO of Research Affiliates. That's a global asset manager and Research Affiliates is known for its award winning research and innovative products, including something called fundamental indexation, which some of you might or might not know about. But fundamental indexation weighs stocks based on their fundamentals and things like the size of their sales, and their profits, and cash flow instead of market capitalization. So its sense is that it better reflects really the economic footprint of companies than just their market value.

Consuelo Mack:        And there are $166 billion in assets worldwide using investment strategies created by Research Affiliates. And since 2006, Katy has been just about every leadership position that you can imagine at Research Affiliates and getting to CEO where she is now. And before that she spent 19 years at the CFA Institute, the Certified Financial Analyst Institute as part of their leadership team. She has a PhD in finance from the Darden School, University of Virginia. She is a visiting professor there. She serves on lots of non-nonprofits, and lots of profit boards as well. And she was also named to Barron's 100 Most Influential Women in US Finance over the last two years.

Consuelo Mack:        So welcome to our panelists. It's definitely a view from the top. So thanks for being here. And this is a two-part conversation, as I said. So we're going to start with the investment climate. And I wanted to just run down for all of you just the big picture backdrop. And just quickly, we've got widespread vaccinations now, especially in the developed world, in the US and the UK, China, Europe. And obviously real problems in some of the developing world, India and Brazil among them. We've got economic reopenings, and growth happening now. It's global, again, centered, mostly where the vaccinations have been more widespread.

Consuelo Mack:        We've got unprecedented monetary and fiscal stimulus. We've got record levels of government debt and corporate debt. And historically low interest rates, still booming stock markets, booming private markets. There is a lot going on, and we've got an exploding digital currency market as well, with Bitcoin at a trillion-dollar market value. So where do we start? And I wanted to start with Jane, because I want to ask each of you to tell us what you're focusing on, what you're talking with your colleagues about, and what you're teaching in your classes. What are the one to three top macroeconomic themes that you're paying attention to and you think we should pay attention to? So Jane, I'm going to start with you.

Jane Buchan:        I think one of the big macroeconomic themes is how high can the stock market go? And also what's happening to interest rates. So while there's been a lot of talk about all sorts of things, whether it's been SPACs, special purpose acquisition company-

Consuelo Mack:        Black check companies, they're called, right?

Jane Buchan:        Exactly. Or cryptocurrency and stuff. I think we're back to the fundamental, what I call finance 101. Where interest rates are likely to go in terms of macroeconomic views, and where's it? What's that mean for the stock market? Because I think clearly one of the things today is it's the low rates that are partially driving the stock market today.

Consuelo Mack:        And do you want to answer those questions?

Jane Buchan:        I'll let you ask some of our fellow panelists.

Consuelo Mack:        Oh, nice passing the buck. So Andrea, you're talking about all of these things in your finance classes. Well, number one, in all fairness to you, what are the top macroeconomic themes that you're focusing on, and that we should pay attention to? And then, we'll answer the questions that Jane raised.

Andrea Eisfeldt:        Okay. So I need to echo Jane. I always say look to the bond markets first when you want to talk about macroeconomics. So I'll come back to what's going on with interest rates. In equity markets, I think you hit on all of the things that are boosting the stock market. Opening up vaccinations, all these new opportunities, where are we going to go post pandemic when we combine the best of both worlds, watching streaming TV, and going on vacation. Going on Zoom and going to conferences.

Andrea Eisfeldt:        Headwinds in the equity markets would be things like corporate taxes, what's going to happen there. Are we're going to meet somewhere between 20 and 30, at 25? How are investors going to think about that? And then also regulation, in particular I'm always looking at what's going on with antitrust, because we have a very concentrated S&P 500 with a lot of value in the top five companies, and those are large companies which the government will always be having a close eye on. Just real-

Consuelo Mack:        Right. So Alphabet, for instance, and Microsoft, and Facebook and... Yeah.

Andrea Eisfeldt:        Yeah. Companies that have a lot of customer data, and more than anyone else could hope to have in a very short amount of time. Yes.

Consuelo Mack:        So Katy, from your perch at Research Affiliates, what are you all talking about? What are the big macro themes that you're talking about?

Katy Sherrerd:        We're not a firm that focuses much on the macro, we're a systematic research based firm. We're very rules based, and we believe in long-term trends rather than short-term trends. I agree very much with what the other panelists Jane and Andrea have said in terms of what the issues are that we're facing now. And I think ultimately, that's partly why we think the US equity market over the next 10 years is going to be flat if anything. I don't know whether it'll go up first, and then down, or down first and that up. But there are a lot of things are going to have to be sorted out in these markets in the coming years, and we tend to be... Go ahead.

Consuelo Mack:        No. Right. So you think of long-term trends. There's no circular trends. There's no question about that. But I know in talking to Rob Arnott, the founder of Research Affiliates over the years. I know that you tend to look for undervalued assets, and so you've been looking at where the leadership has been in growth stocks that Andrea just talked about, and the S&P 500, the concentration there. You've been looking at the fact that large cap companies, large companies have basically been leading the way and that small companies have been lagging. And also the US markets have been leading again, and international markets have been lagging. So those are things that you guys talk about.

Katy Sherrerd:        Absolutely. When we did the panel six months ago, I made the comment that the difference between value and growth stocks was at just an all-time large gap. That the-

Consuelo Mack:        Right. It was the biggest gap in history. Right.

Katy Sherrerd:        ... gap was unsustainable, and that it would not last. And here we are six months later, and the value stocks, the cheaper unloved stocks have been much stronger in the last six months. More of a return to normal types of relationships. And so yes, we definitely look at what's undervalued and what's overpriced. And right now the US market looks less attractive to a valuer or an investor than the riskier emerging markets, or other parts of the world. So you're absolutely right. And it's just really hard. We often tend to be early. We see trends, and aren't great at actually timing them, so we do look at long term valuation relationships.

Consuelo Mack:        And Jane in the alternative space, I mean hedge funds. Who wanted to hedge in the greatest bull market of all time? So hedge funds, this has not been the place to be. So talk to us about the alternatives that we have to this US large cap tech oriented stock market. Talk to us about that. Opportunities there, or-

Jane Buchan:        I mean, you're exactly right Consuelo. I mean if it had been in 2008 and I'd had a perfect crystal ball, I would have been just long the S&P 500. I would have forgotten about overseas investing. I would have forgotten about bond markets. I would have forgotten about hedge funds. I frankly would have forgotten about private equity too. You forgot about a lot of it. Maybe not venture cap, that's a different story. But that's what it is. Now the problem is, I don't have my crystal ball, or my crystal ball is broken, or cloudy. And the problem is what we want to do is invest for the future. And while we've had some very big sharp downs, they've come back pretty quickly.

Jane Buchan:        Even look at March of last year. It was a terrible time, people were talking about, the market is down 10, 20%, but it came back very, very quickly. And if I told you on January 1st, we were going to be down the market 20% in a month, plus we were going to have one of the largest pandemics, probably at least in the US more destructive than the influenza of 1918, you would have thought I was nuts, saying the market is going to be up. You wouldn't believe it. And so, I think what you have to do is be prudently diversified. I think that's one of the big differences between gambling and investing, and you need to tie it to the fundamentals of the economy over the long term. It's very tempting, look at what happened with GameStop. It's very tempting to try to treat it like a casino. And I think that's gambling with your money, not investing over the long haul.

Consuelo Mack:        So that's another question, is that there are some very different things. I mean, well, they're not different. In any bull market of any length, there are always these bubbles that erupt and there are always new, innovative things that are happening. And some of them have legs, and some of them don't. So Andrea, when you're teaching finance at UCLA, what are you telling your students about some of the things that we're seeing in the markets today? And certainly GameStop and Robinhood, the very speculative trading, momentum driven, what does that signify to you in the markets?

Andrea Eisfeldt:        Yeah. It's an interesting question. I actually just listened to an interview of the founder of Robinhood, and how disruptive the whole GameStop episode was because of the collateral that intermediaries have to put up for those trades. I think that democratization of finance is going to be one of the most exciting trends that we see going forward. I think it's going to make the value of education in finance even more exciting and valuable. So I'm excited about those things. I mean, also, I'm a finance professor with a very capital markets focused, market efficiency focused education. Having worked in asset management, I still believe there can be alpha or excess returns in some parts of the market, and you can have mispricing. But I agree that a diversified portfolio that's focused on being tax efficient, and also has low costs is the way to go. One of the things I've been looking at a lot is the value of intangible assets. And I think that that's one thing that we saw may be going wrong with value investing over the last 20 years or so, is that we were ignoring those intangible assets, and-

Consuelo Mack:        And so, talk about intangible assets. You're talking about intellectual property? I mean for people who are not familiar with the balance sheet and the accounting side of things. What are you talking about that you think that we need to pay more attention to?

Andrea Eisfeldt:        Yeah. So a lot of times with value investing, you're looking at the market value relative to the book value, and accounting statements haven't changed much in hundreds of years. And companies look very different. So you invest in processes, logistics, corporate culture, advertising your brand value. You have some software that you maybe expensed some R&D, and you have some value from that. It may not be patented. So all of these things, organization capital, customer capital, brand capital, intellectual property capital, are not on the balance sheets of firms, and drive a lot of future firm cash flows. So I think what we're seeing is an attention to a different anchor for fundamental value.

Consuelo Mack:        And Katy, this is right up your alley because number one, you were at the CFA Institute for 19 years, and there as a leader, as the CEO of Research Affiliates, do you feel very strongly in corporate culture and in diversity and inclusion? So talk to us about the importance, you think, of these intangibles. First of all, how important are they to you?

Katy Sherrerd:        Yeah. Very important. Thank you, Consuelo. But let me go back just a step, and relate to a little bit to research in this area. I'm a big believer in collective intelligence and cognitive diversity. And the diversity can come in any different ways. But a group of us working together in a positive curious manner are going to get to better outcomes, better decisions. Miss some blind spots, miss some mistakes that we didn't see, because in our tunnel vision it wasn't evident. But what might not have been evident to me could have been evident to Andrea or Jane. And if we talk to each other, we miss some of those. And so-

Consuelo Mack:        Can you give us an example, Katy, in your experience of a situation where that has happened, that there would have been blind spots that you've all looked at each other and say, "Wow, I never thought of it that way."?

Katy Sherrerd:        Well, there are lots of conversations when you're just in an investment company. Many people are very attached to the research that they've done, and they don't see the potential pitfalls, or the assumptions that were made that could be flawed. And when you share your research, it's very common to share your research and get feedback from others. And they'll say, "Well, what about this?" Or, "That assumption may not be strong?" Or, "Maybe you're missing something? And what about the data?" And those conversations lead to refinements in the research, which for us lead to refinements in investment products. And it just benefits.

Katy Sherrerd:        And any one person gets in their own head, and it takes collaboration to bring out the best of people's ideas. Or if you can't solve a problem, because you keep going at it the same way, talking to somebody else. If I come to your Consuelo and say, "This is a really thorny problem, I can't figure it out." And you might just say, "Well, Katy, did you look left?" It's like, "No, I was going right?" If you just have that exchange it leads to richer decisions and better problems. And so for me, I think in companies where you have a very dominant leader who's not interested in other people's opinions, they're interested in being right and being proven right, you run the increased risk of making mistakes or missing some good opportunities.

Consuelo Mack:        Yeah. And Jane, number one, do you want to comment on what Katy just said? And I'm just thinking of the hedge fund industry, which is predominantly male. And as is just about in the money management business, it is predominantly male and you are one of the exceptions.

Jane Buchan:        Yeah. No. I mean what Katy says is really true, but I think it's easy to talk about it, but it's much harder to do in practice. Over my career I've evaluated thousands of asset managers, because we were a fund of funds, so we gave money to managers. And everyone liked to say they were competing against the market, but I can't tell you the number of firms that we found over the years, when you actually went in and it was more about people telling the founders that they were right, rather than bringing up differential opinions. And the fact of the matter is, it doesn't matter what you think inside your firm, because you're going to put your positions on, and the markets going to tell you whether they will pay off or not.

Jane Buchan:        So I always found the best firms were firms that really can have active dialogue. But on the other hand, from a managerial point, it's not like you just want random dialogue coming in, you want to talk about the data, you want to say, "Have you thought about this?" Or, "Let me back this up." And I think one of the mistakes I've seen with people is they like just raising issues as opposed to having work through them and say, "What about this different point?" And I think those are the best investing firms.

Consuelo Mack:        Yeah. I was going to say it's hard to analyze. From a CFA point of view or whatever, it's hard to analyze intangibles. So I allowed us to stray in this conversation a little bit into part two of this, of our panel discussion. So Andrea, I want to go back to a couple of points that we did discuss. And you wrote an article recently about inflation and the possible return of inflation. For the first time in over a decade, we're seeing prices perk up in certain areas. And you said it's can be a cause for celebration, whereas Wall Street is terrified of an inflation because it usually is not good for stock prices, because then the Fed raises interest rates, and then the economy slows down. So talk to me about inflation, how real you think the pick up is, and also why we should be celebrating it.

Andrea Eisfeldt:        Sure. Okay. So first of all, actually when I was answering one of the questions in the Q&A, thanks for asking that, about inflation, I just looked up the 10-year breakeven inflation rate. So that's a sum that tells you something about expectation of inflation over the next 10 years. And it's right around two and a half percent. And I think the Fed is probably happy about that, because the target is 2%. And you're talking over 10 years, and so they wanted to get a little bit of inflation, and they've been trying to get inflation since 2008, by the way, and we're never successful. So I think inflation is a sign of increased demand, of increased growth, and of people getting jobs and wages, having a little upward pressure. I think these are all things we should be excited about. And I also, on that note, there has been so much Fed watching. Fed watching has been around in asset management-

Consuelo Mack:        Forever.

Andrea Eisfeldt:        ... forever. But now we're all watching the Fed. Main Street is watching the Fed. And I think we want to watch fundamentals, we want to watch earnings. We don't want to rely on the Fed for high equity market valuations. We want those high equity market valuations to come from good cash flows. So yeah, I think we should celebrate a little bit of inflation.

Consuelo Mack:        And Jane, I want to ask you, in the alternative investment space, you mentioned earlier private equity, I mentioned the hedge funds. You mentioned SPAC, these special purpose acquisition companies, these blank check companies. Again, the money has been flowing into the SPACs, into initial public offerings. What does that tell you about the market and valuations in the market?

Jane Buchan:        I don't know about valuations. I'll defer that to Katy. But to me, it tells me people are people. You have a lot of institutional investors looking down the nose at retail investors regarding GameStop. I think institutional investors are doing the exact same thing regarding SPACs. So depends which foot you put the shoe on. But [crosstalk 00:32:23].

Consuelo Mack:        You mean they're speculating just like the rest of us. Right.

Jane Buchan:        Yeah. You're buying shares of something, you don't even know what it's going to do. I mean it's crazy. But on valuation, Katy is by far the expert on that.

Consuelo Mack:        Katy, are you the expert on this?

Katy Sherrerd:        I'm not an expert on that. But I would say for our audience, one of the salient points for me is, it's really dangerous to follow what's popular as an individual investor. More often than not, you'll lose. The research shows that individual investors that tend to chase performance and not even get the published time weighted return. So all of these conversations, if it's not based on good fundamentals, and if it's overpriced, the odds are that the investor that buys something they don't understand, or that is very, very expensive relative to the underlying cash flows that Andrea was talking about, are going to be hurt. And I think that's a core message that people should think about. If they don't understand it, or it's rather pricey, or they can't understand how they're making profit, then they probably shouldn't buy it.

Consuelo Mack:        Right. Except that's not fun, and that's really boring, Katy. I mean, I will say, there used to be something called fun money. And so, maybe no more than 1% of your portfolio, or whatever you can put into these very hot areas, and if you lose it, it doesn't really matter. I mean there's a place for this speculation, if you put it in this proper proportion.

Katy Sherrerd:        Just don't count on that money for your retirement, or your education, or something like that.

Consuelo Mack:        Right. So I want to talk a little bit about investment strategy. And Jane, I'm going to go back to you is, as far as everybody is saying we should have a diversified portfolio, we know that. So in the alternative investment space, what role do alternative investments have in our portfolio? And where would you put money today? What kinds of alternative investments?

Jane Buchan:        So that's a really good question. And I what I do is I like to hold up any alternative investment to the benchmark of the liquid markets. Most of the alternatives are illiquid. And even though hedge funds trade liquid securities, you can't go in and out every day so they're illiquid in my book. So you have to be, in my view, and the fees tend to be higher around alternative investment space as well. So you have to be able to do something that's different from the public market. So liquid market, I think, in order to be invested in an alternative. I think hedge funds, what I'm seeing a lot, big institutional investors, particularly big pension plans that have a lot of interest rate risk, when they look at where the bond market is today, and the risks that they have to take to buy debt to yield four or 5%, many of them think that investing in hedge funds, which will give them a similar return payoff is a much safer thing to do.

Jane Buchan:        So we're seeing a lot of people, a lot of big investors have a lot of interest rate risk and worry about rates, and have to have... They can't just have equity investments. Thinking about substituting a hedge fund. I think there's a massive debate going on right now in private equity, [inaudible 00:35:59] really blunt. Over the years when I was in this industry, private equity didn't really exist. But when it started to come around, you talked about getting returns that were four to six percentage points, four to 600 basis points higher than public markets.

Jane Buchan:        I actually got off an investment committee two years ago for a foundation, because one of the things we wanted to do was put a lot of money in private equity, but they expected the return to be the same as the S&P 500. And so I'm like, "Why are you doing this? This doesn't make a lot of sense." So I think, understanding that. Venture capital, again, 15 years ago... This is the advantage of having a lot of gray hair. 15 years ago, I couldn't get anyone to look at venture capital. If you looked at the past historic returns 15 years ago, they were really, really lousy. Who did venture capital? What a stupid idea. It had all the returns from the internet bubble. Remember, pets.com?

Consuelo Mack:        Right. Investing in these little startup companies. That's what venture capitalists do.

Jane Buchan:        It was all a fraud.

Consuelo Mack:        Used to do. Right.

Jane Buchan:        Now, the biggest determinant amongst some of the top leading endowments is how much you have in venture capital, and this is the hot place to be. And then, we're seeing the emergence of private credit which is often direct lending to entities who want to find sources of capital, but don't want to go through the public markets because of the cost, and the size, and often are small borrowers. Are only going to borrow... Believe it or not 25 million is a small amount to borrow. So I think I've always been very big proponent of understanding and benchmarking it to some extent against the public markets. I don't think as many people do that, instead they tend to say, "My hedge fund is better than my other hedge fund." Well, why don't you look at a junk bond, they've similar return patterns. You should only be investing in hedge funds, in my view, if you think they're going to do better than junk bonds. What about private equity? Again, they should be doing better than the public markets.

Consuelo Mack:        Mm-hmm (affirmative). Because you're paying more. Again, you're paying a lot more for these things. Yeah.

Jane Buchan:        Exactly. And a lot of venture capitals and tech these days. So you should compare it to tech, and you should decide. And so, those are important things for me, and I think about it as a substitution exercise, much more than having a capital market outlook that's different than the public market.

Consuelo Mack:        So Andrea, as far as investment strategy, given where we are in the equity markets and the fixed income markets, and we didn't really talk about the fixed income markets. But they've been in a 40-year bull market as interest rates have declined since early 1980s. So what is your take on investment strategy in the late stages of it? Certainly the fixed income market, and possibly the late stages of the bull market, even though there are people out there who would definitely disagree with me.

Andrea Eisfeldt:        Yeah. I think that's a really interesting question, and a lot of people have been asking themselves whether a 60/40 mix is always the right thing to do, or whether you should be thinking more about taking more risk when volatility is lower, and maybe less risk when volatility is high. And I don't want to advocate market timing by any means. But I think rethinking that equity bond mix is not a bad idea given where rates are, especially rethinking the long end of the bond maturity structure because you're taking on a lot more interest rate risk, and you're not getting that much more in terms of yield or expected returns. In terms of, equities, alternatives, all of that I remember, and this might have been the last time that Jane and I were together in a room in person, a big, big room. It was post crisis and people were calling the US the cleanest pig. The [crosstalk 00:40:01].

Consuelo Mack:        Yes. Right.

Andrea Eisfeldt:        Everywhere is bad, but maybe the US is not as bad as everywhere else. I think that people are not saying that this time. And that wasn't a crystal ball, because that was already probably six years post crisis, so people were just hindsight quarterbacking. But I do think, maybe we're going to see some... Like the academics would tell you, we have a home bias, we should be more diversified, internationally. And I'm hoping that this message will be validified going forward. We won't just see the US S&P 500 in hindsight looking like the only game in town.

Andrea Eisfeldt:        Last thing I just want to say on this is, just to echo everything that everyone has said, when you decide where to put your money, think about what that firm can do with your money. You are handing money for investment to a firm, what are they going to do with that? Are they going to put it into cash? Are they going to buy another firm? Or are they going to start some cool new thing that's going to produce cash flows down the road? So put yourself in the hands of, who do you want to be using your money?

Consuelo Mack:        Critical question. And the last question of this segment is going to be for Katy, and just all of the changes that you've talked about as far as the diversification. It's something that Research Affiliates has been talking about for a long time. And yes, Katy, Research Affiliates was early in going with these laggards. But I want to bring up one more topic, and that is ESG. So environmental, social, governance. Talk about a big investment trend. And so, if we were to look at the products, where there's going to be cash flow generated, is ESG one of them? And is Research Affiliates creating new products in that area?

Katy Sherrerd:        Yeah. Absolutely. But I want to make one comment on the back of Andrea's, because I totally agree that static 60/40, or static glide path are bad because you've got to pay attention to valuations, and you've got to pay some attention to the forward potential. So anything static is problematic in my mind. So thank you for bringing that up, Andrea. On ESG, ESG is a ticklish subject in the investment space, a lot of people think if you narrow the universe, then you're going to get a sub optimal view. I would say if you've got good financial engineers like UCLA produces, we've got a number of them. You can adapt to what you're taking out. So if you take out quality companies, and let's say the sin stocks, the tobacco and alcohol-

Consuelo Mack:        Right. Defense.

Katy Sherrerd:        ... because you have a ESG, or a social responsibility that doesn't want to own those sectors, you can replace the missing quality with other. You can re-engineer your portfolio and replace that factor, if you will. So we're a big believer that you can create a good investment product and reflect at investor's personal beliefs on ESG, or diversity, or other factors. One of the things we're working on quite a bit now, and it's leading in Europe, not surprising, are a lot of the big asset owners there want to reduce their carbon footprint. So we have a number of products that are rolling out in Europe, which are glide paths to lower carbon footprints, essentially, in your, we call them climate transition portfolios. But they have the same underlying investment characteristics of one that doesn't reduce the carbon footprint, but it will allow, particularly the public, and some of the individual investors who really want lower carbon footprint in their investment vehicles an opportunity to have a good investment product, and a lower carbon footprint.

Consuelo Mack:        Interesting. And these are indexes?

Katy Sherrerd:        Yep.

Consuelo Mack:        Yep. That is definitely a trend in the future. And we can talk more about this. So before we switch to how you got where you are. Jane, do you want to comment on, are you seeing trends in ESG investing in the alternative space?

Jane Buchan:        Not really.

Consuelo Mack:        Not really.

Jane Buchan:        I'm seeing a lot of talk about it. But when people go to alternatives, they tend to go to alternatives for the return. And as Katy said, over the past few years you've been able to get a lot of return out of tech, which our most ESG metrics scores really well. But I know a lot of people right now that are looking a lot of the oil and gas infrastructure, which seems to be very cheap, sort of a value play, and obviously that will be out. And so, not much on the alternative space.

Consuelo Mack:        And Andrea, what an impact do you think that this trend, the flow of funds to ESG type of products, what impact do you think it's going to have on the capital markets, and different sectors, individual companies? Is it going to be large impact?

Andrea Eisfeldt:        Well, it's certainly going to be large from a marketing perspective.

Consuelo Mack:        Right. That's true.

Andrea Eisfeldt:        I mean a lot of ESG is about marketing. And when you think about what you want to do with ESG investing, you're trying to change the cost of capital for firms' investment projects, and make it cheaper to invest green, and make it more expensive to invest brown. There are probably better ways to do that, and I think probably Europe is a little ahead of us on that side. Because we can use taxes and subsidies to encourage green investment, and discourage brown investments. It could be cheaper for us to pay those taxes than to spend a lot on marketing ESG funds, and try to get people to pay more, and earn lower returns for green technology companies.

Consuelo Mack:        I hope that's a conversation that's happening, but not sure it is among investment firms. But you can tell us at some point if it is. Careers. We're looking at you three, and just thinking how influential you all are, and what terrific careers you have, and wondering how you got there. So Jane, I'm going to start with you. And let's just start, when you were, I don't know, in high school when you started thinking about finance, and your education. So talk to us about how you got started.

Jane Buchan:        Okay. Well, I was pretty early in the computer science space. And I was more interested in math and computers. And then when I was in college, I ended up doing some work on, it's an early event study. It's called an early event. So I ended up doing that as my senior project. But it was more about writing the algorithms, correcting the data, going through the research process, not so finance oriented. And actually my advisor wanted to know what I was going to do, and I got up and talked about the evils of investment banking. I lectured very prominent professor about it. He was very nice. And I think just saw a 22-year-old or 21-year-old young woman and he laughed to himself. And I do remember him saying very politely, "Well, Jane, there are a few other jobs in finance." So he actually introduced me to a fellow who had been at Wharton for a while. Who had gone to the real... To an asset management firm, and I-

Consuelo Mack:        The real world, you almost said, right?

Jane Buchan:        Yeah, the real world. I worked with him. And even though I had a title and went to an office and everything, effectively, I was more like his graduate student in terms of work. And I enjoyed modeling, I enjoyed figuring out puzzles. I was never a kid who followed the stock market. I wasn't one of those kids who in their high school years were reading annual reports. To me, it was more like, "How do I model this? How do I get a better hit ratio?" It was a puzzle, a competitive puzzle to solve? And that's what got me started in this space, rather than an intense love of what I call business or economics. It was just a puzzle.

Consuelo Mack:        Right. And the PhD route. So you were really committed, essentially-

Jane Buchan:        Yes.

Consuelo Mack:        ... to this.

Jane Buchan:        So I bounced around a little bit. And after a few years of work experience... But honestly, when you go back to school, my strong view is you should only go get a PhD if you ever want to be a professor. There's plenty of good master's programs and other ways. And I've seen really good work. In fact, even if you pick up the Journal of Finance there are often coauthors on papers who don't have PhDs. So you can do good work. It's a huge investment. My parents who had been professors of medicine, so I knew I didn't want to do that. But I was familiar with the academic lifestyle, and I thought that might be a very interesting thing. And as I said, I was very interested in building models and thinking about data. And so it was the right thing for me.

Jane Buchan:        But as you can say, I lasted three years in it, and I was consulting, and then it was like, "Okay. Wait a second, which job do I really want to do?" And so, I had to make a choice. And I decided I'd rather work in the real world, because the timeframe in academia is really long. You write a paper, which is great, and I love doing the research. But then, it doesn't see the light of day, particularly in the old days when you actually had to read these journals. It doesn't see the light of day for two to three years. Whereas if you go and use your research in the markets, you'll know in a couple of months, whether it's working or not. So it was much more gratifying for me.

Consuelo Mack:        Okay, Andrea, that's your opening. You have chosen a life in academia, and you've been teaching graduate students and management for 20 years or something. And you've done both-

Andrea Eisfeldt:        My 21st year, I guess.

Consuelo Mack:        Yeah. So talk to us about number one, your education. And did you know from the get go that you were interested in finance, and you were interested in teaching. Talk to us about the early years.

Andrea Eisfeldt:        Sounds good. Yeah. Despite my black background, I am in the real world here in academia. But I do actually like to go and practice finance too, as we talked about before. And hedge fund world, or asset management world, FinTech advisors now. But I grew up with parents that wanted me to make a living. I had to be practical, we were clipping coupons and drinking powdered milk, and leaving our diesel car running in the winters. And it was gas crisis in late '70s, and all that. So I thought I was going to go to college and be an accountant. And I went to University of Illinois, undergrad as a commerce major. And I found economics as a commerce major. And I was so intrigued by the way economics could put a structure on really important questions. And I actually did know then that I wanted to be what I thought of as an eternal student, which is, I think what it means to be a professor. You're always asking new questions. You teach yourself along with teaching the world and teaching students.

Andrea Eisfeldt:        So yep, went to the University of Chicago, got my PhD in economics. And finance is a very exciting, and macroeconomics, which are my two fields are very exciting at the University of Chicago. A lot of Nobel Prize winners in those fields, and just great ideas and great seminars, great discussions, going back to Katy, saying the best ideas come from... They're not individually generated, this comes from standing on the shoulders of giants. So grad school was a steep learning curve, a lot of fun. When I graduated, though I was interested in asset management, I interviewed for some internships in investment banks at the time. This was the late '90s.

Andrea Eisfeldt:        But I thought, well, I'll try academia, and if it doesn't work out, then it's easier to go back into asset management than it is to go from asset management into academia. I went to Kellogg and I had a really good time for 10 years. And then, visited UCLA, and that was super fun, and I've been here for 11 years research and teaching. So that's the educational journey. And I teach MBA students, MFE students, PhD students, and I have to say, I love that part of my job. I looked at the participant list, when we were first starting, and this was fantastic. So please, anyone who's thinking about an MBA apply to Anderson, I usually look at my class list, and as you know it's 70% male and 30% female in the whole of Anderson, and then you go to a finance class, and it's going to be lower fraction of women. So all of you women thinking about an MBA, we would love to see you in finance, in particular.

Consuelo Mack:        Here, here. Katy, your background. And again, another PhD, but you had to start early and at a lower level to get there. So talk to us about your education, and if you knew from the get go, where you'd end up.

Katy Sherrerd:        I did not know. At my age, I wasn't raised to go into the finance profession. And so, I went to university as a history major, I love history. But I took economics classes, and I took computer programming, and I'm always been good with math. And I was like, "I could read history anywhere, but this other stuffs is really interesting." So I went to the business school, did a double major finance in and the management information systems at the time. Went out to work and realized that I was struggling a little bit to get respect and attention. I went to corporate finance first, and then insurance industry, and ended up going back to get my degrees mostly for credentialing and more qualifications.

Katy Sherrerd:        I love learning. I've always loved learning and love University. Ended up marrying a university professor, and so I could see firsthand the university professor side of things. But I realized enough about myself that I did not want to go the professor route when I graduated. And I found a career path where I can continue to learn, continue to provide education, and promote education and research through CFA Institute for years. Got a lot of global experience there. Was active with Financial Analysts Journal and the Research Foundation. So I kept an interest there. And then, Research Affiliates is just a great place for people that love to learn and apply that learning in a practical way. So the credentialing, I love learning, and I use the graduate degrees really to open doors and gain some respect in a very male dominated. The quant finance part of our industry is still pretty male dominated. [crosstalk 00:56:14].

Consuelo Mack:        Let me ask you about something that you said earlier, and that was that you had a hard time getting respect from... So therefore you went to get more credentials. So I want to pick up with that, is that because you are a woman, or what were you lacking that you were treated with less respect than you shouldn't have been given your skills?

Katy Sherrerd:        Well, given the audience and the purpose of this program, I would say, when I was doing things in the '70s and '80s, I have plenty of examples where being a woman was not an asset, it was a detriment. And I wasn't listened to, wasn't respected, walked all over, and so forth. But as soon as I was Dr. Sherrerd, it was a little bit harder for them to dismiss me as a young woman that didn't know what she was talking about. Now, I think things have changed, and you mentioned this a little bit earlier, Consuelo. I think it's changed a lot, but it is still a challenge, I suspect, to be heard in our industry.

Consuelo Mack:        Yeah. And Jane, you mentioned earlier too that you don't necessarily need a PhD, that if you have an MBA or whatever... Did I hear you correctly? So what's your experience, and what would your advice be? Did you have a hard time getting respect? You tell me, and then how did you overcome it or whatever?

Jane Buchan:        Yeah. I mean the world moves on, and there's still times. I mean even with a PhD, I can remember I was in an interview once with a guy, and they looked at... It was with a journalist, and she said, "Well, obviously, you're very quantitative, and what are you going to bring to the table." And the guy was a marketing MBA type.

Consuelo Mack:        The worst.

Jane Buchan:        It's like, "Okay. Whatever. I'm the one here who can program, I am the one here who can build the models." So I think the world abounds with stereotypes, our brains use shortcuts, rightly or wrongly, because there's just so much data. And I think it's really important to try to catch ourselves when we're doing that. But the nice thing about doing work is, work is open to anybody. And there's even some really great... Like Rob Arnott he's a genius, and he's done a lot of really great work. He doesn't have a PhD. I was joking with somebody-

Consuelo Mack:        But he is really, really, really smart.

Jane Buchan:        I think [crosstalk 00:58:51].

Katy Sherrerd:        And no graduate degrees.

Jane Buchan:        Exactly.

Consuelo Mack:        Yeah.

Jane Buchan:        And I definitely think that, that being said, there is the pragmatic thing. And I think when I was starting I'm an age between Katy and Andrea, more towards Katy's end. And when I was, women were just starting professionally in the industry. Remember, those floppy bow ties and those Brooks Brothers suits?

Consuelo Mack:        Yes. Maybe-

Jane Buchan:        Because you're a woman, you couldn't even wear pants. My first job you that was not even allowed. But I do think my boss, who was a really nice academic, were given the reward. Obviously, I made this mistake, and I didn't realize it. But he said end of my first or second day at work, "Don't ever offer to get anybody coffee, they will think you're an administrative assistant." And he said, "I want you to go into every room, and where you see the coffee pot, and you sit on the other end, and you just don't want to be helpful." I'm a young kid, 22 years old, 21 years old, just graduated from college, wanting to be helpful, and I was falling into a stereotype and he didn't want to get me stereotyped like that.

Consuelo Mack:        Wow. Great advice.

Jane Buchan:        And I think that's the really important thing, that we can all help each other is, speak up if you see someone say something or stereotyping the wrong way. But we're getting better, but we're still moving to a perfect society. We're not there yet, and we just want to keep getting better.

Consuelo Mack:        Yep. Andrea, did you have any similar lack of respect incidents? And if you did, how did you handle them? Or maybe you didn't.

Andrea Eisfeldt:        No. It's a good question. I think academia is a pretty small world. And so, it's easy, stereotypes happen when you have to use an expectation about what someone's going to be like to think about them. And in academia, it's pretty quickly everyone knows who you are, and so forgets. They know you're a woman, but they forget that, and they think that's Andrea Eisfeldt, and she has been working on market liquidity, or whatever it is. Where I went to school, there were, I think, maybe one or none female finance faculty members during the time of my PhD. There was one really amazing female professor in macroeconomics, Nancy Stokey. So having one role model, I thought was important.

Andrea Eisfeldt:        When I moved into the asset management world, and this was 2015, so I was already 40 years old, over 40, nobody knew who I was anymore. So it might have been internal, because I had to go in and just be me, rather than Andrea Eisfeldt with 16 years of experience and publications under her belt. But I definitely felt that I didn't have the same respect that I had in my field where everyone knew who I was. And it became important where you sit at the table, exactly as Jane said. And at what point do you speak. And those are things that, I think, people should be a little bit aware of just because people don't have full control over their brains. So being a little bit aware of those subtle cues, and things you can do to make sure that everybody knows exactly what you're capable of are probably worth investing a little bit in.

Consuelo Mack:        And again, I mean the three of you do have PhDs, you've gone that route, you're highly credentialed. I guess, for the rest of us, and certainly in the audience, if they're MBA students. I mean how important are those higher credentials at this point, especially to tear down that pink wall? Do really need to credential up?

Katy Sherrerd:        I don't think it all has to be all with PhDs. Jane has already commented on that. I think there are other ways you can credential and learn. But you cannot stop learning. The big mistake is just to get in a particular position and stop because the world keeps going. And so, whether the credential is an MBA, or going all the way to the PhD, if you really like the research and might want to do an academic stint, or going the professional designation. The CFA approach for people while they're working or other options. But you have to keep learning. And commitment to learning, I think, is essential, and showing that you're staying current.

Consuelo Mack:        Go ahead, Jane.

Jane Buchan:        Can I jump in here for one quick second? So maybe this is helpful. I also at one point in my life was a pretty competitive athlete. And one of the interesting things that I learned, because I had to lift weights. To compete at the level that I competed at, that was part of things. In my day and age girls or women didn't lift weights, that was before Greece, before any of these things. What was interesting is that women tended to be better weightlifters. And the reason was, is we walked into the weight room, we said, "What is this?" And we asked questions. And so, we learned, and we learned how to use proper form. Whereas guys had this peer pressure on them, they walk into the weight room, well, you're a guy, you should know how to do this, naturally. So they tended to the half poor form.

Jane Buchan:        I think the same thing you can do with quantitative stuff. And if there's one plea I would make to people, rather than going and getting degrees is to start understanding more quantitative information. You don't have to understand it as super high level, but if you get the sense of it. And ask questions. So for example, my niece has become a really good statistics person. She cried all the way through statistics. I took her to Nordstrom, to the shoe department. How to find the average shoe price. The price that where 85% of the shoes are, and 15% of the shoes. And for those you who are statistically minded, you recognize that was probably a normal distribution, with one standard deviation.

Jane Buchan:        And so you can have wonderful conversations and understand skewness and kurtosis better than most people, because it's all in her brain in terms of shoes. And I think the more that you take just one or two concepts, and you understand them, and you ask questions, and you keep beating your head against the wall, that really goes to waste, because the reality is women do get stereotype that they're weak in this space. And I think just being on firm ground in a couple of places is what a wonderful place to be.

Consuelo Mack:        What a great teaching moment, quite honestly. Let me ask you three, again, leaders in your fields. Leadership, post pandemic. I don't know if the post pandemic matters. But what are the new leadership qualities that you think we're going to see in future leaders, that we wouldn't have seen, let's say, 10 years ago?

Katy Sherrerd:        Well, I could start with that. I think one of the new qualities which ought to be a natural for most of the women leaders is more empathy for the situation of the various team members, and what they have to deal with on a day-to-day basis. Particularly, whether it's family, or whether it's a family in their household, or their extended family far away. And some of the circumstances that they deal with, that people in the past maybe didn't pay much attention to. And I think there'll be more requests for remote working, in which case the management and the employees will have to adapt to how do you keep up the communication, collaboration, being able to assess performance and so forth in a different type of world.

Consuelo Mack:        And you certainly as the CEO of Research Affiliates, you had to deal with a lot of different situations with various employees. And so, the empathy and you act on that empathy. Actually, there's no set rule now, you're much more flexible, or maybe you always were as a leader.

Katy Sherrerd:        Well, I think the empathy with some of the circumstances that people had, we have a lot of people that were not born in the United States and their parents are still around the world that they couldn't see, and it creates different stresses and so forth. So there's some big able to empathize with what they're going through. But then, in managing more willingness to let people work from home more, as they're less... For example, in our firm, very cautious about leaving their children with anybody else right now. So that means one adult in the family, and you have to balance it. So it's not always the woman in a particular household is charged with being home if the children aren't in school, or going to some other care facility. So we're all having to adapt with those types of things.

Consuelo Mack:        Yep. Jane, leadership qualities post pandemic.

Jane Buchan:        I think the real issue for women to be careful about, and I felt very strongly is, it's hard to do everything. And I grew up in the generation where it was... '70s, the end of the '70s when it was women's lib and we can do everything. Bring home the bacon, fry it up in the pan, and do everything. And you really can't. And I know in my case, I basically have had to have a house husband, because there's no way we could have run our family without it. With the level I was working, particularly I was running PAAMCO, a global firm. And I think what's hard is particularly when you're starting out and you're more of a two income family, is women tend to rightly or wrongly get stuck a lot with the child care issue, and that's a big issue.

Consuelo Mack:        Andrea.

Andrea Eisfeldt:        Yeah. I always think it's funny when you meet women at the top, how many have a really great support system. I've two kids and my husband stayed at home and is the main kid caregiver. So a good partner is really important. In terms of leadership, I was thinking about the new MBA students, and the new MFE students, and people who have started jobs in the last year and a half. And I think an important part of management is going to be to make sure that those people, and the new hires coming after that, don't fall through the cracks because this was a really tough time to get started.

Andrea Eisfeldt:        And that was the key thing for me in listening to Katy and Jane about career advice is, one of the things that I've seen with women and in particular seeing MBAs, and people with graduate degrees is just perseverance. I mean careers like the good ones are going to go up, and almost all careers actually go up on average. But they don't always go up. Sometimes they go down, sometimes they plateau for a long time. And just keeping going is a really important part. And so yeah, a little bit of leadership and a little bit of advice.

Consuelo Mack:        Yeah. That's really good advice. Go ahead, Katy.

Katy Sherrerd:        And to just add to Andrea's point. The perseverance, I think there should also be introspection. If you're on a plateau or something is not working, is it what you really want to do? Because to continue to succeed, and to continue to be energized, and learn, and so forth you have to be doing what you like doing. And sometimes we get in ruts and we need to change.

Consuelo Mack:        So I'm going to have to change this conversation because there have been some questions coming in that Lori Santikian has been tracking for us. And so, Lori, do you have a couple of questions you want to ask the panels from our audience?

Lori Santikian:        Absolutely. And for someone to thank you, Consuelo, for your terrific, terrific conversation with the panelists. So we'll just...

Consuelo Mack:        No. So much fun for me.

Lori Santikian:        ... follow a round of applause.

Consuelo Mack:        Thank you, panelists. Yeah.

Lori Santikian:        It's hard to follow an expert, so I'm just basically facilitating questions that came in from the audience. And there are a couple of common themes. So switching back to some of the earlier discussions about markets, we didn't touch on real estate. And that does seem to be a topic that is on the minds of many of our participants. How do you think about the real estate market right now from the perspective of say, residential homeowners and thinking about where prices will go in the near future, as well as thinking about real estate as maybe an income producing investment at this stage?

Andrea Eisfeldt:        I can maybe take that one to start. I've done some research on the returns to single family rentals, and that included looking at house prices and rental yields. And I've been talking to some asset managers that buy to rent space lately. We have a couple of things. I think we're still going to have pretty low interest rates for a while, and real estate benefits from lower interest rates. It also tends to be an inflation hedge, so I think looking at it from the perspective of the bond markets, it still looks pretty okay. Just in terms of the COVID and post COVID, we saw really interesting things like people moving to the suburbs, people wanting more space, different trends from the move to the city things that we had seen previously.

Andrea Eisfeldt:        And depending on how we look, when we all go back to work part time, full time. I mean people have been at home paying their own IT, paying for their own office space. Are firms going to want to pay for expensive downtown Manhattan real estate, or will people still be doing their finance jobs from their homes in California, or New Jersey, or Connecticut? So just a couple of thoughts on that market going... I don't have any strong concerns. I think we're going to see a mix of what we had before people going back to work in the cities maybe, but people also being able to work from home and wanting that more space. So maybe we'll have a little less of the dispersion in really high prices. People have a little more flexibility to do the value investing because they don't need to be in downtown San Francisco or Manhattan.

Consuelo Mack:        Anyone else. It's real estate, residential real estate. It is a really hot, hot market right now. I can't remember what the figures are. But basically, the demand is far outstripping supply. So unless you absolutely have to, I would say, it's probably not a great time to buy a single family home, especially if there are bidding wars going on. That would be my two cents.

Lori Santikian:        And you're having to waive all of your protections as a buyer. Waive all contingencies. Another question, a slightly more specific about CLOs. So collateralized loan obligations. Do you think CLOs will be facing a liquidity crunch coming up?

Consuelo Mack:        Jane, do you want to take that, or?

Jane Buchan:        Yeah. Having done a fair amount on CLOs, it's been a couple of years now. But the CLOs got into trouble as everybody knows in 2008. I think there are better structured and they've made some changes into it. Clearly the issue is with cash flow CLOs, you can have the issues that some of the paper will fail. And at that point I think you want to be very careful where you are in the capital structure. When people talk about CLOs, generally, those AAA and AA parts are bought by big life insurers, and other insurance companies, and other big institutional investors. So when you normally talk about, you're talking about the stub piece, the mezzanine piece, or the equity piece. And you get whatever the end grades are of it. So who knows? I do think they benefit greatly because of the low rates. I think people tend to think about credit, whereas a lot of them, if rates go up, that could be more problematic because of the way they're structured.

Lori Santikian:        So a more career oriented question. As MBA students or other master's students, or even college students start to graduate and go into these jobs, as Andrea said, it's a very difficult time to be starting out. But more generally, what should students be looking for in companies? What types of cultures? And what signals are there, credible signals in how companies are organized and what activities they have, and way that they've structured things that is supportive of women advancing? What should they be looking for in a company to decide whether or not to invest the early stage of their career development there?

Consuelo Mack:        Can I just say that Katy should take that right off the bat because she wouldn't say this, but I would say it. I think she's created a terrific culture at Research Affiliates, and she's rightly proud of it. So Katy, please answer that.

Katy Sherrerd:        Oh, thank you. You're too kind. I think the one of the things that I learned years ago from somebody I respect is that you got to go further than the words, almost everybody's going to say they have a great culture, and almost everybody's going to say that they're going to nurture and develop everybody they hire. So you need to look and see. If you look at the senior team, is it diverse? Are there mentoring programs? Do people respect the other people's point of view. And really it's not just what people say, but also it's really important to do two things. One is look and see how diverse the senior team is. And second, when you're interviewing, ask questions about whether your voice is being heard, whether or not the meetings are actually productive and collaborative, or whether it's, basically, somebody's talking to you. So there are lots of things you can look at to try to assess whether or not it's a culture where your voice will be respected, and your hard work will be respected.

Consuelo Mack:        Anyone else want to add on that?

Katy Sherrerd:        That's my short answer. I could talk all night, Consuelo, but that's my short answer.

Consuelo Mack:        No. Right. But if you're just starting out, or you're a newly minted MBA, I'm just thinking, sometimes there might be a company that you really want to work for, or an industry and that's the opening that you've got. So as wonderful as that should be, but maybe can you see yourself as an agent of change, and take a job that looks really attractive, even if management isn't really diverse, or they're not as open about or flexible of certain things? What do you think?

Katy Sherrerd:        I think the answer is, yes. I mean, I did it.

Consuelo Mack:        I mean, you did it. I sure Andrea did it.

Katy Sherrerd:        Other people can do it. But it's hard.

Consuelo Mack:        Yeah. The did it. Yeah.

Katy Sherrerd:        I think the people that have a lot of confidence, and can carry a lot on their shoulders, absolutely. You have to pick your battles, and you're probably going to get bruised a little bit along the way, and you might have to change companies before you get there. But absolutely, you could do it. But the average person, you have to understand that that's the hard way.

Jane Buchan:        And I think the other thing that's really important right now, which I just want to underscore what Katy just said that is super important, is talk to people, particularly around your levels to how they're treated. Because you'll get a really good sense. And I do know several large firms that have a very, what I call, female unfriendly culture, who are actually trying super hard to change right now, and doing a lot of really positive things. And I know some firms that are more than the middle space. They're not great cultures, but they're not negative. And if I were a young person, I would probably want to go to the ones who want to change because you do change over time. So you want to talk to people who are in the early years right there. What's going on. How does it really work? Do you feel yourself getting heard? That's really important. And I think it's very hard as a new person, particularly in a big firm to change the culture.

Andrea Eisfeldt:        Yeah. I agree with all of those things. I was going to say too, sometimes it's good to not follow people's advice, and do the thing that people are telling you, "No one can do that." Because if you think you're that type of person, then you should definitely go the harder road, because you're paving that road for other people. That can certainly be good too.

Katy Sherrerd:        I agree, Andrea. I would just say that in the early years, sometimes that cuts off some of your opportunities, but as you get into positions where you are respected then you can make more of a difference, and that can be quite rewarding.

Andrea Eisfeldt:        Yeah. I think it's such an interesting trade off, because I see too broadly, two career paths. You start at a big flagship firm that's probably not as easy of an environment if they haven't institutionalized diversity, or you start at a smaller place where because it's a small numbers thing, there happen to be more women in leadership. But then you're starting not at a flagship, and so you're going the smaller firm route where it's often easy to start the flagship, and then go wherever you want from there. It is an interesting question, and it's definitely a matching problem of you, with the type of culture that you're going to thrive in. Is it like the super competitive weightlifting culture, and the one where they say, "Girls can't do math."? And you're like, "Heck, yeah, I can, and I can code too." Or is it going to be one where you really need that friend to go to lunch with, and you really need a female person in the level above you?

Lori Santikian:        Well, so along those lines, and maybe taking it a step beyond, so as Jane also mentioned, there is a lot of progress, and it's not quite as hard as it was when Katy was first starting out. But it is still really hard to really go that last mile and break that glass ceiling, which all of you have done. Could you help everybody in the audience... So we have students, we also have mid-career professionals, a wide range of women and men in the audience thinking about these things, so can you help the women in the audience think about how to set up a strategy to help really go that last mile and break beyond?

Katy Sherrerd:        I could start. Don't ever give up. I mean if you've set that as a goal, study the skills that you need to accomplish your goal. And one piece of advice I would have, a lot of people get stuck by being an expert in a very, very narrow slice of the company. And it's very difficult to go from an expert in a narrow slice to managing the total. And so, if somebody has aspirations for senior leadership, they'll have to plan through their career to get exposure and experience to various parts of the company so that they can look at the company as a whole, rather than the narrow slice that they might be an expert in. And I think that for me, looking at other people, a lot of very bright contributors get stuck because they can't see the entirety of the firm. They don't have the vision, or they don't have the background and experience to be able to manage the total piece.

Consuelo Mack:        Jane or Andrea, do you want to comment?

Jane Buchan:        I think just pulling on two threads. I really agree with what Katy said, but also pulling on what Andrea said is that, depending on where you are in your career, early on there's more stereotyping. Which firm did you start at? Where did you get your degrees? Can you program? Whatever. They're going to go through all those issues. As you get to be more and more senior and in the mid-career, and my strong view of watching this industry over the long haul, it's by your early 40s, people are... They're narrowing what you call the gauntlet for very senior management, not always, but that's the realistic thing from where I'm sitting. And so, I think what's important is if you're in your 30s or your late 20s, is starting to do what Andrea said.

Jane Buchan:        Academics is way smaller, and everybody knows who everybody is within reason, and this is a much bigger issue out here out of the academic world. But start writing a couple of pieces and put your name on it. Go to conferences, participate in panels, do things where... And I think one of the problems is, and I think this is where as women we tend to do weaker thing is, I can't tell you the number of men I've met who basically show up to panels. I've done a lot these discussions over the years. Okay. What's the subject? What am I doing, again? You're like, "How much prep did you do?" And then, you sit there with your four pages of notes, and your thoughts all well-organized. And I think when you're given that opportunity, you need to grab it. And you can't wait for the perfect opportunity because those opportunities, particularly when you're making that transition to be more of a name.

Jane Buchan:        So you become less the person at Research Affiliates, you become Katy at Research Affiliates. And then finally, Katy Sherrerd, who happens to work at Research Affiliates. I mean that's what happens, and as you manage your own brand there, when you're given those opportunities you really have to take them. Because if your circle of acquaintances externally to the firm is really small by the time you're 40, you're going to have a very hard time in my view being a business generator, a revenue generator, whether it's through your investment ideas. It doesn't mean marketing, but just your investment ideas where people want to trust you. And if you don't have the trust of people, it's really hard. I mean that's all what being CEO is, is having the trust of everybody who is working for you that you can lead the company.

Andrea Eisfeldt:        I love that idea of saying you have your own brand. I mean don't be afraid to promote everything good that happens to you in every environment that you can, and make yourself necessary. And I like that idea of everyone knows what you're about.

Jane Buchan:        And there's another great... Like one of my friends she wanted to expand things, and so she just started volunteering on investment committees for small nonprofits. The asset amounts were super small, like $20 million. But that's great, because she got to meet a lot of people and met the founder of TCW, and met the founder of a lot of these places. So start building that network.

Andrea Eisfeldt:        The other thing I love that you said is, don't assume that you can't do something. So don't be afraid to come to the panel without knowing exactly what you're going to say, don't be afraid to go on that investment committee. Believe that you will be able to do it. Everyone else is also learning by doing a little bit, so don't be afraid to say no, you're not ready for that. I love that idea of grabbing the opportunities and assuming you're going to do it, and you're going to do it well.

Angela Dailey:        No. This is what women don't tend to do, promote themselves. So this is a good ending, a good thought to leave us all with. So I want to thank all of our panelists. It was just a fascinating discussion. We could go on for hours. And we'll have to have part two. And I'll also want to thank all of our participants, and of course, UCLA, the Fink Center, the Anderson School. And I forgot to mention, one of our community sponsors, the CFA of Orange County, are always very supportive to us. So I just can't say enough. It was such wonderful session. So thank all of you. And now, anyone interested in our networking, you'll find that in the chat box. There's a link. We can go there. I don't know. Lori, any closing comments from you? Was just fabulous session. Thank you. Consuelo too, and-

Consuelo Mack:        No. Thank you all. It was a great session. So thank you, panelists. It was terrific. And great questions from Lori as well.

Lori Santikian:        Well, thank you to everybody. And we hope to welcome you to UCLA in person in the near future.

Consuelo Mack:        Yes. [crosstalk 01:28:40] in the near future.

Lori Santikian:        Yes. Thank you. Yes. [crosstalk 01:28:43].

Consuelo Mack:        Thank so much.

Lori Santikian:        Thank you.

Consuelo Mack:        It was really, really wonderful.

Andrea Eisfeldt:        Thanks.

Consuelo Mack:        So inspiring. Thank you. Lots to think about ladies. Thank you so much.