E304: Neuberger Berman Co-CIO on Mistakes Smart Investors Make

The podcast explores the nuances of portfolio allocation between public and private assets, particularly for endowments and high-net-worth individuals. Jeff Blazek, co-CIO of Neuberger Berman, compares managing large asset managers like Texas Teachers to smaller, more agile endowments, highlighting the trade-offs between scale and flexibility. He advocates for drawdown as a better risk measure than standard deviation, emphasizing its impact on long-term wealth. Blazek also cautions against the assumption of perpetually low volatility and the over-allocation to venture capital seen in past cycles due to liquidity constraints. He suggests an ideal portfolio allocation of 80% equities and 20% bonds for unconstrained investors, with a significant portion in private equity, and discusses strategies for phased market entry to mitigate risk.