00:00Wellington Management, which oversees about $1.3 trillion, is no exception.
00:04In the last year, the company has been building out its private markets teams,
00:08nabbing Hamilton Lane's Alex Femme to lead its foray into buying and selling P.E. stakes.
00:14That happened just last month, and that's after they recruited a new head of private investments,
00:19capital formation from Goldman Sachs, and after poaching its private credit team from PIMCO.
00:24Let's discuss all of this with Jean Hines.
00:26She's the CEO of Wellington Management, one of the largest privately held asset managers,
00:31a very busy woman.
00:33Jean, it's great to see you.
00:34It's great to be on.
00:35Thank you so much.
00:35And that's not even the extent of it.
00:37I mean, you've also partnered with Blackstone and Vanguard to launch interval funds that
00:41hold private assets for retail investors.
00:43So when you wrap it all together and you think holistically here, what are you hoping to achieve
00:48when it comes to the private market space?
00:51What Wellington's place in it will be?
00:53And how long do you think that timeline is?
00:55So we've actually been in the private business for 10 years, so over 10 years.
01:00We started our first foray into it in 2014.
01:03So we do go back.
01:04And that was based on our first, an investor who was on the public side, recognizing that
01:09companies were staying private longer.
01:11And that may seem very obvious now.
01:13And back in 2012 and 2013, it was not obvious.
01:17And I think our management team at the time thought we were an active manager of public security.
01:22So it was a big foray for us to go into the private markets.
01:26I think really over the past five years, we've really said, what is our strategy in privates?
01:32And we began to build out more capabilities.
01:35We invest in companies before they go on the venture side, before they go close to IPO.
01:42We do that in biotech.
01:44We do that in climate technology.
01:46And so adding on to secondaries was just natural.
01:50And then over the last few years, as you said, we've also done that on the private credit and real
01:56estate side.
01:58If you think about our footprint in the public markets, we are very balanced between equities and fixed income capabilities.
02:08And our private strategy is just an extension of that.
02:12So there are definitely areas that we're not interested in or we wouldn't have an edge in.
02:16But we believe the areas that we've gone into, we do have a real edge.
02:20And it really, as investors, provides us the full picture of what's happening in the economy.
02:24That's our goal.
02:25It's our responsibility.
02:27If we want to provide the best investments to all our clients on the public side and the private side,
02:33you have to know what's going on in the economy.
02:35Well, it's really interesting, that strategy of you start the relationship early, of course, on the venture side,
02:39and you sort of see it through there.
02:41But I have to ask, I mean, I just ran through a laundry list of all the hiring you've been
02:46doing.
02:46Are you happy with the team that you have assembled right now?
02:49Or are we going to have to add to that intro in the next few months?
02:52So if you take, we only actually have one investor that has been on the public side.
02:57So all our investors, we have about 40 of them that we've recruited since the late teens to build our
03:06private's capabilities.
03:07We made that a very deliberate decision that we wanted to make sure we had people with private's experience.
03:14And we couldn't be more happy with the teams we've recruited and the capabilities and the expertise they provide.
03:20But we have a 10-year plan in private's, and so I would expect that over time, we will continue
03:26to either add to those teams
03:28and think about them as a platform and maybe go into other areas that make sense from adjacencies to our
03:34current business.
03:35I am curious about your hedge fund strategy.
03:38It's more of a multi-strat strategy now.
03:42And I am curious as to why you gravitated there instead of sticking with more of, you know, kind of
03:47the single-pillar strategies.
03:48Yeah.
03:49So we've been in the hedge fund business for 30 years.
03:51I actually personally was a hedge fund investor for 20 years.
03:54And so it's one of our long heritages of doing long-short investing at Wellington.
03:59And you were right.
04:00We started with single strategies.
04:02We started with many sector-based funds.
04:04I was a health care investor, so it made sense.
04:07In 2019, and maybe this is a good way to tie in the privates,
04:10in 2019, we did an analysis of what do we want our alternative strategies to be.
04:16So we're not new into hedge funds.
04:18As I said, we were already in privates.
04:20And we took about a year to study what do we want to do.
04:23And that's when we sort of separated those businesses from the equity business that they were in,
04:29and we named leaders.
04:31And I couldn't be more happy now five, six years after that,
04:35that those leaders have taken those businesses to sort of new levels.
04:39In terms of the hedge funds, one of the things that came out of that hedge fund analysis was,
04:44how do we bring this business to be a great long-term business?
04:49And how do we have a flagship multi-strat hedge fund?
04:51So we're very happy that five years later, we launched our first.
04:56We've had a multi-strat hedge fund, but we launched it in a vehicle that made more sense
05:03to be able to really then hire investors.
05:06And we are hiring talent.
05:09I said we're hiring a lot of talent in this market, in our London market.
05:14Do you have any concerns, though, with regards to the multi-strat focus,
05:19that it's going to be a little bit harder to just kind of keep watch on things,
05:23make sure that the strategies are doing exactly what they're intended?
05:25Yeah.
05:26So we have – so what we – the part of our strategy that makes most sense
05:30and is aligned with our long-term is that if you have a health care investor,
05:36if you have an industrial investor, if you have a consumer investor,
05:38they're doing their – they're investing in their sector.
05:41And then we also have a very long-term asset allocation solutions team
05:47that is the one that is putting those solutions together.
05:49So they're the ones that are overseeing from a portfolio management,
05:53from an allocator perspective, how do I put – how do I do risk management?
05:56How do I do risk controls?
05:58But we let the investors manage the money and manage what they do best.
06:04Speaking of investing in health care, I want to talk a little bit about your background
06:07because my understanding, you've been at Wellington for 35 years.
06:11You've spent several of those decades within health care and biotech,
06:15first as an analyst, then you were a portfolio manager.
06:18And I think that's a really interesting pedigree because now you have the top job.
06:23So I'd just love to hear a little bit about that,
06:25how that experience actually in the markets investing money
06:28sort of informs what you're doing now running the whole shop.
06:32So I spent three decades, as you said, being a biotech and pharmaceutical analyst
06:37and then in 2013, I took over the Vanguard Health Care Fund
06:41and so started investing more broadly in all of health care.
06:45And in 2014, I became one of the firm's managing partners.
06:50So one of the most important things to know about Wellington Management
06:53was we're a private partnership.
06:55There are very few private partnerships remaining in the asset management industry.
06:59And there were three managing partners that oversee the governance.
07:02So if you asked me in 2014, I thought, well, I love investing.
07:06I have these strategies from long, short biotech to Vanguard Health Care.
07:12And then I added this talent part of it that I really loved.
07:16I love that being a managing partner and really overseeing the talent of the firm
07:20and the talent processes of the firm.
07:22And then over time, as I worked really closely with the CEO,
07:27it just sort of grew on me.
07:28Like one, that I had the skill set to do the CEO job
07:34and then really trying to figure out what did I want.
07:37So how did I want to spend my last decade at Wellington?
07:39If I had spent 30 years, how did I want to spend my last decade at this great firm?
07:43And so I moved into the CEO job just about five years ago.
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