🎥 Morningstar's Kunal Kapoor - live from the Morningstar Investment Conference

Welcome back to the Alt Goes Mainstream podcast.

Today’s podcast was a conversation that was recorded live at Morningstar’s Investment Conference in Chicago earlier this year.

Morningstar CEO Kunal Kapoor took time out of his packed schedule at the event to sit down with me for a thought-provoking conversation that dove into the nuances of many of the trends that are shaping private markets today.

Morningstar and Kunal have quite an interesting perch in the market. They occupy a critically important function in the market: helping investors understand the data, structures, and trends in public and private markets. They provide fund ratings, investment analysis, and market data to both individual and institutional investors.

As public and private markets experience increasing convergence, Morningstar finds itself at the intersection of markets that are undergoing rapid evolutions across product structures, asset allocation frameworks, and weighty questions around conceptual frameworks of liquidity, risk, volatility, concentration that are on the minds of many. Amongst the wide range of topics Kunal and I covered, one stood out: Morningstar is fiercely on the side of the investor.

If there’s anyone who has a deep understanding of Morningstar’s DNA, it’s Kunal. Kunal started at Morningstar in 1997 as a data analyst, holding a variety of roles at the firm, including leadership positions in research and innovation. He served as director of mutual fund research and was part of the team that launched Morningstar Investment Services, Inc., before moving on to other roles including director of business strategy for international operations, and later, president and chief investment officer of Morningstar Investment Services. During his tenure, he has also led Morningstar.com® and the firm’s data business as well as its global products and client solutions group.

Kunal and I had a fascinating and lively conversation. We covered a number of the most pressing topics in private markets today: the convergence of public and private, liquidity vs illiquidity, investor education, the importance of transparency, and the why, what, and how behind evergreen funds.

Thanks Kunal for coming on the show to share your wisdom, expertise, and passion for public and private markets.

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Clip #1: Is Wall Street smarter than Main Street?

Clip #2: What it means to fight on behalf of the investor.

Clip #3: When should people start to think about working with a financial advisor?

A word from AGM podcast sponsor, Ultimus Fund Solutions

This episode of Alt Goes Mainstream is brought to you by Ultimus Fund Solutions, a leading full-service fund administrator for asset managers in private and public markets. As private markets continue to move into the mainstream, the industry requires infrastructure solutions that help funds and investors keep pace. In an increasingly sophisticated financial marketplace, investment managers must navigate a growing array of challenges: elaborate fund structures, specialized strategies, evolving compliance requirements, a growing need for sophisticated reporting, and intensifying demands for transparency.

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Visit www.ultimusfundsolutions.com to learn more about Ultimus’ technology enhanced services and solutions or contact Ultimus Executive Vice President of Business Development Gary Harris on email at [email protected].

We thank Ultimus for their support of alts going mainstream.

Show Notes

00:00 Ultimus Sponsor Message

01:18 Welcome to Alt Goes Mainstream

01:55 Welcome to the Morningstar Investment Conference

02:33 Convergence of Public and Private Markets

03:15 Challenges in Transitioning to Private Markets

03:32 Morningstar's Evolution and Impact

04:29 Generating Alpha in Private Markets

04:43 Importance of Time Horizon in Investments

06:51 Morningstar's Role in Investor Empowerment

07:15 Cost Reduction and Ownership in Mutual Funds

08:34 Evergreen Funds and Transparency

09:07 Challenges in Private Market Accessibility

09:41 Liquidity and Fee Structures in Private Markets

17:00 Role of SEC in Standardizing Documentation

19:06 Investor Education and Common Language

19:50 Data Availability and Analysis

20:44 Evaluating Different Investment Structures

21:32 Public-Private Partnerships in Investment

22:21 Philosophical Questions on Private Markets

23:43 Behavioral Aspects of Illiquidity

24:26 Evergreen Funds as Buy and Hold Vehicles

25:01 Asset Allocation and Evergreen Structures

26:07 Investor Behavior and Portfolio Construction

26:22 Comparing Individual Investors and Advisors

27:20 Stability of Retail Assets

27:57 Crypto Trading: 24/7 Market Dynamics

28:09 Impact of Social Media on Young Investors

28:31 Comfort with High-Risk Ventures

28:49 Market Resilience and Drawdowns

29:13 Future of Financial Advisors

29:52 Investor Behavior Across Age Groups

31:03 Validation and Information Overload

31:48 Morningstar's Independent Voice

33:02 Transparency in Private Markets

33:24 PitchBook's Role in Market Data

33:51 Challenges in Data Transparency

34:30 Tipping Point in Transparency

35:12 Flywheel Effect in Market Data

35:42 Private Market Indices

36:44 Challenges in Benchmarking Private Markets

37:37 Evolution of Market Structure

38:25 Public vs. Private Market Dynamics

38:58 Future of Private Market Investments

39:54 Fee Structures and Competition

40:51 Operational Burdens in Private Markets

42:11 Pre-Trade Market Structure

42:28 Access to Private Markets

49:01 Brand vs. Performance in Investments

49:18 Morningstar's Role in Investor Education

51:06 Future of Alternative Investments

Editing and post-production work for this episode was provided by The Podcast Consultant.

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