E161: The Death of Modern Portfolio Theory? w/John Bowman

John Bowman, CEO of the CAIA Association, joins How I Invest to discuss the most important shift in institutional investing: the move from the traditional bucketed approach to the Total Portfolio Approach (TPA). In this episode, we go deep on how allocators are modernizing portfolio construction, why liquidity might be a hidden danger, and what the future of alternatives will look like as trillions of dollars flow from public to private markets. Highlights: TPA vs. SAA: Why institutions are moving beyond traditional asset allocation. Liquidity Trap: How too much flexibility can hurt returns. Diversification Myth: Buckets don’t work in a world of blurred asset classes. Family Office Pitfalls: Why starting with direct deals is a mistake. Private Markets Boom: Alternatives now make up over 20% of institutional AUM. Access for Individuals: Platforms like iCapital and Alto are changing the game. Education Gap: Why advisors need to catch up as products evolve. The Future: Alternatives won’t be “alternative” for much longer. -- Guest Bio: John Bowman is the CEO of the CAIA Association, a global organization focused on education and professionalism in the alternatives industry. With over 14,000 charterholders worldwide, CAIA is the standard for private equity, hedge funds, private credit, and real assets. John previously held senior leadership roles at the CFA Institute and has spent decades helping institutions, advisors, and allocators navigate the evolution of the investment landscape. Our Podcast now receives more than 300,000 downloads a month. Are you interested in sponsoring an episode? Please email David Weisburd at david@weisburdcapital.com . We’d like to thank @JuniperSquare for sponsoring this episode! #VentureCapital #VC #Startups #OpenLP #assetmanagement -- Sponsor: Juniper Square is dedicated to transforming the private markets investing experience. The company provides a full range of modern, connected fund technologies and services for over 2,100 private markets GPs across fundraising, reporting, fund administration, treasury, compliance, and business intelligence. Today, over $1 trillion of assets and 600,000+ LP accounts are managed through Juniper Square software and fund administration services. Learn more at www.junipersquare.com/vc . -- Stay Connected: Twitter: David Weisburd: @dweisburd LinkedIn: David Weisburd: https://www.linkedin.com/in/dweisburd/ John Bowman: https://www.linkedin.com/in/johnlbowmancfa/ -- Links CAIA Association: https://caia.org/ -- Questions or topics you want us to discuss on How I Invest? Email us at david@weisburdcapital.com . (0:00) Episode preview (1:45) Evolution and comparison of investment approaches (6:03) Equity risk premia and behavioral studies on portfolio management (9:55) Sponsor: Juniper Square (10:21) The changing landscape of the sixty-forty portfolio (13:55) Institutionalization and investment strategies of family offices (22:22) Behavioral psychology's role in investment and managing ignorance debt (28:15) The impact of modern education on institutional investing (31:17) Trends in allocator portfolios and the democratization of alternatives (39:29) Regulatory impacts on private capital and liquidity constraints (46:15) Predictions for the future of the alternatives industry (49:31) The critical role of diversification and understanding asset classes (53:33) The evolving skillset for investment professionals and industry competition (55:45) Dynamics of mergers and acquisitions in the investment sector (56:41) Closing remarks