Investing Billions - E322: How $70 Billion Gets Allocated During Market Chaos

Episode Date: March 11, 2026

What if one of the most overlooked $700 billion pools of capital in the U.S. is quietly shaping private markets? In this episode, I sit down with Jennifer Mink, President of Investment Performance Services, an investment consulting firm overseeing roughly $70 billion in assets under advisement, to discuss how Taft-Hartley pension plans approach long-term investing. Jennifer shares how IPS designs portfolios that balance public and private markets, using disciplined asset allocation and diversification to improve overall portfolio efficiency and manage risk across market cycles.

So you're present of investment performance services, which has roughly $70 billion in assets under advisement. When we last chatted, you mentioned that you guys are able to increase your returns while decreasing volatility. That caught me by surprise. How are you able to accomplish that? So one of the things that we do for our clients is asset allocation modeling. So we are building portfolios for them to help them not only reach their investment goals, but to have ample liquidity. to pay their ongoing benefits. So when we do that asset allocation modeling, a lot of times what we're able to do

is take an asset class that maybe has a higher standard deviation. When we add that to the investment portfolio, it actually decreases the overall risk and volatility of the total portfolio. So we look at that as a true benefit to diversification. Can me an example of that? The good example would be alternative investments.

So many clients have a lot of experience with public markets. But as we start looking at some more exotic asset classes, private asset classes like infrastructure, private equity, when we look at the standard deviation of some of those investments, relative to say, an investment-grade bond portfolio, when we add that to the portfolio, it actually decreases the overall, you know, volatility of the portfolio,

simply by having that lower correlation. That's a very important factor. So we try to educate our clients about that, about asset class correlation, and sometimes having more things in the portfolio is less risky than only having a few, what we would call safer, less volatile investments. There's two different mistakes that investors oftentimes make. One is, I would just call it double diversification. So they diversify on both the fund level and on their portfolio level, where sometimes the

best portfolios actually have spiky assets. So think of it as a venture fund that might return a 5-7x, but once in a while, might even lose a little money, might be a 0.8x. People are so focused on making sure that that fund is super diversified, where they really want to be diversified on a portfolio level. And then second mistake, to your point, is something could be risky on its own or something could even be crazy to put in a lot of money on its own. But if you're hedging against it, which we'll talk about later,

it's not actually as risky on a portfolio level, even though if you just invested into that one asset, it'd basically be a crazy person. Some things on their own sounds scary, especially if you're not familiar with it. One of the things that we're a huge advocate is education. So we are trying to educate our clients on anything that we are recommending. So we're the investment professionals.

They have different day jobs during the day. We're being in the Tapt-Hartley trade marketplace. So we really have a responsibility to educate them on kind of what it is that we're recommending and then illustrate how it impacts their portfolio in both a return and risk standpoint. It's so underrated to understand and be rooted in a thesis. Example I like to give is Bitcoin. Let's say you are lucky enough to invest at $10 a Bitcoin in 2011.

That sounds great. But if you had no fundamental view on the Bitcoin, you might have sold at $70. You certainly would have sold at $150. And then today it's approaching $100,000. So knowing not only when to buy, which is kind of what all the media is about, and that's what everyone wants to know, like, what should I buy, what should I buy? Understanding the fundamental thesis behind it helps you not only not sell early when it's down, you could revisit the thesis and ask yourself the fundamental question,

is this noise in the market or has something fundamentally changed? That's really, I think, where emotion comes into play. So if somebody is not understanding why they have an investment and kind of what the ups and downs may be through that investment cycle, there's a lot of emotion that comes in. Certainly when assets are doing well, everybody's happy. They're making money. But certainly when there is a downturn, sometimes you can get some panic. So again, that's where the education comes into play. And also our partnership to be a good steward of capital of really trying to be contrarian and not selling when things are.

down and actually adding more money when things are down and doubling down what we think is a good idea over the long term. Is this something that you're messaging ahead of a downturn turn or is it possible to get people to act hyper-rationalally during a downturn? It's trying to get ahead of it and then working through it. So I think a perfect example would be 2020. So that snapback in the market. That happened very, very quickly.

So we had the whole world closed during the month of April. Our offices, like everybody else's office, was closed. I was still coming into the office every day. We still had portfolios to oversee and we had communication to get out. During that month, we were writing memos to clients talking to them about adding more money to the equity market to try to rebounce because the dip was so severe. It was almost like 2008 going into 2009. So 2008, we had a dip of in public markets 40%. Within the first six months of 2009, the S&P was down another 26%.

So you had to rebalance. You were out of compliance with your policy. And it's really trying to hold the feet to the fire to put money in when your emotions are telling you not to. So we were very proactive in 2020 in the second quarter to rebalance specifically to equities. And then I think we all know how quickly that snapped back. It was a little bit of a surprise how quickly it did start to come back. But our clients that were proactive and took the recommendations, their portfolios performed the best that year. What gets easier when you're investing $70 billion?

What gets easier? I think it's really about the structure of the companies. So this year, 2006, IPS, we're actually celebrating the 40th and, of our firm. So over those four decades, we've had pretty steady growth over that time period. So with that growth comes structure. We have very disciplined procedures, especially when it comes to our research. We can apply that whether we're a $7 billion firm, a $70 billion firm, or $170 billion firm. What we look for and what we like in terms of managers and asset classes, doesn't really depend on our size.

When you have $70 billion, what gets harder? I would say managing the growth of the firm. We don't have specific mandates in terms of our size. So it's not like at the beginning of the year. We're setting a goal to go out and bring in X amount of assets or have X amount of clients. Our goal isn't to be the largest Tapp Hartley Consulting firm. We really want to be the best consulting firm. We work with almost 200 unions nationwide, and that is representing working men and women in all 50 states.

So as we continue to grow, it's extremely important to us to hire people who are not only committed to our clients and our mission, but who are willing to show up every day to really get the job done. And we've found that post-COVID, it's getting harder and harder to find people who are willing to do that. One of the hardest things of investing is seeing what's shifting before everyone else does. For decades, only the largest hedge funds could afford extensive channel research programs to spot inflection points before earnings and to stay ahead of consensus. Meanwhile, smaller funds have been forced to cobble together ad hoc channel intelligence or rely on stale reports from sell-side shops. But channel checks are no longer a luxury.

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How in the world do you diligence so many managers and have such a high hit rate? I talked to you earlier about our structure. I mean, that is our number one thing that clients hire us for. So a benefit fund is going to hire an investment consultant for access to investment ideas and to investment managers. We have a dedicated research team. So they are utilizing primarily databases for most of our public market investment managers, looking at the tenure and experience of not only the consultants at our firm, but within our research team.

We have a pretty strong network that we use for public managers, but more for private managers. You know, a firm that's been in business for 40 years and overseeing 70 billion in assets, we have a very good reputation in the industry. So a lot of times firms are calling us. And it's our job to answer those calls. So I get probably two to three emails a day from investment managers who are curious about either our firm, a specific client, or, you know, they're just trying to raise money.

And somehow we showed up on their radar. So we, you know, have some conversations with them. When you're doing about a thousand diligence meetings, averaging that over. over a three-year period. There's a lot of hustle involved with that. How do you look at emerging managers? Is it a subset of the overall portfolio? Do you have a program or do you just track them

until they're on a third, fourth, fifth vintage? We really track them. Being a steward of somebody else's capital and serving as a fiduciary, it's very difficult to say, okay, let me take somebody else's money and try this new idea with this team that's unproven and doesn't have a track record. If we see something we like,

or it could be an investment philosophy that's coming down from our investment committee that we want to start tracking and looking at, that's you're exactly right. We're going to follow that manager through maybe one, two, three vintages of a fund. Typically by a fund for, we're going to be comfortable to start deploying assets.

What exactly are you looking for in the first three funds? That makes you really excited when they come out for a fund for. We want to look at the stability of the team in terms of capital calls. How much are they deploying? How quickly are we getting invested? What is the turnaround looking like? Are we getting distributions back? Are the returns looking kind of what we thought they were?

Is the investment philosophy in line with what they said it was going to be? No big hiccups in terms of legal or regulatory issues. Stability at the firm, no change in ownership. And just really looking for consistency. If I had to pick one word to describe IPS, it would be consistent. We're consistent in our business. We've been doing this for 40 years. This is the only thing we do.

The only thing we do is investment consulting. We're dedicated to the Taft-Hartley marketplace. We've been very institutionally focused. We're just very consistent in what we're looking for. You mentioned earlier about three-quarters of our managers beating their benchmarks. You know, that's not an easy thing to do. and we know this because we actually track it. So for all of our public fund managers, you know, not only do we evaluate the performance

of investment managers, we actually evaluate the performance of ourselves and we do that through our research. So I mentioned earlier, we have the structure in place and we have this criteria that we apply to both public and private managers. Well, how do we know that that is the right criteria and that we're screening for the right things? Well, we have to go back and then we have to do a look back and see. see how did those managers that that criteria led us to actually perform over different market

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vintages? Within those first three vintages, you know, we're really looking for the consistency. So looking for that return, seeing if there's any turnover in the team. So a lot of times if a new team is getting started, is everybody sticking with it? Is anybody leaving? Any changes in fees? Are the fees consistent with what they were supposed to be? Are they meeting their hurdle rates? Are they meeting their benchmarks? So we're just really looking for what they said they were going to do and have they been able to do it. One of the things that we're faced with right now is just slow. distributions coming out of private equity. We do run private equity pacing analysis every year, every client who has private equity. We're doing a model out in terms of where are we in distributions and capital calls and when do we need to commit more money. The problem we're running into right now is as we're having the next vintage launch, we've not gotten enough money back in distributions, whether it's from that manager or other managers to really start redeploying more capital into the I had Alex Ambrose from Alligator Training Institute, and they had done some benchmarking.

The original Yale model, there was roughly 24% DPI per year. 2004 was 9%. 2025 was 9%. So the model as it's made to work is broken today. That's what we're seeing. So last year, most of our searches were into infrastructure. So I said we were big in private equity in 21, 22, not as much in, 23, 24, 24, we were doing a little bit more in private credit. And then last year, we were leaning very

heavily into infrastructure. One of the most underrated things in alternatives, I believe, is this concept of structural alpha. It's become this buzzword. It means many different things. Sometimes it means tax. Sometimes it means literally a specific structure. One underutilized form of structural alpha is when managers create funds specifically for different types of LPs. I had the CIO of the doctor's company T.C. Wilson, and he talked about how insurance companies need funds to have certain kind of structures. And if more people would structure those funds in that way, there would be a big pool of capital.

Do you see the same thing in Taft-Hartley funds in that managers could, if managers went out of their way to structure their funds in certain ways, they could better partner with somebody like yourself? What we look for really with all of our managers, but in particular with our private managers, is we're looking for that ERISA fiduciary acceptance. So that for a lot of people that don't know a lot about ERISA, that is almost like a non-starter.

So unless you're willing to be an ERISA fiduciary, have that in your legal documents or you're able to do that via a side letter, that is going to be, you know, a door that's going to be closed for you if you're not willing to do that. So that's kind of like the first key to get into the door with Tap Harley. So you need structure or fun that at least has some sort of level of ERISA considerations. The second thing is having a responsible contractor policy. So this is extremely important. This is something that we look for in all of our diligence, especially with real assets.

So for real estate and for infrastructure. that RCP, there's two main elements to that. Number one is really looking to have terms in the documents that are going to have some assurance of the use of union labor. The second part of an RCP is what's referred to as a neutrality clause. And what that is, it's having language in there that asset operators are going to honor the right of workers to organize. So without having a full understanding of how the union marketplace works, some of those things, again, we're going back to like, this sounds scary. I don't know if I want to do it. But if you want to work in the Taft-Hartley space, if you want to get those Taft-Hartley dollars, these are really the two things that you're going to need, that ERISA language, as well as the responsible contractor policy. Now, when we had an earlier conversation, David, and I was talking about this marketplace a little bit, I think you made a comment of, you know, Do you feel like some of the things that you're doing result in adverse selection? So now you're not including some good managers because you're being so stringent. And I think my answer to that was I don't think that we are. If we get a question on two or three, which is what is ERISA? I don't know what that is.

And I've never heard the term RCP before. That's not a, okay, thank you, bye. We hang up. We're willing to work with the manager. We're going to explain what that is and really educate. them on it because if it's a manager that we like or it's a thesis or something that we are interested in, we're going to tell them this is what you need to do. And if you do those things, come back to us, come back to us. And sometimes they'll come back to us with the RCP and they're like,

can you look at this? Is this kind of like what is working in the marketplace? So we've been able to work with a lot of managers to educate them. So not only are re-educating our clients, but we're educating private market managers that really don't understand the space to understand how you can raise money in the space. Anytime you have a big pool of capital, you could change governance and change the market in a way that doesn't have to result in adverse selection, as long as it's a big pool, a big enough pool of capital. The market's efficient.

The market starts to call less around these pools of capital. You've been in your seat for nearly 23 years. What surprised you the most? I've been very focused on the Tartartley market for my whole career. And I think one of the thing that surprises me the most is the way, that a lot of people outside of the market or even in the industry may underestimate that market. How much money is there? How committed the trustees are to doing the right thing?

I did the research prior to the interview. It's roughly $700 billion in these types of funds. And you are the first guest that's ever talked about it. Well, happy to be the first guest to talk about Taft-Hartley. I grew up in a in a Taft-Hartley family. So my father is a retired electrician. So he's living on his pension. Most of my family are in a labor union. Police, fire. My sister's in a teacher's union. So I know firsthand how important it is to get it right. And that's why I'm just so committed to, you know, what we're doing in IPS. What's compounded exponentially in your career? And what's kind of just grown linearly where every time you do it over and over. it's about as hard as it was before. I'd say one of the things that's compounded exponentially is really how quickly the markets move and how much you have to stay on top of everything.

You know, when I look at when I started in this business over 20 years ago, kind of hedge funds were the new thing on the horizon for institutional investors. I did a lot of public speaking about hedge funds. It was like a, it was almost like a dirty word if you were, word if you were, I used to equate it to like yelling fire in a theater or shark if you were at the beach. Like you said the word hedge fund and people got very, very nervous about it. Now it's something that people have in their portfolio and you just kind of look at how quickly new products or ideas continue to come into the market and just keeping pace with that. I just went over what we've been

doing over the past couple years and, you know, our largest searches over the past five years have all been in alternative investments. So again, the infrastructure, the private equity, the private credit, opportunistic credit, all of these new facets and areas for investing. Portfolios have become much more complex. One of the things that I think that we're really good at is not investing in certain things. So everybody always talks about, you know, what they invest in and what their clients are in and what made money that year. There's a lot of things that we've looked at over the years that were a hard note for us. You know, we're never chasing the hot dot, the high beta, the high volatility investment, things that utilize a lot of leverage. We've never invested in portable alpha. We don't do

risk parity. We've stayed away from 1.3030 strategies. You know, we've educated our clients on all of those. Those are topics that we brought to our clients to educate them on because they're going to conferences and they're hearing about this. And if they're a large fund, they're getting calls from investment managers, you should be invested in this. Let me come talk to you about it. And then our job is to say, let me explain to you what that is and why we think this is a horrible idea for your fund. I'm old enough to remember when hedge funds were actually hedged. That was the original. And over the last couple of weeks, I got to interview the 23-year CIO of Calsters, Chris Ellman, and the former CIO of UTIO, Britt Harris. And they share the

same philosophy, which is Wall Street's always pushing new products in order to charge new fees. And it's always extremely compelling because Wall Street has some of the top marketers in the world. And sometimes good investing is saying no to those. And sometimes it's truly having beta in a space, which isn't something that anyone ever wants to admit. But sometimes beta is the right way to access an asset class. We have a saying that sometimes the best investment you make is is the one you avoid. If you could go back to 1998 when you just finished your MBA, what is one piece of advice you would have given a younger, Jennifer, that would have either accelerated your career or helped you avoid costly mistakes? That's a good question. I mean,

fortunately, I haven't had any costly mistakes. I was raised in an environment where, you know, a strong work ethic and doing the right thing mattered. And I got to where I am by doing that, by working hard and always doing what was right. That's not to say I didn't have some bumps along the road. But I feel like things like that only make you stronger. You have to learn from some of your mistakes. But looking back, I think the one piece of advice that I would give myself is to not take business personally. You know, business is business. Work ethic and personal commitment don't always translate into new business and people liking you. And as a woman in a male dominated business, I think it took me some time to really figure that out. I would say after 25 years in this business,

thing I've learned is if people aren't talking about you, then you're probably not doing anything important. Certainly in the 90s and 2000s, there was a lot of challenges with being a woman in the space. What are some advantages? And what was some wind at your back that helped you as a female ministry? The advantages of being a woman in the space is a lot of times people may underestimate you. And women in general are extremely meticulous and have an attention to detail that I think men do not have. So I always think it's fun when people want to underestimate me because I'm going to be fully prepared. I've done my homework. I'm going to show up. I'm going to be ready to go. I'm ready to compete. I've seen my wife, Jessica,

she's an absolute savant at dealing in high-end real estate, which is still largely dominated by men, and her ability to read the room and deal with men's ego and get everybody to go in the direction that she wants them to go, but to do it with classes, something just a male could not do. Sometimes I'm in these rooms, I'm like, there's nothing I could have said that could have closed a deal like she did. Maybe we have a level of patience and understanding that we can then execute on that. Well, Jennifer, as I mentioned, first podcast on the Taft-Hartley funds, which is crazy. And to my detriment, it's a $700 billion industry. Before this episode, I looked up.

The entire venture asset class, according to NVCA, was $1.25 trillion. So it's more than half of the entire venture. Just to give people context. And more people need to learn about it. More people should educate themselves. So thanks so much for jumping on and helping educate me and the audience. I appreciate being your first yes and being able to educate your audience about it and really promote what's happening in the Tapt Heartley space. It's important stuff. Thank you, Jennifer. Thank you for having me.

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