Aoifinn Devitt: Series 5 of the 2025 50 Faces podcast is kindly supported by Diamond Hill. Diamond Hill invests on behalf of clients through a shared commitment to its valuation-driven investment principles, long-term perspective, capacity discipline, and client alignment. An independent active asset manager with significant employee ownership, Diamond Hill’s investment strategies include differentiated US and non-US equity, alternative long-short equity, and fixed income.
James Clarke: I think one of the things in this industry that people don’t spend enough time thinking about is luck. Luck is a very important part of this. When we happened to come to market, direct lending was still seen as a very nascent, probably tactical allocation. Now it’s become a more mainstream strategic allocation. And as such, the industry has grown significantly and we’ve been a beneficiary of that. I’m.
Speaker C: Aoife.
Aoifinn Devitt: Devitt, and welcome to the 50 Faces Podcast, a podcast committed to revealing the richness and diversity of the world of investment by focusing on its people and their stories. I’m joined today by James Clark, who is Senior Managing Director at Blue Owl and the Global Head of Institutional Capital. He has 26 years of asset management experience and prior to Blue Owl worked for PIMCO, Goldentree Asset Management, and Landmark Partners. Welcome, James. Thanks for joining me today.
James Clarke: Aoifinn, thank you so much for having me. Pleasure to be here.
Aoifinn Devitt: Well, you participated in many podcasts, and recently I listened to one with Ted Seides that prompted me to reach out to you again. And I think you recall then that we last met on the circuit when I was at Chicago Police Pension Fund.
James Clarke: I do. I do. You were being harangued by every single one of people like me, and you were very gracious to give me about 37 seconds, but I appreciate it.
Aoifinn Devitt: Oh, well, I always— I, I certainly didn’t know your story then, and I really enjoyed hearing the story, particularly with respect to client service, relationship building, in your patience in cultivating some of these networks. And so I’m going to put a link to that podcast in the show notes because it was an excellent coverage of your career journey. So as not to repeat that here, and you do hail from Australia, I think that’s— that you haven’t lost the accent there. Just to build on that I’d love to ask, when looking at these various roles you’ve had, at some of these lessons learned from the streets, what would you say that you draw upon now that you’re in a leadership role? What aspects of your prior, your kind of path to here, do you draw upon most frequently?
James Clarke: You know, Australia was a really interesting place to cut my teeth because it was at that stage, and it is not now, and it will not be going forward, a relatively nascent market. I came into it in the late ’90s, The Australian Superannuation Scheme had just been set up by the Labor government in 1992, and they were just getting their momentum. And it was interesting because the plans that we used to speak to then were about $2.5, $3 billion, and now $140 billion. There’s been a lot of consolidation as well, but I’ve been able to watch them grow up from these embryonic stages to these very mature schemes. But what it taught me then was the most important thing was, what are they looking to achieve? What is it that they need help with? And how is it that you can help them? I think I was lucky because I was young and I didn’t know anything, that the only way that I could consume time in a meeting was to listen. I didn’t really have— and I mean, this sounds awful— I didn’t have a tremendous amount of context to give. I was 24, 25 years old. Really, what I was doing was going into those meetings and listening, and it taught me that as these conversations developed and we started to work with these organizations, that the listening part at the start was the most important part. Ultimately, down the road, we were able to curate strategies at PIMCO that made sense for these clients. PIMCO’s business when I joined in Australia was less than $1 billion. Last time I checked, and that was a decade ago, it was $50 billion, and I just told you the size of these groups. The ability to sit there, listen, and grow alongside people was beneficial for both parties.
Aoifinn Devitt: That’s a fantastic flex. So I think for young people thinking about it, not knowing at all, but actually that, that can actually be a real strength, being in a position to be an intelligent and active listener, I suppose. Really interesting. And we did just have Deanna Stewart from Aware Super on this podcast, and we’ll be in the same series. So nice to kind of circle back to compare their growth through acquisition as well as the solution sales that you were kind of already conceiving.
James Clarke: Well, I, I will tell you a very hard lesson, and I do have to just quickly jump in. I was in one of these meetings and my boss was with me, who incidentally now he reports to me. But anyway, I was in the meeting, someone was talking, and I felt someone bridled enthusiasm to open my voice. And within about 10 seconds, he turned to me, my boss, and said, you were here to carry the books. I learned the hard way.
Aoifinn Devitt: Well, I think another example of this being a repeated game and not the importance of not burning bridges, correct? In, in our industry, correct. And in terms of the rest of your you journey, know, to this point now in a leadership role, How do you coach maybe junior people coming into a role which is about, I think, having a thick skin, learning how to handle rejection? Was that something you were born with or something that you learned the hard way?
James Clarke: Rejection, I kind of learned through all my life. Not to get too much into it, but I was always sort of one of those— you and I both come from countries where sport is considered a much more important thing than necessarily should or would be, but I was always one of those middle-tier people and always wanting to get into the team and somehow finding myself on the outside looking in more often than not. But for the business, I was always told the principle that you never find out without asking. I never saw rejection as a rejection. I think some people fall into this trap that when there’s success, it’s about them, and when there’s failure, it’s about them. Really, what we do is we’re acting as conduits of information. The only way we can be successful at that is obviously being able to articulate what we do, but more importantly, trying to understand what somebody else is doing. But when people make it about themselves in this business, I generally see it go wrong. It goes really, really badly. But if you approach it from the mindset, I am here of service to the organization, but also the client, you’re going to do much, much better. But I joke a little bit about our first interaction. I know where it was. It was at a consultants conference in Chicago. But you were literally surrounded by a ton of people. I had you on my list of people that I didn’t know and I wanted to get to know. The expectation is not that you’re all of a sudden going to fall down and go, “Oh my goodness, I’ve been waiting to have this conversation for the entire conference.” The expectation I knew at that time is this is a person who’s incredibly busy. I just want to say hi. I’ve got nothing else to say other than that, and then to walk off. I always look at folks who are in your seat back then and in the public pension universe, particularly that are representing— you were representing $3 billion. They were representing hundreds of billions of dollars, whatever the amount may be, they get approached as an object, not necessarily as a person. And yet we often approach in a business that’s about relationships, we often temper down the relationship aspect of it, which in my mind is actually the most important thing.
Aoifinn Devitt: Great wisdom there. And I’d say from my perspective, having been an allocator in that role, and you’re right, it was like having a target on your back. It is extremely rare that anybody puts themselves in your shoes in terms of the that, and that, that I think is a great move and a great kind of mindset. The other thing I’d say is, what do allocators really want? And I think PIMCO is a great example of a firm that does this very well, is they want things that make them— educate them, make them smarter, connect them to other allocators like themselves. It’s that kind of value, and that is a value that’s built over time with delivery of excellence. So I think that’s a little bit of a secret from me there in terms of what allocators really want, but I think having hailed from PIMCO, you already know that.
James Clarke: GRAY] WESLEY Well, it’s interesting you say that. Yes, I learned a lot from PIMCO, but I will tell you one of the things I actually do with the young people here at Blue Owl right now is get them to spend a considerable amount of time with some senior people that are on my team now, one of which was the deputy CIO at the Future Fund. Another one has sat on boards at Australian superannuation funds. There’s a number of people here. We used to have the former CEO of the New Jersey state pension system. We have a number of people that worked as asset consultants. And one of the first things I tell them is go talk to those people, because they have sat on the other side of this. They have seen what has worked. More importantly, they’ve seen what absolutely annoys them and what they found completely destructive. A firm like Blue Owl and PIMCO has embedded in it a strong beta. They have very strong track records. They’ve done very well. They’ve done it over a number of years. Their client base is really good. The goal of the— not the salesperson, I don’t like to say that, the client service relationship person is to take that beta and add their own alpha. But it’s funny, with some of those firms, they’re actually negative alpha. And it would be better off if they weren’t there, because they’ve actually convoluted the process by being too pushy, too direct, too transactional, and frankly, coming at it from a perspective of, I need this for me, rather than what do I bring to this for the firm that I work for, and more importantly, the person who is going to invest in the firm. But it’s a really hard lesson to learn unless you’re around people that get it. I was very, very lucky early on in my career to be around a person who understood that. But I have seen people who are young, and they sit in a room, and they watch somebody come in, and the portfolio manager or the head of the firm, and that person sits down and talks for 55 minutes straight. And they think that’s the way it’s done. And their careers, unfortunately, go off on the wrong tangent. What we’re trying to do is educate them from the very beginning and say, I need you to sit down with— the lady’s name is Alicia Gregory. She was at Australia Sovereign Wealth Fund. She saw everybody from all the top of the firm at the BlackRocks and the Blackstones, all the way down to the people that are junior client service people, and she can tell you what worked and didn’t work. And that is the best instruction I’ll ever get. It’s way better than coming from me.
Aoifinn Devitt: And I usually ask about core investment beliefs, and I suppose this would be core kind of business building, business development beliefs. Anything that you have internalized over the years that you think is just the way to succeed in this business?
James Clarke: Yeah, I mean, the one thing that I say here all the time is we don’t sell products, we position partnerships. And I also really try and reinforce a lot of the time that the very best partnerships take time and they don’t happen on your schedule. And that it’s fundamentally important. I always say invest in the process, trust the process, because the process takes care of itself if you do all the little things right. And if you do all the things right, which generally orientate themselves around what’s in it for the client, and you let them make the decision in their own timeframe, then you’re going to have a lot more success. I think where people get things wrong a lot of the time— and look, we’re a public company, we’re publicly traded, we cannot consume ourselves with what the share price is doing on a day-to-day basis. That’s not relevant. What I can tell you, though, is I see it. I’m on the front lines here, and I see all the processes that we’ve got across our investment platforms, our distribution, our client service platforms in wealth and in institutional. Are all doing the right things. And whatever the market catches up to that, the manifestation of that may not be in our schedule, but it will happen. And it will happen in the future because the process is being done the right way. If you try and short circuit the process and invest in the short-term performance of something, you’re going to just derail it. And you’re not going to get the results you want because at the end of the day, the manifestation of of the market is an endorsement of what you have done well in the process. Maybe that’s a little wordy, but really at the end of the day, the moment you distract yourself from the long-term and focus on the short-term, things go pretty badly.
Aoifinn Devitt: And speaking of the process, so Blue Owl, I think you mentioned it’s a public company. It’s known for having had quite staggering growth in recent years. And I wonder if you could just talk us through that in terms of that narrative and what it is that you’re building. And equally how you message that to clients.
James Clarke: I mean, look, everything we do here has a north star of we’re here to generate income and preserve capital, and that’s it. And we prosecute that in 3 different ways or a number of different ways across direct lending, across a segment of the market called GP stakes, where we take passive minority stakes, usually in large GPs. And we also do it in triple net lease, which we do, which is where we do sell leasebacks with investment-grade tenants that pre-describe cap rates for a certain duration. Everything that we do here is around bigger businesses that are scaled, direct lending is bigger businesses, real estate is bigger businesses, because our belief is that scale is likely to withstand any type of cyclical shocks and perform consistently over a secular time horizon. Everything operates around that DNA across what we do. Yeah, we started off as Blue Owl in 2021 with about $60 billion, which was a combination of our direct lending capabilities in our GP stakes. Since then, we’ve grown to $300 billion. I think what’s important isn’t necessarily the growth. The numbers look very sexy and glossy and all that. To me, the most satisfying thing is that we have identified, number one, what you said earlier on, exactly what you said earlier on, which is, I need a solution to something, and I need you to make me look good in achieving that solution. By approaching it in that mindset, it doesn’t matter whether the number is 100, 300, 500, a trillion. What matters to me is the fact that the clients have got what they asked for. As long as we continue to do that and continue to provide that, we’ll continue to succeed. I think one of the things in this industry that people don’t spend enough time thinking about is luck. Luck is a very important part of this. When we happened to come to market, direct lending was still seen as a very nascent, probably tactical allocation. Allocation. Now it’s become a more mainstream strategic allocation. And as such, the industry has grown significantly and we’ve been a beneficiary of that. Having said that, there’s also about 500 to 1,000 direct lenders out there. Not all of them have done that, but I think what we’ve spoken to is a need and the willingness to understand that need and be a solution to what the client needs to solve for, and in doing so, make them look good.
Aoifinn Devitt: We’re going to take a short break to hear from the sponsor of this series, Diamond Hill. I sat down with Krishna Mohanraj, International Portfolio Manager of Diamond Hill, and asked him about the current opportunity set for international investing.
Speaker C: And from our perspective, we’ve always said valuations are important, currency is important, and in both senses, international has been super attractive for a long time. So that’s kind of the backdrop. Today, I would say there’s only one story in town. Know, You the world seems to be coming around to accepting that there is a regime change. We are moving, we don’t know how much, but definitely away from a truly global world to a more local world. And then the question is, how does that path look like? Ups and downs. So that’s kind of more current thinking for us. What is the true north, right? That’s the key. The true north, the philosophy for us is buy good businesses that you can understand.
Aoifinn Devitt: And now back to the show. Do you think the role of large diversified, rarely private asset providers like yourself will be, say, in the next 5 years as you continue to grow?
James Clarke: It’s a really good question. What I see right now, and I spend a lot of time, I probably spend 4 to 5 months of the year overseas meeting with superannuation funds, sovereign wealth funds in the Middle East, in Asia, obviously the US pension systems, which we’ve talked about, and in Europe as well, is that just about everybody says, I want to limit the number of partnerships I have. I want to have more condensed relationships with fewer managers that do a number of different things for me. I think that sometimes we as managers— I mean, there are 15,000 private market businesses out there. The number changes every day, and it seems to be getting bigger, but that was the last time I heard it. You literally, when you were at Chicago Police, I don’t think you could have entertained 5 minutes with 15,000 managers over the course of the year. Sometimes I’m even very grateful just to get in the room and have an audience with people that haven’t invested with us. But this is all to say that they want to limit the amount of times that they actually have to deal with managers to a condensed view, where they can really structure and scale the partnership around what their bespoke needs are, what they’re looking to solve for. In my belief, Aoifinn, and I could be wrong, I don’t want to sound didactic like I’m on a pulpit here. But what I see happening is that they want to have it with partners. They don’t want to do funds. They don’t want to always be in the hamster wheel of having to find new things to do. They want to have some creativity around that. One of the things we tell the young people here is one client is not the same as the other. We deal with about 4,000 idiosyncratic institutional opportunities, different boards, different governance structures, different CIO dynamics. Different asset allocations, different asset consultants, it all varies. And it gets back to my earlier point, if you don’t understand the nuances of each one, you’re not going to be successful. But understanding the nuances takes time. So what I see going forward is the alternative asset industry is maturing. It’s going from an, we’re in market, we’re out of market, we’re in market, we’re out of market, to we are perpetually in market. And the obligation on the manager now is not to show up when they want something or need something, it’s to show up 24/7 and be an extension of the organization which they’re managing capital for. If they are only showing up when it suits them, their chances are very, very low. The last thing I’ll say is, and I do get a little heat from this internally, but if we as Alrock showed up today to start a direct lending fund, there would be no reason for us to exist. We got it very right in 2015, our timing was great. We identified an area of the market where we wanted to focus on, which was sponsor-backed larger businesses. We did that for the reason of generating income and managing the downside. That gravitated, happened to be in that ecosystem where people were moving dollars outside of traditional fixed income and looking more at private credit as a way in which to prosecute their objectives.
Aoifinn Devitt: So interesting. I think a natural things flow from that. I can see more evergreen type arrangements, more separate accounts, and equally more of that kind of consultative partnership whereby we spoke to one of the leaders of one of the New Mexico public funds about how they’re doing this to really leverage and essentially outsource some of their investment team because they just simply don’t have the resources. And for them, it’s hugely efficient to be able to work with a team like that. So it’s really interesting that that is the direction of travel because I think some funds have been early adopters of that. And others are coming around to it. But I look forward to seeing more of the same. Tied to that, you mentioned the excitement around direct lending and that some, for some is getting a little stale or there’s been you either, know, fee erosion, there’ve been some canaries in the coal mine. Could you just gimme your thoughts on where we are in the cycle there?
James Clarke: Well, it’s really interesting. I mean, I said this on something the other day that direct lending seems to go, I’ve gone from the penthouse to the basement. 2 years ago we were calling it the golden age of private credit. Now we’re calling it cockroaches. It literally has gone from here to here in a very short space of time. What has stayed consistent, though, is the performance of the asset class. It’s achieved exactly what it’s set out to achieve, which, as I said before, is generating income in the low double digits and mitigating downside risk. I mean, default rates in direct lending were— I think they were 1.8% in 2024. They’re down to actually 1.1%. The default rates in direct lending are 4 times lower than the broadly syndicated market. If you actually looked with where we traffic in the sponsor-based part of the market, the performance is actually— and the default rates are much, much lower than the non-sponsored market. I do think that the media, and I used to be a journalist, and I get it, is not going to want to write glossy stories about, oh, this asset class just continues to achieve what it’s set out to achieve. Nobody’s going to read that. This desire to find out what they consider to be potentially the next pocket of dislocation in the financial system seems to have gravitated around private credit. What I don’t understand about that is that to me, all asset classes seem overvalued. Equities are at an all-time high, high yield, we are at the very top of the capital structure here, very, very top of the capital structure. We’re talking about, as I said, $300 million EBITDA loans. 30% loan-to-value, there’s 70% of equity sitting behind that, but no one seems to want to have that conversation. That’s not for me to diminish private equity by any stretch. None of this is a private equity or should it be private credit, it’s an and. But if we’re going to have a conversation around systemic shocks in the market, I would rather be at the front of the cap stack with 70% of equity sitting behind me than the other way around.
Aoifinn Devitt: It’s interesting. I mean, just in terms of the use case too, I mean, when we spoke at Mercer Cog Police, we were looking at direct lending specifically for income generation. We had a structurally negative cash flow. We needed income. We needed to have a cash flowing portfolio. And I said, one of the things I’ve also heard is that some direct lending is going to more pick than cash flowing, that that’s a bit of a trend in some. And essentially it’s a sign perhaps of the froth in the market that the issuers are getting away with that. Have you seen the client use case change for private credit?
James Clarke: [Speaker:David_Sherman] I think the client use changes— it’s a great question. I first met Chicago Police when I was at PIMCO in 2005, and you weren’t there, and it was a much smaller organization. I don’t have the update on where they are right now, or frankly, when you were there, but what I do know is that the use case has changed a lot. After the financial crisis, you never, in my experience, and I wasn’t in direct lending at the time, but I started to see the asset class getting momentum., you would see $50, $75, $100 million allocations. Arizona State Retirement Systems was one of the first to do it, I remember. NEPC, which was an asset consultant, was a big advocate of direct lending post the crisis. Michigan Municipal Employees Retirement System, I did it, but they didn’t do it in large scale back then. It went from being that tactical, we’re getting into a fund, we’re going to get in when spreads are gapped out. Wait for them to contract, and we may or may not do it again. It was very much an— it didn’t even sit in an alternative. It was like an opportunistic allocation, which would usually be about somewhere between 2% to 4% of overall plan assets. Then it jumped into the private markets allocation, and then it jumped into the traditional fixed income allocation. Half of our biggest clients are the ones that we manage sizable— I’m talking billion-dollar mandates for— we don’t speak to the alternative team, we speak to the fixed income team. The use case has rapidly changed. I think that what was able to be demonstrated on a risk-adjusted basis was that this asset class could achieve those results at a better level. Remember, floating rate, not fixed rate, top of the capital stack, not at the bottom, it was able to demonstrate itself as an all-weather asset class, or all-weather investment that could perform across market cycles. As such, you also had a period then— I mean, we have to remember that up until recently, cash was free, and the ability for a pension fund— and you would have had an actual rate of return at Chicago Police, and you would have had a funding ratio,— and I’m just guessing, say it was 7.5% and 70% funding ratio, all of a sudden, you’ve got 30% of the portfolio in fixed income barely getting off the ground, putting an overreliance on your risk assets, mostly public equity, to achieve that and to achieve the actual rate of return and actually increase the funding ratio. It was a really tough challenge. This gets back to what I said before, you had a problem, or you needed a solution, and how are you going to fix it? Now, if everybody just came to you and just said, independently, did not know what your actual rate of return was, did not know your funding ratio, and just threw stuff at the wall, they wouldn’t really have an understanding of what you’re trying to achieve. I’m going off on a tangent, but this is to say that the use case changed, and it was able to get the overall portfolio closer, if not higher, above the actuarial rate. And it was able to increase the funding ratio.
Aoifinn Devitt: And I’ve been saying that since 2016, that we should have been thinking about private credit along a spectrum alongside public fixed income. I’m glad to hear that that’s where it is now because that’s, to me, it’s a sliding scale. I’d love to now move to some personal reflections. I’m gonna start off with your leadership style. So how has it evolved over the course of time and how would you describe it today?
James Clarke: This is such a great question and I’m gonna answer this and I’m gonna feel maybe I’ve overshared, but, which I have a tendency to do, Aoifinn, but I was just on a call before you with a guy who’s 80 years old who I’ve befriended over the years who was a former Vietnam veteran. And he was actually in the Marines and he won the Navy Cross, which is the highest award you can get. And he’s a guy that’s a friend of mine. He’s a consultant to me. And every month I sit down with him and I talk about— now you have to remember, this guy’s in a war that people didn’t want to really be in. He’s 21 years old, he’s fighting in a jungle, and he ran a platoon. So let’s say 30 people around him, all from different parts of America, in a country no one’s ever stepped in. And he tells me— I always ask him these questions— well, how do you deal when the situation X happened? How did you deal with when they told you you had to go walk into the jungle to draw fire? And what I’ve learned from him, and there’s a lot I’ve learned from him, and I’ve written it all down,— and I’m not going to go through every point, but those types of people in an experience that’s completely independent of anything related to you. And I always say to him, I’m like, Carl, I don’t want to trivialize what I’m doing here. I’m sitting in a suit in Manhattan with what you had to do, and I would never be disrespectful. He says to me, but that just shows you that what you’re doing, it’s okay to make mistakes from time to time. I couldn’t make mistakes., but the most important thing with leadership is directness. And he told me a story that was really interesting. This was today. He said, there was a time we had to go, it was raining hard, it was the rainy season, we were going into an area that we knew there was a lot of enemy. And I said to them, some of you are going to die tonight. And they appreciated that. And I said, did they? And he goes, yes, some of them did. But the transparency, the honesty, this is what we’re faced with. The other thing he teaches me that’s key is core competence. He said, you would be shocked how many people over there did not even know how to read a compass. People would completely lose faith. We got our lives in your hands. The way I interpret that is I can’t do all the fun stuff. I can’t go to all the conferences, or I can’t present myself to management when the spotlight’s on. I need to do the heavy lifting too. I need to still demonstrate that I can go into a client meeting. I still need to demonstrate that I need to go and have that tough discussion, because if you don’t do it yourself, why would you expect they’re going to do it? The best advice that was ever given to me by him, you work for them, they don’t work for you. My job was to keep them safe, and that was it. That’s a very unpopular war. He distinguished himself, and he’s given me great lessons, and maybe not all of them are applicable, and definitely, again, they are not in the same context The environment is completely different, but it does show you that to successfully lead people, you have to show core competency, honesty, transparency, and a willingness to do it yourself.
Aoifinn Devitt: Amazing. Well, it’s very hard to follow up a story like that with a response that seems halfway appropriate, but I think I will just ponder and thank you for sharing that extraordinary wisdom from that friend of yours. Speaking of narratives and stories, looking over the course of your career, are there any highs or lows you can speak to and any low points that maybe you’ve learned lessons from?
James Clarke: You asked me early on advice to young people. I think failure is a privilege. I really do. People say pressure is a privilege. They say that in sports. I think failure is. I think anybody who is going to have a successful career has had to have a period of failure at some point because inevitably down the road they’re going to be faced with a situation where it could be a flip of a coin, it could go either way. And if you don’t have that— I’ve been fired in this job. It’s happened to me. I’ve worked for a very, very good firm. They had different expectations of how quickly money should be raised. That’s their prerogative. I took a much more long-term nuanced approach to it. And we had a different view. And the one advice I give to young people is don’t look for a career, look for an alignment of values. I’m not saying their alignment of values were worse or better or anything like that. They just had a different view on the values of how to engage the market. They’ve done great. They’re a really good firm. I actually happen to talk highly of them when I’m asked about them. It just wasn’t the right thing for me. That’s okay. That’s fine. I’ve learned very early on in the piece, I even learned last week, I sent out this investor— it’s not really an investor letter, it’s a newsletter, it’s designed to just be a little bit more a little bit more affable and not the stereotypical LTVs are this and picks that and default rates this, but I used the word deploy capital. A friend of mine who’s the CEO of one of the big Australian super funds, he’s universally respected, wrote me back and he said, I loved your article. Having said that, please use the word invest going forward, not deploy. Deploy sounds like asset gathering. Invest sounds smart, prudent, and in the benefit of your clients. 100% right. Sometimes you just get trapped in that ecosystem of this is how we talk. I never used the word deploy in my life until I was about 30. And so now, all of a sudden, yes, I never said when I was young, I’m going to deploy my capital. I said, I’m going to invest my money. And so I took that. And what I like about this firm is I sent that all the way up to the CEOs, and I said, this came from this guy, hugely respected. We’ve got to change the way we— and it’s maybe people will be like, really? Really? Is that— no, that’s such an accurate, great lesson because at the end of the day, you’re working for them. And yes, we are investors, we’re not deployers.
Aoifinn Devitt: Well, James, decades into a career and still learning. I think you’re an absolute class act. I think looking at you, it’s clear that you, you love what you do. You’re passionate about our industry. And you’re passionate about getting in and continuing to work in alignment and to work in partnership with large investors who are themselves overwhelmed by, I think, the crosscurrents and macro factors behind us, the challenging investment landscape. And having you there to help them navigate with such integrity and passion is really something to witness. So thank you for coming here and sharing your insights with us.
James Clarke: Thank you. I don’t have all the answers, Aoifinn, and I’m probably— some of the stuff I said maybe people don’t resonate to, but I think what I am is a constellation of many people’s experiences, and hopefully I’ve picked the best bits.
Aoifinn Devitt: You’re a breath of fresh air indeed. So, so thank you. I’m Aoifinn Devitt. Thank you for listening to the 50 Faces Podcast. If you liked what you heard and would like to tune in to hear more inspiring investors and their personal journeys, please subscribe on Apple Podcasts or wherever you get your podcasts. This podcast is for informational purposes only and should not be construed as investment advice, and all views are personal and should not be attributed to organizations and affiliations of the host or any guest.
Aoifinn Devitt: Series 5 of the 2025 50 Faces podcast is kindly supported by Diamond Hill. Diamond Hill invests on behalf of clients through a shared commitment to its valuation-driven investment principles, long-term perspective, capacity discipline, and client alignment. An independent active asset manager with significant employee ownership, Diamond Hill’s investment strategies include differentiated US and non-US equity, alternative long-short equity, and fixed income.
James Clarke: I think one of the things in this industry that people don’t spend enough time thinking about is luck. Luck is a very important part of this. When we happened to come to market, direct lending was still seen as a very nascent, probably tactical allocation. Now it’s become a more mainstream strategic allocation. And as such, the industry has grown significantly and we’ve been a beneficiary of that. I’m.
Speaker C: Aoife.
Aoifinn Devitt: Devitt, and welcome to the 50 Faces Podcast, a podcast committed to revealing the richness and diversity of the world of investment by focusing on its people and their stories. I’m joined today by James Clark, who is Senior Managing Director at Blue Owl and the Global Head of Institutional Capital. He has 26 years of asset management experience and prior to Blue Owl worked for PIMCO, Goldentree Asset Management, and Landmark Partners. Welcome, James. Thanks for joining me today.
James Clarke: Aoifinn, thank you so much for having me. Pleasure to be here.
Aoifinn Devitt: Well, you participated in many podcasts, and recently I listened to one with Ted Seides that prompted me to reach out to you again. And I think you recall then that we last met on the circuit when I was at Chicago Police Pension Fund.
James Clarke: I do. I do. You were being harangued by every single one of people like me, and you were very gracious to give me about 37 seconds, but I appreciate it.
Aoifinn Devitt: Oh, well, I always— I, I certainly didn’t know your story then, and I really enjoyed hearing the story, particularly with respect to client service, relationship building, in your patience in cultivating some of these networks. And so I’m going to put a link to that podcast in the show notes because it was an excellent coverage of your career journey. So as not to repeat that here, and you do hail from Australia, I think that’s— that you haven’t lost the accent there. Just to build on that I’d love to ask, when looking at these various roles you’ve had, at some of these lessons learned from the streets, what would you say that you draw upon now that you’re in a leadership role? What aspects of your prior, your kind of path to here, do you draw upon most frequently?
James Clarke: You know, Australia was a really interesting place to cut my teeth because it was at that stage, and it is not now, and it will not be going forward, a relatively nascent market. I came into it in the late ’90s, The Australian Superannuation Scheme had just been set up by the Labor government in 1992, and they were just getting their momentum. And it was interesting because the plans that we used to speak to then were about $2.5, $3 billion, and now $140 billion. There’s been a lot of consolidation as well, but I’ve been able to watch them grow up from these embryonic stages to these very mature schemes. But what it taught me then was the most important thing was, what are they looking to achieve? What is it that they need help with? And how is it that you can help them? I think I was lucky because I was young and I didn’t know anything, that the only way that I could consume time in a meeting was to listen. I didn’t really have— and I mean, this sounds awful— I didn’t have a tremendous amount of context to give. I was 24, 25 years old. Really, what I was doing was going into those meetings and listening, and it taught me that as these conversations developed and we started to work with these organizations, that the listening part at the start was the most important part. Ultimately, down the road, we were able to curate strategies at PIMCO that made sense for these clients. PIMCO’s business when I joined in Australia was less than $1 billion. Last time I checked, and that was a decade ago, it was $50 billion, and I just told you the size of these groups. The ability to sit there, listen, and grow alongside people was beneficial for both parties.
Aoifinn Devitt: That’s a fantastic flex. So I think for young people thinking about it, not knowing at all, but actually that, that can actually be a real strength, being in a position to be an intelligent and active listener, I suppose. Really interesting. And we did just have Deanna Stewart from Aware Super on this podcast, and we’ll be in the same series. So nice to kind of circle back to compare their growth through acquisition as well as the solution sales that you were kind of already conceiving.
James Clarke: Well, I, I will tell you a very hard lesson, and I do have to just quickly jump in. I was in one of these meetings and my boss was with me, who incidentally now he reports to me. But anyway, I was in the meeting, someone was talking, and I felt someone bridled enthusiasm to open my voice. And within about 10 seconds, he turned to me, my boss, and said, you were here to carry the books. I learned the hard way.
Aoifinn Devitt: Well, I think another example of this being a repeated game and not the importance of not burning bridges, correct? In, in our industry, correct. And in terms of the rest of your you journey, know, to this point now in a leadership role, How do you coach maybe junior people coming into a role which is about, I think, having a thick skin, learning how to handle rejection? Was that something you were born with or something that you learned the hard way?
James Clarke: Rejection, I kind of learned through all my life. Not to get too much into it, but I was always sort of one of those— you and I both come from countries where sport is considered a much more important thing than necessarily should or would be, but I was always one of those middle-tier people and always wanting to get into the team and somehow finding myself on the outside looking in more often than not. But for the business, I was always told the principle that you never find out without asking. I never saw rejection as a rejection. I think some people fall into this trap that when there’s success, it’s about them, and when there’s failure, it’s about them. Really, what we do is we’re acting as conduits of information. The only way we can be successful at that is obviously being able to articulate what we do, but more importantly, trying to understand what somebody else is doing. But when people make it about themselves in this business, I generally see it go wrong. It goes really, really badly. But if you approach it from the mindset, I am here of service to the organization, but also the client, you’re going to do much, much better. But I joke a little bit about our first interaction. I know where it was. It was at a consultants conference in Chicago. But you were literally surrounded by a ton of people. I had you on my list of people that I didn’t know and I wanted to get to know. The expectation is not that you’re all of a sudden going to fall down and go, “Oh my goodness, I’ve been waiting to have this conversation for the entire conference.” The expectation I knew at that time is this is a person who’s incredibly busy. I just want to say hi. I’ve got nothing else to say other than that, and then to walk off. I always look at folks who are in your seat back then and in the public pension universe, particularly that are representing— you were representing $3 billion. They were representing hundreds of billions of dollars, whatever the amount may be, they get approached as an object, not necessarily as a person. And yet we often approach in a business that’s about relationships, we often temper down the relationship aspect of it, which in my mind is actually the most important thing.
Aoifinn Devitt: Great wisdom there. And I’d say from my perspective, having been an allocator in that role, and you’re right, it was like having a target on your back. It is extremely rare that anybody puts themselves in your shoes in terms of the that, and that, that I think is a great move and a great kind of mindset. The other thing I’d say is, what do allocators really want? And I think PIMCO is a great example of a firm that does this very well, is they want things that make them— educate them, make them smarter, connect them to other allocators like themselves. It’s that kind of value, and that is a value that’s built over time with delivery of excellence. So I think that’s a little bit of a secret from me there in terms of what allocators really want, but I think having hailed from PIMCO, you already know that.
James Clarke: GRAY] WESLEY Well, it’s interesting you say that. Yes, I learned a lot from PIMCO, but I will tell you one of the things I actually do with the young people here at Blue Owl right now is get them to spend a considerable amount of time with some senior people that are on my team now, one of which was the deputy CIO at the Future Fund. Another one has sat on boards at Australian superannuation funds. There’s a number of people here. We used to have the former CEO of the New Jersey state pension system. We have a number of people that worked as asset consultants. And one of the first things I tell them is go talk to those people, because they have sat on the other side of this. They have seen what has worked. More importantly, they’ve seen what absolutely annoys them and what they found completely destructive. A firm like Blue Owl and PIMCO has embedded in it a strong beta. They have very strong track records. They’ve done very well. They’ve done it over a number of years. Their client base is really good. The goal of the— not the salesperson, I don’t like to say that, the client service relationship person is to take that beta and add their own alpha. But it’s funny, with some of those firms, they’re actually negative alpha. And it would be better off if they weren’t there, because they’ve actually convoluted the process by being too pushy, too direct, too transactional, and frankly, coming at it from a perspective of, I need this for me, rather than what do I bring to this for the firm that I work for, and more importantly, the person who is going to invest in the firm. But it’s a really hard lesson to learn unless you’re around people that get it. I was very, very lucky early on in my career to be around a person who understood that. But I have seen people who are young, and they sit in a room, and they watch somebody come in, and the portfolio manager or the head of the firm, and that person sits down and talks for 55 minutes straight. And they think that’s the way it’s done. And their careers, unfortunately, go off on the wrong tangent. What we’re trying to do is educate them from the very beginning and say, I need you to sit down with— the lady’s name is Alicia Gregory. She was at Australia Sovereign Wealth Fund. She saw everybody from all the top of the firm at the BlackRocks and the Blackstones, all the way down to the people that are junior client service people, and she can tell you what worked and didn’t work. And that is the best instruction I’ll ever get. It’s way better than coming from me.
Aoifinn Devitt: And I usually ask about core investment beliefs, and I suppose this would be core kind of business building, business development beliefs. Anything that you have internalized over the years that you think is just the way to succeed in this business?
James Clarke: Yeah, I mean, the one thing that I say here all the time is we don’t sell products, we position partnerships. And I also really try and reinforce a lot of the time that the very best partnerships take time and they don’t happen on your schedule. And that it’s fundamentally important. I always say invest in the process, trust the process, because the process takes care of itself if you do all the little things right. And if you do all the things right, which generally orientate themselves around what’s in it for the client, and you let them make the decision in their own timeframe, then you’re going to have a lot more success. I think where people get things wrong a lot of the time— and look, we’re a public company, we’re publicly traded, we cannot consume ourselves with what the share price is doing on a day-to-day basis. That’s not relevant. What I can tell you, though, is I see it. I’m on the front lines here, and I see all the processes that we’ve got across our investment platforms, our distribution, our client service platforms in wealth and in institutional. Are all doing the right things. And whatever the market catches up to that, the manifestation of that may not be in our schedule, but it will happen. And it will happen in the future because the process is being done the right way. If you try and short circuit the process and invest in the short-term performance of something, you’re going to just derail it. And you’re not going to get the results you want because at the end of the day, the manifestation of of the market is an endorsement of what you have done well in the process. Maybe that’s a little wordy, but really at the end of the day, the moment you distract yourself from the long-term and focus on the short-term, things go pretty badly.
Aoifinn Devitt: And speaking of the process, so Blue Owl, I think you mentioned it’s a public company. It’s known for having had quite staggering growth in recent years. And I wonder if you could just talk us through that in terms of that narrative and what it is that you’re building. And equally how you message that to clients.
James Clarke: I mean, look, everything we do here has a north star of we’re here to generate income and preserve capital, and that’s it. And we prosecute that in 3 different ways or a number of different ways across direct lending, across a segment of the market called GP stakes, where we take passive minority stakes, usually in large GPs. And we also do it in triple net lease, which we do, which is where we do sell leasebacks with investment-grade tenants that pre-describe cap rates for a certain duration. Everything that we do here is around bigger businesses that are scaled, direct lending is bigger businesses, real estate is bigger businesses, because our belief is that scale is likely to withstand any type of cyclical shocks and perform consistently over a secular time horizon. Everything operates around that DNA across what we do. Yeah, we started off as Blue Owl in 2021 with about $60 billion, which was a combination of our direct lending capabilities in our GP stakes. Since then, we’ve grown to $300 billion. I think what’s important isn’t necessarily the growth. The numbers look very sexy and glossy and all that. To me, the most satisfying thing is that we have identified, number one, what you said earlier on, exactly what you said earlier on, which is, I need a solution to something, and I need you to make me look good in achieving that solution. By approaching it in that mindset, it doesn’t matter whether the number is 100, 300, 500, a trillion. What matters to me is the fact that the clients have got what they asked for. As long as we continue to do that and continue to provide that, we’ll continue to succeed. I think one of the things in this industry that people don’t spend enough time thinking about is luck. Luck is a very important part of this. When we happened to come to market, direct lending was still seen as a very nascent, probably tactical allocation. Allocation. Now it’s become a more mainstream strategic allocation. And as such, the industry has grown significantly and we’ve been a beneficiary of that. Having said that, there’s also about 500 to 1,000 direct lenders out there. Not all of them have done that, but I think what we’ve spoken to is a need and the willingness to understand that need and be a solution to what the client needs to solve for, and in doing so, make them look good.
Aoifinn Devitt: We’re going to take a short break to hear from the sponsor of this series, Diamond Hill. I sat down with Krishna Mohanraj, International Portfolio Manager of Diamond Hill, and asked him about the current opportunity set for international investing.
Speaker C: And from our perspective, we’ve always said valuations are important, currency is important, and in both senses, international has been super attractive for a long time. So that’s kind of the backdrop. Today, I would say there’s only one story in town. Know, You the world seems to be coming around to accepting that there is a regime change. We are moving, we don’t know how much, but definitely away from a truly global world to a more local world. And then the question is, how does that path look like? Ups and downs. So that’s kind of more current thinking for us. What is the true north, right? That’s the key. The true north, the philosophy for us is buy good businesses that you can understand.
Aoifinn Devitt: And now back to the show. Do you think the role of large diversified, rarely private asset providers like yourself will be, say, in the next 5 years as you continue to grow?
James Clarke: It’s a really good question. What I see right now, and I spend a lot of time, I probably spend 4 to 5 months of the year overseas meeting with superannuation funds, sovereign wealth funds in the Middle East, in Asia, obviously the US pension systems, which we’ve talked about, and in Europe as well, is that just about everybody says, I want to limit the number of partnerships I have. I want to have more condensed relationships with fewer managers that do a number of different things for me. I think that sometimes we as managers— I mean, there are 15,000 private market businesses out there. The number changes every day, and it seems to be getting bigger, but that was the last time I heard it. You literally, when you were at Chicago Police, I don’t think you could have entertained 5 minutes with 15,000 managers over the course of the year. Sometimes I’m even very grateful just to get in the room and have an audience with people that haven’t invested with us. But this is all to say that they want to limit the amount of times that they actually have to deal with managers to a condensed view, where they can really structure and scale the partnership around what their bespoke needs are, what they’re looking to solve for. In my belief, Aoifinn, and I could be wrong, I don’t want to sound didactic like I’m on a pulpit here. But what I see happening is that they want to have it with partners. They don’t want to do funds. They don’t want to always be in the hamster wheel of having to find new things to do. They want to have some creativity around that. One of the things we tell the young people here is one client is not the same as the other. We deal with about 4,000 idiosyncratic institutional opportunities, different boards, different governance structures, different CIO dynamics. Different asset allocations, different asset consultants, it all varies. And it gets back to my earlier point, if you don’t understand the nuances of each one, you’re not going to be successful. But understanding the nuances takes time. So what I see going forward is the alternative asset industry is maturing. It’s going from an, we’re in market, we’re out of market, we’re in market, we’re out of market, to we are perpetually in market. And the obligation on the manager now is not to show up when they want something or need something, it’s to show up 24/7 and be an extension of the organization which they’re managing capital for. If they are only showing up when it suits them, their chances are very, very low. The last thing I’ll say is, and I do get a little heat from this internally, but if we as Alrock showed up today to start a direct lending fund, there would be no reason for us to exist. We got it very right in 2015, our timing was great. We identified an area of the market where we wanted to focus on, which was sponsor-backed larger businesses. We did that for the reason of generating income and managing the downside. That gravitated, happened to be in that ecosystem where people were moving dollars outside of traditional fixed income and looking more at private credit as a way in which to prosecute their objectives.
Aoifinn Devitt: So interesting. I think a natural things flow from that. I can see more evergreen type arrangements, more separate accounts, and equally more of that kind of consultative partnership whereby we spoke to one of the leaders of one of the New Mexico public funds about how they’re doing this to really leverage and essentially outsource some of their investment team because they just simply don’t have the resources. And for them, it’s hugely efficient to be able to work with a team like that. So it’s really interesting that that is the direction of travel because I think some funds have been early adopters of that. And others are coming around to it. But I look forward to seeing more of the same. Tied to that, you mentioned the excitement around direct lending and that some, for some is getting a little stale or there’s been you either, know, fee erosion, there’ve been some canaries in the coal mine. Could you just gimme your thoughts on where we are in the cycle there?
James Clarke: Well, it’s really interesting. I mean, I said this on something the other day that direct lending seems to go, I’ve gone from the penthouse to the basement. 2 years ago we were calling it the golden age of private credit. Now we’re calling it cockroaches. It literally has gone from here to here in a very short space of time. What has stayed consistent, though, is the performance of the asset class. It’s achieved exactly what it’s set out to achieve, which, as I said before, is generating income in the low double digits and mitigating downside risk. I mean, default rates in direct lending were— I think they were 1.8% in 2024. They’re down to actually 1.1%. The default rates in direct lending are 4 times lower than the broadly syndicated market. If you actually looked with where we traffic in the sponsor-based part of the market, the performance is actually— and the default rates are much, much lower than the non-sponsored market. I do think that the media, and I used to be a journalist, and I get it, is not going to want to write glossy stories about, oh, this asset class just continues to achieve what it’s set out to achieve. Nobody’s going to read that. This desire to find out what they consider to be potentially the next pocket of dislocation in the financial system seems to have gravitated around private credit. What I don’t understand about that is that to me, all asset classes seem overvalued. Equities are at an all-time high, high yield, we are at the very top of the capital structure here, very, very top of the capital structure. We’re talking about, as I said, $300 million EBITDA loans. 30% loan-to-value, there’s 70% of equity sitting behind that, but no one seems to want to have that conversation. That’s not for me to diminish private equity by any stretch. None of this is a private equity or should it be private credit, it’s an and. But if we’re going to have a conversation around systemic shocks in the market, I would rather be at the front of the cap stack with 70% of equity sitting behind me than the other way around.
Aoifinn Devitt: It’s interesting. I mean, just in terms of the use case too, I mean, when we spoke at Mercer Cog Police, we were looking at direct lending specifically for income generation. We had a structurally negative cash flow. We needed income. We needed to have a cash flowing portfolio. And I said, one of the things I’ve also heard is that some direct lending is going to more pick than cash flowing, that that’s a bit of a trend in some. And essentially it’s a sign perhaps of the froth in the market that the issuers are getting away with that. Have you seen the client use case change for private credit?
James Clarke: [Speaker:David_Sherman] I think the client use changes— it’s a great question. I first met Chicago Police when I was at PIMCO in 2005, and you weren’t there, and it was a much smaller organization. I don’t have the update on where they are right now, or frankly, when you were there, but what I do know is that the use case has changed a lot. After the financial crisis, you never, in my experience, and I wasn’t in direct lending at the time, but I started to see the asset class getting momentum., you would see $50, $75, $100 million allocations. Arizona State Retirement Systems was one of the first to do it, I remember. NEPC, which was an asset consultant, was a big advocate of direct lending post the crisis. Michigan Municipal Employees Retirement System, I did it, but they didn’t do it in large scale back then. It went from being that tactical, we’re getting into a fund, we’re going to get in when spreads are gapped out. Wait for them to contract, and we may or may not do it again. It was very much an— it didn’t even sit in an alternative. It was like an opportunistic allocation, which would usually be about somewhere between 2% to 4% of overall plan assets. Then it jumped into the private markets allocation, and then it jumped into the traditional fixed income allocation. Half of our biggest clients are the ones that we manage sizable— I’m talking billion-dollar mandates for— we don’t speak to the alternative team, we speak to the fixed income team. The use case has rapidly changed. I think that what was able to be demonstrated on a risk-adjusted basis was that this asset class could achieve those results at a better level. Remember, floating rate, not fixed rate, top of the capital stack, not at the bottom, it was able to demonstrate itself as an all-weather asset class, or all-weather investment that could perform across market cycles. As such, you also had a period then— I mean, we have to remember that up until recently, cash was free, and the ability for a pension fund— and you would have had an actual rate of return at Chicago Police, and you would have had a funding ratio,— and I’m just guessing, say it was 7.5% and 70% funding ratio, all of a sudden, you’ve got 30% of the portfolio in fixed income barely getting off the ground, putting an overreliance on your risk assets, mostly public equity, to achieve that and to achieve the actual rate of return and actually increase the funding ratio. It was a really tough challenge. This gets back to what I said before, you had a problem, or you needed a solution, and how are you going to fix it? Now, if everybody just came to you and just said, independently, did not know what your actual rate of return was, did not know your funding ratio, and just threw stuff at the wall, they wouldn’t really have an understanding of what you’re trying to achieve. I’m going off on a tangent, but this is to say that the use case changed, and it was able to get the overall portfolio closer, if not higher, above the actuarial rate. And it was able to increase the funding ratio.
Aoifinn Devitt: And I’ve been saying that since 2016, that we should have been thinking about private credit along a spectrum alongside public fixed income. I’m glad to hear that that’s where it is now because that’s, to me, it’s a sliding scale. I’d love to now move to some personal reflections. I’m gonna start off with your leadership style. So how has it evolved over the course of time and how would you describe it today?
James Clarke: This is such a great question and I’m gonna answer this and I’m gonna feel maybe I’ve overshared, but, which I have a tendency to do, Aoifinn, but I was just on a call before you with a guy who’s 80 years old who I’ve befriended over the years who was a former Vietnam veteran. And he was actually in the Marines and he won the Navy Cross, which is the highest award you can get. And he’s a guy that’s a friend of mine. He’s a consultant to me. And every month I sit down with him and I talk about— now you have to remember, this guy’s in a war that people didn’t want to really be in. He’s 21 years old, he’s fighting in a jungle, and he ran a platoon. So let’s say 30 people around him, all from different parts of America, in a country no one’s ever stepped in. And he tells me— I always ask him these questions— well, how do you deal when the situation X happened? How did you deal with when they told you you had to go walk into the jungle to draw fire? And what I’ve learned from him, and there’s a lot I’ve learned from him, and I’ve written it all down,— and I’m not going to go through every point, but those types of people in an experience that’s completely independent of anything related to you. And I always say to him, I’m like, Carl, I don’t want to trivialize what I’m doing here. I’m sitting in a suit in Manhattan with what you had to do, and I would never be disrespectful. He says to me, but that just shows you that what you’re doing, it’s okay to make mistakes from time to time. I couldn’t make mistakes., but the most important thing with leadership is directness. And he told me a story that was really interesting. This was today. He said, there was a time we had to go, it was raining hard, it was the rainy season, we were going into an area that we knew there was a lot of enemy. And I said to them, some of you are going to die tonight. And they appreciated that. And I said, did they? And he goes, yes, some of them did. But the transparency, the honesty, this is what we’re faced with. The other thing he teaches me that’s key is core competence. He said, you would be shocked how many people over there did not even know how to read a compass. People would completely lose faith. We got our lives in your hands. The way I interpret that is I can’t do all the fun stuff. I can’t go to all the conferences, or I can’t present myself to management when the spotlight’s on. I need to do the heavy lifting too. I need to still demonstrate that I can go into a client meeting. I still need to demonstrate that I need to go and have that tough discussion, because if you don’t do it yourself, why would you expect they’re going to do it? The best advice that was ever given to me by him, you work for them, they don’t work for you. My job was to keep them safe, and that was it. That’s a very unpopular war. He distinguished himself, and he’s given me great lessons, and maybe not all of them are applicable, and definitely, again, they are not in the same context The environment is completely different, but it does show you that to successfully lead people, you have to show core competency, honesty, transparency, and a willingness to do it yourself.
Aoifinn Devitt: Amazing. Well, it’s very hard to follow up a story like that with a response that seems halfway appropriate, but I think I will just ponder and thank you for sharing that extraordinary wisdom from that friend of yours. Speaking of narratives and stories, looking over the course of your career, are there any highs or lows you can speak to and any low points that maybe you’ve learned lessons from?
James Clarke: You asked me early on advice to young people. I think failure is a privilege. I really do. People say pressure is a privilege. They say that in sports. I think failure is. I think anybody who is going to have a successful career has had to have a period of failure at some point because inevitably down the road they’re going to be faced with a situation where it could be a flip of a coin, it could go either way. And if you don’t have that— I’ve been fired in this job. It’s happened to me. I’ve worked for a very, very good firm. They had different expectations of how quickly money should be raised. That’s their prerogative. I took a much more long-term nuanced approach to it. And we had a different view. And the one advice I give to young people is don’t look for a career, look for an alignment of values. I’m not saying their alignment of values were worse or better or anything like that. They just had a different view on the values of how to engage the market. They’ve done great. They’re a really good firm. I actually happen to talk highly of them when I’m asked about them. It just wasn’t the right thing for me. That’s okay. That’s fine. I’ve learned very early on in the piece, I even learned last week, I sent out this investor— it’s not really an investor letter, it’s a newsletter, it’s designed to just be a little bit more a little bit more affable and not the stereotypical LTVs are this and picks that and default rates this, but I used the word deploy capital. A friend of mine who’s the CEO of one of the big Australian super funds, he’s universally respected, wrote me back and he said, I loved your article. Having said that, please use the word invest going forward, not deploy. Deploy sounds like asset gathering. Invest sounds smart, prudent, and in the benefit of your clients. 100% right. Sometimes you just get trapped in that ecosystem of this is how we talk. I never used the word deploy in my life until I was about 30. And so now, all of a sudden, yes, I never said when I was young, I’m going to deploy my capital. I said, I’m going to invest my money. And so I took that. And what I like about this firm is I sent that all the way up to the CEOs, and I said, this came from this guy, hugely respected. We’ve got to change the way we— and it’s maybe people will be like, really? Really? Is that— no, that’s such an accurate, great lesson because at the end of the day, you’re working for them. And yes, we are investors, we’re not deployers.
Aoifinn Devitt: Well, James, decades into a career and still learning. I think you’re an absolute class act. I think looking at you, it’s clear that you, you love what you do. You’re passionate about our industry. And you’re passionate about getting in and continuing to work in alignment and to work in partnership with large investors who are themselves overwhelmed by, I think, the crosscurrents and macro factors behind us, the challenging investment landscape. And having you there to help them navigate with such integrity and passion is really something to witness. So thank you for coming here and sharing your insights with us.
James Clarke: Thank you. I don’t have all the answers, Aoifinn, and I’m probably— some of the stuff I said maybe people don’t resonate to, but I think what I am is a constellation of many people’s experiences, and hopefully I’ve picked the best bits.
Aoifinn Devitt: You’re a breath of fresh air indeed. So, so thank you. I’m Aoifinn Devitt. Thank you for listening to the 50 Faces Podcast. If you liked what you heard and would like to tune in to hear more inspiring investors and their personal journeys, please subscribe on Apple Podcasts or wherever you get your podcasts. This podcast is for informational purposes only and should not be construed as investment advice, and all views are personal and should not be attributed to organizations and affiliations of the host or any guest.
