Economic Growth, Governance, and Capital Allocation – Dambisa Moyo (EP.510)

24:56Dambisa Moyo:If you look at that on the lens of, say, Chevron, there's the easy high level poke at dirty energy in a world trying to make the transition to cleaner energy. How do you think about those capital allocation decisions of generating cash flow from the assets that have been around for a long time and then trying to move the world through company in a better direction? The immediate answer is we want to be around. We need companies. We want them to be growing concerns. We're not in the business of doing stuff that's bad, that's going to take us out of business. That would be absurd. Taking advantage of technology, for example, to revisit those assets and think about how we can do it in a clean way is absolutely the center of what we're doing.

25:40Beyond that, it's an industry-wide thing. We've restructured the business models. In the case of Chevron, but it's true for other competitors. We now have a bigger footprint that's looking at renewables. The whole range of them, wind, solar, geothermal, nuclear, starting to revisit that because we want to be around. We want to be part of the solution. We have knowledge over hundreds of years of what creates energy. How do you get carbon, hydrogen, oxygen together to create energy, but also think about new forms of energy that require investment. Questions around scaling. How do you scale solar across the world?

26:15We're in the business of finding those solutions. A lot of the structural changes that have happened, not just from the market reaction or from greater voices from government and also communities, what we've been trying to do in terms of restructuring how the company is set up operationally and how we think about allocating money heavily reflects this idea of leaning into the future. It's a very practical way.

26:39Dambisa Moyo:If you look at Starbucks over many years, one of the things that's changed are the direction of the company based on leadership. And we'd love to get your sense of how do you go about assessing people with the lens of seeing how different it can be within the context of the same company? The important thing that most people who've been involved in any sort of organization, public policy with government, the United Kingdom has had seven prime ministers in 10 years, anything to do with human management. The key important takeaway around how you think about finding the right people, I've learned in 15 years on boards, but being in the House of Lords, trying to ask questions that are outside of checkboxy.

27:29At Starbucks, I haven't been there that long. I wasn't there for all the changes in leadership. Barclays Bank, we had four CEOs in seven years. I'm very familiar with high pace of change. Most of the time when we've had an issue, it was we didn't ask a question outside of the box. We asked whether people had run teams. We talked about whether or not they've had challenges or what financial returns they had, all the obvious stuff. We just didn't ask them how they deal with changes in the environment. You're hired to be the CEO of Company X when the world is globalized and the U.S. and China get along.

28:06There's no pandemic. How do you react if all of a sudden the cost of capital has trebled? We don't ask those black swan questions. We tend to ask questions that fall in a particular remit. If there's one takeaway in 15 years on board, anybody who is going to be in front of me as a board member is qualified. I don't need them to necessarily relate to me how they built a team or generated returns. The fact that they're there tells me that they've done that. What I'm interested in is how do they calibrate for or think about navigating through things that seem implausible but could happen? How do you think about operating a business in a deglobalized world?

28:55You've gone from a world where you can borrow cheap capital in New York and London, invest in Brazil or Thailand and generate returns and repatriate. That world is broken in terms of procurement, in terms of your hiring. How would you think about that? If you talk to somebody 15 years ago, they'd be like, why are you asking me this question? Now it seems like it's an obvious question.

29:17Dambisa Moyo:We're going to take a quick break in the action to tell you about Morgan Stanley Investment Management. The best allocator-manager relationships aren't transactional. They're built over market cycles, through difficult conversations, and around a shared understanding of what an institution's trying to accomplish. Morgan Stanley Investment Management has partnered with institutions for four decades across equity, fixed income, alternatives, and custom solutions with$1.9 trillion in assets worldwide. Learn more at morganstanley.com slash im slash solutions. Morgan Stanley Investment Management is the asset management division of Morgan Stanley.

30:00Dambisa Moyo:Statistics as of December 31st, 2025. All investing involves risk of loss. Views are subject to change. Not investment advice or a recommendation. Copyright 2026 Morgan Stanley. All rights reserved. And now, back to the show. If you take that lens and put it over to your current third board of Condé Nast, a content company with that black swan of AI, being at the board of a company in the space that for sure is thinking about those questions of AI disruption, what have you learned from seeing that experience? Condé Nast was established in 1909. What an eternity. So much has happened. Radio, television, black and white, live events.

30:48Tons have happened. Condé Nast, as a privately held family business, has taught me one thing that is pronounced and how I even think about AI, which is when everything is stripped away, what are the human aspects and elements that remain? We own Vogue. We own Vanity Fair. New York, it reflects human tastes. I don't think that necessarily goes away. How it's distributed, how it's produced. Is it in video? Is it in writing? All those things ebb and flow and they can even change in a very disruptive, revolutionary way. It's not losing sight of what ultimately the business is doing. That's the big driver.

31:30We're not immune or ignorant to the changes that are happening around us and what that might mean for how we operate as a company, the types of people we hire, who gets hired where. The danger is there's so much change, geopolitical, economic, financial, that you lose sight of what you actually do. One other thing I would say with the money manager, I understand the tension of their short-term goal. It's a competitive environment. They're trying to generate returns above the cost of capital. Maybe the mist's secret sauce is trying to understand what your end user, your LP is trying to do. Because do I want more returns?

32:09Yeah, of course. It's not at any cost. We have our own goals. We have our own aspirations for what capital can do. Myself and Jared, we're quite different in terms of our background. That materially influences how we think about operations, capital allocation, views on returns, when they show up, how big they should be. We may agree that we want to do more health and education. How those returns show up is different. If the GPs don't know us, they might just think we only care about return without understanding. Maybe we have more appetite for delayed returns, or maybe not. There's not enough time maybe spent with the LPs to understand what they're trying to get at.

32:52Dambisa Moyo:From the GP's perspective that have a variety of different LPs, How have you seen someone who does that well either cater or do things slightly differently because of what they're hearing from their LPs? It's exhausting work because they essentially have to get into the minds of the LP. And the only way they can do that is by spending time with the LPs. There are gatherings, annual presentations. This is what our returns have been. This is our cost. This is how the J-curve is working. You have to understand that we have our own J-curve. the thing about AI. We're no longer going to rely on the GPs or our money managers to tell us how the J-curve is operating.

33:31I can now look through our own portfolio and see where that J-curve is. It's one small example. If they understood us, it's hard because if you have a lot of LPs, who's got the time to talk to 400 LPs or whatever it may be? For institutional investors, maybe the LP is here today and gone tomorrow. That would be my slight. I wish they knew more about us, what drives us, what we care about, what we believe is possible.

33:56Dambisa Moyo:How much of that do you think is time and listening as compared to them? They're going to go back to their office and maybe go about what they're doing the same way, but just making sure that you're heard. I'm optimistic that they'll hear us more because the role of family offices. It's only grown. Their importance in being part of markets, because it's growing and changing, people care more about what does an LP think. I'm also not ignorant to the challenges that they face, they as money managers, because yeah, sure, they can sit here and say, okay, well, Dambisa cares about structural growth and long term.

34:36She's less concerned about the immediate inflation in the near term because of Straits of Hormuz. She's more interested in the questions have gone deflation longer term, what does this do for the fiscal? Great. They still have to go and work and live in a competitive world where they're competing against people who haven't spoken to me or maybe discount my view. Maybe they think, well, we're not really macro traders. We're in the here and now and we're building a portfolio. I'm not trying to at all say they're wrong, but I do think that it would enhance their effectiveness, particularly those who take LP money from family offices.

35:11I do get the institutional investor thing is quite different. There's different horizons. If you're taking family office money, it's probably in your interest to spend time with the families to understand what they're trying to achieve.

35:23Dambisa Moyo:I'd love to turn to how all of these different lessons in governance, in growth of economies, and capital allocation have informed how, Jared and you, thought about investing in the family office over the last eight years. Where did you start determining the goal of the investment challenge in front of you? We're incredibly fortunate. Jared and I have been together just over 10 years now. When we met, I was doing my thing, which is public policy and investing and being more in the debate around economic growth. He was deep tech, ex-Google, but also founded Qualtrics. Neither of us had anticipated that we would be called upon to think about how to manage a portfolio of capital, also to think about how we could best be impactful for the things that were really important to us.

36:23It's been a journey. It's ongoing. When we first started out, this was 2018 when the company was sold. It was a cash transaction. We went from doing our own thing to, okay, what do we want in this life? We don't have children, but we both come from poor backgrounds. My family background is not impoverished, but I grew up in a poor environment, broadly speaking. Jared is quite similar. He comes from a small town in Utah. We both had seen poverty and we'd seen a lot of structural problems that we thought we could contribute to help fix. We come from different backgrounds. I'm more macroeconomics.

36:59I'd worked at Goldman Sachs for nearly a decade. I came with a bigger view in terms of making economic bets. I was excited about China, for example, back in the day. Now, not so much. It's underperformed. Jared is more of a moonshot person. He grew up in tech. He believed if you put bets onto one big thing, penicillin, as an example, can be incredibly transformative. The reason I say it's a journey is that the first thing out of the gate is I had my long list of money managers, my friends who are running hedge funds from TCI to the Tiger Cubs. We called them immediately and said, oh, my gosh, this is what's happened.

37:38Can you help us? It's been great to go through this learning experience. The good news is that we haven't blown up the principle. We also were lucky early on to sign up Scott Malpass, who was running the Notre Dame endowment. and he was leaving and somebody at Sequoia said, oh, call Scott Malpass, he can really help you. He brought in this idea of we should be thinking about an endowment model. We knew we're going to give it all away. We named it, the endowment, the altered trajectory, because we both believed that we wanted to alter the trajectory of other people. At a very macro level, Jared and I had believed that health and education were the two key pillars we were destined to work on.

38:20We felt that that had been hugely beneficiary to both of us in our experiences. Then the pandemic hit. We were in Provo. There was a lot of food insecurity. So those are best laid plans. Anything can happen because we went from we can do education and we can do health care to food emergency in our backyard. This is an evolving thing. From a capital allocation point of view, we ended up with 47 managers, way too many, overlapping theses, 13 Fs. There was massive correlation. We did take a big exposure in China. I own it because I was a big believer in systemic change and China already had a record of that.

39:03They have underperformed in the certain positions that we've been in. We've been a little bit disappointed there. We're big believers in risk-taking over, let's just do bonds. We had initially private credit positions. The rule of thumb for family offices is a third, a third, a third, a third in equities, third in real estate. It used to be a third in art. Our own experience is we probably have more private equity than we thought we would. A lot of people are in those positions because many people are in SpaceX and now it's this huge valuation is 50 % of your position. We're more equity loving.

39:36We're not big on bonds. Anything that's on the leverage side is not exciting for us.

39:42Dambisa Moyo:So you had some of these details where you had 47 managers that felt like it was too much, the macro perspective, the moonshot perspective. How did you put structure around this pool of assets? That's the discipline that comes from Scott Malpass, also the passage of time. We all know the rule of 72 heuristics around where returns come from. Cliff Esna said 80 % of returns come from like four stocks. If I'm critical of what we've done, the funds are growing, we're happy with the positioning. We did not think about coming from this idea of the endowment model, some of the aspects of churn in positions, for example, long short funds, a lot of institutional investors who were co-investing with us, they weren't suffering the costs of position churns.

40:32Some of it sounds like, how would you not know that? It became a big reality, particularly with the sell-off after the pandemic, coming back, trying to figure out what does an endowment model look like for a family office? That's where we started to get a lot of structure. We have the CIO. We got the financial metrics that we're trying to attain better articulated. It is a live document. Somebody from Sequoia said, oh, you guys don't want to be in money management business. I think they're probably right. Jared loves his deep tech. I love being at the interim section of investing in boards, public policy.

41:07We also have a responsibility, which is what we've taken on, to oversee it and make sure that it's doing the best that it can. We went from 47 down to around 15. It feels better. It's hard to get out of some positions. It takes a bit of time. I was keen in the beginning, oh, we've got to do China. China's important for diversification. is great for being part of this new structural story. Returns have just not panned out. You can't miss the AI aspects and opportunities to invest and be part of an important super cycle.

41:36Dambisa Moyo:If you look through that group of managers, how do you think about what you own? China, not so much. There's a super cycle you want exposure to. There's moonshots related to that or other things that Jared would want to invest in. How do you think about the portfolio as a whole? It skews quite heavily to tech, particularly in the venture part of the portfolio, probably around 30 to 35%. We do a buyout. We're in some food chain type companies and we're in other types of investments that give us exposure to a range of other sectors. Most of it is skewed to tech. It's more on the equity side, in both private and public equities.

42:19It does capture that Jared aspect. It's more US focused. We have a CIO now, Jay Sheth, who's amazing. He was at Tepper for a long time, ex-Goldman as well. He has done brilliantly outperforming the market. He's good at looking beyond AI means Mag7. He understands the tentacles of where the second order effects and benefits will come from. We have a big position in healthcare stocks that have done well. We have some positioning and energy that's outside of direct AI trades. That's been incredibly helpful.

42:57Dambisa Moyo:With a relatively small team and deep knowledge of tech, curious how you thought about AI, both use cases for the office and then on the investing side. Jared is reflective on how you can go from a great idea, the execution to actually seeing the returns, it's quite a journey. That's the externally facing piece. Where should we be investing? There's a bit more maturity on what might be feasible and when. We can all get returns, but hopefully we're still alive when they come in. Jared, broaden a lot of discipline around OKRs, objectives and key results, common in how tech companies run themselves.

43:39bringing that discipline and financial management into the family office has been transformative.

43:46Dambisa Moyo:I'd love to ask you about some of the important themes, a few of which you've touched on here and there at the onset, natural resources. How have you thought about integrating that into the investment program? That's where I bring in my more fundamental view that no country ever in history has achieved economic success without having cheap energy. I think a lot about reliability, the cleanliness aspect, critical minerals, water, arable land. The energy piece has become interesting. Without tripping up on the fact that I sit on the board of Chevron, it has gone from a sector that people understood and valued and was in the index of about 20 % to one that fell out of favor.

44:29There was some reset. There's a lot of messaging work that needed to get done, and it did. Coming out of 2022 into a world where, as price takers, you see a massive demand that was not priced in from AI. It's brought that sector back into play in a way that requires a lot of innovation, a lot of smarts, because the backdrop is the geopolitics have eroded quite a bit. We have positions in natural resources. The obvious stuff is thinking about the chain, exploration, development, production, thinking about the suppliers into delivering on that chain. The more tip of the spear stuff in the family offices, nuclear fusion.

45:14It's interesting because with my public policy hat, I hear a lot of people say, oh, it's close. It's three to five years. Then I go and look at some of the stocks that are trading publicly. And I'm like, really? they? They're not going to get earnings anytime soon. We want to be innovative. I still am driven by the growth story. Which country is going to grow? The record, even just the past, since 2008, the financial crisis, United States and Europe were about the same size. The United States is almost two times as big. It's always hard to bet against America. The USPs around energy, arable land, ideas, deep capital markets, unreplicated anywhere else.

45:53You've got to go for tech. It seems to me this is the first time from an economic lens we've had a super cycle in 40 years. We had women coming into the workforce and brought new consumers in the 1940s and 50s. Then we had the fall of the wall in 1989. It brought in the globalization trade. We had the financial crisis and pandemic, which were all negative drag. Here we are at the early innings of the next super cycle, which is AI and the energy transition. We want to be part of that. We make a big effort spending time in Palo Alto and Silicon Valley.

46:27Dambisa Moyo:I'm curious how you go about implementing in that in the sense that some of those big drivers are known and at times very expensive. How have you balanced the difference between the growth opportunity and the pricing of the growth in the current markets? It's hard. One of the challenges we have is even though we're fortunate to be ventures, series AB investors, we still see a lot of the stuff as being expensive when it comes to stuff in the public market. We're looking for that upside. Our most important thing is making sure that we don't lose money. The discipline of our CIO is one where he doesn't like to overpay.

47:10Expensive markets are expensive markets, no matter what is promised. The specific example, we love our Teslas. We love using Starlink. It's pretty heavy. We are in SpaceX from the venture exposure. You start to look at where these things are trading, completely delinked from 16 times PE average over the past decades or so. It's just hard to justify. At the same time, we want to be optimistic. Can we have data centers in the sky? If that's possible, then we want to play in that. But we don't want to do it at a place where it's just so expensive. It's a discipline that comes from my boards. We don't want to overpay.

47:47The companies that I've been involved with have been good at instilling that discipline. Things look attractive. There's lots of competition. There's a lot of money. We've been in an era of sovereign wealth funds, money coming from all over the world. You don't want to overpay. Same for how we run the family office. we don't want to be the dumb money that's overpaying.

48:03Dambisa Moyo:Where are you finding opportunities you're excited about? Silicon Valley. Seems like a flippant answer because then it sounds like you're just doing what everybody else is doing. Doing the graft of being there, listening to what people are saying, trying to understand those second order effects. What does this mean for the sectors that have not traditionally been affected by technology, education, healthcare? I think it's an AEI chart, which shows the industries where prices have only gone up versus the ones where they've come down. Food production, telecommunications, technologies have contributed to a decline and deflation in prices.

48:41Education, healthcare, housing, prices have only gone up. Will AI be the technology that will break that? That's a lot of the conversation I'm hearing.

48:51Dambisa Moyo:Curious how you've gone about accessing opportunities in the Valley. There were a lot of capacity-constrained opportunities, a lot of money sloshing around trying to find the next great trillion-dollar company. It largely drives relationships. Great investors who invested in Qualtrics. We've subsequently gone back in with them. They've been fantastic. From my years at Goldman Sachs, I brought a lot of macro traders. Unfortunately, that's where we ended up with a are the tax elements that family office are uniquely challenged by. Relationship building, for both of us, it's been because of our careers.

49:31Jared in Silicon Valley, he's been part of the discourse. It got him seats at the table. My side is all the macro hedge funds. I covered them when I was at Goldman. I'm still good friends with people like Dan Loeb from Third Point. I grew up at the time when they were building their hedge funds.

49:47Dambisa Moyo:What are the risks and headwinds that you're worried about and staying away from in the portfolio? Concentration is a big risk that we manage actively. Not getting too carried away with tech, tech light or tech adjacent. There's a lot of opportunity in what I would call bog standard elements of human existence, food, pharmaceuticals, healthcare, not getting too seduced by the, oh, what could it might be from the tech spiel. The other risk we mitigate for more and more now is not trying to be too clever about diversification or returns from emerging markets, some of them bigger industrial countries.

50:30It's hard. I now have come to the realization that it's a hard perch, high hurdle to leave the U.S., take my one marginal dollar and invest in country X in the emerging markets and expect a competitive risk-adjusted return. It has to be compelling because the structural issues of creating sustained economic growth, now that I'm a woman of a certain age, it's much more obvious to me that it's extremely hard, even for developed countries in other places where I always point to the UK. It's 40 cents a kilowatt hour is the energy price versus China where it's 8 cents or the US where it's between 12 and 16 cents.

51:11It's such a massive headwind and constraint. Does it outweigh all the good stuff, the language, rule of law? It's harder to get people excited about investing in countries where there's a lot of ideology that seeps in.

51:28Dambisa Moyo:When you bring together all of these different lenses you've experienced all the way down to the investor level, what does that look like when you sit on the investment committee at Oxford? They have a different agenda because they're funding scholarships, capital projects, research and development. They need to have things that are more liquid. They also are an organization that's going to outlive us all. They have more appetite and more willingness to take the longer China bet than we might because we're going to die at some point and somebody else is going to be responsible for the endowment.

52:03We wanted to leave it in a good stead. We're in a lot of the same things. We don't have the sort of capital projects and scholarship challenges and demands that a traditional university endowment would have.

52:15Dambisa Moyo:What is it like being in the House of Lords? I absolutely love it. I'm going into my fifth year. I pinch myself all the time. It's a second bite at the apple from being in university, even first year of university, where you are buzzing with people with lots of different ideas who are trying to address the same issue, whether it's assisted dying or Ukraine or the budget. It goes back to this idea of the theme in my life of competing ideologies, competing views about what works and what doesn't work. What I love the most is being in a room where you think one thing and you're pretty certain that you're broadly right and somebody stands up and delivers a speech or an argument on the same issue that's completely different.

53:06Something like immigration. As an immigrant, I'm a big believer in immigration. I think it's a net positive sort of society. Yes, of course, there may be challenges of assimilation, but fundamentally, it's a good thing. Hearing people say, well, here's a list of where it can be problematic. And these are not people who are sort of behind a dark courage and saying we hate immigrants. It's people who are like, how do we think about education and assimilation, language adoption? It starts to get much more layered than just it's economically net good because we are more workers and those workers are producing a tax base is much more element to the debate on all the issues that we cover.

53:43Dambisa Moyo:David, so I want to make sure I get a chance to ask you a couple of fun closing questions. Before we get to the closing questions, I want to tell you about one of our strategic investments. We've made a few and each are working on a product or service we think will be valuable to our community. One is Oldwell Labs or OWL. OWL is the very best software I've seen for allocators to find and track managers. And I've seen a lot of them. Trust me, it'll be worth the look. There's a link in the show notes so you can learn more. And here are those closing questions. What's your favorite hobby or activity outside of work and family?

54:18Dambisa Moyo:I love working out. Now that I'm older, I've tried everything. I've done boxing. I've run four marathons, hot yoga, et cetera. I've settled on weight training and I do a lot on a trampoline and I've been doing that for about five years. So I do love working out. I'm quite obsessed. What's one thing most people don't know about you that you find interesting? I love murder mysteries. Everything from Agatha Christie to Columbo. I could spend hours watching murder mysteries. There's no rhyme or reason. In Columbo's case, a 1970s actor, you know who did it from the very opening scene. I've watched rerun after rerun.

54:58There's still something smart and captivating about watching the whole thing to figure out whodunit or how they did it. I'm a big lover of Poirot and a lot of the characters out of Agatha Christie. But one other thing about Columbo that I didn't realize was that a lot of the screenwriters at the time, it was 1970s, inequality was a big issue then also. All the scripts and all the episodes were basically tackling inequality because Columbo was this crumpled guy who complained about paying 50 cents for a cup of coffee. All the villains were wealthy, elite, connected political class. I only figured this out a few years ago.

55:38Somebody told me and I was like, oh my God, how did I miss that? I had to go back and watch all of them again. Murder mysteries, I could spend a lot of time talking about them.

55:46Dambisa Moyo:What's the best advice you ever received? No doesn't mean never. It means not now. The young generation, they're seduced by shortcuts. This idea that, oh, I can do it quickly. I don't know if it's an artifact of the technology space. Thinking about building a body of work, you have to keep at it. There's a graft required and there are no shortcuts has been great advice for me. If the next five years are a chapter in your life, what's that chapter about? A friend of mine is a historian. He said, it's the moment where you go from becoming to being. I quite like that. If I think of my life up to now, in many aspects of it are still striving and you're working, doing all this stuff.

56:29At some point, you have to start being, not becoming. I like that phraseology. I don't know what it means necessarily on a practical level because I do love working. There's something about making sure that you exist as the person that you thought you were working to be for the past 40 years.

56:50Dambisa Moyo:Dembisa, thanks so much. Thank you for hosting me. I appreciate being here. Thanks for listening to the show. If you like what you heard, hop on our website at capitalallocators.com where you can access past shows, join our mailing list, and sign up for premium content. Have a good one and see you next time.

57:19as a basis for investment decisions. Clients of capital allocators or podcast guests may maintain positions in securities discussed on this podcast.