What if transparency (not secrecy) is actually your competitive advantage when pitching AI strategies?

In this solo episode of The Institutional Edge, host Angelo Calvello, PhD, co-founder of Rosetta Analytics, shares critical lessons from nine years of pitching AI-based investment strategies to institutional allocators. Angelo breaks down four essential lessons for managers: defining AI precisely through transparency, disclosing model sources and demonstrating technical ownership, emphasizing human-AI collaboration over autonomy, and making explainability non-negotiable. Drawing on research from Gary Marcus and Anthropic, plus real allocator feedback, Angelo reveals why institutional investors aren't ready for fully autonomous AI strategies and provides practical frameworks for successful fundraising conversations.

In This Episode:

(00:00) Introduction to pitching AI strategies and the allocator knowledge gap

(01:08) Lesson 1: Define your AI precisely and build trust through transparency

(04:10) Lesson 2: Disclose model source and demonstrate technical ownership

(07:23) Lesson 3: Emphasize human-AI collaboration, not AI autonomy

(09:02) Lesson 4: Explainability techniques, black box challenges, and closing recap
Send me your ideas on how to pitch an AI strategy!

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Dr. Angelo Calvello is a serial innovator and co-founder of multiple investment firms, including Rosetta Analytics and Blue Diamond Asset Management. He leverages his extensive professional network and reputation for authentic thought leadership to curate conversations with genuinely innovative allocators.

As the "Dissident" columnist for Institutional Investor and former "Doctor Is In" columnist for Chief Investment Officer (winner of the 2016 Jesse H. Neal Award), Calvello has become a leading voice challenging conventional investment wisdom.

Beyond his professional pursuits, Calvello serves as Chairman of the Maryland State Retirement and Pension System's Climate Advisory Panel, Chairman of the Board of Outreach with Lacrosse and Schools (OWLS Lacrosse), a nonprofit organization creating opportunities for at-risk youths in Chicago, and trustee for a Chicago-area police pension fund. His career-long focus on leveraging innovation to deliver superior client outcomes makes him the ideal host for cutting-edge institutional investing conversations.

Resources:

Related Articles:

• Pensions & Investments Op-Ed: Pitching AI Strategies - Angelo's full article on this topic

Research & References Mentioned:

• Gary Marcus on LLM limitations: A Knockout Blow for LLMs

• Gary Marcus on agentic misalignment: "Nobody in the industry has a clue how to stop this"

• Anthropic Research: Agentic Misalignment Study

Email Angelo: Angelo.Calvello@pionline.com
Email Julie: julie.parten@pionline.com
Pensions & Investments
Dr. Angelo Calvello LinkedIn

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How did LACERA stay positive in fiscal 2022 when most pension funds were down—and what does their "functional framework" have to do with it?

Some nvestment consultants are promoting Total Portfolio Approach (TPA) as the next evolution in institutional investing. But what if sophisticated asset owners have been doing this work all along—without the capital letters?

Jon Grabel, CIO of Los Angeles County Employees Retirement Association (LACERA), joins the show to discuss how his team manages $90 billion for 200,000 active and retired members using what he calls a "total fund approach" (lowercase, thank you very much). Jon explains why he's skeptical of buzzwords and how LACERA's functional framework has delivered proof points through multiple market cycles.

What We Cover

• Why capitalizing "TPA" may overcomplicate what sophisticated plans already do
• LACERA's functional framework: Growth, Risk Mitigation, Real Assets, and Credit
• How LACERA's team structure mirrors its investment structure to break down silos
• Culture Day: One day per month with no manager meetings, focused on team development
• Investment committee structure where every vote is equal (CIO votes last)
• The role of benchmarks in accountability vs. marketing
• Governance evolution: Education, board delegation, and investment beliefs as policy
• Competition within teams (public vs. private equity) rather than between teams
• Why knowing your prospect's name matters (seriously, get this right)

Jonathan Grabel is Chief Investment Officer at Los Angeles County Employees Retirement Association (LACERA), where he manages the $90 billion defined benefit pension fund and oversees investments for LACERA's retiree healthcare benefits program serving approximately 200,000 active and retired members. Prior to LACERA, Jon was CIO at New Mexico PERA, overseeing the $15 billion defined benefit fund. Previously, he was a general partner at a private equity firm focused on growth-stage technology investments and worked as an investment banker and licensed CPA. Jon holds a Bachelor of Science in Economics from Wharton and an MBA from the University of Chicago Booth School of Business.

In This Episode:

(00:00) Jon Grabel, CIO at LACERA managing $90 billion

(04:05) Setting the stage: What is total portfolio approach

(05:59) Why capitalizing letters overcomplicated sophisticated asset owner work

(13:06) Competition within teams versus between teams at LACERA

(19:05) Building culture through monthly culture days and healthy debate

(26:16) Benchmarks as accountability tools versus marketing purposes

(30:28) Worst pitch: When firms confuse your organization's name

Like, subscribe, and share this episode with someone who might be interested, and please take time to leave us a review!

Dr. Angelo Calvello is a serial innovator and co-founder of multiple investment firms, including Rosetta Analytics and Blue Diamond Asset Management. He leverages his extensive professional network and reputation for authentic thought leadership to curate conversations with genuinely innovative allocators.

As the "Dissident" columnist for Institutional Investor and former "Doctor Is In" columnist for Chief Investment Officer (winner of the 2016 Jesse H. Neal Award), Calvello has become a leading voice challenging conventional investment wisdom.

Beyond his professional pursuits, Calvello serves as Chairman of the Maryland State Retirement and Pension System's Climate Advisory Panel, Chairman of the Board of Outreach with Lacrosse an...

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Why does IPERS say NO to 95% of co-investment deals? Their CIO reveals the disciplined approach that attracts top practitioners to public service.

In Episode 13 of “The Institutional EDge,” host Angelo Calvello explores an innovative co-investment approach with IPERS' CIO Sriram Lakshminarayanan and Senior Investment Officer Craig Payne. Managing $47 billion with a nine-person team, IPERS maintains a selective <5% co-investment acceptance rate while requiring three-week minimum diligence timelines. Beyond fee reduction, their coinvestment program serves as a deliberate talent development strategy, empowering staff to make consequential investment decisions while testing GP capabilities in real-time. The conversation reveals how hiring "practitioners of investments" creates a knowledge-based culture that attracts sophisticated talent to public service while elevating team conversations from manager selection to investment strategy.

Sriram Lakshmararayanan serves as Chief Investment Officer at Iowa Public Employees' Retirement System, overseeing approximately $47 billion in pension assets. He has transformed IPERS' approach to public and private markets, emphasizing cost-effective beta access and strategic co-investment practices. Craig Payne is Senior Investment Officer at IPERS, focusing on private asset investments including fund commitments and co-investments. With over two decades of private markets experience, Craig previously served as Managing Director and IC Member at BlackRock Private Equity Partners and brings deep expertise in co-investment diligence and portfolio construction to IPERS' innovative approach.

Craig Payne is Senior Investment Officer at Iowa Public Employees' Retirement System (IPERS), where he focuses on private asset investments, including fund commitments and co-investments across real assets and private credit. Craig brings over two decades of private markets experience to IPERS, most recently serving as Managing Director and IC Member at Transition Equity Partners (2022-23). Previously, he served as Director of Private Investments at Olympus Ventures (2020-2022), Managing Director and IC member at BlackRock Private Equity Partners (2007-2019). His earlier career includes roles at General Electric Equity as Vice President (2002-2006), where he managed a $1.6 billion portfolio. Craig holds a BA in Economics and Political Science from McGill University and an MBA in Finance, Entrepreneurship, Strategic Management, and Accounting from the University of Chicago.

In This Episode:

(00:00) Introduction to IPERS co-investment strategy and guest backgrounds

(03:29) Craig Payne: Accessing beta cost-effectively across public and private markets

(13:43) Independent diligence process and rubber stamp avoidance strategies

(19:54) Managing GP timelines while maintaining fiduciary responsibility standards

(23:40) Hiring practitioners over oversight managers for organizational development

(33:19) Mission-driven work and public service compensation realities

(39:32) Worst pitch stories from decades of private markets experience

Like, subscribe, and share this episode with someone who might be interested!

Dr. Angelo Calvello is a serial innovator and co-founder of multiple investment firms, including Rosetta Analytics and Blue Diamond Asset Management. He leverages his extensive professional network and reputation for authentic thought leadership to curate conversations with genuinely innovative allocators.

As the "Dissident" columnist for Institutional Investor and former "Doctor Is In" columnist for Chief Investment Officer (winner of the 2016 Jesse H. Neal Award), Calvello has become a leading voice challenging conventional investment wisdom.

Beyond his professional pursuits, Calvello serves as Chairman of the Maryland State Re...

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