Jan 18, 2021
Fran Kinniry is a twenty-three year veteran at the Vanguard
Group, where he’s led the teams that spearhead Vanguard’s research
into new products. Fran helped Vanguard enter the direct advice
business, developed Vanguard’s Advisor Alpha concept, started its
Investment Strategy Group, and most recently heads Vanguard’s
latest initiative investing in private equity.
Our conversation covers an overview of Vanguard business, Fran’s
three roles over a quarter century at the firm, behavioral
coaching, and the firm’s foray into private equity. We discuss the
research process leading to the introduction of private equity,
potential scale across institutional and retail clients, timing of
the decision, fees, and manager selection. We then close
discussing Vanguard’s cooperative ownership model, compensation,
and the future of index fund.
When the industry’s leading index fund manager known for low-cost
investing steps into high-cost private equity after years of
research that showed the benefits of the asset class, those calling
for the abandonment of active management should take notice. Like
all other practitioners in active management, Fran and Vanguard
preach outcomes over costs.
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