Notes, theses, and field reports. No marketing sequences.
Capital at Risk — Paper 11 I. Measurement as Structure Capital is organised around the risk that can be measured. Volatility, drawdown and correlation can be observed, reported and compared. These measures provide a framework for communication between managers, advisers and clients, and allow portfolios to be evaluated within defined intervals
I. The Horizon Problem Capital operates on long horizons. The structures surrounding it are designed around short ones. Businesses develop over decades. Property is held across cycles. Family wealth often spans generations. Yet the financial structures surrounding that capital are organised around much shorter intervals. Performance is measured quarterly. Funds
I. Measurement and Management Capital is usually organised around the risk we can measure. Volatility can be calculated. Drawdown can be reported. Duration can be modelled. Correlation can be observed across historical data. These measures are useful. They provide a common language for describing risk, a basis for comparison, and
Capital at Risk — Paper 08 I. Environments Structures optimised for one environment often become restrictive in another. Capital systems are typically designed around the conditions prevailing at the time they are created. Tax regimes appear stable. Jurisdictions seem predictable. Monetary policy follows familiar patterns. Investment vehicles are constructed to operate
Capital at Risk — Paper 07 I. Uncertainty Capital planning is usually framed as a response to uncertain markets. Markets fluctuate, interest rates change, and economic conditions evolve in ways that cannot be predicted with precision. Yet many of the most significant uncertainties surrounding capital arise outside markets altogether. Families expand
Capital at Risk — Paper 06 I. The Fossil Record In evolutionary biology the fossils remain. Extinct species leave traces. Their disappearance becomes part of the scientific record. The history of failure is visible. Financial systems behave differently. Companies disappear through bankruptcy or acquisition. Investment funds close, merge, or relaunch under
Capital at Risk — Paper 05 I. Illiquidity and Institutional Design Institutional investors do not treat illiquidity as a defect requiring concealment. They structure around it. Infrastructure projects, private credit arrangements, commercial real estate and direct private equity holdings require time. Their value is realised through duration rather than continuous trading.
Capital at Risk — Paper 04 I. Liquidity as Assumption Liquidity is often treated as a characteristic of the asset itself. Equities are described as liquid. Property is described as illiquid. Government bonds are assumed to trade continuously. In practice, liquidity is rarely a simple property of the asset. It is
Capital at Risk — Paper 03 I. Theory Without Context Modern Portfolio Theory was developed within an institutional context. It assumed capital with defined mandates, relatively stable funding, and the ability to tolerate interim variance in pursuit of expected return. Its central insight — diversification across imperfectly correlated assets — remains conceptually sound.
Capital at Risk — Paper 02 I. When “Low Risk” Fails Traditional portfolio construction assumes that combining equities and bonds reduces risk. Equities provide growth. Bonds stabilise. The interaction between them is expected to smooth outcomes. That assumption held long enough to feel embedded. The 2022 UK Gilt Crisis exposed its
Capital at Risk — Paper 01 I. The Discipline Problem at Market Extremes Market peaks rarely present themselves as unstable. They consolidate around confidence. Volatility compresses, credit spreads narrow, liquidity appears abundant, and benchmark performance strengthens. Participation broadens sufficiently to validate the prevailing narrative. In such conditions, defensive positioning appears unnecessary.