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It is time to quit defending active management as it is and to start imagining what it should be.

Lots of important readings in this edition. In addition to the ones featured in the title: investment model validation, the life cycle of popular stocks, secondaries, venture capital, finding ideas, changes in trading, skin in the game, and several more.

Perspectives on active and passive (and the magnificent), commercial real estate, generating attribution commentaries, the Archegos unwind, hedge funds as “alpha-negative and beta-light,” optimization problems, and elephants in the IC meeting room.

A dictionary of investment terms by Jason Zweig provides insight into the language and practices that animate the business. History, etymology, and satire make for a fun and enlightening read.

Manager selection, deal-making, proxy voting, private markets adoption and governance, instant performance, raising capital, listed and unlisted real estate, “a question that can be asked about everything,” and several more ideas of note.

“AI corner,” bank losses, market sentiment and concentration, analyst ratings, public fund performance, diversity in asset management, ESG as a luxury good, limited partner advisory committees, and a few other things. Dig in!

The pattern is clear: Performance drives asset flows from investors. But what about the other way around? A new academic paper with a provocative title lifts the lid on an important concept.

Along with the title topics, this edition of the Fortnightly has items on whether to play the AI mania, endowment performance, banks in disguise, pod shops, stock comps, performance tests, a look back at a prescient early warning, and other stories worth reading.

Why are Duke Ellington, Glenn Gould, Billy Joel, John Denver, Beyoncé, and Trent Reznor hanging around an investment blog? Because the issues of categorization and process that they have dealt with are not unlike our own.

In addition to the headline items, there are stories about the passing of a couple of legends, the effects of debt, catalysts, the changing nature of big tech firms, “the OCIO mirage,” the denominator effect, several more important topics, and some words from Jerry Seinfeld.

Investment advisory firms must weigh the tradeoffs between offering customized or universal services for their clients. The implications of those decisions affect their business models, advisors, and clients.

Each edition of the Fortnightly features a wide range of content from different parts of the investment world. There is something for everyone, especially since looking past your area of specialization can lead to fresh insights.

Among the topics covered in this issue: private credit, hedge funds, the activity cycle of asset owners (and their increased use of ETFs), AI replacing analysts, tributes to Daniel Kahneman, a variety of other articles, and a “vague but exciting” note of yore.

This edition has sections on AI claims by asset managers, alternative credit, private equity, and an untapped indicator. Plus, performance measurement in privates, fee comparisons, the equity risk premium, and many more great reads.

The series concludes with the story of an endowment CIO struggling with subpar performance and trying to make sense of the assumptions about what it means (and what it takes) to be an institutional capital allocator.