A Conversation with Lado Gurgenidze, Co-Chair of the Emory Center for Alternative Investments

The Emory Center for Alternative Investments (ECAI) recently announced the newest member of its board, Lado Gurgenidze. As the board’s Co-Chairman, Gurgenidze will share duties with Larry Benveniste, Dean of Goizueta Business School. The ex-Soviet-born Gurgenidze has worked in international banking and finance for more than 15 years—including roles as Executive Chairman of the Bank of Georgia Supervisory Board, Head of M&A, Emerging Europe, and Head of Technology Corporate Finance at ABN AMRO, and Head of Europe at investment banking firm Putnam Lovell (now part of Jefferies). Gurgenidze was 22 years old when he received his MBA from Goizueta in 1993 and has packed a multitude of experiences into his post-graduate career. In November 2007, he agreed to serve as Prime Minister of Georgia and spent a year in the position, continuing the country’s free market reforms and stabilizing the Georgian economy in the aftermath of the country’s armed conflict with Russia in August 2008. The experience, says Gurgenidze, “Gave me more crisis management experience than I ever could have acquired or that I’d ever wish for anyone.” Gurgenidze currently chairs a commission focused on stabilizing Georgia’s financial sector.

On a recent visit to Goizueta, Gurgenidze spoke with Klaas Baks, ECAI’s executive director, about his vision for the Center.

Baks: Why did you come back to help build The Emory Center for Alternative Investments?

Gurgenidze: Reconnecting with Goizueta feels like a very natural thing to do, and what The Center is setting out to do – addressing the issues that the alternative investment community deals with – is very important and topical considering the economic dislocation of the past year. I think what we’re dealing with now will largely determine how the investment management industry is going to evolve. It’s on a scale we’ve not seen for generations. For example, the questions that arise as a result of this crisis about asset allocation are critical indeed – is there sufficient safety in diversification at times of severe economic stress when all asset classes underperform dramatically.

An obvious response is for the institutional investor to monitor more rigorously the performance of the managers they choose. That may mean shorter investment cycles in between performance reviews. But then how do you reconcile the shorter performance review cycles with the liability side of the balance sheet given the increasing longevity of the population—a trend in almost all industrialized countries?

We’re not yet out of the woods (in terms of economic fundamentals) and we have the very dynamic and very entrepreneurial investment management industry—especially as it pertains to the alternatives—finding its way through a dramatically changing landscape.

Baks: How will the ECAI fit into this landscape?

Gurgenidze: It will be at the forefront of the developments of this industry and help shape the thought leadership around these topical issues. It’s a very exciting task that The Center has chosen and it’s done so at a very exciting and interesting time.

In many ways, it’s a natural area of interest for me to devote some of my time working with you, the dean and others at The Center because I have been a career banker. I’ve sat on that side of the industry for many years. I also built a fairly large—at least by the standards prevalent in Georgia—public company with a 100 percent free float and 85 percent institutional ownership with the majority of the shareholders coming from the alternative space. Now is great time to reflect on basic tenets of the alternatives industry.

Baks: How will The Center address these current economic issues? Where do you see The Center a year from now?

Gurgenidze: The first thing is to figure out what matters to our key constituents—the institutional investors and the investment managers that serve them. What are the issues where The Center can realistically add value and add value in a time sensitive fashion—not five years down the road, but something in near real time that matters? Of course, another very important constituency we need to be mindful of is the student body.

Baks: Absolutely. How do you envision The Center in terms of the students?

Gurgenidze: Students come to this excellent institution to learn, to experience new thinking, new ideas, fresh approaches. At the end of the day, much of the research output by The Center will be of use for years to come and of relevance and interest to the students as well.

Baks: I’m very excited for you to join our board. We look forward to working with you.

Gurgenidze: Likewise.