491. How AI Reshapes LP Allocation Strategy, The Convergence of Venture and Buyout, and Permanent Shifts to Liquidity (Lara Banks)

This episode of TFR is brought to you by Ramp, the spend management platform we use here at TFR. They're offering listeners a $150 just to take a demo. We've never had an offer quite like this. Claim your $150 before this offer is gone at our partner link, ramp.com/partner/tfr. And this episode of TFR is brought to you by the American Arbitration Association, where smart startups and investors turn to for fast, efficient, and cost effective dispute resolution. Visit adr.org/tfr to learn more. Welcome to the podcast about venture capital, where investors and founders alike can learn how VCs make decisions and reach conviction. Your host is Nick Moran, and this is the full ratchet. Lara Banks joins us today from Menlo Park. She's the managing director and head of private equity at McKenna Capital Management, a global investment firm managing multi asset and private equity portfolios for leading endowments, foundations, family offices, and sovereign wealth funds. Before McKenna, Lara worked at GE Energy Financial Services. Lara, welcome to the show. Thanks, Nick, for having me. I'm really excited to chat more. Yeah. It's a pleasure to have you. Can you talk about your backstory and your path to becoming an investor? Yeah. It was kind of a a meandering path. I kinda had a very diverse set of careers in terms of what I've done in in investing. I started as a more of a quant in a prop shop, investing in power and really playing more locational spreads. It's like an arbitrage shop. And as much as I loved getting to know what was a a kind of new market, I wanted to do something bigger picture and and not be kind of in the weeds and coding all day. And so I moved to business school and and went to GE Capital, and I was able to spend more time on the energy investing side, which I really enjoyed. I have a passion for climate and the environment, and then got this great opportunity to come out to the West Coast and to to join McKenna Capital back in 2012. And I've been here for thirteen years, and I worked across a number of parts of the portfolio and now lead our private equity and venture portfolios. Perfect. And tell us more about the thesis at McKenna. So McKenna got its roots from Stanford's Endowment, and the idea back then was to bring the endowment model to smaller endowments foundations and to be able to have the power of larger pools of capital and what that meant for, you know, the types of investments that you could you could access. Since then, we've grown to about 20,000,000,000 of asset under management, and we had a pretty, I think, unique structure and probably early to this evergreen structure for private. In 2017, we made the building blocks of the endowment investable, most notably private equity and venture capital. So people could go a la carte, and so …