Episode Overview

Podcast: Capital Allocators – Inside the Institutional Investment Industry
Host: Ted Seides
Guests: Mike Trigg (Portfolio Manager & Co-CEO, WCM Investment Management) and Sanjay Ayer (Portfolio Manager, WCM)
Episode: “The Discipline of Getting Better at WCM” (EP.467)
Date: October 27, 2025

In this episode, Ted Seides explores the journey of WCM Investment Management through a challenging stretch of performance post-2021. Mike Trigg and Sanjay Ayer reflect on lessons learned, deep changes to process, evolving with the market, and building a resilient investment and organizational culture. With candor, they discuss the iterative process of getting better, idea generation, portfolio construction, integrating AI, expanding into private markets, and fostering talent.

Key Discussion Points & Insights

1. Navigating a Difficult Performance Period

• Hitting the Peak and the Fall:
  • WCM had meteoric growth until 2021, but 2022 marked "our most difficult year, performance wise."
  • Quote: “With the benefit of three more years, you kind of look back on [2022] and say, I'm so glad that happened to us, because I know we've gotten so much better because of it.” (Mike Trigg, 03:16)
• Cultural and Emotional Response:
  • No panic or triumphalism; even in good years, they would “tamp things down and warn people that market moves in cycles. We're not this good.” (Sanjay Ayer, 05:40)
  • “Oftentimes playing the long game is the right strategy... but there are occasions where long termism is a lazy crutch.” (Sanjay Ayer, 05:40)

2. Candid Approach to Clients and Internal Evolution

• Client Conversations:
  • Despite poor performance, clients were “incredibly supportive” and net institutional inflows persisted.
  • WCM openly discussed their core philosophy of evolution: “A lot of people in this industry don't believe in this notion of adaptation and evolution of an investment process. That's how we're wired.” (Mike Trigg, 07:00)
• Key Lessons and Process Changes:
  • A November 2022 offsite crystallized their need to rejuvenate "moat trajectory."
  • “We needed to put the trajectory back in moat trajectory.” (Mike Trigg via Sanjay Ayer, 09:28)
  • Recognized that "forward-looking quality growth was going to be different than backward-looking." (Sanjay Ayer, 09:28)

3. Hardwiring Adaptation into Research & Portfolio Construction

• Idea Breadth & Research Funnel:
  • The research pipeline had become too correlated; new tools and "guards" were created to enforce breadth.
  • “If we see three analysts trying to bring up another data center theme stock to own, we’ll pull up our construction and say, we own enough of this.” (Sanjay Ayer, 12:13)
• Custom Categorization:
  • WCM moved beyond GICS to create 100 custom categories, allowing deeper understanding of exposures.
  • “You have a better sense of what you own and also what you don't own.” (Mike Trigg, 13:38)
• Portfolio Refreshing Amid Drawdown:
  • The team had to be transparent about higher turnover and explain the rationale, even as immediate results lagged.
  • “You’re making these changes. It’s not the next month, you’re paid off. Oftentimes you’re a little bit late, a little bit early. That compounds the questions you get.” (Sanjay Ayer, 15:20)

4. Internal Challenges and Steadfastness

• Doubt and Support in 2023:
  • As previous holdings snapped back post-sale, internal and client pressure mounted.
  • “There’s a loneliness when you’re going through that ... you hear the chatter, ‘these guys better be right.’” (Mike Trigg, 16:10)
  • Partners provided emotional counterbalance: “There’d be days I’d be okay and he’d be down... we know each other well enough to be counter emotional during those points.” (Sanjay Ayer, 18:28)

5. Concrete Process Improvements

• Smaller, Focused Meetings:
  • “We really reduced meeting sizes to get the people with the strongest views and most relevant views in the room.” (Sanjay Ayer, 20:30)
• Weekly Updates and Check-ins:
  • Instituted a Friday write-up for alignment and clarity—“it lifted an incredible management burden off of us.” (Mike Trigg, 21:14)
• Quantifying Moat Trajectory:
  • Added rigorous forecasting and modeling: “You have to really be able to tell that moat trajectory story through numbers and through a model.” (Mike Trigg, 22:03)

6. Live Examples of Portfolio Evolution

• Pivot to Industrial Cyclicals:
  • Exits: Sold expensive, maturing names like Atlas Copco, Sika, Old Dominion (Industrials); Costco (Retail), Louis Vuitton.
  • Entries: Bought GE, benefiting from a post-COVID turnaround, then spun into Vernova (turbines, benefited from power grid renewal+AI). Also bought Safran, Rolls Royce, Siemens Energy.
  • “GE was the seed that brought all these other ideas.” (Mike Trigg, 22:47)
• Switch from Costco to 3i Group/Action:
  • “Costco at 50s [P/E] vs. 3i group in the 20s – that seems like a trade we should pull the trigger on.” (Sanjay Ayer, 26:14)
  • Leveraged their generalist view to avoid the “specialist trap.”

7. Culture as the Bedrock

• Trust and Peer Leadership:
  • “I’m grateful that people trust us to be able to do what we do, but also iterate and evolve and do it the way we think we need to do it.” (Mike Trigg, 29:20)
  • WCM encourages “1% better every single day” and empowers incremental improvements firm-wide.
• Team Design Choices:
  • WCM intentionally remains lean, generalist, and flexible to avoid bureaucracy and the “specialist echo chamber.”
  • “There’s a contagion at play when you see other people waking up every day asking … how can I make the best people around me better?” (Sanjay Ayer, 32:36)
  • “Without [flexibility], we wouldn’t be where we are today.” (Sanjay Ayer, 34:48)

8. Talent, Empathy, and Creativity

• On Hiring & Qualities Sought:
  • High bar: “Hiring is the field of compounding knowledge. The more you do it, the more you should get better at it.” (Sanjay Ayer, 36:02)
  • Values creativity (“ability to live a few years in the future”) and empathy (“seeing the world through eyes of an entrenched analyst”). (36:02)

9. Integrating AI into Research

• AI as a Research Partner, Not a Silver Bullet:
  • Focus: Use AI to amplify breadth and sharpen ability to diagnose “moat trajectory” and culture.
  • “We’re building tools to really codify moat trajectory and culture into a model... can view it as a research partner.” (Sanjay Ayer, 38:10)
• Firm-Wide Embrace:
  • “There’s no skepticism about this because it’s been built to be so consistent with the philosophy itself.” (Mike Trigg, 40:02)
  • AI is shared weekly in the investment team; cross-org AI adoption is encouraged: “If you have [a negative] attitude, you will be made redundant by AI.” (Mike Trigg, 41:12)
• Honest Comparison to Industry:
  • Even large peers are slower or less nimble due to bureaucracy and silos.

10. Strategic Expansion into Private Markets

• Diversifying Beyond Flagships:
  • WCM now has nine $1B+ strategies and is “better positioned” than ever. (Mike Trigg, 43:22)
• Origin and Success in Privates:
  • Entered at the right time post-2022, avoiding frothy deals.
  • Early wins: Anduril (defense), Databricks, Anthropic.
  • Unique advantage: Same public/private team, curated concentrated approach, research synergies with public portfolios.
  • “If you think about right to win … we’re taking a very curated, concentrated, best ideas approach which resonates with founders and with clients.” (Mike Trigg, 43:22)

11. New Research Initiatives

• AI-Driven Research (“Sherpa” Project):
  • “That's definitely the single most exciting new thing that we’re doing.” (Mike Trigg, 48:43)
• Advancing the Culture Framework:
  • “One of our culture analysts just wrote this great paper called Putting the Cult Back in Culture…” (Mike Trigg, 48:43)
  • Seeks to measure not just values but the social mechanisms reinforcing culture.

Notable Quotes & Memorable Moments

• “Playing the long game is the right strategy... but there are occasions where long termism is a lazy crutch.” (Sanjay Ayer, 00:00, 05:40)
• “We needed to put the trajectory back in moat trajectory.” (Mike Trigg via Sanjay Ayer, 09:28)
• “There’s a loneliness when you’re going through that ... you hear the chatter ‘these guys better be right.’” (Mike Trigg, 16:10)
• “You could call that passive curiosity versus active curiosity.” (Sanjay Ayer, 52:49)
• On culture, “The unsexy part of the investment process is really where we made a lot of the biggest gains.” (Mike Trigg, 29:20)
• On AI: “There’s no skepticism about this because it’s been built to be so consistent with the philosophy itself.” (Mike Trigg, 40:02)
• “We’re just getting started… this is really the first time Mike and I feel like we have what we need. … now it’s really about staying true to who we are and being different and getting better and serving others.” (Sanjay Ayer, 57:42)

Timestamps for Major Segments

• Addressing 2022 Downturn/Lessons – 03:16–07:00
• Key Research Process Changes – 09:28–14:52
• Portfolio Refresh, Tough Decisions – 14:52–17:37
• Emotional Challenges in 2023 – 18:04–21:14
• Process Improvements (Meetings, Modeling) – 20:30–22:03
• Portfolio Evolution (Industrials, Retail Pivot Examples) – 22:47–26:14
• Discussion on Culture & Team Design – 29:20–36:02
• On Hiring & Talent Qualities – 36:02–37:58
• AI Integration into Research – 38:10–42:26
• Strategic Move into Private Markets – 43:22–47:32
• Research Initiatives & Evolving Culture Lens – 48:43–51:56
• Personal Reflections and Pet Peeves – 52:44–56:33
• Aspirations for Next Five Years – 56:39–58:56

Episode Summary

Mike Trigg and Sanjay Ayer provide a behind-the-scenes look at WCM’s response to adversity, continuous improvement ethos, and deep belief in humility and adaptability. They illustrate how being willing to ask tough questions, let go of past winners, and embrace new ways of thinking (such as AI augmentation and portfolio construction frameworks) distinguishes their approach. At the heart is a culture dedicated to 1% improvements, empowering the team, and thinking differently—not just about investments, but about organizational mindset, talent, and client relationships. Their eyes are fixed on being a “manager who stands the test of time,” with the next chapter focused on unleashing potential, serving others, and iteratively getting better.