Niche Alpha: Finding Value Beyond Traditional Private Markets

Are you still chasing crowded private equity deals, or have you discovered the niche sectors banks won't touch?

In Episode 5 of the Private Markets Series, Angelo Calvello, host of Institutional Edge, interviews Eric Farls, Senior Portfolio Manager at Maryland State Retirement and Pension System, about the pension fund's strategic pivot from traditional private equity to sector-specific credit investments. Eric explains how Maryland's $4 billion private credit portfolio targets mining finance, sports finance, and music royalties—sectors offering attractive spreads where traditional banks don't aggressively lend. The conversation covers player transfer receivables backed by FIFA enforcement, music royalty resilience through economic cycles, inflation hedging characteristics, and the critical importance of deep GP partnerships for evaluating these niche opportunities.

Eric Farls is Senior Portfolio Manager within the Fixed Income Group at the Maryland State Retirement and Pension System, where he focuses on private credit investments with special emphasis on sector-specific opportunities including mining finance, sports finance, and music royalties. He joined the Maryland State Retirement Agency in February 2011 as a Senior Investment Analyst in the Real Assets Group. Eric is also a member of the Agency's ESG Committee. He earned a Bachelor's degree in Business Administration from the University of North Carolina at Chapel Hill and is a CFA charterholder and member of the CFA Institute and Baltimore Society of Financial Analysts.

In This Episode:

(00:00) Maryland's strategic shift to niche private credit

(05:44) Mining finance sector strategy and investment thesis explained

(09:04) Sports finance opportunities and player transfer receivables landscape

(19:49) Music royalties portfolio and entertainment sector resilience

(29:35) Risk management, GP partnerships and investment implementation approach

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Dr. Angelo Calvello is a serial innovator and co-founder of multiple investment firms, including Rosetta Analytics and Blue Diamond Asset Management. He leverages his extensive professional network and reputation for authentic thought leadership to curate conversations with genuinely innovative allocators.

As the "Dissident" columnist for Institutional Investor and former "Doctor Is In" columnist for Chief Investment Officer (winner of the 2016 Jesse H. Neal Award), Calvello has become a leading voice challenging conventional investment wisdom.

Beyond his professional pursuits, Calvello serves as Chairman of the Maryland State Retirement and Pension System's Climate Advisory Panel, Chairman of the Board of Outreach with Lacrosse and Schools (OWLS Lacrosse), a nonprofit organization creating opportunities for at-risk youths in Chicago, and trustee for a Chicago-area police pension fund. His career-long focus on leveraging innovation to deliver superior client outcomes makes him the ideal host for cutting-edge institutional investin...

Chapters

• (00:00:00) - Institutional Edge: The Podcast
• (00:00:46) - Private Markets
• (00:02:05) - Maryland Investment Group's Private Market Exposure
• (00:04:37) - How big is the team at Morgan Stanley's Private Credit team?
• (00:05:31) - Pension Plan: Core Strategies and Niche Strategies
• (00:08:16) - Mining Finance and Property & Construction
• (00:09:04) - Immortal: Sports Finance, Media & Entertainment
• (00:11:08) - Private Capital: Sports Financing
• (00:17:08) - Immaterials: Sports Financing
• (00:19:40) - In the Elevator: Music, Sports and Mining
• (00:22:31) - Do You Do Any Co-Investments?
• (00:23:21) - Pension Plan Manager on Music Funds
• (00:26:04) - Private Sector Attractive Features
• (00:29:26) - Is Co-Investment Necessary For Wealth?
• (00:32:52) - Jefferies: The Worst Investment Pitch