Fran Kinniry is a twenty three-year veteran at the Vanguard Group, where he’s led the teams that spearhead Vanguard’s research into new products. Fran helped Vanguard enter the direct advice business, developed Vanguard’s Advisor Alpha concept, started its Investment Strategy Group, and most recently, has headed Vanguard’s latest initiative investing in private equity.

Our conversation covers an overview of Vanguard’s business, Fran’s roles over a quarter century at the firm, behavioral coaching, and the latest asset class foray. We discuss the research process that led to the introduction of private equity, potential scale across institutional and retail clients, timing of the decision, fees, and manager selection. We then close discussing Vanguard’s cooperative ownership model, compensation, and the future of index funds.

When the industry’s leading index fund manager known for low-cost investing steps into high-cost private equity after years of research, those calling for the abandonment of active management should take notice. As you’ll soon hear, like all other practitioners of active management, Fran and Vanguard preach outcomes over costs.