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Q I'd love to double click on hedge funds. What do you think today about the role of hedge funds that you said at least once were 40% of what you're doing and how you're participating in that space?

A Hedge funds are no longer 40%, but they're still meaningful. Today, our target allocation across our long, short, and absolute return portfolio is 27% in aggregate. We're a believer. They have been a very important part of our portfolio, not only for meeting that return objective that I mentioned, they do so while maintaining our liquidity, also helping us to manage volatility. When you're spending five percent of the portfolio every year, All three of those mandates do matter. Something that gets lost when people talk about returns. If the goal of this endowment was to just put it in a drawer and not spend from it for 10 years, you might do something differently than if you knew you had to draw five percent from it every year. In that context, hedge funds make a lot of sense. They've obviously gone through many different cycles and periods where they've done better or worse. This is where Williams is fortunate in that we've had these longstanding relationships. We have the confidence to see through cycles. We have some amazing manager names that have done well for the portfolio.

AI assessment note: “Today, our target allocation across our long, short, and absolute return portfolio is 27%”

Q How do you think about your strategy and almost your right to win as an LP? What do you bring to the table as the next LP and a fund that you're interested in investing in?

A There are a couple different things that we will talk about with a manager when we're meeting with them and hopefully getting access to something that may be more access constrained. One is the mission that really does resonate with people. Williams is extremely generous with its financial aid program. We have no loans in our financial aid program at this point in time because of the generosity that comes from the endowment and our donors. That resonates with people. Beyond that, We manage a nice size of assets at four and a half billion. We can have a meaningful position in our portfolio without overwhelming a manager. Still be meaningful partners in both directions. We have an amazing team here. They are smart and thoughtful. Sometimes people just like sitting across the table from them. We show up to meetings. We're prepared. We ask careful, thoughtful questions. We want to be on the same team as our managers. That approach really can resonate.

AI assessment note: “There are a couple different things that we will talk about with a manager”

Q How have you thought about liquidity in the context of the whole portfolio?

A We think about it so much. This is something Colette taught us very well, which is our number one purpose for being here is to support the college. Period. End of story. There is no question that that is what we need to be able to do. Not having enough liquidity is not an option. We obsess over our liquidity position, by which I mean it is one of the key topics we cover every week as part of our team meeting. We are regularly going over every line item that comes in and out of the portfolio every week. We know what the forecast is for the next 12 months for every asset class and where the dollars are going, and importantly, where the money is going to come from to support the college. We're also, as part of that, stress testing it regularly. We also maintain a hundred and fifty million dollars worth of lines of credit for the investment office. These are really belt and suspenders, but if we needed it, we would have a backup source of liquidity. We're fully invested. We only maintain between one and two percent Of the portfolio in cash. That's why we have to be planful about our liquidity. That's a really important advantage long term because it means that the portfolio is in the markets and working. When you have a team of 11 people, as we do here, one of the things that we can be spending time on and thinking about is liquidity and where is it going to come from and planning …

AI assessment note: “We only maintain between one and two percent Of the portfolio in cash.”

Q If you go back to your original domains, post business school investment grade bonds and real assets, how's your thinking changed about their use in the portfolio?

A So much. I was reflecting. I remember it was August of. 20 11 when the U.S. got downgraded. I was managing an investment grade fixed income portfolio. That was my first moment of panic. Oh, no, I'm probably supposed to know what this is going to mean for the portfolio. It happened on a Friday night. I remember being in the office all weekend trying to figure out what is this going to mean for our portfolio. It turns out it didn't mean much. We've been on an interesting episodic journey with investment grade fixed income. It came out of the portfolio entirely, I think, in 2019. We don't take a view on interest rates. That's really important. But as one of our committee members likes to say, there was a higher probability that rates were going to go up than they were going to go down. It's not having a view. It's understanding what the probabilities are. We did reintroduce it about a year ago as rates came off of zero, but it's still a modest position. It's one percent position in our portfolio, and it's meant to be that rainy day. It's not a big piece of what we do anymore. It used to be 10% of the portfolio back in fixed income heyday, so it's changed a lot. And then real assets. Similarly, we no longer do funds dedicated to the extraction of oil and gas. What does it mean to manage a real assets portfolio in that context has had to change and evolve. We're still trying to figu…

AI assessment note: “It's one percent position in our portfolio... It used to be 10%”

Q How did you evolve from covering these two asset classes to broadening across the portfolio?

A The biggest next step that I took was taking over our hedge fund asset classes. Those have been important asset classes for our portfolio. We've been long-term investors in hedge funds. At the time, they might have represented 40% of the portfolio. Because I had built a little bit of a muscle around how to learn to do something new, stepping into the complexity of long, short equity and absolute return, there's some more sensitivities. How much time you're taking with managers? I had to learn to sharpen my diligence process, which was a really good evolution. It was a different network. There were new people that I needed to talk to from the LP community as well as the GP community. That expanded my horizons.

AI assessment note: “The biggest next step that I took was taking over our hedge fund asset classes.”

Q There's a lot of successes in the venture world that are still sitting as very large late stage privates that filter into your portfolio. How have you thought about that group of companies that have been winners from venture investments that you don't have liquidity on today?

A This is where we're fortunate to be long-term investors. We can be really patient. For most of those companies, we agree with our venture managers that they're still compounding. Whether or not they're publicly traded, they're still great companies, and we're going to benefit long-term from their continued growth. It has had an impact on our asset allocation. One of the things that we did do over the last few years was increase our target To buyouts and venture. There were a number of reasons for that. Part of it is in recognition of the fact that there are a lot of companies staying private for longer, and they're going to compound in your private portfolio. What's also interesting about that is whether or not you're still getting venture-like returns on those investments, or are they something different? As long as their equity returns, we're generally comfortable, because most important is we want to make sure we have a significant enough weight to Equity broadly defined for that growth component, but it has had some impact on both the allocation and then what your expected return might be from those asset classes.

AI assessment note: “We can be really patient. For most of those companies... they're still compounding.”

Q In a lot of transitions we see, you don't necessarily see the internal candidate become the next CIO. I'd love to get your perspective on the value of duration. Having been here for 20 years now becoming the CIO, what are some of the things that you think Williams has benefited from because of the duration of the team?

A We've been clear-eyed about what our strategy is since day one, and that hasn't changed. By having an internal candidate become the CIO, we can stay laser-focused on what it is that we're here to do. There was no time wasted or lost repointing the ship. That is a huge benefit. I also, coming into the role, knew the portfolio, especially some of our longstanding relationships. The role that they played, the value that they added, the fact that those were not going to change anytime soon. Having some clear things that we weren't going to be changing was very valuable. On the flip side, there were a couple new people that joined as I became CIO. One of the things that is powerful right now about our team is that we have a lot of people that bring different experience with them from other investment offices. We understand and respect the history of the portfolio, why we've been able to generate the returns that we have over time, what's important to stay focused on, and yet we're not stagnant in the work that we're doing. That pairing is important, and one of the things that's been very fun for me in having this team is the ability to learn from them, to draw from them the best practices that they bring to the table from the different places that they have all worked.

AI assessment note: “There was no time wasted or lost repointing the ship. That is a huge benefit.”

Q How do you think about the blend of cooperation and competition with peers?

A We tend to lean more on the cooperative side. It's not as if we are going to block somebody out from an opportunity or they're going to block us out. We can still be meaningful at a reasonable check size. We're cognizant of the fact that we are a small team. We're seven investment people covering the global opportunity set. When we can benefit from another person's perspective, we are happy to take the input, the advice. That's not a one-way street. You have to be willing to share. On the margin, we would prefer to be cooperative, learn from other people's experiences. We're competitive in that we want to produce an excellent return for Williams, and we know how that stacks up relative to our peers. We want it to look great. We also believe we can do that with some cooperation.

AI assessment note: “We tend to lean more on the cooperative side. It's not as if”

Q What are some examples of things that were eye-opening for you that other people brought in from their past experiences?

A I spent little time previously on biotech as an opportunity set. Both of the managing directors, Julia and Paul have a lot of experience investing in that space. That was an area where early on they were both saying we could lean in here. There's some interesting opportunities. They both had well-developed lists of high quality managers that we should be speaking to. In that moment, I was the least experienced one at the table. I, in some ways, loved that because it was such an opportunity for our portfolio. We had to strike a balance of not doing too much too quickly and being careful. On the flip side, it's exciting when there's an area for us that we can go do good work. There's been a lot of interesting process improvements that we've been able to adapt from everybody's experiences, which has had the added benefit of helping us Know our portfolio even better. Know our managers better. Know what we hold. This is a culture that really embraces technology. That's been wonderful to embrace that and improve things.

AI assessment note: “Both of the managing directors, Julia and Paul have a lot of experience investing in that space.”

Q Once you built that technical knowledge, you could say even in those two asset classes, and then started applying it to understanding who was good in the space, what did you come to learn about managers to get to the point where you were comfortable that you felt like you knew what you were doing?

A One of the biggest lessons that I learned is that you can teach people what they're supposed to do, but it's really hard to teach people what they're not supposed to do without them actually making the mistakes themselves. One of the things that I'm very grateful for was how long of a leash I had to figure out some of the mistakes, and that's maybe where I had the greatest lessons. One of them is when it's clear that there's something great, chances are good you should just go for it. In this business, we don't get points for difficulty. We get points for making money. You don't necessarily have to always go find the least discovered idea. If somebody's recommending a manager to you over and over again, for example, probably worth taking that advice and at least spending a lot of time on it. The other thing is, Real Assets was not a place where quite as many people were spending a ton of time. The managers were so generous with me, and the time that they gave me got me comfortable sitting in a conference room for hours upon hours, constantly asking as many questions as I possibly could. They were all so patient with me. That taught me a lot, too. Those are some of my lessons, is not being afraid to ask questions, to take their time when you need it. You're gonna make some mistakes.

AI assessment note: “If somebody's recommending a manager to you over and over again, for example”

Q moving to Ridgeline gain a decided advantage. That's why customers call it miraculous, game-changing, and an awakening. If that's not how you would describe your investment management tech, request a demo at ridgeline.ai. And now, back to the show. When you run through that math exercise, where do you come at on the other end of how much you want to reduce your commitment pacing on a run rate basis?

A It's interesting and tricky because one of the things that drives that too is how much growth do you expect from the overall pool? Even when we have pushed out, the expectation is distributions might be further out into the future. When you pair that with this is the expected growth of the pool over time, it's not as dramatic as you would think. We've seen a little bit of a decline in the venture portfolio. The model we're working on right now is telling us we still need to be stepping up commitments and buyouts, interestingly, which is a point of Big discussion within the team. Do we think we have enough good assumptions in this model? The other thing I will always say is the models are guidelines. We're mindful of the fact that we are not filling buckets. The model may tell us we need to do one hundred and fifty million dollars of commitments this year. If we don't see opportunity that matches that level, we're just going to do it. We also try to think about things that the average over the next three years Versus any one year's commitment budget. It's a moving target. We get to adjust it a lot. It's responsive to the market. The headline numbers are bigger. That is a question mark for us.

AI assessment note: “it's not as dramatic as you would think. We've seen a little bit”

Q What are you hoping to lean into over the next couple of years to make that happen?

A It can be daunting to understand our mandate and to think about it in big picture terms, what we need to be able to do. Whenever I get daunted by the task at hand, the best thing for me to do is come back to, well, what is it that we can do today to work towards that goal? Showing up every day, getting to work beside a great team, and making good decisions, talking everything through, Double checking our work, hustling. This team is well positioned to do all of that, but it is just going to be the accumulation of hard work day in and day out that is going to lead to great results. There isn't going to be some magic bullet or asset class or manager that we're going to come across that's going to be the answer to it all. It's going to be that compounding of great work.

AI assessment note: “it is just going to be the accumulation of hard work day in and day out”

Q If you look at your first couple of years and just take the unit of researching a manager, thinking about a decision, What did you know or not know that you learned in the next phase?

A I didn't know a lot early on. I was here for a year before I went to business school. I came back to the investment office in 2010. I remember sitting down with Colette. I'd gone out to lunch with her. It was my second year of business school. I had a couple job offers, and I was sitting down to ask her advice about which one I might take. She said, well, I'd really like for you to come back to the investment office. Would you consider doing that? I said, yes, I'd love to. She said, okay, why don't you write the job description for the job that you'd like to do, then we'll talk about it. I remember going home and writing that job description. There were three key things that were on that job description. One was I wanted to own asset classes. Two is I wanted to manage people, hence the analyst program. Three was I wanted to report to Colette, because I knew that was going to be my opportunity to learn a lot. I think what she did was went to the two managing directors at the time, One on the marketable, one on the non-marketable side, and said, which ASSA class do you want to give up? I like to think that I ended up with great asset classes, but I think they were basically the ones nobody wanted, which meant that I was managing investment grade fixed income and real assets. I had not a lot of background in either of those areas of the market. Those are really technical asset cla…

AI assessment note: “I had not a lot of background in either of those areas of the market.”

Q You put the lens back on of learning by making mistakes. What are some of the mistakes you think you made coming into the CIOC?

A I don't want to say it's a mistake. It's a piece of advice that I will credit to our current investment committee chair, who's amazing, Nate Sleeper. One of the things that I was wrestling with was this tension between respecting our history and understanding that part of the reason that they were interested in promoting an internal candidate was they liked what was happening. I did too. We had a great track record. How do you stay respectful to all of that, yet make your mark and do things your way, the tension between the two, and what's the right balance? There's no right answer to that. You have to feel your way through that. I remember saying at one point to Nate, if I'm going too fast with anything, will you tell me if that's the case? He said, I don't think that's going to be the case. More likely than not, you're going to look back at Where you are after three years and say, gosh, I wish I had done some of these things sooner. As I'm coming up to, July first will be three years. I'm so happy with where we sit today. Even some of the things that we have done, if we could only have done that even faster, that would have been great. It's not necessarily a mistake. You have to have some time to build your confidence. I don't know that I could have gone back and done it differently. It's okay to do things the way that you want to do them.

AI assessment note: “I don't want to say it's a mistake. It's a piece of advice”