J. Paul Getty Trust

“We have the overweights that I mentioned in China, and the other big overweight is in energy. And what we like about energy, and still do, is the fundamentals are really, really good, but the attitudes, the news reports, the emotions are not good, and that's r…”

“US markets are pretty richly valued, so we are underweight, our targets, but not by huge amounts, but you try to maintain some discipline in your targets, but we are underweight.”

“Here we fully support 95% of what the Getty does.”

“So we have a long-term expected return through market cycles of something, eight percent plus.”

“From that expertise, I think you can do a superior job in manager selection under an asset class structure, but it has shortcomings. You can become too narrow and too insulated or isolated within your asset class, and the generalists do a better job on asset a…”

“In international, we are overweight. We think they're earlier in their cycle, so we're overweight. Particularly in emerging and within emerging, particularly in China.”

“We're organized along asset class categories. So we have four managing directors. Each of them has an analyst, and then an assistant and myself. So the whole department is 10. We have no responsibilities for back office work.”

“And right now we have a really big overweight on China, but I think it has more to do that we have high conviction in several Chinese managers than it is about a view on China. We like China. We think there's a tailwind story there, but the real reason we have…”

“If we looked at our returns versus benchmark going back over the 15 years that we're here, it's between one and two percent, call it a percent and a half, do a percent and a half on the assets that we have compounded over 15 years. We've had over seven billion…”

“Our overweights, we still have some overweights in credit. We have virtually no core fixed income. It's all, we'd rather take credit risk than any kind of duration risk.”

“The last couple of people we hired, we had over 500 people apply for the opening.”

“Anytime you look at the secondary markets to do a sale, what you're offered for these old stubs is such a large discount that it's not worth doing that. So we'll let this pretty meaningfully big number of small stubs stay in the portfolio and let it run off.”

“And the speed advantage is just that the trustees have delegated broad authority to us in the investment office that we have final authority on manager decisions. We don't have to go back to the committee.”

“We will never know as much as a GP does. You just have to accept that about anything you underwrite. You do not know as much as a GP. So there needs to be a pretty strong alignment of interest. A knowledge that the GP is putting some of their own money in this…”

“And our internal analysis and look across this is that it's really more manager driven.”

“And again, as in all of the asset classes, we have a pretty big bias toward small to mid-market. The smaller managers in virtually every asset class is the space where we're more focused. We think there's more inefficiencies and greater opportunities in that s…”

“We tend to be more in relative value and arbitrage type strategies. The beta is down around a .3. So it's not a big, heavy equity presence there. We don't do much in macro. The binary bets of up or down are less appealing to us.”

“We had one person move from being an analyst to being a managing director, but that's not a normal process, and that may never happen again. So the analyst will eventually have to leave. There's not a step for them, and I try to tell them that really early on.…”

“Our largest public equity in domestic equity is a five percent position, and in international equity, we have a five percent position. That's at the manager level. A manager for the total fund, not in the asset class. So it's a very sizable, 30% piece of an as…”

“The big but is that it has to be with an existing high conviction manager only. We never do a co-investment that comes in over the transom. We don't do a cold call co-investment. We only do it with our highest conviction managers.”

“This is kind of a least dirty shirt market. So portfolios are made up of a collection of least dirty shirts. There aren't a lot of great opportunities today. It's a least dirty shirt portfolio.”

“If we put all of our co-investments together from all the different asset classes and put all the co-investments into one pool, it would be our best performing asset class.”