Dec 16, 2019 · 42m · capital-allocators
Neal Triplett and Kim Lew – Issues of Management at Duke and Carnegie (Capital Allocators, EP.116)
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
Recorded live at the 2019 TIFF Annual Investment Forum, host Ted Seides moderates a discussion with CIOs Neal Triplett of DUMAC and Kim Lew of the Carnegie Corporation on asset allocation, manager selection, data analytics, and institutional leadership. The conversation provides an in-depth look at how leading endowment and foundation allocators manage macroeconomic risks, build competitive advantages, evaluate investment partners, and lead high-performing teams.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Ted holds 29.2% of the talking time here. How this is scored →
Ted as informed peer 4.6 Guest teaching 3.3 Guest disagreement 1.3 Ted pushing back 2.1
speaking balance: gold is Ted, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 12:55 Kim parries Ted's quip on portfolio inaction
When Ted jokingly suggests she has only changed portfolio labels without acting, Kim pushes back humorously, warning him not to underestimate the value of framing and discourse.
Hardest push from Ted ▶ 12:53 Ted presses Kim on lack of executionTed cuts through Kim's theoretical discourse on China and emerging markets to call out that no portfolio reallocation actually took place.
Biggest teaching moment ▶ 23:16 Kim reframes negative feedback as an investment giftKim provides a masterclass on leadership and feedback dynamics, explaining why withholding constructive criticism signifies apathy rather than kindness.
Ted holds their own ▶ 32:48 Ted challenges Neal on undermining manager convictionTed sharpens the discussion by asking whether an allocator correcting a manager's trading data damages that manager's core investment independence.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Ted as informed peer | Guest teaching | Guest disagreement | Ted pushing back | Why |
|---|---|---|---|---|---|---|
| Capital Allocators Resources and Housekeeping | 4 | 2 | 1 | 1 | The segment begins with sponsor messages and event housekeeping from Pat before Ted opens the panel with a broad question on evolving investment philosophies. Neal and Kim provide measured overviews distinguishing market noise from structural shifts. | |
| Navigating Geopolitics, Emerging Markets, and Currency Hedging | 6 | 3 | 3 | 6 | Ted directly challenges Kim's emerging markets overview, playfully calling out that she hasn't actually made tactical portfolio adjustments beyond changing labels. Kim defends the importance of ongoing dialogue while Neal shares concrete currency hedging actions. | |
| Defining Institutional Competitive Edge and Access Advantages | 4 | 4 | 1 | 2 | Ted probes on how allocators define their distinct edge relative to peers. Neal highlights qualitative people assessment while Kim details Carnegie's durable reputational brand and mission-driven access advantage. | |
| Manager Selection Criteria: Alignment and Competition for Alpha | 5 | 3 | 1 | 2 | Ted explores specific manager selection criteria and structural governance differences. Kim points out the unique freedom foundation CIOs enjoy without meddling alumni stakeholders, while Neal explains running a portfolio-wide competition for alpha. | |
| People Management, Leadership Evolution, and Candid Feedback | 4 | 4 | 1 | 1 | Ted asks about the transition from pure allocator to team manager. Kim delivers an insightful monologue reframing negative feedback as an act of mentorship and care, drawing parallels to parenting. | |
| Countering Behavioral Biases and Cultivating Debate Culture | 5 | 4 | 1 | 1 | Ted inquires into practical methods for tackling behavioral biases. Kim details an internal exercise where team members self-identified personal blind spots, while Neal outlines DUMAC's culture of structured debate and post-investment data tracking. | |
| Sponsor Message: Ridgeline Front-to-Back Platform | 6 | 3 | 2 | 5 | Following a sponsor break, Ted drills into allocator data analytics, questioning whether managers retain independence if allocators point out sub-optimal trading patterns. Neal clarifies that DUMAC shares yellow flags without dictating trading rules. | |
| Prioritizing Liquidity Analytics and Scenario Modeling | 4 | 5 | 1 | 1 | Kim articulates how Carnegie utilizes data primarily to run dynamic liquidity modeling and portfolio stress testing under zero-inflow constraints. Ted listens as she explains the difficulty of information overload for a lean four-person senior team. | |
| Thematic Exploration Trips and Data Infrastructure Initiatives | 4 | 3 | 1 | 1 | Ted asks about recent exploratory research initiatives. Kim humorously shares stories of team-wide exploratory trips in agriculture where an analyst left to become a farmer, while Neal highlights building a proprietary data warehouse. | |
| Navigating Stakeholder Politics and Organizational Friction | 4 | 2 | 1 | 1 | In closing, Ted asks about the biggest thorns in their sides. Neal and Kim candidly discuss managing interpersonal organizational politics, student activists, and internal office friction between investment teams and program staff. |
Statements from this episode (16)
Triplett: DUMAC selectively hedges emerging market and Chinese currency risk
“We don't tend to hedge our currency exposure in emerging markets, but we may get very nervous broadly about emerging markets exposure for macro reasons, and hedge that exposure even though it's quite expensive to do so, or something like China specifically, wh…”
Triplett: DUMAC bought Chinese equities during the trade war dislocation
“We added some to Chinese equities in the midst of that as those equities had dislocated.”
Triplett: Past returns are not a major driver in DUMAC manager selection
“Really returns aren't a big driver of our decision-making process. We want the best people in the portfolio working for Duke, and that's what we try to find.”
Lew: Allocators cannot succeed without manager access, despite having elite talent
“You can be, have the best people of the world. If you don't have access, then you cannot be successful, and I think that's an access advantage that we have, and the people are the second advantage”
Lew: Fund terms always favor GPs, making character alignment essential
“The terms are always gonna, in some way, favor the GP, so you just have to align yourself with a GP who you think in the crisis is going to do the right thing.”
Triplett: Filling rigid portfolio asset buckets leads allocators to hire B-teams
“The way we think about it across the portfolio, as opposed to kind of picking and choosing buckets that we're trying to fill, that's, you didn't ask the question, those are the mistakes that we always make, is if we're trying to fill a bucket, that's usually p…”
Triplett: Private investments make up approximately half of Duke's portfolio
“Privates are about half of the portfolio now, and so those are some things that I think given the risk culture at Duke, we're able to do.”
Lew: Dead donors give foundations a structural advantage over university endowments
“An advantage a foundation has over an educational institution is the fact that no one feels like they own the capital that we have. Andrew's been dead a 108 years, and so he didn't leave anything to his heirs, and so there's no one who feels an ownership of th…”
Lew: I only give negative feedback to high-potential people and let others fail
“And when I don't like somebody, I don't say anything. Hey, just go and fail. I don't care. It does come down to that. And because it's painful, right? It's not comfortable to give people negative feedback. So I really only do it to the people who I care about …”
Lew: Carnegie required the investment team to list their cognitive biases
“I think it was two years ago I asked everybody on my team to give me a list of their biases. Tell me what you think gets in the way of you objectively looking at investments and that may either create an environment where you're taking risks that you should no…”
Triplett: DUMAC maintains position-level transparency on 90% of its portfolio
“We have full transparency on about 90% of our portfolio, so we have a very robust data set. We can look at daily P&Ls for all of our public managers. We have it all plugged into Bloomberg”
Triplett: Allocators should step away rather than dictate manager portfolio decisions
“We've hesitated to dictate to the managers how to manage their portfolio. We've tried that a few times. It becomes very messy and complicated, so usually we'll just step away at that point”
Lew: Foundations prioritize liquidity analytics because they have no capital inflows
“And for us as a foundation, we figured out that liquidity is the thing that we've got To spend the most time. We have no inflows of capital.”
Lew: Carnegie conducts triennial whole-team research trips without predefined theses
“So the Carnegie team does team trips every three years. Whole team goes, and the idea is we don't necessarily have a fully developed thesis before we go. That's why everybody goes, and everybody can ask questions, and the assumption is that it perhaps isn't so…”
Triplett: Managing people, boards, and student activists is a CIO's hardest job
“The things that are most challenging for me, I think, even though I like the team and the people, but I think managing teams and people and boards are probably the most challenging part of my job, and student groups especially, if you throw those in there. Tho…”