The Exchanges

Q Why don't you take me back to the start of your career? Walk me through the core steps that lead you to where you are today.

A I did not set out to become an investor. I thought I was gonna go into public policy. My parents moved to Washington, D.C. when I was in high school. I was fascinated by policy and government. My whole college career was internships on Capitol Hill, political science major. The fall of my senior year, I got a call from Goldman Sachs. They had an open slot in their San Francisco office for the following fall. Did I want to come interview? I remember sitting there on the phone thinking, I've never taken a class in finance, but why not? I had a good appreciation for the role that markets play in the global economy. As somebody interested in policy, that was important. I crammed for the interview. I talked to all of my friends who had done banking internships or sales and trading internships the summer before. Long story short, I got the job. I graduated in 2008 into the financial crisis with a job at Goldman Sachs. I don't think anything has shaped how I think about portfolio management or how I manage stakeholders Or how I manage my career quite like starting out in the middle of a financial crisis. I learned a lot in the two years I spent at Goldman.

AI assessment note: “I graduated in 2008 into the financial crisis with a job at Goldman Sachs.”

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A Two pieces. The institution and then the team. On the institution side, NYU positions itself. It's the largest private university in the U.S. We have 60,000 students, 700,000 living alumni. Most of the GPs and managers that we talk to have a family member who went to NYU. We're treated at NYU Langone Medical Center. The reach of the university is massive. That's appealing for a lot of our partners, especially when you combine that with the specific role of the endowment, which is to provide accessibility to that institution through financial aid. That's a compelling motivator for our managers. That's great in theory. Then there's the reality of the day-to-day. That's where the team comes into play. Our team leans in to building active partnerships with our managers. That can look like helping secure a room for a recruiting event that they're doing at NYU, or debating what the appropriate pricing model is for a product that we're not even invested in. We want to be the partner of choice because Managers find it valuable to have conversations with us. One of the best compliments I got from a manager was they said, when something's up, we like to call you first, because we know that you'll answer the phone in a timely manner. By the time we hang up, we'll be well prepared for all of the client calls to come. That's the type of value add that we want to be able to provide to our pa…

AI assessment note: “Two pieces. The institution and then the team.”

Q Which two people have had the biggest impact on your professional life?

A The first one I have to go with is my parents. I'll treat them as one because they act like a unit. When I was 16, right around this time where I decided that I was going to go into policy and politics, they sat me down and they said, great, you also need to understand how a stock works. They bought me books. I didn't have much of an interest in the markets at that time. They were adamant that understanding investing was an important life skill. The second person is Will Fox, who was the managing partner in the US at Partners Capital when I joined after Goldman. Will taught me a lot of what I know about managing portfolios and investing. Also running a business. When I went to Will and said, I want to understand how partners works as a business, he gave me that opportunity to understand how the finances worked. He both gave me a lot of confidence to keep doing what I was doing. Pushed me really hard to be better. Never minced words on what needed work. That shaped both my time at Mellon and then at NYU. To the extent that when I initially started interviewing at NYU, one of my first calls was to Will to get his thoughts and hash through what it might look like.

AI assessment note: “The first one I have to go with is my parents... The second person is Will Fox”

Q What did you find when you got there?

A The endowment has been around for a while, although it's much younger than most of our peers. When I got there, the university leadership gave me a mandate to change how the portfolio was being run. While the pool of capital at six and a half billion dollars was sizable, it's relatively small compared to the scale of NYU. Up until 2010, it was a sub two billion dollar pool of capital. A lot of that growth had come several years before I got there. The university leadership was ready to look to the next level, which required more growth from the endowment. The portfolio as it stood at that point was more conservatively positioned. All of the investment decisions were run through the investment committee. The portfolio was all flavors of Bottom-up, fundamental, mostly U.S.-based corporate securities. Mostly equity, some credit. Because of the conservative mandate that preceded me, there was a big focus on managing volatility. When I came in with this mandate that was growth-oriented, we had to rethink that construct across the board. Everything from the governance structure to how we thought about asset allocation to the types of investment managers that made up the portfolio, the team to underwrite all of that. It was all a blank sheet of paper.

AI assessment note: “The portfolio as it stood at that point was more conservatively positioned.”

Q When it comes to asset allocation and portfolio construction, how have you set up that framework to get at your growth objectives?

A We've walked a little bit of the middle ground between a more traditional asset allocation and a total portfolio approach. At the core of our asset allocation, we've tried to hone in on what are the different types of assets and the different roles that we want our assets to play in the portfolio. Grouping those together, which is where the somewhat of an asset allocation framework comes into play, But then creating a list of criteria for every single investment in the portfolio on how it fits into that bucket. What that's meant for us is we have an equity part of the portfolio, which has a private equity component and a public equity component. We have a liquidity and cash component to the portfolio, and we have absolute return and opportunistic. We have a small allocation to real assets, Although I would say that is a heavily debated topic of whether that deserves its own allocation. The idea stems from my view, my team generally shares this, that the most reliable source of return over the long term is equity market exposure. If we are going to generate a return that is going to fulfill the university's objectives of spend plus preserving purchasing power, Anything we invest in needs to be competing with that long term equity market return. There are lots of reasons to move away from equity market returns. We've got to be really clear on what those reasons are for each part …

AI assessment note: “We've walked a little bit of the middle ground between a more traditional asset allocation”

Q What are some of the areas you've leaned into that are a little different from your peers?

A One is on the hedge fund side, where when I was at the Mellon Foundation, we were relatively early to underwriting hedge fund strategies that are more trading oriented, that run higher levels of leverage, where you don't have necessarily a single persistent source of return. It's much more down to technology or manager skill or Or some insight into the data. We've leaned in heavily there. That absolute return and opportunistic bucket that I described, almost all of that right now is in those strategies. We're able to do that because we've built a team that has a lot of expertise in those strategies. We can underwrite the different types of risks effectively. The other thing we've done that's different Is a function of the structure of the portfolio at NYU, where we have liquidity. When I got to NYU, less than 15% of the endowment was in private assets. Our team has the view that there is still a lot of value to be had over the long term in private markets. Maybe not every private market. We want to be more discerning there. But we have the ability, and we have been growing that portfolio Substantially over the last few years when many of our peers have been pulling back their allocations.

AI assessment note: “growing that portfolio Substantially over the last few years when many of our peers have been pulling back”

Q How did you navigate the order of magnitude less resources at the foundation than you had had at Partners?

A In some ways, it was freeing because I could do it myself. In other ways, it required building that network of individuals outside the foundation that I could trade ideas with, debate something with. It was one of the areas where being in New York was a huge benefit because there's a fantastic community of investors here, whether they are other LPs or managers or other members of the finance community. It was easy to find individuals who were experts in the areas that I was trying to get to know better. Whether I called somebody that I had worked with at Goldman who was working on a muni desk now because I was trying to get deeper into treasury functions for fixed income RV strategies, and he connected me with somebody at Goldman's desk that could help me understand it better. It was about finding those connections and that information outside the foundation.

AI assessment note: “it required building that network of individuals outside the foundation”

Q What have you tried to do similarly from what you saw in the past, and what have you tried to do differently?

A On the similarity side, there's a lot that we've retained in terms of what creates an edge for a given manager. How do we think about correlations across different asset types and return streams? Those are all commonplace assumptions. The thing that we try to do differently is trying to pressure test for ourselves why a certain opportunity set exists, how we think that opportunity set is best accessed. Everything from why active management in this market versus passive to Why does this royalty stream exist, and how do you capitalize it? Is that an interesting opportunity for us? We've tried to take each one of those from a top-down perspective of why is there a return here, and why should it persist? Also from the bottom-up side of let's put together the mechanics of how this works, how we access it, and whether that's an interesting investment

AI assessment note: “On the similarity side, there's a lot that we've retained... The thing that we try to do differently”

Q How did you navigate this group coming together for the first time, who all have priors about how they go about research, what types of things they like, how they think about decisions?

A There were a couple threads that each person coming in had in common that really helped. The first one was this commitment to continuous improvement. We've done a couple team conversations on values, and it's a theme that comes up over and over again. It was something that I was looking for as we were hiring. When you find individuals who value continuous improvement, There's a learning mindset and an openness. Is there a way to do this differently or better? And think intellectually honestly about whether my prior is the right answer or just what I know. That drove a lot of good conversations on the team. Helped us build some process that we've adopted now as our own as a group. The other piece is the hustle factor. Everybody we brought onto the team, the team members who were there before, everybody's trying to get as much done as possible to serve the portfolio and to serve the office. We have a strong in-office culture, so people got to know each other. People could sit in a room, hash it out. We've created all of these forums for discussion and communication. That's how you get past that hump of different expectations or assumptions coming in. Everybody's been intentional and deliberate about it. It's worked really well.

AI assessment note: “That's how you get past that hump of different expectations or assumptions coming in.”

Q Venture has a long duration to get paid. So as you're thinking of ramping into that, there's a bunch of late stage companies that have continued to grow to the sky. How did you think about deploying across the potential range of opportunities?

A We set out to build a balanced portfolio where we wanted to have allocations everywhere from early incubator stage of venture capital straight through to pre-IPO, now IPO-ing companies that have been growing massively. We did that by Looking at who we thought the best in class players were across the spectrum, and also being pragmatic about how we can build more concentrated relationships with a few players, that early pre-season side of things. When it comes to the mid to late stages of venture, we've been trying to build relationships with a combination of some of the large multi-stage firms, also some of the smaller Boutique firms that can offer exposure to not just those going-to-the-moon huge companies, also some of the smaller companies that have great prospects ahead of them, either on a standalone basis or as potential acquisition targets for those large companies.

AI assessment note: “We set out to build a balanced portfolio where we wanted to have allocations everywhere”

Q If data combined with forward looking is that first key aspect of your manager selection, what are the other ones?

A The opportunity set is critical. We spend more time on that than I have in some of my prior roles, partly because at the size endowment we have, we don't have to do anything. Thinking about what is the opportunity set in growth equity long short or venture capital or royalties or aspect finance, we can figure out why an opportunity set exists and then make sure the managers are positioned to take advantage of that. Some of that also comes down to the structure that the manager is offering the investment in, where we've seen a lot of mismatches in recent years between an opportunity set Maybe the duration of that opportunity set and the structure that a manager is offering. We've tried to make sure that the opportunity set that we are trying to access is what we're actually getting exposure to in the fund we're investing in.

AI assessment note: “The opportunity set is critical. We spend more time on that”

Q How have you thought about building this ship on a sea of the market environment that is so different, more volatile, geopolitical issues, economic issues, at the same time that the sea is moving underneath your rudder?

A We have a huge advantage in the longevity of NYU's endowment. We can build with that medium to long-term North Star while being cognizant of what's going on around us. When it comes to the asset allocation or the opportunity sets that we're underwriting, most of that is designed with the idea that you're going to have these periods of volatility or macroeconomic change. We're just starting in it. It's somewhat built into the thought process, and it doesn't have a huge impact on the goal. What it does change is it gives me a little bit more preference for flexibility and liquidity. Some of that has to do with the volatility of the landscape. Some of it has to do with figuring out How the end of the zero interest rate environment flows through to different asset classes. That's more of a regime shift rather than temporary volatility. We're trying to focus more on some of those strategic changes, what that means for our go forward allocations, trying to crowd out some of the noise of volatility or This small concentrated group of stocks is driving public market returns for this six months, trying to make sure that what we're focusing on is our true objective of delivering spend plus inflation for the endowment, then the long-term growth of the portfolio.

AI assessment note: “What it does change is it gives me a little bit more preference for flexibility”

Q What's in the plan for the next two years?

A So many things. We are still restructuring the portfolio. We have the foundation laid. We've made great investments. There is a big chunk of our absolute return portfolio and our public equity portfolio. We're still moving in the direction of being more diversified, more open to new strategies. We're also looking at Different mechanisms for how we structure the portfolio. We stood up a co-investment portfolio earlier this year. We're crawling with it right now. Over the next two years, I'd like to walk. I don't know if we'll get to run, but we'd like to walk with it. We're also building out features of some of our risk management. A lot of what we're doing right now is important at the portfolio level. Creating much more nuanced management at the subset, for example, for that equity sleeve or for that absolute return sleeve is going to continue to evolve so that we can manage our investments better going forward.

AI assessment note: “Over the next two years, I'd like to walk.”

Q Were there other key lessons you remember from that time?

A Using your network was a critical component of making those good decisions. One of the things I appreciated at Goldman was you had so many smart people focusing on different things in different parts of the firm. They were all happy to talk to their colleagues, even if you were in a completely different group and you'd never met them. Being able to leverage those different information sources to pull together a better picture of what was going on Instead of just focusing on your small microcosm was an important lesson, especially as I went to smaller organizations where you didn't have that built into the firm. Cultivating that network more broadly across the investment industry and beyond that is important for having those information sources in good times and in bad. I spent the two years at Goldman trying to figure out what I wanted to do longer term. Did I want to go back to policy? Did I want to stay in finance? I honed in on two things. One, I was fascinated by the markets, and I wanted to learn more. The second piece was I didn't feel like I had a good understanding of how to underwrite an investment. I ended up taking a role at Partners Capital, which was a relatively small, they called themselves an institutional investment office at the time. OCIO wasn't a term yet. I moved to Boston, started a role where I spent half of my time managing client portfolios, half of my …

AI assessment note: “Using your network was a critical component of making those good decisions.”