The Exchanges

Q So take me back to your time at Yale and going to Bowdoin. What were the formative lessons you took from what you learned from David into that seat at Bowdoin?

A Well, first of all, I think that the Yale model, quote unquote, is not a recipe that can be transferred. It's different for every organization, so it's more the key tenets of thinking about long-term investing rather than a recipe. You can't bring it. So when I went to Bowdoin, the first thing I did, I took a year to get to know the risk profile of the college, which was very different than Yale. So understanding sort of your clients, who is your board of Trustees, as well as your president, is a really integral part of it. But from David, I think you learn in some ways that managers, they were very talented managers that you could access. Also, in some of the cases in some asset classes, for instance, venture capital, unless you had access to the very best managers, it wasn't worth doing at all. And one of the things that I learned at Bowdoin Through David's impact was figure out where your competitive edges are. So for instance, at Bowdoin, since we had Stan Druckenmiller and a really great alumni in the global macro world, we added that. And when I first got there, David would look over my shoulder and say, no one can anticipate interest rates. You should get rid of these investments in global macro. However, those have been a signature part of Bowdoin's portfolio. Another thing is, no question is too silly. David loved teaching, as you know. I remember once I asked him what…

AI assessment note: “one of the things that I learned at Bowdoin Through David's impact was figure out”

Q You got to Bowdoin and you're managing at the time, which is four hundred fifty million and it grew to a few billion. How did you think about the size of the pool as a competitive advantage or disadvantage?

A I think endowments, especially the size of Bowdoin, and I still think like 3,000,000,002 1,000,000,003 billion is still a competitive size. You can do small investments that make a difference. So I really like the venture capital firms that are raising 253 hundred and fifty million. Scale doesn't work in many asset classes, and so The ability to invest small amounts of money, but it will make a big impact on the bottom line is important. Of course, you have disadvantages in that you have, and you have to be very entrepreneurial in a smaller endowment. You have a smaller staff. You have to sort of be nimble and think across asset classes and all that. I think it's very exciting. I once talked to Jane Mandillo and she said running a small endowment is like being an entrepreneur because you You're doing many things. You also are interacting with the finance department. There is spending. There's all these things that you have to do, but I definitely think smaller size is an advantage.

AI assessment note: “I definitely think smaller size is an advantage.”

Q When you look back on these 20 years at Bowdoin and before we'll move on to Rockefeller, what do you see as the biggest drivers of your success?

A I think partially my background in the liberal arts and art history, and I know it sounds really weird, but in my studio doing a priceless work of art, say I have a Rauschenberg transfer drawing, I'm going to repair a tear on it, or I'm going to take a stain out of it. I do so much work beforehand, because this is a one-of-a-kind piece of work. I have to do testing under the microscope, this and that, and this, and then I come up with a plan. And I also come up with a plan if something happens, how I'm going to save myself. And I think in investing, you do lots of due diligence up front, and then you also have a plan, and I feel like I can take that over, you know, right brain, left brain. I feel like what I learned in conservation is absolutely critical in how I think about investments. And the other thing I think is knowing risk management, but also being able to take risk I always remember like in big drawdowns, like in March after the COVID was starting to happen, the March drawdown, you want to make sure your manager is sitting back up on their chair and looking at their screen rather than under their desk, and so I'm always monitoring risk, but also taking risk, and I think I take educated risks in investing.

AI assessment note: “I think partially my background in the liberal arts and art history”

Q 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. So as you try to flesh out a venture portfolio around the sequoias of the world, there are so many of these managers. What have you found to be the distinguishing characteristics about the ones that you want to plant a small seed in?

A Yeah, I think sourcing is one. I know a lot of firms have started these seed or scout funds where they're investing really early just to sort of throw the spaghetti at the wall and see who's going to come. You saw Y Combinator was a source for that. I also think rational underwriting is important. Humility. Lately, I've been thinking a lot about risk management because I've been thinking about China and some of the manager's That we're so overweight in some of the education companies and things like that. You can't really do that in venture capital because it's a long term commitment. But I would say sourcing of networks are probably the most important and also the domain expertise of the team.

AI assessment note: “I think sourcing is one... rational underwriting is important. Humility.”

Q What do you think you see differently in how to manage one of these pools than some of your peers?

A As a CIO, I'm a little bit different than people that delegate a lot, you know, and have teams and just say, you do it. I love to be involved in the research. I love to work with the team and sit in on the reference calls and all that. I love to know positions in the portfolio, so I'll read the financial statements. So that's one thing, and that's just because I am like a nerd or something, and I read all the financial statements. My sensibility that came from the art history and the liberal arts has me look at things differently. I also think the relationships I develop with managers are really important. I feel like I want a manager where I can call them up and they will answer my question when I want it. I also love managers who give us money back when there's no opportunities and then they call when they're pounding the table. And not a lot of managers do that, you know, cause it's all about asset gathering.

AI assessment note: “As a CIO, I'm a little bit different than people that delegate a lot”

Q As you look around the world now across asset classes, where are the opportunities you're most excited to dive into?

A I think Europe is interesting and overlooked, and so European equities I think are interesting. Everyone's doing fintech, but I think really qualified people in fintech. Biotech is interesting, but again, you have to find the right managers with the domain expertise. I'm doing a lot of work on crypto and trying to understand it, and is it a new asset class, or how do we think about that? And then also ESG, even though I think that as endowments, we'll like roll our eyes. It's funny. Jillian Tett used to say ESG was eye roll, sigh, and groan. That's what it meant. But now I think it's important. And so I think with the carbon initiatives, for instance, in our macro funds, One of our managers is making good money by trading carbon credits, so that's a really interesting area. But I do think as time goes on, endowments are gonna have to be more transparent in their financial statements about what their carbon footprints are, so that's something I'm interested in.

AI assessment note: “I think Europe is interesting and overlooked, and so European equities I think are interesting.”

Q So when you're investing a global portfolio and you're trying to source managers across asset classes around the world with a small team, how do you do that?

A I have done it by finding a theme. Like I think disruption across industries is really interesting. There's the theme of FinTech. There's this theme of crypto, but I think a meeting as many managers as you can on your home turf, whether it's going to the breakers conference and doing a million meetings or doing that. The other thing is collaboration and sharing among, once you get trust with some of your peers, they're sharing. I think usually I would go to China twice a year, London, probably four times a year, Latin America, probably two or three times a year. Silicon Valley a lot. Now that travel has stopped, we'll see how that goes, but when you did that, you crammed as much as you can into a trip as possible. I always remember one time I was with David McFarlane, and we went to London, and so I landed in the airport in London. And then we go meeting, meeting, meeting, meeting, meeting. And it's like, we had a cup of coffee, I think, during the whole day. So then his assistant had actually scheduled us to go to the theater at like eight o'clock. So we literally got out of meeting at 7:30. We go to the theater and his assistant goes, oh my God, you haven't eaten yet. So I've made a reservation for you in the green room at the intermission. So we go to the green room at intermission and it was me and David and Mick Jagger and his daughter, And, uh, another woman drinking gin …

AI assessment note: “I have done it by finding a theme... The other thing is collaboration and sharing”

Q So when you have that interest in doing the work yourself alongside your team, how do you structure your team?

A I have a great team at Rockefeller and I just met with all of them. I'm thinking of like, okay, you focus most of the time on absolute return. Okay. You're going to focus on private equity for a little while. I think shaking it up because I think people get in silos. When I first came to Bowdoin, they had asset class committees. So they had a hedge fund committee, a core equity, private equity. And it was interesting because there were overlaps, but they're also like on the long, short funnel. Say they're a short Tesla, whereas in the long fund, they're long Tesla. So you're paying all this money for things that are canceling each other out. So for the team, I love people that are curious, good writers. I think writing is important because we need to convey our information to a board and an investment committee. I think a lot of times you have investment committee members that are really busy and they can't read a giant thing. So getting a succinct executive Personal overview for something, and I also think I want people to say they don't understand something or to ask questions. Also, one of the things I learned about Stan and the amazing committee at Bowdoin, you knew that you had to do your homework. You couldn't walk in there and BS pretty much, and if you didn't know what the answer was, you had to say, I want to get back to you, and that, I think, is really important for …

AI assessment note: “I think shaking it up because I think people get in silos.”

Q That's great. So you mentioned that Bowdoin wasn't Yale, and so you couldn't just take the Yale model and put it at Bowdoin. What did your portfolios come to look like at Bowdoin?

A Yeah, there were certain areas we had no expertise. We didn't do timber. I don't know if you remember, if you went on that timber trip that we did at Yale with Randy, and we all wore Dartmouth t-shirts because we didn't want Yale to know we were doing timber stuff. But like at Bowdoin and Maine, we didn't have any expertise there. It was sort of a asset class where the state was struggling from the demise of the timber industry, so we didn't do timber. No passive investing, all active, and believing in active management, and if you look back on the attribution of our performance over the years, it's all manager selection, and I think asset allocation is important, but as, like, even today, asset allocation gets blurry. You have privates and public funds and publics and private funds, and I think one of the things that I did was I hired nimble managers who could And who were really smart. The first year I didn't make many changes, but then the second year I started doing research. And I was just telling someone this. We had no venture capital at Bowdoin when I got there. Zero. And actually when I got there the first day I opened this desk drawer and there was a note and it said, Would Bowdoin like an allocation to Greylock and Kleiner Perkins? And someone wrote, no, our college has no business in that asset class. So we had nothing. And actually I started July, 17th, 2000 was my…

AI assessment note: “We didn't do timber... No passive investing, all active... We had no venture capital”

Q So now you step into an established pool with an existing portfolio. What are the first steps you think of taking?

A Amy Falls did a fantastic job here. I mean, she was amazing. She's put together an amazing team. As I said, the institution is very different. I was trying to think today about who our benchmarks would be, because we only have 35 students, no tuition, not a lot of gifts, a completely different risk profile. So it's not really like a university portfolio. The portfolio is high quality. I think there's Things that could be better. I can use my networks to get access to things that Rockefeller didn't have before. The first six months I'm in a listening mode. I want to meet with the board. I'm meeting with the investment committee, which is amazing. Scott Besant is the chair, and he's amazing, and then Bill Ford is the chair of the trustees, so lots of amazing knowledge on investments in this place, and Rick Lifton, who's the president, is amazing. I read the book about CRISPR before I came, because I thought I'd need to know a little bit about what they do over there. It's really exciting.

AI assessment note: “The first six months I'm in a listening mode. I want to meet”

Q So I'd love to ask about those two features. So the first is building this network of top tier venture capitalists. How accessible is that today compared to 20 years ago when you started doing it?

A First of all, the industry has changed dramatically. The length of time until you get all your money back is much longer. They hold Publix longer. There's a whole secondary market where people, and there's all these new solo VCs, and it's changed a lot. I used to go up and down Silicon Valley. I know when I got to Sequoia, they're like, please don't call us again. You know, we're going to give you this little piece and thank you, go away. It turned out to be a great relationship. But I think now, and actually for Rockefeller, I'm doing this as well, there's a whole new generation of venture capitalists. They talk to each other differently. They have different skills. Like, for instance, in crypto, a lot of the really talented crypto investors grew up gaming. And then there's people that have come out of things like Stripe, or they have come out of companies where they have a differentiated skill set than the VCs of old. So one of the things I did at Bowdoin in the hedge fund was start an emerging managers fund where we, we didn't take economics, but we would usually get capacity rights, maybe a lower fee, like all that. So I think for venture, I'm doing that now. I'm putting a little bit in, I want to learn about the manager's What their sourcing is. I think right now in venture capital, the sourcing is really interesting. What's your network? I do think right now the pace is r…

AI assessment note: “I used to go up and down Silicon Valley... there's a whole new generation”