The Exchanges

Q And how about the public side, public equity, fixed income?

A Fixed income. So I'll start with that one first. What I inherited was a group I had never heard of before, but it had been around for 40 plus years, and it was a family business with multiple generations of the family. That took over. They only invest in U.S. treasuries, and they've been doing it for 40 years, and it's been a great environment to do it over the long haul. They have written down the interest rate curve and really produced demonstrable alpha that you can measure over thick and thin. And when I got that, the ten-year treasury rate was 90 basis points, and this was January of 2021. And I said, okay, I got plenty of bigger fish to fry. Let me just kind of Put this one on hold for a little bit, and had my first IC meeting at the end of February that year, and then March comes, and I get the quarterly numbers, and that position is down 15%. I think the tenure had gone to 1.4%. When folks ever said you can't lose money on fixed income, I don't know what finance textbook that they're looking at, but that, when I say what kept me up at night, that thing suddenly kept me up at night, kind of every day, and their duration that they were carrying was kind of 22 years. Amy Falls always taught me, you know, she, and she was a fixed income expert. She said, I have no idea where rates are going, but it doesn't mean that that maybe this time it's different when the fed says they…

AI assessment note: “Fixed income. So I'll start with that one first. What I inherited was a group”

Q Right, Tom. Let's turn to a couple of closing questions. I mean, you already talked about golf, so we'll sketch on a favorite hobby or activity. Here's one. If you could start over today, money was no object, and you couldn't be an investor or an asset allocator, what do you think you would most like to do?

A I think I would most like to be a teacher. I had experience at Common Fund pinch hitting at a class at the University of Dayton, where three of my brothers went to school, and it was such a fun thing. They would invite me back every year to speak at a class. And talk about private equity investing. Something I had done as a direct investor once upon a time in a prior life and had some fluency to talk about it and actually went through a deal that I had worked on that actually turned out to be good. And so that was so fun. And these were kids in college. They were 19, twenty-year-olds. And the enthusiasm, the energy, both the intellectual as well as the emotional high you get from seeing Their eyes light up. And of course, there's always the fun kids in the back who are asleep. But just seeing how they get engaged, there is no better feeling. And in some respect, I get a little bit of that high working with my team. I'm always teaching and always learning every single day. And they have things that they are teaching me and things like that. So you get a little bit of that. But I think if I could redo things, I would probably do that full time.

AI assessment note: “I think I would most like to be a teacher.”

Q What teaching from your parents has most stayed with you?

A I'd have to look at my mother, and if I ever think that I work hard, I just have to put myself back into perspective. For most of my growing up, and I was the youngest of eight children, she was the breadwinner, the sole breadwinner as a head nurse in Akron, Ohio. I actually wrote about this in my business school application, learning about labor relations, like why I wanted to go to business school is to get an idea. There were times where she was on strike, and I never knew what that was back in the day when they had unions. She went from being on the line to being, you know, in management. So she's seen both sides of it, but I would be on the picket lines with her. And I remember like, what am I doing here? It's cold. I'm sitting by this giant fire, this drum that's, you know, providing warmth, and we're holding these signs and yelling scab at people crossing the picket lines. I can't remember how old I was, but I was young. And I was thinking, why is my mom doing this? Am I, am I part of a propaganda technique? And the answer is, there was no daycare. She couldn't afford it if there was, but I was there just because there was no place else to put me. And so, As I got to the age of reason and tried to understand and have my own children, my own family, the pressures that she went, you know, went for. And many times she had two jobs and working weekends and would always come …

AI assessment note: “She taught me how to work hard. No question about it. And also humility.”

Q As you're going through building from the aspects of a rebuild, the team, the portfolio, I'm curious when something like crypto comes up, which is just a different area that requires a level of understanding of new language and everything, how do you tackle it?

A Yeah, I know we've talked before about when it's something that's brand new, we don't ever want to be the first mover. Here at Wallace. We, and again, the good news is we're small enough. The world's big enough. There's nothing we have to do. And there's lots of things that we could do and let's figure it out. What makes sense to us? Where do we have any area of expertise? Where do we have an edge if we have one? And if we don't, we should really think about that. Crypto is definitely one of those areas where we've already missed the boat. If you will, we're definitely not first movers. We're digesting it very slowly. One of the first ways we're trying to learn about it. And we actually have a team member, Joyce raised her hand and she actually did some work early back in the day in crypto. And she actually did, I think, a fellowship with Hill House, with Lei Zhang, and I think Lei may have actually helped bring her under his wing to help with that. So she raised her hand and said, I actually have done a little bit of work in this space, kind of know some of the players. I said, great, take it and run with it and start with some of our managers that are already doing crypto investments. So we don't have any dedicated crypto funds, but we have a couple, not all, but a couple of venture managers who were early investors in Coinbase. Okay, let's talk to them first. They're gonna h…

AI assessment note: “take it and run with it and start with some of our managers”

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

A I have two. I'm going to cheat. I'm going to give you three. I'll do it quicker so it'll fit in the same time. So one person that I met while at Common Fund was Bill Dietrich out of Pittsburgh. And he was the grandfather or the godfather of Pittsburgh and was so involved in so many different groups and put together so many investment teams. And he really is so impressive for so many reasons. One of my most treasured possessions is a picture with him before he passed, and we were both kind of smiling, and he knew the value of relationships. He also had great civic pride in the city of Pittsburgh, and being from Cleveland, I admire it from afar. I can't like it too much. It's against my DNA, but I absolutely have the most admiration for him and what he was able to do to take a city and really cobble together tremendous purchasing power and investment power by sharing information. And bringing people together, and if he came across a great idea, he would share it with University of Pittsburgh Medical Center, or with Carnegie Mellon, or with the Symphony, or any of the groups that, that had pools of capital invest. I can't think of another city like that, where everyone went to him to kiss the ring, but it was much more than that. They all worked together, they all shared information, and collectively, they were incredibly powerful, and could get access to things because they could…

AI assessment note: “one person that I met while at Common Fund was Bill Dietrich out of Pittsburgh.”

Q So this is a really interesting interview you did with Bill. And I guess there's a couple of questions that I'm curious to ask you about it. And the first is he was the chair of your investment committee at Rockefeller for a long time. What was the dynamic of having a chair of your investment committee also be one of your managers?

A So what's interesting is while at Rockefeller, we had put in a conflict of interest policy in place. It was one of the first things we did. And to be honest, I think it was one of the best things we ever did. So that we could actually not commit or invest in any of our managers or any of our board members funds. So that included folks like Henry Kravis, like Jim Simons, Sandra Horbach, and of course, Bill Ford. So he was our investment committee chair for many years. Then he became chair of the overall board at Rockefeller University. So we could not invest in general Atlantic. And when I got to Wallace foundation earlier this year, pleasantly surprised that Wallace had already committed to a general Atlantic fund and they were coming back to market like now. So the dynamic really wasn't there until a couple months ago. It's one of those wonderful things. You kind of just walk into it. There's pure dumb luck. And I never really knew what GA's numbers were. You know, we never asked and we can never really look at it. So when I started doing the work on GA earlier this year for the 20, 21 fund was just pleasantly surprised. I always heard good things, but you never really saw the data and just was kind of blown away at how well they've been able to perform at scale. Most groups, as you know, size is the enemy of returns and they really have gotten better. I think that's elusive. …

AI assessment note: “So the dynamic really wasn't there until a couple months ago.”

Q And, and what is it about baseball that pulls you in?

A I think it's, there's so many intricacies. The, the, the more you are, the longer you are a fan, you The more you realize how important everybody's position on the field is, every player, the different decisions that the manager faces, and to a casual fan, you might get quite bored and say, oh, it's just the same old thing, but there are matchups that they're considering. There's even, you know, to each individual pitch, the interaction between the catcher, the pitcher, and the batter, if you're really watching and paying attention, is quite fascinating, and it differs all the time, and Like most sports, uh, no matter how heavily you're favored, you know, any given Sunday or in baseball parlance, any given day, uh, somebody else can win. And that, that proved itself on Saturday night when, uh, when Verlander was, was bounced in the, uh, in the fifth inning.

AI assessment note: “I think it's, there's so many intricacies.”

Q And what were some of the key lessons? You said you have these great mentors. What did they teach you?

A So Jeff Greenberg, I use this a lot with, with, um, with my own team. And especially when we bring new people on board, something that will always stick with me. One of the things he taught me was when there's a hole that needs to be dug, pick up a shovel and start digging. And what I took that to mean was everybody's on the same team. We're all pulling together for the same goal. There's not this huge delineation in terms of roles and responsibilities. At the end of the day, there's one responsibility and that's to accomplish whatever Whether it's the best risk-weighted returns you can generate, whether it's the, uh, getting the IPO of Allstate across the finish line, whatever it takes. And I actually use that with my kids as well.

AI assessment note: “One of the things he taught me was when there's a hole that needs to be dug”

Q And how about on the private equity side? You've seen the same dynamic?

A Doesn't seem to be as acute, I would say. The velocity of the capital doesn't seem to be as hot as it has been in venture. Not sure why. We actually have a lot more exposure, again, in the kind of the fund-to-funds arena, but we also have some terrific incumbent managers, and so where we were really looking to rebuild venture from scratch, we've only had a couple spots that we've filled on the private equity side, and most of who we have incumbent managers are heavy tech, if not all tech. Everybody's doing tech these days. Everybody has a tech group, but most of these groups that we have and that I inherited are solely tech, so we've been Looking for decidedly non-tech. And there's a great group here in New York that we had at Rockefeller, which is going to be very easy for us to port over. And they're raising right now. They're generalists in nature. They do industrials. They do healthcare. They do business services. They do franchises. They do a lot of different things. And they're actually a great window onto how is the US economy? How is it dealing with inflation? They're kind of a, an ad hoc research analyst that I will talk to to get their views because they have a 150 incumbent portfolio companies that are on the ground Dealing with inflation on a daily basis.

AI assessment note: “Doesn't seem to be as acute, I would say.”

Q How about on the investment side? Investment pet peeve?

A Herd mentality. Not saying this by any means about crypto, but just Crypto's everywhere these days. We're getting a solicitation a day about a brand new crypto fund from some incumbent managers, from brand new managers, folks spinning out. And I don't want to pick on crypto. I'm just saying like the idea that everybody in our business, we get that moniker every now and then that we're just kind of following the herd. And I think that's one of the more dangerous things that we all care about. And I don't think anybody wants to be part of that, but we, we should all be very careful. And it also doesn't mean we should be contrarian just for the sake of being contrarian. It just means we should have our own thoughts. We should all be critical and In our thinking and continuously questioning things and not taking anything for granted.

AI assessment note: “Herd mentality. Not saying this by any means about crypto”

Q I'm curious about emerging markets. So China has certainly come up in people's minds, maybe in a slightly different way these days, but a lot of these pools of capital have had, call it relative overweights in emerging markets for a long time. Which hasn't really worked. U.S. has been really strong. How are you attacking both China and emerging markets more broadly?

A We have about 15% of the portfolio, public and private, in Asia. And we'll just, I'll start with China first. So it's, and of that, half of it is in China, half is elsewhere in Asia, which I actually think is a good number. If anything, I could see us maybe tilting a little bit more. But when we think about what the makeup of that is, we actually have a handful of managers that are indigenous to the region. Versus global managers that give us a piece of what they do is exposure into Asia. What I think we're going to be doing on that front is reducing the global exposure and going more with the local or regional managers. We've actually done some things that we ported over from Rockefeller in Japan, as well as in South Korea. So it's not just China, although China is probably half of our total exposure. And here at Wallace, I had a chance to re-underwrite the thesis. Everything that's been going on last year. In some respects, what we thought was a risk that The Chinese Communist Party would have a heavy hand in regulation and getting involved in things. It actually has happened. So in one respect, it's no longer a risk of the unknown. It's a risk of the very known, and it can happen, and it can continue to happen. If you take a broader perspective and kind of open up the aperture, this is cyclical. This happens every seven to 10 years, where the Chinese government makes sure ev…

AI assessment note: “We have about 15% of the portfolio, public and private, in Asia.”

Q So when you brought that lens to looking at GA, what did you find under the roof?

A I always kind of thought, rightly or wrongly, that GA was more like a technology firm, and that was clearly where their roots were, primarily in software. But I never really knew much about the consumer piece or the financial services piece, and now the healthcare piece. So they are multi-industry sector. They can do everything from seed to early stage, venture-ish type deals. All the way to large cap global buyout across the world. And so one of the things I wanted to touch on during my discussion with Bill was how do you put everything on one common bar to say that looking at an early stage software investment in India, how does that compete with a Rust Belt industrial company in Pittsburgh as an example? So the only way they can really do it is by delegating. So they do have the investment committee that looks at everything, but before it even gets to the investment committee, It has to bubble its way up through multiple layers of leadership in the organization and their transition this year from Bill being CEO to also kind of being chair and then adding a lot of co CEOs and CIOs. It seemed like semantics kind of effortless because they kind of have been running the organization that way anyway, for a long time to have the next layer of leadership really step up. So that was particularly intriguing to kind of see that happen first time when I did my diligence.

AI assessment note: “So they are multi-industry sector. They can do everything from seed to early stage”

Q And, and yet today you're not in that business anymore. So somewhere along the way with, with all this sort of great experience and fantastic first rate firms, even if it was early days for them, how did you come to decide to leave and move on to the allocator side?

A So I had just gotten married and just had our first child. My daughter, she was born in 2003. And when they're really young, there's not a whole lot that the dads can do except just watch and try to help out wherever they can around the house. But not, not a whole lot we can do to rear the child at that age. But as they get older, very quickly, that, that, that tide turns. And for personal reasons, had felt that I loved the direct side of the business, but it's incredibly intense. And, and the type of business that I was working with, if you're fortunate enough to have, to get one, to get a tiger by the tail, it takes over your life. I didn't love the fact that it can be kind of all consuming. And I did learn that from my analyst days back at Goldman, that Everything else comes second. And so I thought, is there a happy medium where you can actually have a better balance between work and personal life? They're so intertwined in those types of careers. They're kind of one and the same. And if it gets to be too much on one end, then the other end can really suffer and, uh, and can, can permeate to the other side. So I started thinking at that time in 2005, is there, is there another alternative where I can have all this terrific exposure and excitement to the direct world Without having to kind of be on the front lines. So I was recruited by a firm in Connecticut that was miles a…

AI assessment note: “I thought, is there a happy medium where you can actually have a better balance”

Q What were the commonalities and maybe the surprises that you saw when you were doing the diligence knowing Bill for such a long time and then seeing what happens inside the organization?

A Having worked with Bill so long at Rockefeller for just about 10 years, The personality, what you see is what you get. So Bill does not act differently in our committee meetings as he does with an LP, as he does on the other myriad of nonprofits that he serves on. He is the same, and he is one of the best chairs of any committee that I've ever been with. He does an excellent job of facilitating conversation and making sure everybody participates. He'll do the Socratic method and will call people out if they're not participating. And in a very Non-threatening way. But if he knows that somebody has a particular area of expertise in an asset class or a manager or a geography, he will say, Hey, blankety blank, feel free to weigh in. Or what, when you had your experiences with this group, what do you think? And just really facilitates a conversation. And at the same time as a CIO or a deputy CIO, if you needed his support on something, we would always meet with them before the meeting, just to make sure that we got our ducks in a row and, and made sure the flow was okay. And if we needed his support on something in particular that might be a little bit sticky, he would weigh in early and kind of set the tone. And other times he wouldn't weigh in. He'd kind of wait to make sure everybody else had a chance to talk first before giving his own view. That really is an art to do that well…

AI assessment note: “The personality, what you see is what you get. So Bill does not act differently”

Q So what, what's an example of sort of the most active debate that came out of this past February's meeting?

A So, you know, I hate to use names at the risk of my own career, but Jim Simons is on our committee from Renaissance, and he is a life trustee of Rockefeller. He's been involved for, you know, I think, I think 30 years, 30 plus years. So, um, a terrific, uh, benefactor for what we do. He brought, it wasn't this past February, but two Februaries ago, he said, you know, we don't invest in asset classes. We invest in people. So you're making assumptions in our asset allocation mix of asset classes, and we think we could expect what kind of premiums we should demand for giving up liquidity. We're happy to give up liquidity. That's one of the most valuable assets we have is our liquidity. And, and we couldn't make our targeted rates of return without I'm sacrificing it. But how do we? How should we? And we invest in managers. They're the ones that do it. So whatever assumptions we have for the asset class, that's great. How are our managers doing? Are they doing exactly what we're modeling and we're projecting? And are they giving us, we don't have to be theoretical at all. We can actually look at actual data. Now the issue that we have a little bit is that the manager lineup that we have today is drastically different from what we had.

AI assessment note: “it wasn't this past February, but two Februaries ago, he said”

Q So in the year you've been here, what's been different from your expectations coming in?

A Well, I would say a big one was just the volume of emails. I always knew that Amy had a tidal wave of emails that she was going through, and I knew that she read all of them. I don't know how she did it. I don't know if she actually ever operated on any one time zone. She's kind of a global citizen anyway, and so I kind of think that she just worked 26 hours a day. There'd be plenty of emails that she would ask me to respond to or other team members, but she would still have to kind of process all that. And that was a great life lesson was you got to pick and choose. Not every email, I hate to say this, not every email deserves a response. And so you got to be very picky. It's a broader idea that you got to be very picky with how you spend your time. That is the one thing I can say that we can control in this crazy world is how we spend our time and actually our team's time. So while I was at Rockefeller, I was still helping to manage the entire investment team and was a very collaborative approach with Amy. And that didn't change. That's kind of the same here, but I never really gave full appreciation for what it's like to kind of sit in the chair. You're not just in charge of your own time. You're in charge of everybody else's time and making sure that we're putting it to the most productive use possible.

AI assessment note: “a big one was just the volume of emails.”

Q So you turn that around. So you've, you've said, okay, let's look at what the people, the managers we employ are actually doing. You do some research and find, wow, the private managers are doing even better than we thought. Does that then color your asset allocation?

A It does. It does. Having said that, we still want to try to apply some outside judgment, and it doesn't make sense for us to get the target. And, and other groups, you know, they, they're strict adherence to whatever the, the, the allocation target is, you know, you get there and you take all of your, all of your own kind of personal alpha based on manager selection. And you're, you're graded by how well you do, you know, kind of adherence to that. We're not that strict. I would say that we definitely believe that, um, asset allocation plays a part, but we also are not wholly driven that we actually have to get to whatever targets we establish. Another one, you know, we, we have a five percent target to fixed income, so we reduced it from the eight percent that we had before. We've never gotten there. Amy is a fixed income person. It, it keeps her up at night. It pains her not to have that exposure, um, At the levels that we're hoping for, you know, to combat other types of risks, like the risk of deflation, which wasn't too long ago, you know, a year, two years ago, where that was a real risk. It's certainly happening in other parts of the world, but it was a real risk in the United States that we'd actually be facing, you know, huge deflation. And we had nothing in the portfolio that would do well in that environment. We've maintained around a two percent of effective allocat…

AI assessment note: “It does. It does. Having said that, we still want to try to apply”

Q So in theory, that makes sense. You've got the infrastructure laid, you've got the excess reserves if you need them. In practice, When markets are taking a hit, people notoriously don't invest in those points in time. So how have you set up a process such that you think that when that time comes, you will take advantage of it?

A Yeah, the great question. I actually, uh, printed out some materials that we presented to our committee earlier this week, and it is exactly that. So we actually took our lumps in January and February of this year in parts of the portfolio that were heavily exposed to biotech and to Software. Those, you know, obviously very growthy by definition, but in particular, for all the reasons, all the risks out there, everything got finally digested at one point in time, and the market went from being heavy risk on to heavy risk off in those particular sectors, and probably was way overbought, and now it's probably way oversold. And so just making sure that you go to the committee with data. I think the first thing is you got to have a great relationship with your committee. You should start with that. And that is definitely a lesson I learned from Amy Falls, and get to know them on a personal level, well in advance of a crisis, so that there is a level of trust, and then also having a playbook, talking to them about what is on your mind all the time. There's always risks and things that we're wrestling with, and talking with the committee, and kind of having a playbook ready to go. I hate to say it's off the shelf, because it's going to depend on the conditions of the time, but at least saying if these things were to happen, This is where we would see the opportunities, and this is wh…

AI assessment note: “having a playbook ready to go... if these things were to happen, This is where”

Q This seems to be a pattern here. Did you get to banking not knowing much? Get to PIA not knowing much.

A Bumbling through life. Just hopefully keeping your head above water long enough so you don't drown. Um, so when I was at, at Marsh, we came across a company called SoftBank. And at that time, we actually knew they were big. We, you know, they weren't, they weren't this, you know, kind of small little group, but we said, wow, they're pretty big, and they're actually pretty big in this emerging area called e-commerce and e-finance in particular. They wanted to build, you know, it's a Japanese organization. They actually wanted to build a Koretsu of companies that would do online lending with e-loan, that would do online stock trades with, with e-trade. They had this whole web. This was back in the late nineties, all kind of figured out, and they actually gave birth to all these different pieces of the puzzle. Some of which are still around today. One of the companies they started was called Innsweb, and Innsweb was the very first online comparison shopping tool that you would use as an individual to shop for insurance. So if you wanted to buy auto insurance or homeowners or life insurance, all personal lines, so nothing commercial at the time, you could go there, and instead of, you know, the good old days, you maybe would work with an outside broker, maybe you would Dial, you know, phone numbers and call and get comparison quotes. This was the first time you could actually go on…

AI assessment note: “Bumbling through life. Just hopefully keeping your head above water long enough so you don't drown.”

Q And how about a big winner, and, and lessons learned, or how you exited?

A I mean, again, I hate to use names, but Greylock is, You know, one, we love all of our managers. Greylock was proof to us that, again, when we talk about rebuilding the venture strategy, our thesis, a piece of that thesis worked. We weren't sure if it would work. We had no clue. But we never had spoken to, as an institution, we'd never spoken to Greylock. And there's plenty of groups that we didn't speak with, but we kind of scratched our head like, that's on everybody's list. In terms of a top organization, and there's a lot of reasons why, and it's not just because of their financial returns. I would say that's looking at the end game and not looking at how they got there. When you look at how they got there, and they do meetings twice a year, they used to do meetings four times a year, and the, the level of transparency and the level of disclosure and how they think of the world as a partnership, not only with their portfolio company CEOs, their own team members, their own LPs, they think of the whole thing as a partnership. That is so, Refreshing. I'd like to say it's, it's, it's so commonplace, and it's so not. It's so not. And we try to really find that in every one of our groups. But that was not easy. We spoke with them for several years. And when we, you know, they, they love the story, love what we do. They don't increase their fund sizes. They do, they, every one of …

AI assessment note: “Greylock was proof to us that, again, when we talk about rebuilding the venture strategy”

Q So you talked earlier about venture and being in this unusual position where you were growing your allocation and I know a lot of people are on the other side of that, where returns were great, funds are coming back, they're coming back bigger. What are you seeing in that landscape in terms of how your peers are approaching this challenge?

A Yeah, we are going to London next week, and I think we're the only investors going to London that are not going to the Sequoia annual meeting. I think there's going to be hundreds of people, and they're going to be in Windsor, I think in Windsor. So It could be a super spreader event. I sure hope not. I hope everything goes great and everything, everything comes, everyone comes back healthy, but I was astounded. We only found out about that because we're not Sequoia investors because we were meeting our incumbent managers, some of them for the first time in person with me carrying a Wallace business card. And we had to rejigger the schedule because everybody else is meeting them too. I said, wow, what is going on in town? That's the World Cup effectively of our world. So What people are doing right now, they're picking out their best relationships, and they're trying to concentrate. So I think it's really hard today for a brand new group to try to break through the ice, because so many groups have done so well, there isn't a need to go out and find new managers. The incumbents have done a great job, just stick with them. Some groups did a better job of taking advantage of the record liquidity last year, and getting the money back, and enabling people to kind of help reload. We actually have an incumbent who, who has actually a lot of public company exposure that they own a pret…

AI assessment note: “What people are doing right now, they're picking out their best relationships, and they're trying to concentrate.”

Q How do you think about the, whether it's the re-underwriting or certainly with any new manager, you're not traveling to China these days, haven't in a while. So how has that due diligence process evolved?

A I would say the vast majority of the things that we put on the books here at Wallace have been relationships that I've had either at Rockefeller or Wintergren or any of the other organizations in which I'm affiliated with. So I don't know how else to do it. There is one exception with a group that is an exceptional manager in the UK that is Pan-European Early Stage Venture, and that is a group that we got to know last year. Never met them in person until about six months ago, but we made a commitment last year, and they're now back actually, it was to their Opportunities Fund, and they're now back with their flagship fund, and it was one that was elusive and never heard of them before until I got to Wallace, and it came in through A placement agent who was a very trusted advisor. He shows us two or three things a year. And whenever he shows us, they go to the top of the pile and he's really high quality. And he rolls over his fee into the product that he's selling. So he's clearly aligned and he's just an impressive person. So when he came calling about that, we had always been looking at Rockefeller for a great pan-European early stage venture investor. We know who the usual suspects are, but I think some of the best ones out there are part of a large global conglomerate. And so you can't just do the Europe fund. You have to do the India fund, or you have to do the growth fund…

AI assessment note: “vast majority of the things that we put on the books here at Wallace have been relationships”

Q Yeah. So I'm gonna go through a bunch of those opportunities. Where did you come out in terms of that structure, say asset allocation?

A So I would say that a big difference between starting here at Wallace in 2021 versus starting at Rockefeller in 2011. Rockefeller was, at that time, a complete tear down, and so I took a lot of lessons, worked with Amy for nine and a half years. The first thing that she did was get the team right. She really rebuilt the team from scratch, and I was her first new hire. So I'm actually used to working on a lean team. It was just she and I for, you know, a good year and a half, and then we built that team up to about five investment professionals, all of whom were just exceptional, and we were off and running there. But she didn't waste any time doing that. It was very quick. So when I got here, I took a lesson saying, yes, we need to get the right players in the field, and then let them do great things. And so that was a terrific lesson to be learned. Asset allocation wise, Rockefeller was a teardown. It had to be kind of rebuilt from scratch, rethink everything. There was very little that we kept in terms of managers back in the day. Fast forward to Wallace, I would say half the portfolio was Fine. Totally fine. And if anything, we actually, some groups that I knew of before, some groups I got to meet for the first time, and actually added to them over the course of last year. The other half are areas which we can definitely improve. And so from an asset allocation perspective, …

AI assessment note: “from an asset allocation perspective, we increased our exposure to privates from 25% to 35%”

Q How'd you go through the recruiting process to get that right?

A I ran the recruiting effort at common fund way back in the day, and there was a group that we worked with that just was perpetually producing superstar candidates for us at the kind of the junior level. So these are folks that were already had a job out of undergrad, and then we were getting them kind of for their next phase of their career for two or three years as kind of a rotational program, all generalist, and then they would move on typically to go off to do something different business school or some other job. And you're getting some folks that are bright-eyed, bushy-tailed. They already have some work experience, thank God. You don't have to teach them how to dress. You don't have to teach them how to talk in a meeting. Somebody else, you know, did the heavy lifting for all of that. So by the time you're getting them, they actually have an expertise in something, but they also have a dose of humility. And I think that is the most important thing that I look for. It's one of my most valuable, I would say, investment qualities. One of the things you had asked me once upon a time was, you know, what's your favorite hobby? And it's golf. And I think golf and investing have a lot of similarities. When you play with somebody for a long time, you know if they're really good or not. If you haven't played with somebody, but somebody brand new, you're not sure if they had a good…

AI assessment note: “there was a group that we worked with that just was perpetually producing superstar candidates”