Assertion Not checkable as stated
Amherst concentrates 50% of its assets in top 10 managers
“So we have less than 40 managers in the portfolio. Half of our assets are in our top 10 managers.”
Disclosure
Amherst omits real estate, private credit, and emerging markets managers
“We have some very meaningful holes in the portfolio when you look at us compared to peers, one of which is real estate. We have very little private credit to speak of. We don't have any global emerging markets managers. There are all sorts of things that we do…”
Insight
Johnson: Manager Selection Matters as Much as Asset Allocation
“There's a real difference that comes in in the manager selection piece. And I think one of the things that I started to realize over time is that the manager selection piece is as important and as impactful”
Insight
Letitia Johnson: Rigid asset class delineations fail to reflect manager opportunities
“These delineations and asset classes don't actually reflect the manager opportunity set.”
Insight
Johnson: Uncalled commitments cause institutional crises, not private marks
“I have no control over private marks. The one thing that I do have control over is my commitment. Amounts. And oh, by the way, that's what gets me into trouble in times of crisis. The private NAV doesn't get me into trouble in times of crisis. It doesn't matte…”
Insight
Johnson: Beta is completely useless for private asset portfolios
“Like this notion of beta basically becomes completely useless when you have privates. It's not helpful.”
Insight
Johnson: Long-term allocators should back generalists over unpredictable 10-year horizons
“An important result of that is that you tend to invest with generalists because we do not know what the market is going to look like in 10 years. We need these people to be building investment processes and have diverse enough interests that they can thrive ac…”
Insight
Johnson: Top managers often endure awful periods that catalyze renewal
“Some of the best performing ones are ones that had absolutely awful periods, because those awful periods catalyzed an incredible renewal of the organization. And if you can stick with managers through that, it's so extremely powerful”
Insight
Johnson: Governance fails when roles are unclear or history is ignored
“A lot of institutions fall down is if it's not clear who is deciding what. The other place where you can fall down is if you have a solution that might be clear But it doesn't even remotely take into consideration the history or the portfolio itself, then the …”
Assertion Not checkable as stated
Johnson: Amherst managed its endowment bottom-up despite a written policy portfolio
“They did have a more traditional policy portfolio that was written down in paper, but in actuality, the way that they had managed the portfolio over time was a much more bottom-up, flexible framework.”
Disclosure
Amherst allocates half to privates with heavy venture concentration
“Half of our portfolio is public, half is private. Of the private portfolio, we have a lot in venture and growth.”
Insight
Johnson: Institutional Allocators Cannot Trade Venture NAV Cycles
“Venture is incredibly cyclical. There are going to be times when our venture NAV really spikes, and we just had that, and then it's going to come back down. I am in absolutely no position to trade our venture NAV. No one is. So that's not what I'm going to do.…”
Disclosure
Johnson: Amherst avoids niche strategies to keep manager concentration high
“Doing very nichey things is generally not something that we're doing. We're trying to get those interesting kinds of investments through more generalist broad managers because we want to keep the manager concentration so high.”
Disclosure
Johnson: Amherst has exited zero new managers in five years
“I started five years ago, and maybe this is just a really good example of the long-term nature of the way that we do things. I've exited nothing that we have put in.”
Opinion
Amherst CIO Johnson views public biotech as an interesting investment opportunity
“I think biotech is a really interesting place to be investing in the public markets right now.”
Insight
Johnson: Autonomy and runway from governance committees are remarkably rare in investing
“Feeling like the committee has your back and that you have the runway to actually figure out what you want to do is incredibly helpful. And again, is analogous to what we were just talking about with managers. This is the entire investment world. You need to f…”
Assertion Supported
Johnson: Most Endowments Maintain 5% to 10% Bond Allocations
“Asset allocation doesn't tend to vary that dramatically. Most endowments tend to have an equity bias. Their bonds are going to be somewhere between five and 10%.”
Disclosure
Amherst added zero new managers in 2023
“We do maybe one to two new managers a year. Some years we will do none. We did none in 2023.”
Disclosure
Johnson: Amherst unfunded commitments stand at 12% against 50% private NAV
“Our unfunded, just as an example today, is 12% to support a 50% NAV. It's extremely low. We have a very mature private portfolio. We're not trying to grow our private portfolio.”
Disclosure
Amherst holds 4% to 5% cash and remained cash flow positive
“That's why we hold four to five percent of our portfolios in cash. That's a really important feature, but through this entire time period, our portfolio has been cash flow positive, and I think that's a function of incredibly high-quality managers that have co…”
Assertion Partly supported
Johnson: Amherst College has generated roughly 10% annualized returns over decades
“AMRS' 10, 20, and 30 year return has been about 10% compound annualized over that period of time.”
Disclosure
Johnson: Amherst College is at maximum capacity for unfunded commitments
“A lot of the conversation comes into competition for capital within illiquids, because we are basically at the max that we can be in terms of unfunded capital.”
Disclosure
Johnson: Amherst benchmarks endowment against 70/30 and peer median long term
“For us, our benchmarks are much longer term than that, and they're the 7030 and the peer median.”
Assertion Supported
Johnson: Asbestos trusts hold billions and pay out half within five years
“The quick and dirty on asbestos trusts is they tend to be low to mid single digit billions. So these are large pools that were created out of the bankruptcies of these companies to pay out claims against asbestos litigation for people who are exposed to asbest…”
