Disclosure
Wilson redeemed nearly half of WashU's endowment in his first weeks
“We put in redemptions for almost half the portfolio in the first several weeks.”
Disclosure
WashU turned over 80% of its legacy endowment portfolio in three years
“At this point, I think we've probably turned over. 70, 80% of the original pool, even more than 80%, actually. So the vast majority of it's been turned over and those we've kept, we've added capital to and concentrated exposures.”
Insight
Multi-manager hedge funds act as expensive index funds guaranteeing underperformance
“Because essentially you're an index fund on both sides of the market with an expensive active management fee structure on top of it. And the fee structure is problematic in that it guarantees you always do worse than the average, right? So you're essentially i…”
Assertion Not checkable as stated
WashU drove strong returns buying Russian tech at 5x earnings multiples
“Russia, we've made quite a bit of money in some of the more tech based companies that would trade it. 20 times revenue in the U S that are trading at five times earnings in Russia, growing in return on equity of 60% plus growing at 30, 40% right through COVID …”
Assertion Not checkable as stated
WashU's top 100 look-through positions constitute over one-third of the portfolio
“If you looked at our top hundred positions, that's going to be probably a third of the portfolio and maybe even slightly more than that currently, just because we've had such a big run in some of those names”
Insight
Traditional allocators require years of mentoring to adapt to direct underwriting
“I don't think someone who comes from a traditional allocator background and grew up in that world, it takes, I think, several years of learning and mentoring before they're comfortable with this kind of investment style.”
Disclosure
WashU avoids micro VC funds due to difficulty underwriting differentiated thinkers
“We haven't had really much success in kind of the micro VC world. Like there's so many of these small micro VC funds. And again, these are a lot of smart, talented people who come from good places, but it's just really tough for us to underwrite and find uniqu…”
Assertion Supported
Grinnell's endowment often held over 10% in single stock positions
“So if you look at the biggest investments in Grinnell's history, it wasn't uncommon for them to have north of 10% of the portfolio in a single individual name.”
Disclosure
WashU's endowment portfolio currently holds only four traditional hedge funds
“Right now, I'd say we only have four, what you'd call traditional hedge funds in the whole portfolio.”
Disclosure
WashU's entire investment team operates as generalists without asset class silos
“Everybody on the team is a generalist, so nobody's kind of married to any one geography or asset class”
Disclosure
WashU's biggest wins included Brazilian utilities, Swedish medical, and Indian biosimilars
“So if you look at the largest contributors to the portfolio over the last three years, you'd see like a Brazilian utility company, a Swedish supplier of medical products and Indian biosimilars companies, a U S based aerospace and telecom company.”
Disclosure
WashU requires a $100M minimum position size to reflect genuine conviction
“As a general, if I tell the team, look, if we're not willing to put one percent of the portfolio in it, then like that's not a lot of conviction. And for one percent for us is currently just over a hundred million us dollars.”
Disclosure
WashU rarely makes direct cap table investments without fund partner consent
“So we're rarely trading kind of on our own. Balance sheet. And we would never do that without expressed written consent from the partners. There are times we have gone directly on the cap table, but only because that's how we were asked to invest. But for the …”
Prediction Held up
WashU expects its three-year endowment performance to rank near top peers
“If you look at what's really generated our returns, if you look at our performance this year and how we've done over the last three years, we'll end up towards the top of our peer group over that timeframe.”
Insight
WashU usually fires managers over AUM creep or thematic strategy shifts
“I'd say our partners with managers is typically, if you look at what's ended more relationships, it's, we disagree with them on size of the opportunity set or what the right size of AUM is, or their ability to find idiosyncratic ideas. Or places where the mana…”
Assertion Not publicly verifiable
Over a third of WashU's investment partners are women or minority-led
“Over a third of our partners, either in the U S or even more internationally. Are managed by people of color or female heads.”
Assertion Partly supported
Grinnell turned $73 million in principal into a $1 billion endowment
“Over that timeframe, I think over that timeframe, they only took in seventy million dollars in gifts and turned three million into over a billion dollars.”
Disclosure
WashU's endowment allocation is 45% private markets and one-third public equities
“If you think we're roughly a third public equities, which bounces around, we're probably a little bit overweighted in privates. That's probably 45% of the portfolio today, just because privates, particularly venture and growth equities had such a big run. And …”
