Disclosure
The James Irvine Foundation Has Zeroed Out European Private Equity
“Even how we construct our managers, where they're located, like we basically have zeroed out private equity in Europe.”
Disclosure
Recker: Irvine foundation runs a top-heavy team of veteran directors
“So I believe in running top heavy teams. So we have three investment directors, all that have 20 plus years experience, and then we have two pre-MBA associates.”
Disclosure
Recker: Irvine uses a 'majors and minors' model for team diligence
“I call it majors and minors. Each of my three directors take on a risk category between publics, privates, and hedge funds, and that's their domain background, but they, all decisions are made across the entire team. All diligence for a new manager is actually…”
Insight
Recker: Investment staff cannot match committee members' peer references
“We'll never get the same lens that they get because they're viewed as peers or friends. And so they can tell us a whole set of things that are valuable.”
Disclosure
Recker: Irvine avoids co-investments due to operational and resource complexity
“That would suggest you should go do that here, but we're not, and it's a function of the complexity that it brings. We're not set up structurally from a resourcing point of view. We're not set up from an operational point of view, from a tax point of view. We'…”
Disclosure
Recker: Irvine Foundation holds over 10% of total assets in China
“We've got a major overweight to emerging markets and particularly China, and we're actually debating what's the right allocation for China, et cetera. Right now it's a little over 10% of the entity. It's an important component of our public equities. We're abo…”
Insight
Recker: Evaluating public equity managers requires a full 7-8 year cycle
“And so we truly try and take, you know, a five to 10 year horizon with each of those managers. We think of business cycle of seven to eight years, and some of those managers need the full business cycle to make sure their strategy works.”
Insight
Recker: Allocators usually regret not firing managers they question
“My experience has been, if you're deeply questioning it more times than not, you regret not pulling the trigger, but the difficulty is knowing when to step in.”
Disclosure
Recker: Irvine backed a quant fund where machines generate algorithms
“We have, I'll say, dipped our toe with one. I would like to not talk to who it is, but they actually are using machine learning where the machines actually build the algorithms versus most quants, the people build the algorithms, and a lot of times you just ge…”
Disclosure
Recker: James Irvine Foundation is running light on portfolio liquidity
“We are pretty light on liquidity relative to probably where we should be because the opportunity cost has been so high, but we're actually having a conversation in October with our investment committee around that to really hone in on like what we think about …”
Insight
Recker: Knock-On Crisis Contagion Can Damage High-Quality Liquid Asset Prices
“I'm very worried about the knock-on effects on things where, just like we felt in the last crisis, where just because something was a high-quality asset that was liquid, the price was more damaged than we anticipated. That could affect some of our assumptions.”
Disclosure
Recker: Irvine's first profitable co-investment was actually a bad decision
“Honestly, our first co-investment we did, we made really good money, but in hindsight, we missed some things, and if we were intellectually honest, I would say it was a bad investment decision”
Assertion Not checkable as stated
Recker: GE Capital's $5B insurance portfolio used fewer than 15 managers
“So it was a five billion dollar insurance portfolio, property and casualty portfolio, and it was just the CIO and myself running five billion dollars. And for context, we only had 15 managers. I think, I can't remember the exact number, but less than 15 manage…”
Assertion Supported
Recker: Michigan Retirement System Backed Accel, Blackstone, and Berkshire in Fund I
“But they were first fund investors with Excel Ventures, with Blackstone, with Berkshire Partners, just a long list of firms that were excellent firms. They were there in fund one.”
Disclosure
Recker: UC Regents allocated 30% to 40% of capital and time to co-investments
“I would say it's at least 30 to 40% of the time was allocated to co-investments, which was aligned with how much capital was allocated to co-investments.”
Assertion Partly supported
Recker: Only four US state pension plans use sole fiduciary model
“At Michigan, it's a sole fiduciary state, which is very interesting. There's only four in the United States. For the state plans. And so that means the state treasurer is basically the fiduciary and makes all the decisions.”
Disclosure
Recker: Hard-closed managers make rebalancing the Irvine Foundation portfolio difficult
“Part of it is with such a concentrated manager, and a large portion of those are actually hard, hard closed, so even moving money around within our existing manager base is difficult.”
Assertion Not publicly verifiable
UC Regents Co-Investments Generated Roughly 35% Net Returns Under Tim Recker
“We generated almost, call it, 35% net returns plus minus, depending on whether you're using IR or time-weighted returns.”
Disclosure
Recker: Irvine Foundation sold lowest-expected-value privates after overallocation
“Because when I came in, we were over allocated on privates, and we ended up selling our lowest performing, on a future expected value, our lowest performing privates.”
Assertion Not checkable as stated
Recker: Late-1990s GE Study Identified Alternatives as Best CIO Background
“GE did a study about future CIOs, and they concluded that alternatives was the proper background for future CIOs.”
Assertion Supported
Recker: Michigan Retirement System Was 5th Largest Alternatives Investor in 1990s
“The Michigan Retirement System, which at the time was the fifth largest alternatives provider globally, which today it's, there's so much more dollars in alternatives, but at the time was truly a really Dominant player in that space.”
