Prediction Didn’t hold up
Lenehan: China will very shortly become the world's largest economy
“But from our perspective, we actually think that China's going to be the largest economy very shortly. It will grow. It'll continue to grow. At a rate higher than any other developed country kind of post COVID.”
Insight
Chinese regulatory crackdowns cyclically occur every seven to ten years
“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 everybody knows and realizes kind of who's in charge at the end of the day.”
Insight
Lenehan: Diligencing a new fund manager from scratch cannot be done over Zoom
“Otherwise, if we were meeting a group from scratch, it's great that we can certainly meet them on Zoom, but until we actually get on the ground, walk the floor, meet the people, meet the team in person, one-on-ones, you can't do it.”
Opinion
The Federal Reserve never successfully executes economic soft landings
“I tend to think that the Federal Reserve, they never seem to get it right. They're right in the direction, but in the execution, they never really navigate a soft landing, per se. We're expecting bumps along the ride.”
Insight
Lenehan: Distressed debt windows close too fast for dedicated funds
“I've seen the last 10 years as if there is a distressed moment in time, it's a blip. There is so much capital that is just waiting on the sidelines to kind of plow into from dedicated distress managers and their time, the window just opens and closes very quic…”
Opinion
Lenehan: Widespread inflation across corporate operating costs is not temporary
“I was speaking to somebody yesterday who has a public investment, I think, in DoorDash, and he talks to that management team quite often, and the inflation that they're feeling is everywhere. It is in the packaging of the materials. It is in the food costs. It…”
Opinion
Lenehan: Biotech and Software Were Probably Way Oversold in Early 2022
“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.”
Opinion
Western response to Russia altered near-term risk calculus for Taiwan
“Given the response of the Western allies and NATO to Ukraine and to Russia, perhaps that has maybe changed the calculus a bit as it relates to what's going on in Taiwan.”
Assertion Not checkable as stated
Rockefeller's private market portfolio beats public equivalents by 400-500 basis points
“We actually kind of thought that we should be getting, I'll just use, you know, privates as an example, we should be getting kind of four to 500 basis points above the public market equivalent, whatever that is... And we were pleasantly surprised to see that n…”
Insight
Time is the only controllable variable for institutional allocators
“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 i…”
Insight
Lenehan: Fully exit unwanted positions immediately rather than dollar-cost averaging
“It was a good lesson learned. It was like, look, if you figured it out that you don't want that position, then you don't have to dollar cost, just get out and move on to bigger amount of things.”
Disclosure
Wallace Foundation committee voted to decarbonize portfolio in 2021
“We actually made a decision last year at the committee to decarbonize the portfolio.”
Disclosure
Lenehan: Wallace Foundation relies primarily on pre-existing relationships for manager commitments
“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.”
Insight
Lenehan: Diligence in China requires a native speaker to capture critical nuances
“When you're dealing with China, I think our secret weapon is to have a native speaker. And when you're speaking in the native language, she can pick up on so many of the nuances that I can't, and she can be on the chat boards and just get so much richer view o…”
Disclosure
Staff are not evaluated on whether sourced deals make the portfolio
“No one's going to get graded on whether or not their idea made it in the portfolio. At the end of the day, we all make that decision.”
Disclosure
Wallace Foundation re-underwrites incumbent manager re-ups identically to new managers
“We re-underwrite any commitment to capital, whether it's to a new manager or to an incumbent the same way, but really have to be thoughtful.”
Insight
Lenehan: Investment memos should distill impactful points, not document all diligence
“One of the things that, that I had to train folks at Rockefeller when they came from other jobs, they put everything and anything into the memo. And I said, let's just distill this down. We're not going to put all the work that we did, you know, quite the oppo…”
Disclosure
Lenehan: Wallace Foundation avoids being a first mover in new asset classes
“When it's something that's brand new, we don't ever want to be the first mover. Here at Wallace.”
Insight
Venture capital requires acting as a promoter despite a 90% failure rate
“If anybody thinks venture is easy, they are out of their tree. It is incredibly difficult. You have to get, you have to be a salesperson. You have to promote things and think they're the best thing ever, if you're a good venture capitalist, realizing that you'…”
Disclosure
Rockefeller University barred endowment investments in board members' funds
“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 a…”
Insight
Lenahan: A few high-quality reference calls beat 50 superficial ones
“Sue Carter at Common Fund Capital taught me once upon a time that a handful of really high performing quality Reference calls is way better than doing 50 surface level call home type calls.”
Assertion Supported
Summit Partners and TA Associates pioneered private equity cold-calling
“This was the cold call model was being implemented, but by, you know, a handful of the summit and TA type folks, they were the pioneers. Now it seems like it's complete commonplace for any group, you know, almost any size, they have some element of kind of rea…”
Assertion Supported
Rockefeller University operates with an aggressive 5.5% annual endowment spend rate
“So we're now today at 5.5%, which is still high, still aggressive, plus inflation.”
Disclosure
Rockefeller University cut its long/short hedge fund allocation from 25% to 10%
“On the other side of the hedge fund slice, where that was 25%, we reduced that down to 12. And we're currently today at about 10.”
