Morehead: Baylor restricts marketable portfolio to highly liquid markets like US high yield
David Morehead · David Morehead – Top Down Allocation at Baylor (EP.381) · Apr 22, 2024 · at 43:15
Baylor University CIO David Morehead explains why the endowment's active reallocation strategy imposes strict liquidity requirements when picking public market asset classes.
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“And because we're running an active allocation portfolio on the marketable side, we can only be in liquid categories. We would participate in US high yield and European high yield, but we would not participate in Asian high yield because it's easy to buy something. The trick is getting out of it. And so if a market or a strategy is not Liquid or deep enough to get out of it when we want to get out of it, then we simply decide not to play because our entire ethos of how we invest, our entire philosophy is built around this idea of being able to take capital from the thing that is doing well and give it to the strategy that is not doing well. And if we can't get out of that, then the whole thing breaks down.”
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