The Ledger
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Williams College's value-add comes entirely from manager selection, not market timing
“You know, all of our value add is in manager selection. It's not in calling the market or anything like that. When we do the attribution work, it's all manager selection.”
Massachusetts municipal pension funds are underfunded and mismanaged
“So the pension funds up here are terribly underfunded and mismanaged. Each city and town has its own pension fund, and so the state one started doing well, and so then the towns could invest with the state.”
Williams College allocates nearly 40% of its portfolio to hedge funds
“We have almost 40% of our portfolio in hedge funds”
One-third of Williams College's portfolio is in first-time funds
“We've done a lot of investing with first-time funds, or a day one investor, about a third of our portfolio. When I went back and looked, it's, you know, we were in fund one, or invested with somebody who started, so a lot of times the track record isn't really…”
Liberal arts grads are better suited for investing than business students
“These kids come out and they learn how to think critically and write and make an argument and put a mosaic of things together, and that's what investing is, right? So I keep telling these guys, you are the most well-suited for investing or investment managemen…”
Pension fund returns drove Lucent's corporate earnings in the 1990s
“I used to make the joke that Lucent was really a pension fund with a little bit of technology on the side, which is what drove the earnings of the company for that whole time, but nobody thought that joke was funny except for me, but it was actually pretty clo…”
Lucent headcount plunged from 150,000 to 8,000 during Chilton's tenure
“When I started at Lucent, there were a 150,000 employees, and when I left, there were 8000 employees.”
Investment committees easily add positions but struggle to cut them
“The problem with having committees put portfolios together is they love putting stuff in, but they really don't like taking stuff out, and it's hard to agree on what to stop doing.”
Williams College's secret sauce is unbiased alumni advisory committees
“And I tell people that that's the secret sauce of the Williams Investment Program, is we have these alums who are on these committees, and they love helping us, and they don't have an ax to grind. They're not trying to sell us something, or it's like you can c…”
Williams takes a year to underwrite and recommend new managers
“It takes us about a year between the time we meet someone and recommend putting them into the portfolio.”
Williams College avoids black box and quant strategies for fundamental managers
“What's important for us is understanding what our managers do and being able to explain it to the investment committee. So I've always sort of felt like if I can't explain to these guys what we're doing and why something went wrong, then I shouldn't be in this…”
Andreas Halvorsen helped start Williams' portfolio, imparting Tiger's investing style
“Andreas Halvorsen was part of the committee that started this portfolio, and there are a lot of Williams people who have worked at Tiger or Tiger family firms, and so what that means for our portfolio today is there's kind of this fundamental bottom-up kind of…”
Williams College's VC allocation reached roughly triple its 6% target
“So our target allocation is six percent. Our current allocation is like Three times that.”
Rushing due diligence based on urgent recommendations rarely ends well
“They say something to you like, run, don't walk to this manager, and you do, and that is not necessarily a good thing to do. I mentioned earlier that we have sort of a slow, careful process for adding new managers and getting to know them, and sometimes when y…”
Investing in a manager just because peers do is a bad strategy
“All your friends are doing it, And you say, this doesn't feel right to me. But all the cool kids are doing this, so we're gonna do this. And that's never a good strategy.”
Williams was the first endowment to replace its custodian with an administrator
“We did one thing that was innovative, I thought, and saved us a lot of money and headaches is we moved away from a custodian and hired an administrator, which at the time we did it, nobody had done that in the endowment world, and not very many people have don…”
Williams College endowment supports over 50% of the operating budget
“Whereas at Williams, we support over 50% of the operating budget, so it's incredibly important, but there are like people I knew who retired and were relying on what we did every day.”
AT&T was among the first corporate pensions to back venture capital
“AT&T was one of the first corporate pension funds to invest in venture capital and private equity.”
Williams College invested in earliest CD&R and Madison Dearborn funds
“Joe Rice's good friend was John Canning. So we were in like the earliest CDNR and Madison Dearborn funds.”
Bill Simon, Andreas Halvorsen, and Paul Singer advised Williams College
“So the chair of that committee was Bill Simon, is famous for almost being the Republican governor of California. He's a wonderful person and a dear friend. So he chaired that and then people on the committee were like Andreas Halverson and Paul Singer and just…”
Williams College endowment grew from $1.5 billion to $3 billion
“You know, when I started, the pool was 1.5 billion, and now it's three billion over 14 years, and we've tried to keep the number of managers the same as when I started.”
Williams College holds about one-third of its endowment in private assets
“The private part of the portfolio is about a third of the portfolio, I want to say.”
Williams conducts 500 manager meetings yearly, adding only a small handful
“We do like 500 meetings a year between our current and potential managers, and we only will add a small handful of new managers every year.”
Elliott's Paul Singer was a longtime Williams investment committee volunteer
“Paul was an incredible committee member and served for a long time, and he's not an alum. He has two sons who went to Williams, which is how he got involved and was an incredible non-alum volunteer.”