CIO Greatest Hits: Endowments – Scott Wilson (WashU)

Summary

Capital Allocators Episode Summary: CIO Greatest Hits – Endowments with Scott Wilson (WashU)

Release Date: July 21, 2025

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Introduction

In this episode of Capital Allocators – Inside the Institutional Investment Industry, host Ted Seides engages in a profound conversation with Scott Wilson from Washington University in St. Louis (WashU). This episode is part of the podcast's 2025 Summer Series, which spotlights Chief Investment Officers (CIOs) from various institutional investment backgrounds. Alongside Scott Wilson, retired CIO Andy Golden from Princeton University Investment Management Company joins the discussion, offering comparative insights into their investment philosophies and strategies.

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Guest Background and Career Journey

Basketball Roots and Academic Choices

Scott Wilson begins by sharing his unexpected journey from small-town Alaska to the halls of Grinnell College, where his basketball prowess earned him a place on the team. Reflecting on his athletic and academic decisions, Scott states:

"Ultimately decided I was going to go to college for academics and not just basketball... we led the country all four years while I was there and it was just a great experience all around."
— [07:15]

Transition to Finance

Despite an initial interest in engineering, Scott's exposure to the financial world during his sophomore year at Grinnell pivoted his career trajectory. An influential friend introduced him to investment banking, leading to internships at Paine Weber and an asset management firm. Post-graduation, he joined First Boston's Equity Research Group, where mentorship under notable figures like Michael Mauboussin enriched his expertise.

"When you're 20, 21 years old, you're just a sponge for that kind of stuff. So it was really a great experience."
— [11:50]

Global Experience and Endowment Leadership

Scott's career path took him through roles in Merrill's Global Growth Group, a stint in Tokyo as a derivatives trader, and eventually back to the U.S. to lead an endowment at Grinnell College. His international experience provided a unique foundation for his current role at WashU, where he emphasizes a concentrated, opportunistic investment approach.

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Investment Philosophy and Portfolio Construction

Grinnell Endowment's Buffett-Like Approach

Scott highlights the distinctive investment philosophy of the Grinnell Endowment, influenced by legends like Warren Buffett. Unlike the traditional Yale model, Grinnell focuses on identifying exceptional individual companies and maintaining concentrated exposures to leverage long-term growth.

"Let's find great individual companies, great partners, and see if we can leverage those relationships to put concentrated exposure into individual positions that we can compound with over really long periods of time."
— [17:58]

Portfolio Evolution at WashU

Upon taking the helm at WashU, Scott undertook significant portfolio restructuring to align with his investment ethos. This involved reducing the number of external managers from over 100 to about 30, concentrating exposures, and integrating individual securities to enhance portfolio performance.

"We've probably turned over 70, 80% of the original pool... it's a very, very different looking portfolio than it was when I started three years ago."
— [21:28]

Generalist Team Model

Emphasizing a generalist approach, Scott's team avoids being siloed into specific asset classes or geographies. This flexibility allows for capital to compete across various opportunities, fostering a dynamic and responsive investment environment.

"Nobody's kind of married to any one geography or asset class. And we have people who have historical experience in privates or publics and tend to have more relationships there."
— [27:26]

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Manager Selection and Due Diligence

Selective Partner Criteria

Scott outlines a rigorous manager selection process, prioritizing small, concentrated managers with long-term investment horizons. The team avoids systematic and macro strategies, focusing instead on managers whose portfolios align closely with WashU's investment goals.

"We're looking for people who have a long-term view... we typically stay away from systematic and macro."
— [22:50]

Bottom-Up Evaluation

The evaluation process centers on a bottom-up approach, examining individual investments rather than solely assessing managerial processes. This method ensures that each position contributes uniquely to the portfolio's diversification and performance.

"We're trying to concentrate our exposures in individual investments that completely idiosyncratic outcomes over some period of time."
— [29:51]

Co-Investing and Relationships

Building strong relationships with managers allows WashU to participate in co-investments and set up Special Purpose Vehicles (SPVs) for specific opportunities. This collaborative approach enhances WashU's ability to capitalize on promising investments without overextending its resources.

"We'll set up an SPV and still pay them, like they'll manage the position for us and fee and carries."
— [42:57]

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Challenges and Team Dynamics

Winnowing the Manager Pool

Transitioning to a more concentrated portfolio required difficult decisions, including terminating relationships with managers whose strategies no longer aligned with WashU's objectives. Scott emphasizes the importance of team cohesion and collective decision-making in navigating these changes.

"We put in redemptions for almost half the portfolio in the first several weeks."
— [22:50]

Team Adaptation and Performance

Despite the initial challenges, the team's adaptability has led to enhanced portfolio performance. Scott credits the team's embrace of the generalist model and their ability to manage a concentrated portfolio effectively.

"The team has done just phenomenally well. And I think it's really added a ton of value to the portfolio over the last couple years."
— [28:18]

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Investment Process and Strategy

Focus on Idiosyncratic Opportunities

WashU's strategy centers on identifying investment opportunities that are uncorrelated and idiosyncratic, thereby reducing overall portfolio risk while enhancing returns through concentrated bets on high-conviction ideas.

"We're looking for opportunities that aren't based purely on our macro view of the world. But for us to go above that, again, we would have to have a significant view of downside, really be comfortable with the underwriting process."
— [37:27]

Geographical Diversification

Scott highlights WashU's interest in frontier and emerging markets, where the team has successfully identified undervalued opportunities, particularly in regions like Africa, Bangladesh, and Russia.

"Emerging and frontier markets for us has been a big bright spot in the portfolio... Africa is probably where we're spending more time."
— [35:15]

Risk Management and Position Sizing

Position sizing is handled with an artistic approach, balancing the potential for significant returns against the ability to withstand downside risks. Scott notes that each position typically represents a meaningful but manageable portion of the overall portfolio.

"If we're not willing to put 1% of the portfolio in it, then like that's not a lot of conviction."
— [37:27]

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Lessons Learned and Future Outlook

Understanding the Bear Case

Scott underscores the importance of comprehensively understanding the downside risks associated with each investment. This approach ensures that WashU can navigate uncertainties and maintain portfolio resilience.

"Make sure you understand the bear case on every investment... overestimating your ability to underwrite the downside."
— [51:14]

Governance and Autonomy

A supportive governance structure and board alignment have been pivotal in enabling Scott and his team to implement their investment strategies effectively. Autonomy allows for flexibility and responsiveness to market opportunities.

"Governance process drives so much. And the institution here has just been amazingly supportive."
— [46:16]

Commitment to ESG and Diversity

While not adhering to a strict Environmental, Social, and Governance (ESG) mandate, WashU integrates ESG considerations into its investment framework by seeking partners with aligned moral compasses and diverse leadership.

"Over a third of our partners, either in the US or even more internationally, are managed by people of color or female heads."
— [55:03]

Future Strategies

Looking ahead, Scott anticipates continuing with the current investment approach, focusing on concentrated, idiosyncratic opportunities without significant alterations to the overall process.

"I don't think we're going to do things much differently over the next five, 10 years."
— [52:38]

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Personal Insights and Reflections

Hobbies and Daily Habits

Outside of his professional life, Scott cherishes activities like downhill skiing and fly fishing, which connect him to his Alaskan roots. His daily habit centers around continuous learning and staying intellectually curious about both his portfolio and global events.

"I always want to know what's going on, not just with the portfolio, but in the world in general."
— [56:30]

Pet Peeves and Life Lessons

Scott expresses frustration with inefficiency and unproductivity, emphasizing the importance of proactive problem-solving over complaining. A pivotal life lesson for him has been the value of listening over speaking and recognizing that success often hinges on interpersonal skills as much as on intelligence.

"Intelligence is only one small factor in people being successful... people who are really good at driving consensus, communicating ideas, great salespeople."
— [58:26]

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Conclusion

This episode offers a comprehensive look into Scott Wilson's transformative approach to managing the endowment at WashU. His emphasis on concentrated, idiosyncratic investments, rigorous manager selection, and strong team dynamics provides valuable insights for institutional investors aiming to enhance portfolio performance through strategic capital allocation.

For more detailed discussions and future episodes, visit capitalallocators.com.

Transcript

[Ted Seides]

Capital Allocators is brought to you by my friends at WCM Investment Management. To outperform the markets, you have to do something differently from others. In my 30 something years investing in managers, there may be no one I've come across who does that as clearly and as well as wcm. I've seen it up close. As an investor in their international growth strategy for the last five years, WCM is a global equity investment manager majority owned by its employees. They believe that being based on the west coast, away from the influence of Wall street groupthink provides them with the freedom to live out their investment team's core values, think different and get better as advocates of integrating culture research into the investment process and advancing wide moat investing. With the concept of moat trajectory, WCM has delivered differentiated returns while building concentrated portfolios designed to stand out from the crowd. WCM is committed to defying the status qu by dismantling outdated practices, believing in the extraordinary capabilities of its people, and fostering optimism to inspire each individual to become the best version of themselves. To learn more about WCM, visit their [e-mail] and tune into this slot on the show to hear more about WCM all year long.

[WCM Investment Management]

This testimonial is being provided by Ted Seides and Capital Allocators who have been compensated a flat fee by wcm. This payment was made in connection with Capital Allocators testimonial and production of podcasts and is not depend on the success or level of business generated. The opinions expressed are solely those of Capital Allocators and may not reflect the opinions of others. Investing involves risk, including the possible loss of principle. Past performance is not indicative of future results. Please visit wcminvest.com for WCM's ADB and further information.

[Ted Seides]

Capital Allocators is also brought to you by AlphaSense. AlphaSense has become indispensable in modern investment research. It's the market intelligence platform trusted by the world's top institutional investors and for good reason. AlphaSense combines premium content with powerful AI to deliver clarity fast. From company filings to over 200,000 expert interview transcripts, it helps investment teams zero in on what matters most when deeper insights are needed. AlphaSense's expert call services provide direct access to high quality vetted experts on demand. Unlike Traditional Expert Networks, AlphaSense Custom sources experts to fill specific research needs. Whether validating a thesis, pressure testing an idea or gathering real time field intelligence, all without the friction or price markup of legacy models, what truly sets AlphaSense apart is its ability to surface proprietary insights combining expert access with AI purpose built to extract qualitative intelligence at scale. The result is differentiated perspectives and decision making confidence delivered faster than ever. See it in action at alpha alpha sense.com capital that's alpha-sense.com capital.

[Scott Wilson]

Hello, I'm.

[Ted Seides]

Ted Seides and this is Capital Allocators. This show is an open exploration of the people and process behind capital allocation. Through conversations with leaders in the money game, we learn how these holders of the keys to the kingdom allocate their time and their capital. You can join our mailing list and access Premium [e-mail] All opinions expressed by.

[Andy Golden]

Ted and podcast guests are solely their own opinions and do not reflect the opinion of capital allocators or their firms.

[Ted Seides]

This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of Capital Allocators or podcast guests.

[Andy Golden]

May maintain positions in securities discussed on this podcast.

[Ted Seides]

With eight years and over £500 podcasts under my belt, I'm often asked to recommend my favorite episode. But I can't really answer that question. I feel like I have 500 children and don't think I've disowned a single one. So when asked, I usually offer up a great recent episode to get a listener started. Finding the best episodes in a big library of content isn't easy, so we thought we'd help. Each summer going forward, we're going to share our best. Over seven weeks, we'll replay conversations curated from our favorites and yours, excluding those from the last 12 months. Our 2025 Summer Series focuses on CIOs. We're blessed to have an incredible library of long shelf life content and we just couldn't pick seven. Instead, we'll share a dozen gems, canvassing every type of institutional asset owner. Our summer series kickoff is a twofer of Andy golden, now retired after 30 years at Princeton University Investment Management Company and Scott Wilson from Washington University St. Louis. We packaged these two leading endowment investment officers to compare their investment styles. Andy started his career at Yale with me and became one of the leaders of the Endowment model for decades. His discussion of print go's decision making process is among the most referenced descriptions of any podcast with a cio. We've Scott comes from a direct investing background and has adopted a position focused approach to diligence and co investing, leading to a very different portfolio construction. It's perhaps the leading example of a new approach in the endowment world.

[WCM Investment Management]

Before we get to the interview, a quick announcement. We've set new dates for our Capital Allocators University for Investor Relations and Business Development Professionals. Those dates are December 3rd and 4th in New York City. Later in the year is just a better time of year for this gathering. It's post AGM season, travel starts to wind down, it's right before the holiday crunch time and it's a great time for capital raisers to reflect on their previous year and plan for the year ahead. December 3rd and 4th in New York City. CAU for IRBD is a closed door gathering for capital raisers to connect with peers, learn from Allocators and other experts and really share in best practices with each other. You can learn [e-mail] thanks so much for spreading the word about Capital Allocators University for Investor Relations and Business Development Professionals.

[Ted Seides]

Please enjoy my conversations with Andy golden all the way Back to episode 13 in 2017 and Scott Wilson from 2020.

[Scott Wilson]

Scott, thanks so much for joining me.

[Andy Golden]

Yeah, thanks for having me. It's great to be here.

[Ted Seides]

I think we should go all the.

[Scott Wilson]

Way back to your college experience and before we get into any thoughts about investing, love to hear about your basketball experience at Cornell.

[Andy Golden]

Yeah, okay. I grew up and maybe to start with like the very beginning, I grew up in small town Alaska and me and my younger brother were both big basketball fans and and I was an okay high school basketball player, like good for the state of Alaska, which is kind of a small basketball state, though we did have some, some great players who went on to play, particularly at Duke. I was recruited by a small handful of schools and had a couple partial scholarship offers and some full scholarship offers like junior colleges and stuff, but ultimately decided I was going to go to college for academics and not just basketball, but was recruited to play basketball at Grinnell College and met some great people there who have actually quite a few of them went off into the financial world as well. But it was one of the original run and gun style, Loyola Marymount 1990s style and the coach I think was very progressive at the time in terms of just understand the power of this kind of three for two relationship and we led the country all four years while I was there and it was just a great experience all around and we definitely had some success there. We won conference one year but we were usually in the hunt for it. And if you're a shooter, I played point guard and shooting guard, mostly shooting guard while I was there. The point guard experiment was pretty unsuccessful from what I remember, but overall great.

[Scott Wilson]

Experience at that age did that different style of basketball sink in any deeper about kind of thinking differently?

[Andy Golden]

Yeah, it was certainly different at the time. And to be honest, it's a hard system to learn and it doesn't come natural. You know, if I look at the way my high school and kind of AU basketball coach taught basketball is, you know, motion offense, work hard, get great shots, try and set yourself up for opportunity. Where here it was like take that first initial shot, hopefully within six, eight seconds of taking possession of the ball, and you're better off taking a quick three then, particularly like the way we offensive would crash the offensive boards. You get a lot more of those kind of long rebounds on the offensive side than you do on the defensive side and kick it back out for another quick three. It was very different. And I think the team approach certainly resonated in that every player had like specific responsibilities. We had designated shooters and some really great players while I was there, but a different style of basketball. And you've seen it become more of the norm at a lot of places now, I think, which is kind of interesting. And the coach became pretty famous for it and wrote some books on the system, as he calls it.

[Scott Wilson]

And did your thoughts at the time extend beyond basketball into, hey, thinking differently about this game? You grew up thinking about one way could be extrapolated into other things.

[Andy Golden]

I'm not sure I was that forward thinking at the time, to be honest. I grew up in very small, rural Alaska and didn't have any clue. I thought I wanted to be an engineer when I went to school, and that's obviously not the path I took. But I remember my first foray into the financial world wasn't until I was really a sophomore in college. And it was through the people I met at Grinnell that kind of opened my eyes to the financial world. Neither of my parents went to college and I really just had no idea of the whole whether it was investment banking or asset management. I had no real concept at the time.

[Scott Wilson]

So how'd you get started?

[Andy Golden]

I was fortunate, really close friend of mine who was two years ahead of me that went off to be very successful in the financial world. He kind of took me under his wing, I guess, and he was dead set on going into investment banking and finance even when I think he was a freshman in college and I had no idea what investment banking was. I was good at math and science and so thought I wanted to be an engineer. And if you grow up in small town Alaska, that's the, the guy who has the big house at the end of the Street. And so that's what I thought I wanted to do. And my skill set was well suited for. And then the more I learned about investment banking and finance, the more interested I became. And I guess after my sophomore year, I got an internship at Paine Weber, basically a retail brokerage house that doesn't exist anymore, but learned quite a bit about finance and the stock market in general. And then the following summer got an internship at a kind of a real asset management firm. And then when I was graduating from college, I was fortunate in that this was peak of the Internet bubble and it was easier for kids from places like Grinnell to insert their foot into the recruiting process and interviewed at a bunch of the investment banks and consulting firms and ultimately ended up at First Boston Equity Research Group there, and that same friend, actually the one who helped me get my foot in the door there as well.

[Scott Wilson]

And so what were those early experiences like on the Street?

[Andy Golden]

Not having a traditional. Like my undergrad major, I was a double major in math and economics, was surprisingly less quantitative than I thought the investing world would be, but also just super interesting. I've been super fortunate to have like, great people to work with and great mentors throughout my career. And those early experiences were just wonderful learning opportunities. When I first started at First Boston, Michael Mauboussin was an equity researcher. Maybe he was product manager or something by the time I started there. But there was all kinds of interesting people to learn, and you just had a huge, huge array of resources too. And when you're 20, 21 years old, you're just a sponge for that kind of stuff. So it was really a great experience. I mean, it's a lot of hours like those analyst programs that the investment banks are. I don't think they're as bad as they used to be, but it's labor intensive and you see a lot of attrition throughout the ranks, like even over two, three years. I just really enjoyed it. It was great experience.

[Scott Wilson]

What do you either gravitate to or get placed in, as the case may be.

[Andy Golden]

I was fortunate. There was a guy who was number one I ranked research analyst, and his name was Greg Capelli. Just super smart, thoughtful guy. And I was earmarked to go into his group immediately. So I was just the junior person on the totem pole doing equity research like basic financial models and basic due diligence on companies that we were either trying to take public, trying to raise money for, or just traditional equity research analysis.

[Scott Wilson]

And how did that progress over your years before you came over to this.

[Andy Golden]

Side of the business I started at csfb. I had the opportunity to go to Merrill at the end of my two year program to be a senior equity research analyst. So I moved out to Maryland. The tech group in San Francisco, I guess they called it the Global Growth Group and was there during the whole implosion of the tech bubble and was fortunate enough to be at a stage of my career. I was given the choice, hey, you can go back to business school. I had a guarantee when I went over and they were going to potentially move me to New York and find a spot for me. But it was easy enough for me to go back to grad school. So I applied to a couple of different grad schools, but ultimately chose the financial mathematics program at University of Chicago and was going to go to school full time and try and work part time. Like got an offer from bank of America to be a quant in the strategy group there that was mostly focused on fixed income derivatives, some fx, some of the exotics. But I ended up going to school part time and working full time. And that was kind of a great financial decision. But I worked there for just maybe it was a year and a half, 18 months before they shipped me off to the Tokyo office and landed in Tokyo as a junior trader on the derivatives desk and worked my way up. So I was running the fixed income mostly like interest rate derivatives, swaps, swaptions, caps fors in Tokyo and then got transferred to London during the financial crisis to to take over the euro sterling and Swissy books there. And then after the merger with B of A and Merrill, ultimately went back to Barclays in Japan before I got a call from Grinnell College to talk about coming to work for an endowment. So very circuitous, kind of random route. I mean, I guess there are links in the chain where you can point to where it was kind of logical at the time, but certainly didn't grow up in this kind of allocator world or even in asset management.

[Scott Wilson]

What was it like when you got that call?

[Andy Golden]

I was like, do you have the right number? I don't even know what you guys do. I was only conceptually aware of endowments because Grinnell was kind of famous for being this little tiny college in the middle of Iowa that had a large endowment and certainly new people who worked in the investment office. And that's how they got my number. But they wanted someone who had kind of international experience, experience in fixed income, experience in equities. And so my background kind of loosely fit there. And obviously I tied to Grinnell College as well. So. And the truth is my kids were starting school and we had started the kind of private school thing in Tokyo. And my wife is originally from the Midwest. She's from small town Iowa actually. And it just worked out for the family. And I thought the job was super interesting. Certainly the compensation scales are very different. Running a derivatives trading desk at an investment bank versus working at a smaller endowment. So that was kind of a big life decision. And it just seemed like something, hey, this is super interesting. It's more meaningful. And it ended up being a great decision.

[Scott Wilson]

In hindsight, the Grinnell Endowment has a pretty interesting history. And why don't you maybe talk a little bit about what drove the process over the years.

[Andy Golden]

Is probably most famous because of the connection with Buffett. Buffett hasn't been active since the late 70s, early 80s, but certainly was instrumental. And there's a famous investor. I think Money magazine wrote him up as the most famous investor you'd never heard of. And that was Joe Rosenfield. And he had a huge role in the endowment from 1941 until 2000. And then David Clay, the CIO who hired me, he started in the 80s as well and worked with Joe and was really super instrumental in that portfolio over basically a 30 year period. And super talented investor and just a wonderful human being. And I was so lucky to start there and work under David for that seven years I was there. He was just following more of that kind of Berkshire style investing than the traditional Yale model. David just was a really great investor, I think looked at the world in a very similar way to Joe did. And it was really good for me because I had no idea really what they did in an endowment when I first started. And I guess my role technically was director of public investments and then quickly took over as managing privates and publics and then ultimately became the CIO in my fourth year there. But it was a great place to start and David still a great mentor.

[Scott Wilson]

So you mentioned that Dave and Joe style is probably more Buffett like than endowment model like. What did that mean? What was the philosophy of it when you showed up?

[Andy Golden]

It was definitely, hey, let's find great individual companies, great partners, and see if we can leverage those relationships to put concentrated exposure into individual positions that we can compound with over really long periods of time. 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, particularly when Joe was there. They had a historical relationship with Buffett and Sequoia, the mutual fund, if Joe liked it and Warren liked it and Sequoia like they could potentially own it in the internal portfolio and both places. So you'd end up with these large concentrated exposures, but produced just unbelievable returns over many many decades. I think when, when Joe started the endowment was just a couple million dollars in 1940s and was over $1 billion almost completely through capital gains over that timeframe. I think over that time frame they only took in $70 million in gifts and turned $3 million into over a billion dollars.

[Scott Wilson]

So what did that portfolio look like?

[Andy Golden]

When I first got there there was still legacy concentrated exposure to large cap domestic equities. And certainly the mandate from the board was the college had grown more dependent on the endowment and wanted to reduce overall volatility. So there was a mandate to diversify to some extent while still kind of maintaining the core beliefs and tenants that had grown the end same time period.

[Scott Wilson]

And so when you say concentrated, was it 10 names or was it managers? What was the setup?

[Andy Golden]

Yeah, it was more like 10 managers and predominantly US equities, predominantly US large cap value investors.

[Scott Wilson]

And then what did it look like as seven years later, as you were getting ready to leave it still look.

[Andy Golden]

I think pretty similar. We had gone from say 10 managers who mattered to probably 15. And then we'd also done quite a few individual co investments either in public markets or private markets. That changed the risk profile of the portfolio quite substantially.

[Scott Wilson]

In this world where ostensibly all of your peers have completely different looking portfolios, global diversification, equities, credit, real assets, how did you think about sticking to effectively concentration in predominantly US equities?

[Andy Golden]

When we went from 10 to 15, the bulk of that came in from international partners, particularly in kind of emerging frontier markets. I like to think like here at Wash U we're completely opportunistic. We're more or less indifferent between domestic, international, public, private, where we can find interesting partners, interesting opportunities, interesting places to put capital, particularly when we think it reduces the risk profile of the overall portfolio. Like we're always looking for something that we think is orthogonal or idiosyncratic to what we currently have in the portfolio. And that's where we like to kind of concentrate our exposures.

[Scott Wilson]

So yeah, let's turn over to Wash you. What did the portfolio look like when you arrived a couple years ago?

[Andy Golden]

We had a very traditional kind of endowment asset allocation. If you think top down, we haven't shifted the asset allocation too meaningfully. We've reduced exposure to the hedge Funds I think we've gone from 100 partners plus to 50 that matter or really 30 that matter. So we've concentrated our exposures and then we have a significant portion of the portfolio in individual securities and individual names.

[Scott Wilson]

How difficult was it for you stepping into a seat where there was a much more diversified group of managers to start winnowing it down?

[Andy Golden]

We certainly were not popular in certain circles for quite some time. Probably still not. And those are tough decisions. Those partners didn't necessarily fit our portfolio. I mean these are smart, thoughtful, well intentioned, good people and often great investors. It's just, it didn't fit what we were trying to do with the portfolio. And so we had to make a lot of tough decisions at the margins. I would say like we went through with the board and garnered internal support, but we put in redemptions for almost half the portfolio in the first several weeks. Now I was fortunate to have the portfolio for several months before I actually landed in the seat. So we spent a lot of time going over individual partners and individual names of who we're going to keep in the portfolio and who we weren't. 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, we've added capital to and concentrated exposures. But for the most part it's a very, very different looking portfolio than it was when I started three years ago.

[Scott Wilson]

What were the filters you used to start to winnow that down?

[Andy Golden]

There's some kind of very high level things. We tend to like smaller managers, we tend to like people who concentrate, we like people who have a long term view. We typically stay away from systematic and macro. Generally those are the things that we have a harder time getting over the hump. So we were able to eliminate quite a few of those relationships and those partners just right off the top. And then it became like how do we re underwrite this manager if you start with a blank slate? Is this somebody we would put in the portfolio? If the answer was no, then we would look to terminate over time.

[Scott Wilson]

And what are your sort of favored criteria within say a manager you kept and a manager that was close but you didn't.

[Andy Golden]

It's the same lens that we look through all managers. I mean, first and foremost we're looking for people we think are great investors, people who are operating in an interesting opportunity set. People we think have a institutionalized, repeatable process. Ultimately we evaluate them based on what we think the quality of their portfolio is. And we think about our portfolio on a bottoms up basis in that we own what our partners own in some fraction. So if we're they own 10 stocks and we're 10% of the fund, we think about our portfolio as these individual pieces and then we have a fee and liquidity structure on top of that. And that portfolio has to make sense on a look through basis. So if you take our hedge fund portfolio three years ago and I were to evaluate it on a look through basis, I'd say we own 2,000 names on both sides of the market and we have a fee structure that's 1 and a half and 20. That's a portfolio construction problem. Right? 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 long correlation. If you have a hedge fund that's up 10% and a hedge fund that's down 10% on a gross basis, you're flat, right? But you paid them both 1.5% ish as a management fee. And then the one that was up 10% you also paid that 15, 20% carry to. So on a gross basis you're flat. But after you put on your fee structure you've done horribly. And that's problematic in hedge funds in general. And I think you can look at it like industry wide returns. It struggles because the proliferation of just the number of hedge funds on a look through basis that's kind of what the industry owns. They own both sides of the market. It's really tough with that fee structure.

[Scott Wilson]

To produce alpha at an aggregate level. It's easy to make the case that it never makes any sense. But you're not really dealing the aggregate level, you're dealing with the subset of managers that you inherited when you showed up and maybe a few that you liked from before. So how do you put together that kind of bearish macro perspective, say on long short with bottom up manager by manager decisions?

[Andy Golden]

We're just hugely selective and I guess you have to be humble and intellectually honest about your ability to really choose the absolute best performing managers. There's a lot of large number problem in that, let's say 95% of the time we can tell a really good manager from a really bad manager, but if only 1% of them are actually really good, then you still end up with 5 to 1 ratio of not so good managers. With good managers right now, I'd say we only have four, what you'd call traditional hedge funds in the whole portfolio. And then we're also looking for places where we can leverage that relationship to make the overall portfolio better. So we're looking for people we can kind of use as either outsourced research partners, places where we can add capital and we think they have a really interesting idea that again, is kind of idiosyncratic to everything else we have in the portfolio. That's a really valuable relationship for us. And I would say the we also understand the process, we understand their portfolio, and we have the ability to assess when things are going poorly, whether it's a short term or long term problem. And I would say most of our partners, we've been able to produce significantly better returns than you would think just looking at their headline numbers, because we have the conviction to add capital when things aren't going that well and can rebalance when things are going well.

[Scott Wilson]

I'm curious, what have the dynamics on your team, on the investments office been when, as you said, it's hard winnowing it down, it's not fun. And you can imagine it being difficult to positively motivate the people on their team when they're making the phone calls saying, hey, we're taking money out of all these managers.

[Andy Golden]

It's easy enough for me to be the bad guy, so I'm happy having those calls. It doesn't have to be the team, but certainly there's personal relationships that people on the team had with these people going back. Everybody on the team is a generalist, so nobody's kind of married to any one geography or asset class. And we have people who have historical experience in privates or publics and tend to have more relationships there. But in general, we do things as a group and that makes it a little easier. We're trying to make all asset classes compete for capital. And that's a lot easier to do with the generalist model than it is when people are siloed into individual asset classes. And then it also gives us the ability to size things probably more if you're thinking about the entire portfolio in context versus just my one little siloed asset class. I think the way you'd size positions is quite a bit different.

[Scott Wilson]

So what kind of impact did it have on the team?

[Andy Golden]

Overall it's been really good. The team is different. We made changes to the team early on as well. But the team has done just phenomenally well. And I think it's really added a ton of value to the portfolio over the last couple years. And the people who, who are still here, I think have really embraced this model of investing. It's a little bit of organized chaos at times. Running a generalist model with 10, 12 people on the investment staff and oftentimes we have four people on a trip or five or six people or even the whole team in a meeting where we probably only need five. But I think it's helped the portfolio over time.

[Scott Wilson]

How do you think about the generalist model in light of the concentration that you want in the portfolio where you could imagine the price of being wrong on something's a lot higher?

[Andy Golden]

Yeah, I would say that's definitely true. But also the benefit of being right is a lot higher. So if you're going to do something, do it in a size that will move the needle and that's easier to do. When you think about, you know, if you have say 5% of the portfolio in one individual relationship, one manager, that's huge concentration. If it's 20% of your overall equity exposure, you're kind of betting the house on it if that's your silo. Whereas depending on the underlying concentration, that may be perfectly reasonable for the portfolio as a whole.

[Scott Wilson]

How do you match this top down thinking and bottom up thinking? If top down is traditional asset class or risk exposures and bottom up is the one off selection of the managers in your portfolio?

[Andy Golden]

Our focus is really on the bottoms up. If you look at even the way we think about diversification, we're trying to concentrate our exposures in individual investments that completely idiosyncratic outcomes over some period of time. Right. 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 US based aerospace and telecom company. And there's no reason why we think those investments should have correlated outcomes over some investment time horizon. Now in the short term, if we go through a crisis like we did in March, where the cost of capital rises for all risk assets, we don't expect that portfolio to be immune, but we expect those investment outcomes to be completely independent over our investment time horizon. And that's a lot easier framework to find real diversification. Whereas if I step back and say what are the diversification benefits for being in venture versus public equity versus private equity buyouts or real estate, like that's very difficult to quantify, particularly in times of severe market stress, where you really need Diversification. And I think that's a better framework for us to evaluate real diversification benefits in the portfolio as opposed to this top down approach. Now we use the top down approach, both presenting to the board and as a framework for thinking about how we guide our search. But, but really we're looking for those idiosyncratic, completely independent outcome investments from a bottoms up basis. And that's how we like to concentrate the portfolio.

[Scott Wilson]

So when you think about exposures and drivers of return, it sounds like you're focused on the position level as opposed to say even a manager as a position.

[Andy Golden]

Yeah, and even our individual managers on our public and privates, we're generally thinking about them as individual exposures as opposed to like manager level. The returns aggregate through the, through the partnership. But we think about the exposure on an individual investment level basis.

[Scott Wilson]

How does it different in the way that you do your due diligence on managers?

[Andy Golden]

At the highest level? We look for all the things that all of our peers would have on their checklist. I think the way we evaluate them is really what we think based on the quality of the portfolio and we'll use our own lens for that. So the quality of the individual investment ideas and the attractiveness essentially do we want to own what they own and how does that fit in our overall portfolio? So like there's lots of managers that we think are talented investors, have a good process, but for whatever reason we don't think their underlying holdings fit our portfolio or it's not something we're excited about and we would probably pass on that. We're always trying to err. I guess most of this job is saying no. If you think of how many opportunities you look at before one actually makes it into the portfolio, it's probably closer to 0.1% than it is 1%.

[Scott Wilson]

When you're looking at a manager, are you focused on underwriting their positions more than their process to find the next position?

[Andy Golden]

We use that lens of underwriting their existing position. So it's really just like case studies of either what they currently own, what they haven't. And that's how we evaluate what caused you to make this investment. What was the process that led to this? Do you have a kind of unique differential view on the quality of the business or the industry? What is the real investment thesis is that empirically verifiable investment thesis that's different than what we think the market or how the market is viewing that business. And that's the lens through which we look at their process. How did they Think about valuation, how did they think about risk and return? How did they think about the industry? We spend our time focused on looking at those individual names.

[Scott Wilson]

How does that translate over into thinking about participating in the private markets?

[Andy Golden]

It's the exact same lens. You don't have the same obviously price discovery and transparency in private markets versus public markets. But oftentimes you have better access to financials and diligence materials and access to management teams.

[Scott Wilson]

So when you roll all that up today, what's the structure of the portfolio look like?

[Andy Golden]

I'd say top down, it hasn't changed that much. If you think we're roughly 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 then we have 5 to 10% of the portfolio in real assets type exposure, another 10% in hedge funds and the balance would just be cash.

[Scott Wilson]

And how much do you try to do on the margin sort of in addition to just what the managers are doing on your behalf?

[Andy Golden]

We focus most of our process internally on incremental research. We typically know what their thesis is like, how do we verify it, how can we use our networks or people within the university to help verify and re underwrite the thesis? And it's a super time consuming way to invest, especially since you have to think you spend most of your time doing research on stuff that never makes it into the portfolio. And that can be a little disheartening at time but, but ultimately when something does make it into the portfolio, you understand it that much better. You have a much better understanding of the process and the partnership.

[Scott Wilson]

What opportunities are you particularly excited about today?

[Andy Golden]

Frontier markets is super interesting. Emerging and frontier markets for us has been a big bright spot in the portfolio. If you look at the headline return numbers in emerging and frontier markets, it's significantly lagged developed markets, particularly the US over the last last five years. For us it's the opposite. We've been able to find really unique, interesting places to put capital in some of these markets. That has been a big differentiator for us in terms of performance. Again it tends to be individual name individual securities. But we have a ton of really high quality partners on the ground there. And it's been an interesting hunting ground for the last several years. And I think it's gotten better over time, not worse.

[Scott Wilson]

Their particular region you're excited about, we.

[Andy Golden]

Spent quite a bit of Time in Africa, Bangladesh, Russia has been really good for us. Africa is probably where we're spending more time and again it tends to be kind of one off idiosyncratic opportunities. But it's been a really interesting place to invest.

[Scott Wilson]

What's an example of something that's worked well for you?

[Andy Golden]

Russia. We've made quite a bit of money in some of the more tech based companies that we traded 20 times revenue in the US that are trading at 5 times earnings in Russia. Growing return on equity of 60% plus growing at 30, 40% right through Covid. Super interesting companies that they're in Russia. So we're not going to bet the portfolio on Russia. And I know we have peers who basically said we would never invest in Russia. When we step back, our view is kind of look, all investing involves risk, right? If you're paying 100 times revenue for a unproven business model in Silicon Valley, that's a risk. The question is like are you being compensated for that risk? And we wouldn't have a massive portion of the portfolio, but we found opportunities that are compelling enough. Even being in Russia, we think they're interesting and we've been well compensated for that. I'd say the same in places like Bangladesh. We spent time in Pakistan and all over the continent in Africa.

[Scott Wilson]

And what's that balance of. You want to have a concentrated portfolio, so something's got to be big enough to move the needle. But then there's sort of known left tail risk so that you don't want it to be too big. How do you think about sizing?

[Andy Golden]

It's more of an art than a science. You size things based on how they fit in the overall portfolio and then whether or not you can underwrite the downside. And then again, we're always looking for things that we think add positive convexity to the portfolio. Right? They have significant asymmetric risk and reward. As a general rule of thumb, tell the team, look, if we're not willing to put 1% 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. So we don't always have that type of liquidity. Right? Like the opportunity set isn't always that big, so things aren't always sized there. But again if you're not willing to put 1% of the portfolio in it, and if you, let's say you do a disastrous job underwriting the downside and you lose half your money there, we can tolerate 50 basis points on the overall portfolio and hopefully make that up in other places. Particularly if we think it's very, very idiosyncratic. We're looking for opportunities that aren't based purely on our macro view of the world. But for us to go above that, again, we would have to have a significant view of downside, really be comfortable with the underwriting process.

[Scott Wilson]

So if you're willing to go to Russia, go to Pakistan, Bangladesh for investments. Are there areas that you avoid?

[Andy Golden]

There's certainly certain markets that are tough that make Russia look like a very developed market, Particularly across Africa. There are places that are just really difficult to invest, whether that's property rights or contract enforceability. Like there's lots of things that just make it a very, very tough place to invest, particularly in the type of size that we're hoping to do. So there's certain places that we just don't go hunting. But, but I'd say very few places are completely off limits.

[Scott Wilson]

How does the process sort of work for your team in finding a new idea so you can break it down? Like where does the sourcing start?

[Andy Golden]

We try and spend a lot of time on the ground in the various markets that we're investing in and it's really randomness and optionality. You never really know what the next interesting idea is going to come from, what it's going to look like and which partner it's going to come from. So it's just basic blocking and tackling. I'd like to say we have a great funnel where we're looking at this really high level, interesting set of opportunities and it boils down to a small group of investments that we end up making. But it's really random and I think it's just hard work out there knowing what our partners are doing, knowing what our partners are looking at and trying to find interesting places to put capital.

[Scott Wilson]

If you think back to one of the more recent, maybe it's pretty pandemic, but one of the more recent new commitments you made, walk me through the process of how you found it, where it came from and what that due diligence was like.

[Andy Golden]

A recent one would be a co investment in an additive manufacturing company that one of our Silicon Valley partners based out there. Like at the last annual meeting, this was one of the companies that had presented. We thought it was super interesting company, spun out of a really great institution on the east coast, at least the intellectual property did. Our partner in California was one of the original seed investors of the company. Interesting sophomore platform, interesting hardware platform. What we think is very unique defensible IP. When we saw the CEO present at that annual meeting, I guess it was 2018, came back and said, look, this is a company we should start doing some work on just in case. So we spent spent probably six months just diligencing the company. We spent time talking to people in the industry, talking to potential customers, spent time with the management team and just basically trying to position ourselves just in case they raise capital. At some point, we could come in as a preferred provider of someone. Hey, we've already done all our diligence. We're super interested in this. If we think the valuation makes sense, we'd love to be involved and have a great relationship with that particular partner and in California. And when they did come back to market with that round, we weren't able to get the full allocation that we would have liked, but we're able to put in a fairly sizable chunk of capital and what we think is a really interesting company for the next two decades.

[Scott Wilson]

That example brings up a whole host of questions in and around process. So the first is, how do you think about time allocation when you're spending all that time with a chunk of your team on one company?

[Andy Golden]

The truth is, like, if I think about the overall portfolio, if we find four or five companies like that a year, we've done our job like four or five places and how much capital we have to reallocate every year. You hope you have a very long time horizon. And most of the time we're allocating to our core partners and re upping in funds. And we have lots of places we can put capital if we have excess capital. But finding these four or five differentiators of return places where we have excess exposure and we think it's super interesting over a long period of time, like that's all we need. So the truth of it is that most of your time ends up being relatively unproductive just because you're looking at things that don't ever make it into the portfolio. But we have a big team and we have a lot of resources. And if we can produce a small amount of alpha compounded on a $10 billion portfolio over long periods of time, that's definitely worth it.

[Scott Wilson]

How does that change the nature of the relationship you have with the manager, in this case private equity firm, who already has a position in the company and you know, may want to put more in if it's doing well and you're in some sense their partner, in some sense could be a competitor for a limited amount of capital investment.

[Andy Golden]

Well, I mean, we always say that they would obviously get their fill before we would get anything. So in this particular case they were bringing us on instead of another outside partner. So they took their pro rata rights and we were able to come in on the back of that. And then like we'll set up an SPV and still pay them, like they'll manage the position for us and fee and carries. Typically there's not a management fee associated with those, but we'll still pay them for all the help that they've done and manage the position over time. 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 most part we're setting these up as, as SPVs.

[Scott Wilson]

And how about the skill set of the people on your team where underwriting a company can be different skill set from diving in underwriting managers?

[Andy Golden]

Yeah, it's a very different skill set. It's a very different mindset, I would say. But that's taken a lot of time and effort to kind of bring the team up to speed. And it's a very different, 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.

[Scott Wilson]

Where have your people come from?

[Andy Golden]

Generally it's fairly random. Like people who come from traditional asset management industries consulting backgrounds I think are good. Private equity investment background is really good. And then we have people who were one person on the team who was a PhD in physics and smart, curious, intellectually curious people. They enjoy investing this way. And if you step back why it's interesting to work for an endowment. You have this pool of capital that's not too big. Right. You're not a 100 billion dollar pension fund. So you can do interesting things that will move the needle. And you have an opportunity set that's pretty much any asset class, any geography within reason in the entire world. So that's a super interesting, very long time horizon, unlimited opportunity set. And you're only looking for a small handful of really great investments every year. That's a super interesting framework to start from. And certain people fit well within that framework and certain people don't because as a team we might be looking at again a Brazilian utility company one day and a medical products company in Sweden and they're both interesting investments, but it's a very different diligence and underwriting approach. And some people enjoy it, some people don't. And we've had great people, great investors who it just wasn't the right framework for them. And then when we can, we can hopefully be helpful to them to find someplace where they're going to excel.

[Scott Wilson]

And when you add it all up, how many positions would you say you have in the portfolio today? And how does that compare with more typical endowment?

[Andy Golden]

We have more like a hundred positions that really drive performance on a look through basis. 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 over the last 18 months, but it's a manageable position for a team of 10, 12 investment professionals, we're typically looking for ways to concentrate that further, not less.

[Scott Wilson]

What have you learned the most from being in the seat the last bunch of years?

[Andy Golden]

Coming from a smaller endowment, realizing how much the team matters, can't be on every call, you can't be in every meeting. And being able to leverage the team and leverage resources, that's been a huge shift. Going from a $2 billion endowment to now $10 billion endowment. And then like governance, having a board that buys into the strategy that gives you the autonomy and flexibility to manage the portfolio. The way we manage it, I think it's been just super important. And that governance thing I think is maybe the most important thing. That really is the North Star for all endowments. That governance process drives so much. And the institution here has just been amazingly supportive.

[Scott Wilson]

What does the day to day look like or the week to week look like on your team?

[Andy Golden]

We try and organize it as much as we can, but we'll typically have one to two team calls per week. Typically Monday morning. What are we working on? What do we think is interesting? What's in the pipeline? What can we kill? And we'll include the entire team on that, including operations folks. And we try and integrate investment in operations as much as we can. That's mostly pipeline focused. And then what's interesting that's happening in our portfolio, like who's adding to what names, how our position size is changing, what's performing, what's not performing, what are interesting hunting grounds, places to at least start your search. Right now it's very different just because there's no travel. I would have said I spent 30 to 50% of my time in Any given week or month on the road, but that's not happening. And then from there again, it's very random to like what kind of names or what geography, what we're spending our time on. It really depends on what's happening with our various partners in any given week. So it tends to be really random from one week to the other. And we organize the team so that nobody's over focused on one geography or one asset class. So you could have three calls in a day looking at new investments or existing investments and there'll be five people on each call. But none of those five people overlap on any given call.

[Scott Wilson]

So much of the process of investing ties to trying to identify a competitive advantage or an edge. And I'm curious what you think yours is taking this approach.

[Andy Golden]

I step back and say, look, our top here is these are smart, well intentioned, thoughtful investors. Like do we really have a sourcing edge? No. Do we have an underwriting edge? Probably not. 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 time frame. It's our willingness and ability to go where our peers are not, I think like go to certain geographies and take outsized risk positions in assets where we think we have an underwriting advantage. And because these underlying investments tend to be uncorrelated, again we're looking for independent outcomes over our time horizon. I think it's reduced the overall risk in the portfolio while enhancing returns. But I'm not so sure there's a clearly definable edge. If I'm being intellectual honest. From a top down perspective, we would have similar looking portfolios. But when you look at the underlying exposures is where our tracking error comes from.

[Scott Wilson]

And when you're looking at, you mentioned potentially an underwriting advantage, is that compared to say endowment peers that are picking managers or is it compared to the managers doing the underlying security work?

[Andy Golden]

Like I was comparing ourselves to our peers, you know, other larger endowments. Certainly we're not doing what the underlying partners are doing. I'd say we're trying to recognize super interesting opportunities. We're not necessarily sourcing those on our own, although we're doing our own work. We're leveraging everything that our partners are doing and hopefully we can find incremental ways to add value to that research process. So again, most of us come from non traditional backgrounds. We have our own networks and own people within industries and certainly people who are tied to the university that we can leverage.

[Scott Wilson]

How have you found those differential insights helping the process of just manager selection?

[Andy Golden]

Everything looks good on paper, right? Like you've never seen a pitchbook or whether it's someone's pitching you an individual investment or it's a manager pitchbook. Like it always looks good on paper. And again, it's peeling back the onion. To understand where these positions come from, how are they sourced? Like what was the underwriting process, what do we think of their framework around risk or evaluation? And I think doing your own work on the underlying names gives you, you have your own opinion on all that stuff and you can compare and contrast it with what your partner's doing. And that's a valuable framework that I'm not sure everybody does.

[Scott Wilson]

Where do you think you've tripped up the most?

[Andy Golden]

The list is long and undistinguished. That's what I would say. We make mistakes all the time. And I would say certainly a big lesson over time is make sure you understand the bear case on every investment, whether it's a manager or underlying company and overestimating your ability to whether it's underwrite the downside, understand competitive dynamics within the industry. It's a super, super long list of places where I think we've learned over time both on the manager side and individual selection side. I'd say our partners with managers is typically, if you look at what's ended more relationships, we disagree with them on the size of the opportunity set or what the right size of AUM is, or their ability to find out idiosyncratic ideas or places where the manager has become more thematic investors than bottoms up research driven investors. We're always looking for idiosyncratic risks. So most of the partners who are really thematic tend not to fit our portfolio or the way we look at the world. But entry point is one thing and we've made all kinds of mistakes on exits. My old boss and through his training used to say there's no good or bad, bad trades. There's only good and bad exit and entry points. And there's some truth to that.

[Scott Wilson]

So if you look out five or 10 years of your portfolio, what do you think will evolve?

[Andy Golden]

I don't think we're going to do things much differently over the next five, 10 years. We certainly have some positions, if you look at them over the last two, three years have become outsized risk exposures in the book just because of organically the positions have grown and over the next five, 10 years. Some of those positions could get really big if they continue on a similar trajectory. But I can't imagine we change our overall process significantly.

[Scott Wilson]

How do you think about taking this model and applying it in the venture capital area?

[Andy Golden]

Venture capital is tough, right? Just the nature of the industry. It's tough to underwrite. If you look at our partners and we have a great group of partners who have done extremely well for the port portfolio, but 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 unique differentiated thinkers in that area. And so we've just shied away from it. We typically, I guess we've concentrated our exposures and people that we think we can partner with very closely and we have ways to monetize the relationship outside of their ability just to pick really good early stage companies and that we can grow our exposure with them over time, either partnering in these co investments or finding ways to add capital to what we think are their most interesting ideas.

[Scott Wilson]

So does that prevent you from investing with some of kind of the perceived best of breed that are always massively in excess demand?

[Andy Golden]

No, I mean, I'd say we're still opportunistic. There are certain partners who we think are just great investors and, and we have no ability to partner with them closely but we still think it's a great investment and we're happy to take whatever capacity we can get in some of these underlying partners and just think they, they have a great process, they have great pipeline, they've done tremendously well over long periods of time. And it's a group of just really talented investors and whatever they're doing, we obviously would like a piece of it. But it's hard for us to scale up those relationships over time.

[Scott Wilson]

There's just limited capacity with an increasingly concentrated portfolio. Curious how you factor in some of these broader issues that are increasingly coming to light like the sustainable investing lens and diversity and inclusion.

[Andy Golden]

We've obviously spent a decent amount of time on that and I did when I was at Grinnell. That kind of ESG lens. I think it's a framework that plays in everything we do. We don't have a specific kind of ESG mandate, but we're always looking for partners. I tell the team we want somebody who has a similar moral compass. We want people who have a framework and has similar value systems that we do and understand the mission of the university. And nobody works in an endowment because they're trying to maximize their current compensation. If you can't buy into the mission, this isn't the right place to be. And I think that's something that pervades everything we do, whether it's hiring people on the team or finding new partners. And we obviously just recently went through this. Over a third of our partners, either in the US or even more internationally, are managed by people of color or female heads. And that's not something that's a purely bottoms up driven outcome. And we don't positively or negatively screen for that. It's just, I think, an important framework for how we view the world.

[Scott Wilson]

All right, Scott, let's turn to a couple closing questions. What's your favorite hobby or activity outside of work and family?

[Andy Golden]

I can't say I get to spend that much time outside of work and family. But I grew up in small town Alaska and I love downhill skiing and fly fishing, which were just two activities that I grew up with. And obviously I love sharing those activities with my family.

[Scott Wilson]

Best of all, what's your most important daily habit?

[Andy Golden]

Are they just reading? Being intellectually curious? I always want to know what's going on, not just with the portfolio, but in the world in general.

[Scott Wilson]

What's your biggest pet peeve?

[Andy Golden]

I've got a lot of these behavioral pet peeves, I guess, people who are just unproductive and lazy. I think working in Endowment again, we have this huge, wide open space where we can invest in, within reason, anything we want anywhere in the world. If you can't find something to look at, something to do, you're probably not in the in the right seat. And then people who spend any time complaining or kind of whining about circumstances like, I'm sure I inherited that from my father. But if you're complaining about something and something's wrong, then fix it. If you can't, then there's no, no reason to complain about it if you can't fix it anyway. I guess may maybe one other thing I would say, like firms that quote gross returns and not net returns, I think is another probably pet peeve that shared with a lot of our peers.

[Scott Wilson]

What's the biggest mistake you've made in.

[Andy Golden]

Terms of investment mistake? Talking to a friend about this recently. I think when I graduated from college, I knew nothing about investing. I was a math and econ major and I'm dumped down into junior seat and equity research and I spent the first two years paying off student Loans, right. I was sleeping on the floor trying to save enough money so I could actually buy a stock or whatever, put some skin in the game. And finally I got a bonus in February, March of 2000 that I could invest. And I think the first thing I did was buy a bunch of just disastrous tech names that I'd been following for the last two years. In hindsight, it was a cheap lesson because I didn't have that much money to lose. I think certainly has been a positive influence for the last two decades, but that in hindsight was a really quick way to evaporate half my tiny capital base.

[Scott Wilson]

What teaching from your parents has most stayed with you?

[Andy Golden]

Work ethic? I mentioned neither. My parents went to college, my father worked in construction, my mom was a bookkeeper and did odd jobs when I was a kid. And they're both just super hard working people. My father is just one of the most productive human beings. He never went to college, but he's just super intelligent person. And I'd say now that he's been retired several years, he's still just this amazing, hardworking, productive human being.

[Scott Wilson]

Scott, last one. What life lesson have you learned that you wish you knew a lot earlier in life?

[Andy Golden]

We talked about mindfulness training before. I think my big takeaway from that was to speak less, listen more. Is something I wish I would known when I was younger. I think the other thing too is intelligence is only one small factor in people being successful. When I was young, I thought that if you didn't have kind of a logical analytical framework, you'd have a hard time being successful. Whereas like people who are really good at driving consensus, communicating ideas, great salespeople, like all those things are just a huge facet of what makes you successful.

[Scott Wilson]

Scott, thanks so much for taking the time.

[Andy Golden]

Yeah, well, thanks for having me. I appreciate it.

[Ted Seides]

Ted, thanks for listening to the show. To learn more, hop on our [e-mail] where you can join our mailing list, access past shows, learn about our gatherings, and sign up for premium content, including podcast transcripts, my investment portfolio, and a lot more. Have a good one and see you next time.