Educational Alpha Podcast – Season 3

Conversation with Kane Brenan and Anne Duggan, TIFF Investment Management

Release Date: September 3, 2025
Host: Bill Kelly (CAIA Association)
Guests: Kane Brenan (CEO, TIFF Investment Management) and Anne Duggan (Managing Director, TIFF Investment Management)

Episode Overview

In this in-depth episode, Bill Kelly sits down with Kane Brenan and Anne Duggan from TIFF Investment Management to explore TIFF’s mission, the evolving landscape of institutional investing, and the nuances of asset allocation and manager selection. The conversation touches on TIFF’s historical origins, strategic approaches to alternatives, the pressures and opportunities created by recent macroeconomic changes and regulatory shifts (notably the new endowment taxes), and the increasingly complex bridge between institutional and retail access to alternative investments.

Guest and Firm Background

TIFF’s Origin Story & DNA

• TIFF stands for The Investment Fund for Foundations.
• Founded in the early 1990s by "heavyweights" from the nonprofit and endowment world (e.g., David Salem, Larry Landry, David Swensen, Jack Meyer, Alice Handy) to provide smaller endowments and foundations with access to the same quality of returns and alternative investment vehicles as much larger institutions (e.g., Ivy Leagues, Gates Foundation).
• "TIFF was very early into alternatives. It was really innovative around hedge funds, private equity." (Kane, 04:45)
• TIFF’s legacy as a provider of endowment-like returns remains a core advantage, driving privileged access to top-tier managers.

The Team

• Kane Brenan: CEO of TIFF, previously 22 years at Goldman Sachs in multi-asset class, PE secondaries, leveraged finance, OCIO, and large retail fund management.
• Anne Duggan: Managing Director, brings rich experience across client-oriented solutions and manager due diligence gained at outsourcers and banks including Morgan Stanley and Credit Suisse.

Key Discussion Points & Insights

1. TIFF’s Mission, Client Base, and Future Vision

[04:27–08:36]

• TIFF’s core focus: Delivering institutional, alternative-heavy, actively managed portfolios to endowments and foundations—regardless of size.
• Over 34 years, TIFF has remained client-centric but now increasingly customizes solutions for larger organizations that require it.
• Manager Access as a Structural Advantage:
  "If you're a general partner ... somewhere very near the top of your LP list is someone that has the type of client base that we have." (Kane, 07:30)

2. Navigating Today’s Macro Backdrop

[09:28–14:37]

• TIFF's philosophy is not to be forced into taking positions.
• "Our bias is to only do something when we see a fat pitch." (Kane, 09:53)
• Key macro calls:
  • Resilience of the equity risk premium, continued U.S. market structural advantages.
  • Some internal debate but leaning toward USD depreciation.
  • Consistent "short duration" stance: "We're short overall fixed income, we are short duration ... more likely for the 10-year to go to 6% than to 2.5%." (Kane, 12:08)
  • Primary risk: U.S. debt ("debt bomb") and political inaction.

3. Endowment Tax: Impact and Strategies

[17:17–20:12]

• New "tiered endowment tax" (now up to 8% for the largest):
  • "The magnitude from an investment perspective, 30 to 50 basis points ... not a wholesale change in approach." (Anne, 19:39)
• Expected adjustments:
  • "Tweaking of a strategy" as opposed to large-scale changes.
  • Possible moves: tax loss harvesting, increased use of tax-favorable assets (e.g., private equity), and away from high-turnover/higher-tax strategies.

4. Liquidity Pressures and Democratization in Private Markets

[20:12–25:38]

• Greater liquidity demands driven by the need for immediate spend from endowments/foundations (e.g., paying taxes, operational needs).
• Secondary market in private assets is growing but still small; retail is increasingly on the receiving end as institutional investors rebalance.
• "Our clients are really focused on ensuring they have the right amount of liquidity. ... It's scenario planning as rules of engagement are shifting." (Anne, 22:30)

5. Private Equity: Value, Structure, and Manager Access

[25:38–35:53]

• "Right now, the industry is split on whether the future of private equity is positive or negative. TIFF is strongly in the camp that there's a lot of value there." (Anne, 25:53)
• Private equity’s structural advantages:
  1. Alignment and value addition: "The ability to get non-public information ... add value to portfolio companies." (Kane, 27:10)
  2. Sector-specific opportunities.
  3. Returns depend heavily on manager access; "Persistence of buyout managers ... it's 35%. If you were in the first quartile in fund A, the likelihood that you're going to be first quartile in Fund B is 35%." (Kane, 33:21)
• Retail access critique: Liquid wrappers like interval funds "dilute" the private equity experience and do not align with the asset’s nature.

6. Replicating Private Equity Returns: The Limits

[35:53–39:41]

• Bill posits: Could there be "private equity beta" analogous to what Vanguard brought to stocks?
• Kane’s direct answer: "No ... The beta of private equity is the same as the public markets ... if you want alpha, you have to get alpha." (Kane, 37:21)
• Long-term data supports private equity's persistent outperformance over decades.

7. The Real Private Equity Premium: Activism Over Illiquidity

[40:27–42:32]

• "I like to think of it as more of an activism premium ... the real value is that you have control and can change things actively inside the company." (Anne, 40:27)
• Illiquidity premium compensates for lockup, but excess returns mainly come from control and long-term value addition.

8. Wrappers, Liquidity Mismatches, and Structural Risks

[42:32–43:47]

• Liquid wrappers (interval/evergreen funds) are only “liquid until they’re not.”
• Liquidity mismatches are a latent risk for the retail segment.

9. Hedge Funds: Fit, Challenges, and Portfolio Construction

[45:25–49:49]

• Hedge funds continue to offer value, but not as a monolithic block.
• "Hedge funds is actually a catch-all bucket for a very wide range of strategies. ... many of them are actually very technically complicated." (Anne, 45:51)
• Investor disappointment often stems from misconstrued expectations and poor portfolio construction.
• TIFF’s approach seeks the right balance—diversification and true risk-adjusted return—through careful manager selection and risk management.

10. The Centrality of Due Diligence

[49:49–51:00]

• In both private markets and hedge funds, success relies on deep, ongoing manager due diligence—especially given the breadth of sub-strategies.
• TIFF’s history, board, and network help maintain access and quality.

Notable Quotes & Memorable Moments

• "TIFF was very early into alternatives. It was really innovative around hedge funds, private equity." – Kane (04:45)
• "If you're a general partner and you have people throwing money at you frequently ... very near the top of your LP list is someone that has the type of client base that we have." – Kane (07:30)
• "Our bias is to only do something when we see a fat pitch." – Kane (09:53)
• "The world only ends once. So betting chronically for the world to end is a money losing strategy." – Kane (15:27)
• "The magnitude from an investment perspective, 30 to 50 basis points, tweaking of the strategy, not a wholesale change of approach." – Anne (19:39)
• "Private equity is interesting right now in particular because people are running away from it. ... maybe that is actually an interesting space to be in." – Anne (25:53)
• "With VC it's even better, it's 45%. ... The likelihood you'd drop from first quartile to fourth quartile is only 12%. Just think about that astonishing persistence." – Kane (33:33)
• "If you want Alpha, you actually have to get Alpha." – Kane (37:51)
• "I like to think of it as more of an activism premium ... you can change things actively with inside of the company." – Anne (40:27)
• "Hedge funds is actually a catch-all bucket for a very wide range of strategies. ... Investors are approaching the asset class in the wrong way and have incorrect performance expectations." – Anne (45:51)

Key Timestamps

| Timestamp | Segment | |---------------|-------------------------------------------------------------------| | 01:00 | Episode overview | | 02:31 | Kane’s background and TIFF origins | | 04:27 | TIFF’s mission and strategic advantages | | 09:28 | Macro backdrop and investment philosophy | | 17:17 | Endowment tax—current state and investment impact | | 20:12 | Liquidity demands and secondary market trends | | 25:38 | Private equity outlook, structural edge, and entry point timing | | 27:04 | The three pillars of private equity value (alignment, sector, access) | | 32:56 | Manager access: persistence data; retail ‘utility’ model | | 35:53 | Replicating private equity beta and the limitations | | 40:27 | The activism (control) premium in private equity | | 42:32 | The problem of liquid wrappers and liquidity mismatches | | 45:25 | Hedge funds: strategy, expectations, and TIFF’s approach | | 49:49 | The centrality and challenge of due diligence |

Conclusion

This episode delivers a candid exploration into the reality of institutional investing, particularly in alternatives, as navigated by a mission-driven firm. Listeners come away with a meaningful understanding of:

• The origins and ongoing advantages of TIFF’s model.
• How institutional asset allocators are interpreting the current complex macro environment.
• Why long-term outperformance in alternatives is both possible and rare—manager access and due diligence are everything.
• The tension between democratization (retail access) and the structural realities—and risks—of private markets.
• Why, even amid cycles of shifting sentiment, alternatives (private equity, hedge funds) remain tools for genuine, differentiated value—but only when used by those with access, diligence, and long-term perspective.

For more resources or to subscribe, visit the CAIA Association or TIFF Investment Management websites.