A (3:17)

David Swensen originally popularized the Yale model, but he also really started this idea of leveraging the alumni base in order to help him get access to funds. Today, University of Michigan is famous for doing this. Babson does it on a smaller scale. Are you able to leverage your alumni base to get into opportunities and what other benefits accrue to having engagement with alumni?

B (3:44)

Yeah, it's been an amazing lever, lever for us to be able to lean into as we think about ways to identify strong firms that we want to partner with going forward. So we have the Gabelli School of Business here, which has produced an amazing number of high flyers in the worlds of finance and investing and venture and all kinds of different industries. We also have on campus a student run venture fund, which is like an angel fund that the business school has supported and that allows our graduate students to train on how to identify angel invest investments going forward and hopefully sends them off into the world with that skill set. And then finally, as you said, we have a great alumni base that wants to help. They're out there doing the hard work that we're doing and they want to be part of the solution for students in the future. And so having them think through ways that they can be useful, whether it's making an introduction, whether it's something sending over a fund that they've recently invested in that they think could be a good fit for us, whether it's just having us dialogue with people in the field who can give us some ideas on which areas to focus on. All of those things are additive. They're kind of all pieces of the puzzle that can really help us enhance and improve what we're doing on a daily basis.

A (5:11)

You mentioned these 30 to 40 core positions. Tell me about, for lack of a better word, your relationship management with these fund managers. Tell me about the cadence, the style when you choose to lean into a manager. And how do you go about managing this portfolio of relationships?

B (5:32)

Like with any relationship, you have to invest into it. Right. So I was at an event yesterday where the speaker was talking about how just like with a marriage, you have to invest time and energy into it. You can't just say, okay, I'll see you in a year and then, you know, meet them again. So I think a lot of it, obviously, given how we all travel and we're all very busy with things going on in our day jobs, a lot of it is numerous touch points through different ways. So whether that's a phone call, an email, even a Webinar listening to their agm, going to their agm, whatever the form that it might take for that specific manager, we need to make sure that we're deploying our resources in a strategic way to be able to develop and strengthen that relationship. We don't want to be the person that finds out that someone's left the firm through an email blast or through a news article. That's kind of a worst case scenario with us. So regardless of the size of the firm, whether it's a very small firm or a very large firm, we want to make sure that we have a relationship with someone there who can think of us when an important development comes up. When they're deciding to start a new fund, whatever it might be, we want to make sure that there's actually a person on the other end of that phone call. So it can take a lot of different forms. For the larger firms, it's making sure that we're going to the right meetings with them, we're Talking to other LPs, we're spending time with the client service people, but also some of the underlying investors doing reference calls. All of those pieces of the puzzle. I think we flex into some of them for different types of firms. And so we've tried to be thoughtful about it because we can't do everything. There's only five of us total. We know that we can't go to every single AGM and we can't do every single call and we can't do. So we're trying to really identify which works best for us and for the manager. And then double click on those.

A (7:27)

You have a relatively small team managing a billion dollars. Are you always meeting with every GP or the top gps? Are you somehow allocating that to your staff? And what are the best practices that you've learned over your career on how to best break down this relationship management puzzle?

B (7:45)

One of the hardest things in coming into the CIO role, especially at a place like Fordham with a small team, is being able to delegate to the right people at the right time. So when I first started, I was the only person in the investment office at Fordham. They had never had a full fledged investment office before. And so I was doing everything. So I was meeting, I met all the managers on Zoom. I went to see the largest relationships. I did multiple calls, reference calls, all of that good stuff. But once my team got into place and got up to speed, that was no longer part of my portfolio that needed to be put, put down to or that needed to be transferred over to the team, because that was really their forte was double clicking and focusing on those relationships. My role at that point comes into a more big picture, strategic. Where would this manager potentially fit into our larger portfolio? How do we see that relationship growing over time? Is this something that we want to continue to be a part of in the next 10 years? You know, thinking through the implications of what a new relationship might mean to our total portfolio, where does that take assets away from in the future? Where we can't then put money to work in that asset class or in that space. So now it's a question of when do they need me to come in and meet with managers? Which managers are the most important for me to continue to invest time into those relationships? And when we're looking at new managers, when can I come in and be additive to the process as opposed to just a hurdle to create. Create more questions that aren't really relevant to the conversation.

A (9:29)

It might sound very woo, but energy management is a thing. Jeff Bezos talks about it. All the top CEOs talk about it. I think one of the reasons it is a thing is that for some reason human beings are really bad at once you're on a task, regardless of how small or how big, more or less takes the same amount of energy. So in other words, if you're opening up letters and writing emails to administrative people, by the time it's, you know, comes into the afternoon, you're not going to have a lot of energy left for these higher level things. And even though these higher level things are really important, you could argue they're not urgent. So they, they're always at the back of the line. So you have to kind of make the space. It's as much about what you don't do than what you do. Because what you don't do leads to what you have space to do.

B (10:17)

It's absolutely a great point. And it becomes difficult. We only have so much energy, mental energy, to be able to deal with all the tasks in our lives. And so you want to make sure that you're giving your best self to the most impactful ones that you have on your plate.

A (10:35)

Double click a little bit on your portfolio allocation today. And also how has that evolved since you became cio?

B (10:43)

So when I came into the university, the former CIO had been retired. He retired about a year before I joined. And so in the interim time, there was an OCIO firm that was managing the portfolio. When I came in, the portfolio was very heavily exposed to equities, both public and private, which was expected and needed at the same time, there was a large allocation to real estate and a large allocation to private credit. And so it was a very, it was a very high octane portfolio in that it didn't leave a lot of room for fixed income or capital call management from a cash perspective. One of the things that I did in conjunction with our consultant was work through transitioning the portfolio to a slightly lower level of private investments to improve the liquidity of the underlying investments, but also to preserve the growth potential of it. Long story short, this portfolio needs return, and we're not going to be able to get return if we don't emphasize an allocation to both public and private equities. And so we want to make sure that we're preserving the space for that investment while also managing strategically a portfolio of complementary investments, including absolute return, fixed income, and a very small amount of transitional cash. So it's a little bit more of a balanced portfolio now from a liquidity perspective, but continues to focus on trying to emphasize return on a risk adjusted basis.

A (12:40)

Something that's been extremely surprising to me is this rise of these semi liquid interval funds that are being used by institutional investors, even pension funds. It's always been kind of billed for the last decade as this retail or high net worth product. Do you see a place for semi liquid structures like Interrell funds in the Fordham portfolio? And if not, why not?

B (13:03)

I haven't had great luck with them, just the small exposure that I've had with them, either through the portfolios that I've directly managed or through client portfolios that I've advised on. I have found that they've never been able to give me the liquidity that I've needed at the right time time. So that doesn't mean that there's not a place for them. I've just not been able to strategically manage them in a successful way. And so I think that as this space continues to evolve, there will probably be more and more use for those types of strategies in an institutional portfolio. I just don't know if I'm there yet or if the strategies are there yet.

A (13:49)

I only know about interval funds theoretically, and I understand there's an infinite amount of iterations of it. But what I understand is typically it's about 5% liquidity per quarter over five years. Let's say that that's a base case. Are you saying that you're having trouble, you've had troubles in the past liquidating 5%, or is it that you need liquidity, you need 10 or 15% of the portfolio liquid. And at that time everyone's going to, going for the gates and you're limited to 5%.

B (14:17)

Yeah, it's more the latter. So I don't think that the manager is not fulfilling their obligations. It's more that when we've thought about trying to generate liquidity from those types of investments, the liquidity hasn't. Everyone's thinking about the same thing. So the liquidity hasn't really been as robust as we might like. And it's not that they're not fulfilling what they said they would do. It's more that the potential to redeem above and beyond is not really there in the times when we might need it. And part of that is us as far as liquidity management, because strategically we should be able to forecast out a little bit better. But I found like they're kind of the, the kind of devil in the middle. Right. Like you want liquidity, but it's not really liquid. But you also want return, but it's a little less return seeking because of that liquidity space. So it's sort of like a kind of tale of two cities. You're wanting to get something from it, but on both pieces you're going to have to give up a little bit. So I would kind of rather either go for one space, which is it's liquid, it's fully liquid and you get that, or it's illiquid and you know that going into it. And so don't even expect that you're going to get cash out of it because you're just not going to.

A (15:41)

And maybe a dumb question, but when everyone's trying to get liquidity, are these major crises like the global financial crisis where just people have liquidity constraints across the entire board, or is it more like today you could argue large buyout is out of favor and maybe quote, unquote, too much capital is going into that and you want to cycle into other assets. Why is there consensus on everybody going for their gates?

B (16:05)

Yeah, for us it's more the latter. We are very far from any sort of a crisis at the moment. But when we think about trying to really take this portfolio to the point where my team and I feel like we've really put our mark on it, we've really put funds in it that we believe strongly have a high chance of outperforming, that we feel are very aligned with what we're trying to do within the endowment and the university as a whole, that becomes difficult if you have a lot of capital locked up and when funds Continue to not give distributions, continue to create more and more extensions on their original term, create condenuation vehicles to try and keep those one off investments in the portfolio. It becomes very hard to see a path towards realization. Even though you know it's a 10 year fund and yes, maybe you'll have one or two extensions and we have some funds in this portfolio that I would have never guessed would be as long lived as they've been. And so understanding that tail risk as it relates to term, I'm almost sort of assuming that all of them are going to extend as long as they can because that's been our experience. They've just all been in the same sort of environment of no distributions or very low distributions. Capital continues to get called and then we find ourselves in this position where we don't see a way to generate cash out of this portfolio for many, many years. And so the next step is okay, so what are our options as it relates to a very less liquid investment, heavy endowment.

A (17:53)

And that's not just venture, that's also private equity. Yeah, and you mentioned continuation vehicles. I'm personally have invested personally but see I feel very bullish on the premise. The alignment is your default stance when you have a continuation vehicle opportunity in your portfolio. Are you a default yes or are you default no?

B (18:20)

I would like to be a default yes. I don't know if my investment committee would agree with me. Keep in mind that I've been here for three years. The investment committee is relatively new and so I think they're grappling with a lot of different priorities at the moment, including the big picture state of higher ed, which is very negative. I think when they see a continuation vehicle opportunity arise from an investment perspective, they may all want to say yes, from a big picture. This is where we are right now as it relates to the university and our investment strategy. They see, I think they sometimes will see that opportunity for liquidation and say this gives us cash and we need to recycle this cash back somewhere else. So it's a tough one I think for from a true investment philosophy. I'm a default yes. For all the reasons that you mentioned, alignment fees, the opportunity for a return stream. That's just going to be transformative. I'm a default Yes.

A (19:29)

I just fact checked myself. It does appear to be lower risk and higher returning which is rare for an asset class. Yeah, double clicking a little bit on this DPI issue. Is it an issue of liquidity or is it that I could promise you a 2x return but if it's over 20 years, you're going to get, you're going to get that in, let's say treasuries today. Is that the issue isn't an IRR issue that concerns you or is it just DPI and cash cash management and what really drives this kind of the second order pain of not having liquidity these funds?

B (20:08)

My instinct is to say cash management, but we don't factor cash coming back to us on a regular cadence with these types of investments in a way that we do with fixed income or something like that. When we instinctively think about it, we say it's the cash management aspect. But I think as we dig deeper into the DPI piece of it and we think about how to measure return in these types of investments, it's a much fuzzier space. And so I worry that we are seeing a multiple or we're seeing an IRR and we're just saying, oh yeah, yeah, that's great. But we're not factoring in all of the pieces that allow us to actually judge whether or not this investment has been a success over a number of years. There are a couple people on LinkedIn who I follow that talk a lot about the way that of course it's always marketing people and salespeople market some of these funds and they say, oh, you're getting a return of 30% expected return. Those numbers don't mean a lot unless you're putting them in a context of vintage year and IRR and DPI and all of those things. So this space in particular, we really feel like we have to dig very deeply into what are the components of that return that help us decide whether or not this has been a good investment. Of course it's always backward looking because we don't know how the fund is going to perform in the future. But we spent a lot of time on that recently, particularly this summer.

A (21:50)

Almost feels like alligators have gotten so cynical with IRR that they've almost overbalanced on moic. Of course, everyone says you can't eat ir, you could eat moic. But the counter to that I would say is inflation eats your moik. So MOIC is also needs to have context. The best data and best kind of standardization of data that I've seen is Professor Steve Kaplan at University of Chicago. He created this Kaplan Shore index that normalizes stock market versus private equity versus venture capital and all the different asset classes. And he does it. The reason I love it is he does it on DPI basis, which I see as ground truth, like Cash in, cash out is essentially ground truth. It's non gamble. Of course you can't do it for recent vintages, which is, which is complicated in general, but it seems to be at least the most unbiased and well thought out index that I'm aware of.

B (22:48)

Yeah, I very much appreciate academics and practitioners who really want to dig into this topic because it's such an easy thing to get lost like the devil is in the details. And so I wish there was an easy way to just like create a headline to give to my investment committee and say this is why the return is this. But it's just never that simple.

A (23:13)

So before you started out, your portfolio was quite active on the public side. You've chosen to go passive. Explain the rationale. And how do you pick your passive book? I know it's kind of a paradoxical question, but tell me about that.

B (23:30)

So the portfolio was invested in a lot of line items that ranged from very large firms doing active global equity to smaller firms doing very active US specific like US small cap equity. And I've spent a lot of time on this subject. I wrote a white paper on it when I was working in consulting. I've watched it over many, many years, the active versus passive debate. And again it comes down to kind of my lived experience. I have not had a great space, I have not had a great record in picking active long only managers. I have had good experiences in very specific asset classes. But when I look at broad strokes, like the broad big picture, US large cap equity managers, I have not had a good track record. And I personally don't think that there are a lot of managers who do it consistently well. So I would rather spend my time and my team's time looking on the private side, on the absolute return side, looking for active management in those spaces. Because I feel like those are areas where we have a good chance of picking a manager or managers that can do well. So after becoming oriented with the book and meeting all of the managers in it, I terminated virtually all of them. Not all of them, but virtually all of them to go to a much more commodity driven. And by commodity I mean very basic passive exposure, US and non US equity. The way we selected the passive manager is actually an interesting one. You know, obviously there are, as I said, it's basically a commodity now. So there are lots of great people out there doing this work. But one of the things we wanted to do, given that it is a relatively sizable piece of the book, was make sure that we were picking the right firm that was aligned with what we were trying to do and that we felt really good about. And so we reached out to a lot of other CIOs and investment teams and we identified a smaller passive provider that works with another Catholic institution that we know of, does just as well as anyone else, does it at a relatively competitive fee and is very much hands on with us. And so we've found that that's been a really good way for us to express what we want to do in the portfolio through a large position that otherwise would have just gone to a very large firm doing this all day long.

A (26:05)

And I'm very intrigued. You mentioned macro Long only is not is a place certainly when you put in the fees, it's very difficult to outperform and the fees could be very heavy. What are the niche products in the public markets before that you found that actually can outperform a passive strategy?

B (26:25)

So we've had good success in the emerging markets. We haven't done country specific funds. So like an India fund or a China fund or a Latam fund. Given the size of the portfolio, we just really don't feel that that's a good use of the way that we invest. So we're using bigger picture emerging market strategies and those have done relatively well. They're firms that we've known for a long time. We also have some active. We do have some active US equity, but it's relatively small relative to the rest of the book. And that's been a long standing relationship that the endowment has had for many years and has done very well. And then we also feel like there's a lot of opportunity in the developed non US space, but it's more of a manager by manager sort of area. So we've had some success identifying managers that we've worked with in the past. We haven't really pulled the trigger yet in that space, but I do feel like there is opportunity for an active manager, particularly in Europe. We feel like there's a lot of money on the table there that could be meaningful for our endowment. So we're thinking about that space.

A (27:40)

To use a sports analogy, a lot of allocators think of all their assets playing a different position, let's say akin to baseball team. What position do your assets play in your portfolio?

C (27:54)

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A (28:34)

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B (28:52)

So can I turn this around on you?

A (28:54)

Yeah.

B (28:55)

I'm going to use instead of a sports analogy, I thought about this. I'm going to use an orchestra. I was thinking about this today as I came into the office. I think when we think about a piece of music or an orchestra, everybody has a different role to play. But there are certain pieces that are certain instruments that you think of. You're going to hear them like the piano or the flute, the clarinet, like the melody pieces. And yet underlying that is sort of like, you know, there's basses and there's drums and there's percussion and there are pieces that they add to it. You could probably listen to a song without hearing them, but they're still there. And there are certain pieces where they actually are the main spotlight of the portfolio, of the song. And so I think about that as I think about our portfolio. So you've got kind of your engine of it, which is gonna be the public and the private equity piece of it, the venture piece, which you're hoping is gonna continually do well for you with the J curve. But basically they're gonna continue to be outperforming. Higher risk but higher return. And then you've got your fixed income, your cash management, your absolute return. They are kind of the drums, the bass, the lower wind instruments where they're like, you don't really always hear them but, but you know they're there and at certain points they're going to actually shine. And so we've seen that happen, we've seen those ballasts of the portfolio actually come through when we most need them, when equities are down. And so it's that like combination of all of those pieces coming together that creates that end result which is hopefully going to be a very nice sounding piece of music.

A (30:37)

I think the most underrated aspect of finance is behavioral finance. It's just been less focused. People see as a soft and maybe not not real, although the behavior is very real that results from it. And one of the things that I think about is a lot of what you would call the drums, the cash management, the fixed income. It ensures that you take the right behavior during very difficult times and it provides for liquidity and it makes sure that you're able to be in asset classes at the right time, which the market thinks is the wrong time. For example, like venture post 2001 venture. You know, I would argue in the last couple of years, anything after a big downturn, because all these, all these asset classes are supply and demand driven. So in theory, if there's less demand, the pricing is going to be lower and then you buy low, sell high, essentially, which is much, much harder to do than it sounds. And I think that's one of the things that's underrated. I think if you were a purely emotionless AI, you could maybe overweight more inequity in theory, if you didn't have to deal with your own emotions, if you didn't have stakeholders like investment committees, if you didn't have liquidity needs for your students, for your scholarships. In theory you could be more weighted, but in reality, having this kind of entire orchestra working in tandem, make sure that you allow to continue to compound your growth side of the portfolio.

B (32:06)

I totally agree with you. I think sometimes my team or our consultant maybe thinks that I'm crazy because I'm thinking about things like are we actually using the right fixed income fund? Are we doing as well as we can in cash management? Are we looking at fees? Enough fees is one of my hugest areas of focus. Because that drag, although it's small, it's like a tap dripping in your house, right? Like, you know, I had this happen to me. We had a sprinkler head in our backyard break, and I got a water bill that was literally about the size of our whole town's water bill. Everyone was like, oh my God, what did you do? We had no idea. I mean, it was happening all through the month and we had no idea. And so it's like those tiny drags on the portfolio that they're not sexy, they're not fun to talk about, they're not interesting, they're, you know, vanilla, but they're important, they make a difference.

A (33:03)

Oftentimes. Think about this advice that's not Memeable. That's not spreadable, but important.

B (33:08)

Yeah.

A (33:09)

And that, that's where a lot of the interesting concepts come in. Yeah, you really focus. Fordham really focuses. And you, as a cio, focus on fund threes and fund fours, which sounds great by Fund 3, but it's hyper, hyper competitive. How do you get into the top fund threes and fund fours by starting at that vintage?

B (33:33)

Yeah, I think we try and start to get to know people at Fund 2, so we start building that relationship earlier. We recognize that if a fund comes to us and says, oh, it's June 1st and our close is going to be September 30th, the chances of us participating in a fund like that is basically none. We need to get to know the team, the fund, its LPs, the investments, founders, all of the things that we can learn. That takes months of time, whether it's for me or for my team or whoever it is that's working on the potential investment. So we want to learn about them long before they're out in the market closing and raising and closing. That might mean we miss the fund three and then we end up in fund four, but we're okay with that. I think what we don't want to happen is for us to find out about a fund that we really, really like and then see that there's just no way that we can learn enough about it in time to be able to put it in front of, put it in the portfolio. So we're trying to do the legwork in advance, and that's not always easy because of our day jobs. But we're trying to identify those names in a bullpen so that when we're ready to put them out, we can say we've known them for the past year and a half. You know, we've been talking to them over many different periods. So that helps us to get us on that list of Fund 3 potential LPs. There are definitely going to be funds where we're just not going to be able to get up there. They're just, they'll get to know us, they'll like us, and they'll say, you know what, we're just full. We're not going to be able to make room for you. Part of us being at that billion dollar mark helps us in that space, in that we are not trying to come in and dictate terms. We're not trying to come in and say we need to put a commitment of 100 million in. We're not going to be that manager or that lp. But we do want to command some time of the underlying LPs. We've had instances where we've seen underlying GPS. I should say we've had instances where we've GPS that are like, we won't do. We're not able to do any calls with you. You'll have to read our materials. And that's just not. The chances of us ever doing that are very slim. Because if we're nobody, we're just another name on a spreadsheet. That's not a relationship.

A (35:58)

I want to double click on that because I've reached out to call it like the most difficult to access VC funds. And I always joke, like I always volunteer, like, I'll draft up a side letter that says, I will never talk to you, all I need is a K1 and I will be the easiest LP. And then I'll try to make introductions. You know, it's somewhat facetious, but also kind of serious. Obviously you're a fiduciary, it's not your own money, you're managing for the university. But is there never a time where just being in is good enough?

B (36:33)

I mean, it's a great question and we think about it a lot. I think just being in, our chances of being on that list of someone who could just be in are pretty slim already. I wish I could say that we've turned away a bunch of great investments because they refused to meet with us. We really haven't.

A (36:52)

It's a signal.

B (36:54)

Yeah, exactly. And so, you know, maybe we're not in the right room because if we were, then we would have all these wonderful opportunities that we would just say, well, maybe, maybe we'll bend on this. We have yet to be invited to those types of investments. Do I think that if we had those in front of us, would we be flexible? I'll always be flexible. I'll always be flexible. So if I can somehow recreate that relationship through other LP references, through meeting with people who've worked there, through meeting with founders who've dealt with the gp, that may get me to a place where I feel comfortable enough. I just haven't found it yet.

A (37:35)

So maybe you could double click on that. You mentioned you like to build a relationship from vintage 2 to vintage 3. What are the best practices to building a relationship before you invest?

B (37:48)

A lot of it, as crazy as this is, in our virtual AI computer driven world, a lot of it is meeting people in person, just creating that relationship again, it's going back to what I said earlier. It's about Investing the time and trying to figure out whether we're going to be a good fit for one another. We, of course, as the lp, want certain things. We want certain access, we want certain materials, we want certain insights. But we also want to create a symbiotic relationship in that we want them to understand. These are the students that you're managing money for. These are the students who we're trying to help get out into the world and become the next gps, to become the next titans of industry. All of those good things that we all want for our young people of the world. And so the best relationships that we've had with managers and with gps have been the ones who have really taken that to heart and have said, thank you for what you're doing. How can we help? Whether it's coming to a class, whether it's doing a webinar, whether it's zooming into a Portfolio Management 101 class, whether it's helping with internships, there's so many ways that a GP can be helpful, from very small things to very big things, like inviting us to their AGM or being willing to have a coffee with someone who is out in Silicon Valley for the summer, things like that, very micro level events. But they could be transformative for a student at Fordham. And those are the types of things that really resonate with us.

A (39:26)

I've been thinking about this, this whole concept of the signal that they don't want to meet with you being, being, being more, more of the effect than the cause. What other signals are you looking for? Because you're investing your time. That's one of the things in this podcast, is you're choosing what not to do and you're choosing also what to do and where to invest your time. So you have a portfolio of assets, but also a portfolio of time. How do you know to lean into certain GP relationships? And how do you know what are the early signals that there might be reciprocity there and they might value you.

B (39:58)

As a relationship, as a gp, your job is to identify the investments that you think are going to outperform the companies of the future that are going to make many, many millions of dollars for your underlying investors. And so we're not trying to tell you that you need to come and spend time with us, because that's very important to us. What's important to us is that you make money because that helps all of us. It helps me, it helps you, it helps the students, it helps everybody. That is your underlying stakeholders. So we want you to go out and do your job, which is invest at the same time, if you have the capacity to be able to devote some time to understanding what it is we do at Fordham and how we want to do it. And if you can be additive to that in some way, that's a pretty strong indication that we will likely be good partners. And we've seen it time and time again from very large firms to very small firms. And so all of them have different. Similar to the analogy we were talking about earlier, all of them have different pieces to play. Not everyone is going to be very hands on and take a Fordham student for the summer. That's not going to happen. But it might happen for one firm or maybe two firms. Another big firm might give us an internship program that somebody could apply to, and that's their way of doing it. Every piece of it has a different way that they can be additive. A really big firm may just make sure that our students get support for some kind of a program. We have one of the firms that we've been talking to did a, an orientation for new finance graduates and they invited our students and our students went and they really enjoyed it. So there are small things that for us may seem like, you know, not very impactful. But for the life of a student, particularly a Fordham student, many of whom are scholarship students, working a job, a work study job, potentially the first person in their family to go to college, a lot of those things are hard for them to navigate. And so having any piece of help with all of that is really additive for us.

A (42:06)

They also have their portfolio of money, but also time and then meeting with you. Them doing these things are not only valuable for you, they're also signals of the relationship. They're true skin the game.

B (42:19)

Yeah, I think that's right. We're looking for alignment just like everybody else. So obviously fees are alignment. You know, making sure that we were being rewarded for the fees that we're paying, that's really very important. It's the bottom line. But at the same time, we recognize that not everyone is going to be able to shoot the lights out of every fund every year. And so there are lots of ways that you can add value to our relationship.

A (42:52)

And we've had a lot of this conversation focus on EQ and behavioral things. Some IQ as well. Is a CIO position essentially half and half. Like, how would you divide up that finite 100% pie between what it takes to be a top decile cio?

B (43:12)

I mean, at the end of the day, it's performance, right? We Say this to our managers all the time. We may love you, you may be a great partner for us, but if you don't put up the numbers at the end of the day, that's why we pay you. At the same time, any smart investment committee, board, lp, anyone knows that performance goes through cycles. And so it's what you bring to the table when performance is challenging that really demonstrates true character. And so to be able to highlight and illustrate all of the things that you've been doing for that eventuality, because it's going to come to all of us, we're all going to have years of underperformance. Being able to demonstrate the value that you bring to me is kind of what I think about when I approach the job and come to the office every day. You know, a huge part of it is relationship management, a much bigger part of it now than it ever was for me, particularly as it relates to investing now. Investing is really my team's. That's their primary focus. My focus is making sure that investment message gets out there to the right people in the right way so that they understand and they can support the things that we're trying to do within the portfolio and for the endowment as a whole. A lot of that is donor management, alumni management, representing the university out there in the broader, in the broader universe, Talking with other CIOs, talking with other senior investment professionals at firms, you talking to gps that maybe someday we will get to the fund two with them or the fund three with them, building the framework so that my team can go in and do the heavy lifting of all right now we're going to do the due diligence on this manager because we really think that this is something special that we can really get behind from an investment perspective. And I never appreciated how much work I would have to do in explaining the portfolio to whether it's the president, the board, the investment committee, other GPs, understanding where they fit in the portfolio, that message, understanding that story, all of that is a much bigger part of my job now than it ever was before.

A (45:31)

It's A tough question, EQ versus IQ on CIOs, but if you keep on doubly clicking on it and you work with some assumptions, let's say that there's not that much alpha in the public and bond portfolio. Your alpha, your differentiation, is in the private portfolio. There becomes a second order question, which is, is being a great pri. Is it being a great endowment investment in the privates markets? More about access or picking? So I'm going to ask you that, is it, is it more about access or picking?

B (46:03)

I mean, it's a great question. I don't, in a true endowment universe with, you know, kind of following that, some variation of the endowment model that David Swensen created, I find it difficult to understand how you can do really well unless you're just a great market timer, how you can do really well if you can't pick the right funds. I just, it's really been, it's really been brought home to me over the last year about how differentiating being in the right vintages and the right funds means how impactful it can be on the endowment. And so we've seen it because we look at, you know, we've analyzed the past performance of our endowment before we all joined the firm, before we all joined the university, and really have just spent time, you know, seeing how those decisions that you make 10 years ago, how they are now impacting the portfolio. So I really think it's, it's a combination of both. I mean, it would be great. There are probably LPs that are so well known and so well regarded and so sought after that they kind of can fail up. There's no way that they can pick them. They're not going to end up in bad funds, mostly because they're going to get invited to the really, really sought after funds. And they probably have the assets to be able to do it. They've got space in the portfolio and they have the time to be able to devote to it because they have very large teams and they have the network. So they can reach out to other people who may know this GP and say, okay, is this really something that we want in our portfolio? Whereas we don't have any of that. Or maybe we have a little bit of it, but it's a very small scale. Right. Like, I have a network, but it's not the network that the Yale University Endowment office has. It's not the network that the Harvard Management Company has. So we have to recognize our limitations as a smaller institution, as a smaller investment team and work with what we have. We can't try to be all things to all people. There's no way we can be Harvard with the type of resources and the type of endowment that we have. So for us it's more about singles and doubles. Going back to your sports analogy, we wish and we hope that we have a couple of those home run grand slam type hitters in the portfolio. But for us, it's about slow and steady identifying firms that we believe have the tools in place to be able to identify the companies of the future that are going to do well and break out and, and really spending time making sure that we're, we're making those good decisions as it relates to each one of those funds has to play an important role.

A (48:47)

Taken to the most extreme, if you're the Yale Endowment, you don't have to worry about picking because you just have access. You just go into benchmark founders, Fund, Sequoia. So it's almost about like brand reputation management and keeping that reputation. On the other extreme, if you have, if you're a high net worth individual, you have to be the best in the world, almost a picking, you have to actually be better than yell ironically because you don't have the automatic kind of the automatic alpha. And then with you guys at a billion dollars, you have to also be good at picking. But you're also advantage in that you could go into smaller funds which Yale cannot go into. So you have to be kind of the giant and the call it the 500 million to $5 billion kind of peer set. So it's. You have to be the yell of that peer set in order to kind of get that automatic alpha.

B (49:40)

Yes. Yeah. And I think there are no hard and fast rules, right. Like if we can identify through our network or through our alumni base or through our investment committee, our board, if there is a fund that comes to us and it is a fun one and there's compelling opportunity there, we will think about it. We will do. And we have done a fund one. So it's not that there's a hard and fast red line. It's more that we have to have enough evidence to flex on. We'd rather do a fund two or a fund three.

A (50:16)

I know it's another term that gets highly overused first principles thinking. But if you think about it not as vintages but as parts of a thesis that needs to be de risked. If a fund fund one might have 30 positions, fund three might have 15 positions. You could argue not apples to apples, but you could argue the fund one in some ways has, is more de risked on certain factors, not on team and vintage and all those things. But so taking up two first principles approach can give you kind of a leg up versus versus your peers. Because a lot of peers are also saying we only do fund threes. These kind of try and true rules can keep you kind of going into hyper competitive situations.

B (50:57)

For sure. For sure. And we kind of assume that we're unlikely to be able to win in a Very hyper competitive situation. Maybe that's being pessimistic, but I try to temper expectations so that if we're surprised on the upside, that's a great thing. We'd rather enter a space where the GP really wants us to be an LP. They want us in their portfolio of LPs, they want us on our client list. They are not just like, you're going to get cut back, you're going to get 3 million. 3 million is not. It's not going to do anything for our portfolio. So it's really not worth the time to invest in that partnership if we're only going to get an allocation of 3 million.

A (51:37)

I'd call it probabilistic. Right. How do you design a portfolio strategy by default wins versus relying on luck, which I think could be a difficult strategy. What is one thing that you wish you knew when you went over into the endowment world when you first started? What's one piece of advice you would have came back and told yourself when you started?

B (52:01)

Yeah, it's a great question. I think it centers around the idea of you don't have to be right all the time, that idea. And it's ironic given that Fordham is a Jesuit university. And the Jesuit concept of discernment really resonates with me and with my team in that it focuses on the idea of trying to be open to being wrong and to really spend, truthfully spend the time listening to someone else's point of view and, and researching and looking into the fact that you might not be right. And so if you're not open to not being right, you're never really going to be able to truly express or truly reach a positive answer or a true answer. And I find that every day, right, whether it's my family, whether it's my relatives, whether it's my co workers, whether it's my boss, whether it's my committee, whoever it might be, the person giving me a coffee at Starbucks. That person's wrong and I'm right. That person's wrong and I'm right. I know I'm right. I'm right. But being able to allow yourself the possibility of not being right, it's hard when you. I think many of us right, we go to good schools, we go to great programs, we have great employers. We live in a world of hyper competitive. We're all great and we're all smart. And we are, we're all smart. We've all done the CFA and the Kaya and all of these great things. And, you know, we get asked to do great podcasts like this one. And so we're all, you know, we're kind of in a world of, you know, meritocracy, and we all think we're. When we are, we're all smart, Right? But I think being willing to say, you know what? I wasn't right about that, like, I have found that very important as I think about being willing to stick up for what I think is correct, but also being willing to listen to other people and what they have to say. And it's a tough one for me because I think, especially being a woman in this industry, you often kind of think you're being second guessed or you're second guessing yourself. And maybe I think I'm right, but I don't want to say it because I'm going to look obnoxious or aggressive. So being able to sort of let that person, that other person across the table from you explain where they're coming from, that has been really powerful for me, particularly as I deal with alums or donors at Fordham or vice presidents or whoever it might be that is like, well, we always do it this way. So, like, explain to me why we always do it this way. You know, let's get to a place where we can both be happy and comfortable. It may not be where I thought I'd get to, it may not be where you thought you'd get to, but there's probably somewhere in the middle that we can all kind of agree on. So spending time on that without doing myself a disservice, and that's the other piece of it, is making sure that you stick up for yourself and you're not constantly putting yourself down or thinking that you're always wrong. That's kind of the flip side of it, which I work with my team a lot on, because I think a lot of them instantly, especially when you're the cio, they think, oh, well, the CIO knows best. She knows what's right all the time. And that's definitely not the case.

A (55:21)

So many great things to unpack there. One is, I have a framework for this. I call it fine tuning my LLM. So part of the reason why I make these statements on the podcast is to be corrected. And I'm like, very excited, actually. I want to be corrected. I've somehow rewired my brain in that I get excited by it at this point. The second thing is there's an interesting nuance. I learned this from Tom Bilyeu. So he started a company. He's literally went from poverty sold a company for a billion dollars. Then he started. He now has, like, the top five podcasts in the world. He has a podcast called Impact Theory, and He's also lost 60 pounds. He's just, like, succeed in all these domains. And the nuance that I learned from him, which was really helpful, is that you want to listen to everybody, but you also don't want to essentially, like, flatter a junior person by taking what you know to be the wrong decision. There's, like, two types of people. There's people that, like, don't listen to people or people that, like, listen too much. And if you listen too much, especially, like, it's your role as a CIO or as any leader to listen. But ultimately it's your decision. It's your head and your decision. And the organization could only function in that manner. And almost like placating and doing something that you know or just feels wrong is also the opposite extreme. And balancing those could be extremely powerful.

B (56:41)

Yeah, absolutely. Definitely resonates with me, what you just said, Gita.

A (56:45)

This has been a pleasure. Look forward to sitting down. I know we're both in New York, so no excuses. And look forward to continuing the conversation live.

B (56:55)

Thank you so much, David. It's been great. Thanks for having me.

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