How have you been a change agent at
your organization? What have you done
that you’re particularly proud of?
Over the last three years, the portfolio had a
complete overhaul. The ACIO left to take a
CIO position, so I ended up being the right
hand of our CIO. My risk and economic analysis had always been a factor in allocation, but
now I was also driving the derivatives portfolio. During this time, I structured more
upside into the equity portfolio while adding various hedges, added swaps which have
added significant Alpha, and diversified our
counterparties. I took an active role in negotiating MCA agreements, which led to better
fees and co-investment opportunities. Derivatives are a cost-effective way to gain Beta
exposure and manage risk. MCA agreements
allow us to focus on idiosyncratic risk. These
two pillars embody our investment philosophy, which I have helped to build.
What is the asset class or investment
that keeps you up at night, and why?
We have structured our exposure to market
risk well. Our co-investments which often
take an extended amount of time to play out
and are event-driven can be a bumpy ride.
With that said, this is why we are highly selective with who becomes an MCA partner.
What methodologies have you adopted
within your institution?
When I started, there really weren’t any
internal risk measurements. I used both
parametric and distribution-free methods
in various ways to measure market risk, factor risk, and tail risk, among others. This
approach allowed us to expedite the rebuild.
Now, we are mostly passive in public equities,
which Bloomberg tracks nicely, and we have
increased our rate of co-investments. Risk
management has changed substantially, yet
again, to underwriting individual deals.
Where do you fall in the passive vs.
Both are important. I try not to overpay for
false Alpha or Beta in disguise.
What are the changes you’d like to see
the institutional investing community
make in 10 years?
The alternative investment industry has
grown tremendously. They have been great
at capturing fees and delivering low, uncorrelated returns. They serviced a demand for
their product, and then received the backlash
as clients realized that true Alpha is fleeting, difficult, costly, and in limited supply.
I would like to see the investors seek more
bespoke solutions and order off the menu.
Many Alpha-focused funds are over-diversi-fied, which can be suboptimal.
Who is a manager you don’t currently
work with whose brain you’d like to pick?
Renaissance Technology, but my mind may
be too fragile to handle it.
Ideally, where would that meeting take
Mars… Seriously, it’s time to accelerate the
What is the software investment tool
that helps you most?
Initially, SAS. I then used it to vet Risk Plus
Senior Investment Officer, Texas Tech University
System (Lubbock, TX)
The private debt portfolio is outperforming the
Barclays Global Aggregate by 700–1000 basis
points over any period the last five years.
(a PerTrac module created by Finanalytica),
which is easier to use. Now, I mostly use
Bloomberg and manually track any co-investments.
What would improve the relationship
between you and managers?
We have a high level of transparency with
our MCA managers. This is in stark contrast
to some of the legacy private asset managers.
There is already enough information asymmetry without paying 2 and 20 for more of it.
Why did you choose your current path?
I had a difficult time settling on a career
path. This one is multi-faceted, dynamic,
and challenging. It allows me to use my
entire toolbox. Using it to benefit the endowment is extremely gratifying.