YouSaid · the spoken record

Alan Forman

lines on the record: 72
first: 2023-09-25
most recent: 2023-09-25
sittings or episodes: 1
sources: podcast

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“About investments. And I think having the passion for investing is critical to do well on it. And it's nice that you're not making a rich guy richer. You're making Yale richer and they're doing really good things with it. But my day-to-day job was all about investing. And the mission was important in the background, but it wasn't the primary reason of why I really enjoyed the job.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“It always comes down to the people and the collegiality. We felt like we were doing some groundbreaking stuff early on and really being a part of something that was really special. It was a close-knit group. We were working really hard. I think everyone really enjoyed what we were doing. It was a passion. We thought we were doing some really interesting things. And we were at the early stage of an industry that was developing. I'm not sure we knew it at the time, but we were doing some interesting stuff. Also, David was very focused on the mission of the organization and Yale specifically, whether it was basketball games or financial aid or working with students. And that was fantastic. But at the end of the day, we worked at the investments office and we were working 12 hours a day on investments. And I think one thing that gets a little lost is we're in the investment business and we're spending all of our time thinking.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“To be persuasive and to be concise and to say what you mean in as few words as possible and have it held up to scrutiny. And that way he was a great teacher.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, officially, it didn't change at all. I think David's level of gravitas in the committees was greater. But other than that, the work never changed. David was a big believer in the process. And he was a big believer in not changing the process. Even though we were better at doing it in 2002 than 1992, we needed to go through the process and be rigorous. And when you put something in writing, it exposed the flaws or how good it was. You were forced to do that, even though you probably weren't learning a lot from the writing process, just the act of putting it on paper was really important. One thing I give David total credit for is he taught me how to write. And writing is super important. I went to college. I went to business school, and I learned how to write at the Yale Investments Office. To really write.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“Early on, Dave was very involved, maybe even in first meetings in many cases, later on less involved, and we would do most of our homework up front and then bring the manager in to meet David and Dean Takahashi and make sure that they were on board. And then we would write up a memo for our investment committee, as you might imagine, what David recommended to the committee more often than not was approved. So, I mean, David was the big hurdle that we had to get over internally. He was particularly early on very engaged. I mean, he would go on the property tours and things like that.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“Comes from a lot of different sources, and we actually did a big deal with the Kimpton Hotel group as an example. We had met with Bill Kimpton years before and just never were able to make a deal. And then when things got a lot cheaper, Bill had actually passed away, but the company was still around and we spent some time reintroducing ourselves and understanding what the plan is, what they want to do. But it's a lot of rabbit holes, a lot of just meeting a lot of people. The good news is at Yale The door is open. So you can meet with anybody. They take your call. That was the amazing thing. I could be 25 years old not knowing a thing about real estate. And you call the CEO of a company and you said you worked at the Yale Endowment and the Dwarf almost instantaneously opened up. At the time, I didn't fully probably appreciate how nice that was, but it was a great calling card that we had that we could use.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, in a situation like hotels coming out of 9 11, how do you turn over rocks and trying to understand who the best hotel operators are that you might be able to put into the type of structure that you like investing”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“One thing I learned from David was there are certain things that managers can't respond to in a way that would change the outcome, and if you could come up with examples where there's nothing they can do about what their structure is, then you have an easy way out. I tried to give managers real feedback at times. Worry that the LP community sometimes doesn't give enough direct feedback to help these people do their job better. I think that's important to help the business develop. People are doing something wrong. You can say no in a lot of different ways. Some ways are helpful and some ways are not that helpful.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“The hardest thing the young people had was getting to know. A lot of the young people were 22, 24 years old. There's some 50-year-old real estate guy on the phone who's very good and very persuasive. And I would tell the young people, you need to figure out your way to get to know quicker because that's your job without offending somebody who's probably old enough to be your father or mother. And I would encourage them and I would walk through examples of how they can do it because managers were very sophisticated about pushing back and responding and they had to learn how to think on their feet. The original ones you would obviously do it in front of them and you'd show them your way. But everyone needed to develop their own style of how they were going to interact with people. And one thing I worry about in today's world, there's less of that. What's more over email and less the human.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“People, but I just felt like you never knew where the next great deal was going to come from. Warren the greatest marketers of themselves, the business wasn't as sophisticated in terms of presentations. You had to look through some of the noise to find the kernel could potentially create a great investment company there because there was a placement agents and all this stuff. But we spent a lot of time just meeting with a lot of people and filtering. I mean, the one good thing is you get better at it. You get a lot better, a lot faster. You sort of look at a pitch book in a different way after 10 years of looking at it and you get a sense, is this something in the good pile or the bad pile pretty quickly, you begin to figure out how to navigate that and you're hopefully have a team around you that is also getting good at that and you let the younger people figure out how they're going to do that. And that was important for them to figure out how to navigate that process early on.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“Some of it was relationships, some of it was we wanted to gain exposure to certain property types. So we might do deeper dives in certain areas. So after 9-11, we thought it would probably be a good time to think about hotels. And we did broad survey of the hotel business to find people that we thought might fit what we're looking for. Sometimes you'd go down paths and there was nobody that fit the bill. Sometimes there weren't a lot of players in certain property types or maybe there just weren't enough that made the grade. For whatever reason, we didn't get in early enough to make it happen. So there's a lot of luck that also goes along with it to find the right person at the right time. The one thing I always did, I took every call. My pride at the end of the day was I returned every phone call. Usually before I went home that night. I always felt I really like this business, so I like talking to a lot of people.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“You definitely want people that are driven and working really hard, but you also want them to have some balance in their life and have the right mindset to do this for decades and trying to find that right balance was hard. And some people change too, as they have success, they're stepping up and get hungry or others step back a little bit. So we really try to understand what drives them and is that the type of person that we want to be partners with for a long period of time. It's more art than science.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“Obviously, we think they're really smart people. They're very driven, sometimes too driven. We weren't the cheapest money out there. There was doing good with the money, what Yale would do with the proceeds and things like that. There was a higher calling than just making money, although I think a large part of it was making money. It wasn't the only thing. And creating something that was enduring, that would last a long time and that they could use to grow their platform. The other thing I would say is we really look for people that could add value. We thought real estate was a pretty inefficient market and we were looking for people that weren't just buying the asset class. There would have to be an ability to create some alpha there.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“And who understood the issues that we cared about, obviously there were structuring issues early in the day, the legal side of it was much more time intensive. And in most cases, Yale was doing the lion's share of the legal work on behalf of the investor group. When you're negotiating the small legal terms, you're getting a sense of what the partner is like and how they think about things, what they care about, what they don't care about, how available they are, how hard are they working, how responsive are they? All those things are sort of indications of what they will be like. And you try to piece together a puzzle that is never complete. And there's always a sinking feeling right before you close a deal. Because we were backing pretty early stage people that were, for the most part, unproven. There wasn't as much of a track record as you'd.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“Lot of time than doing the work at our desk and doing a lot of interaction with the manager. Sometimes I was just over the phone. Obviously today would be more Zoom related. You would learn a lot from all the different aspects of that. There are different things to learn at different times. We'd have a pretty good sense after we toured usets whether these people have the general bones of what we're looking for in terms of a partner and then we would try to find tune it. We found that the due diligence calls, which is very common underwriting venture firms, wasn't as helpful in the real estate business. It's a less collegial business on a venture deal, two venture firms can be on the board of a company and they're working together toward the same goal. You got the real estate deal and the other guy didn't. We still did a lot of calls, but we tried to understand the dynamic of what people were saying and why.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“I'd say we'd have two initial meetings trying to understand how they think, how they do what they do, what's the culture of the team and the level of drive and all those intangible things to figure out whether this is somebody that Yale wants to be partners with for a long period of time. And then we probably go out on the field and spend a solid twenty four hours with the persuasive play of dinner, tour assets, maybe two days of asset tours, depending on how close together the assets were. One thing that's nice about real estate is you got to spend a lot of time in the field, kicking the tire, seeing assets, meeting the people, real estate people like to talk a lot. So there's a lot of sharing, and you really get to know somebody when you're spending six, eight, ten hours in a car driving around looking at assets. And it tells you not just about their investment acumen, but also who they are as people. And then we'd come back and we'd probably spend a”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“It was stepping way back trying to understand how the people ended up where they are at that meeting, what's their education, what's their history, how the partners came together, why are they doing this? Where do they want to go from there? It was less about the deal. It was more trying to understand the people and really trying to understand what makes them tick. Because I think at the end of the day, we're all going to have good and bad things happen from time to time and you want to understand how people are going to respond under trying circumstances. So we try to spend as much time trying to understand that.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“Do you want me in this meeting? He goes, Of course, you're on the team. It was a very sensitive issue that was being addressed at the time. And I was probably the youngest person in the room by decades. It taught me a lesson about how to keep people engaged and how to make it not just collegial, but you're part of the team and you're part of the group. And that's for good and bad and for sensitive and not sensitive.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“We had asked that class specialist, but there was also this openness to knowing what was going on in the rest of the office. So there were staff meetings and you would learn about what's going on in absolute return and domestic equity and venture capital. And there were managers coming in and the office was very open and collegial about meeting with all those different managers. You had the best of both worlds. You got to see the day-to-day in your asset class and you also got to see the bigger picture day-to-day in the asset class was a lot of meetings. Some of the dynamics in the office, young people were included in everything and there was no segregation of, oh, this is a high level meeting. So everyone got to see everything and there was one example I remember I was in my mid twenties and there was this controversial issue with this one manager and we were going to see them and I said to David.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“Today Yale was a direct real estate owner of assets. When I joined, I was put in charge of managing all those assets, and David and Ellen and Donna were pursuing this new model called private equity real estate, and I got the real estate training on the direct asset set, but also got exposure on the ground floor in the private equity real estate business.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“Alan, great to see you. Good to be here. Why don't you take me back after 30-something years of working at Yale, how you got in the office in the first place? I was at NYU Business School and I wanted to get into the real estate business. It was 1990, very rough time in the real estate business. There was a job posting to work at the Yale Endowment, which was something that most people didn't know much about. Endowment management didn't exist. I interviewed for the job and it took a few months to get through the process. And I picked up and moved to New Haven and was working for some guy named David Swenson that nobody had ever heard of before. The office was not that much bigger than this conference room I'm sitting in now. I was working for Ellen Schumann and Donna Dean and we started to figure out how to invest Yale's money in real estate.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source
“I guessed on today's show is Alan Foreman, the former director of real estate at the Yale Investment Office, where he spent thirty one and a half years before retiring last year. For three decades, Alan was one of the core four at Yale, alongside David Swenson, Dean Takahashi, and Tim Sullivan. In his next chapter, he hung a shingle named Blue Orchard Capital and works with real estate managers to help them understand best practices in the industry. In our conversation, Alan shares rare insight into Yale's investment operation and in particular highlights the consistent and essential importance of people and alignment in Yale's strategy. We walk through how he applied the process to the real estate asset class and how he's looking to help the next generation of great real estate managers in his post-Yale endeavors.”
2023-09-25 · Capital Allocators · Alan Forman – Yale Endowment Real Estate (EP.340) · IDENTIFIED FROM THE TRANSCRIPT · source