YouSaid · the spoken record

Anne Martin

lines on the record: 70
first: 2019-12-02
most recent: 2019-12-02
sittings or episodes: 1
sources: podcast

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“My mother used to say, Tomorrow is another day, wouldn't you have a really bad day? It'll all look better in the morning. And that is for sure and something we should all remember. Sometimes we get really worried and just going to bed and sleeping on it will make you feel a lot better. My mother used to have a lot of sayings, you know, the two wrongs don't make a right. It'll all look better in the morning.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“I have no idea No, I'm serious. I looked at this one and I was just like. Don't know. Either I'm one of those people I'm such a forward thinker and not a backward thinker that I can't even remember. Like I'm sure I made tons of mistakes, but they all seem.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“But she was just so resilient. Like she just kept fighting her whole life for the rights of people that were forgotten. So she's just a real inspiration to me.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“So my father passed away when I was in college. So that's early when you're 18 and you lose your dad. You can hardly remember what he taught you before that. But my mother was a huge role model. My mother was an amazing person. She graduated from Smith in 1954, Magna Cum Latte in math and went to work for IBM, if you can believe it. Once she married my dad and got pregnant, that was it because you weren't allowed to work after that. So she was a stay-at-home mom, but always very ambitious. And she was super resilient. So when I was in high school She ran for the Congress of the United States for the Democratic Farm and Labor Party in Minnesota. So I remember traveling around on farms with her and talking to these farmers. And she was just such a ardent believer in social justice and fairness and helping the little person. She was just amazing and she lost in the caucus or in the primary to somebody.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“Not really only when somebody asks about some esoteric thing that I really don't care about. I feel like, oh, all the smart people are talking about like this last week, this whole repo mess. We don't have any of that in our portfolio. It got solved really quick. I didn't spend a lot of time reading about that. I don't care.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, there's another one that I don't have a periodical or anything I read on a regular basis. It's pretty eclectic. I mean, I try to hit pitchbook in the morning because venture is such a dynamic area. Sometimes I'll learn that something left our portfolio or entered our portfolio first through that. And I read the... The New York Times blurb that comes across my email. But other than that, I really don't have anything I read on a regular basis. It's much more books than it is news. I'm not a big believer that I really need to read the news every day. It's kind of disjording.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, you know what really bothers me in the investment world is when people talk about groceries versus net returns. That's a pet peeve. We can't spend gross returns.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't watch TV. So that frees up a lot of time. I read on plane flights. So I never watch movies on plane flights very rarely. That provides a lot of time, if you saw my travel schedule. So I love to read. I do the New York Times Crossword puzzle every day. And I am a fanatic exerciser. I ride my bicycles, all six of them frequently.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“It is a lot, so I've only read like 24 this year, so I'm way behind. Last year I managed to exceed the 50 by a good number.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“Have influenced my thinking on a couple things. I mean, we bring all of our manager approvals to them, and we don't want them to get obviously bogged down in manager approvals, but sometimes they have been very good at saying, wow, this looks risky. Are you sure this is the sizing you want? And we've downsized a couple things because of the good dialogue we've had with them. And those have turned out to be the right decisions. So on the asset allocation, they're really the ones that are setting the risk parameters for the endowment. And so I think there's really a lot of healthy discussion around equity exposure. We've had a lot of discussions around credit because credit is a growing part of the investment toolkit. And there's lots of flavors out there. And we've done a couple things there that have worked out. It's always a trade-off, right? You're trading off long-term equity return for what looks like an appealing return of capital along the way, but gets you very low multiples.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, that was one of the things I had to change when I came in because the governance used to be the portfolio subcommittee reported to the finance committee, which reported to the board. So clearly legacy structure left over from the time that the treasurer was probably picking out bonds and stocks for the portfolio. So we disbanded that and we started an investment committee. And it's, I think it's eight people now, and we meet four times a year, and they are We have one parent on the committee. It's mostly trustees, but we do have places for advisory members. Those happen to be mostly alums over the time too. But it's a good group.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“We try to cultivate a lot of intellectual curiosity in the office. We try to, when we meet with managers and we're really trying to hard to have a dialogue, we like to be prepared. We kind of feel like if we leave a meeting, they didn't think, oh, gosh, she really made me think about that harder. Oh, that's a new perspective where I, oh, I really learned something about how somebody else is doing stuff. If we don't add something in the meeting, We kind of feel like we failed. So, I think our competitive edge is Maybe everybody does this, but I really do think we're very intellectually engaged on the subjects our managers care about. And then Wesleyan. I mean, I think Wesleyan's an amazing school. And part of my job is to sell managers on why you want to help Wesleyan. And it's an incredible place. It's been around since 1831. We have”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it's funny, we had an off-site last year and we talked about this very question what is our edge? And everybody had a slightly different answer. It was really interesting. First thing is we have... As you know, endowments and foundations are super special because we have the longest time horizon of any investor. So we can be super patient. So that's just an edge for our class of investor. I think for us in particular our people, I think”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“Say there's things like everybody talks about quant funds. I don't even know what that means, but what we'll do is something like that is say, okay, the next year, let's do this project and let's go meet with some of these funds. Let's go meet with people who run these funds. Let's go meet with people who invest with these funds. Let's try to understand. Is there really, A, is there something different here that is compelling? And B, if it's not compelling to us, how will it affect what's already in our portfolio? Does it have ramifications for fundamental investing that we should understand? So we'll put something like that on the project list and maybe something will come out of it. It's not something we go and chase.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I think it's really easy to get mesmerized by the next shiny object, and I think we try our best to resist that One of the ways we do that is we don't go to any conferences. Another way we do that is we don't meet with any firms that are trying to sell us factor risk or smart beta or any of those things. And maybe those things are great. But we still ultimately believe this is about fundamentals and fundamental investing. And so understanding a company, understanding the management team, understanding the capital allocation decisions, understanding the industry structure, the competitive factors, all that stuff matters a ton. Don't know how to get conviction in something that's. That's machine based. So we've really resisted the shiny object thing.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“As you think of your portfolio as a whole, and now that it's settled in after 10 years, There's a lot of people are always kind of looking for the next thing, whether it's analyzing based on risk factors these days or a new asset class. How have you thought about balancing kind of going deeper into what you have with broader into what the next thing is?”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“sell a business that maybe people think you shouldn't be selling. You can do all the things that are economically the right thing with a five to ten year horizon but would cause your quarterly earnings to go down. I mean, oftentimes in these buy-up funds, what we see is that the EBITDA is down for the first two or three years because they're really investing in these companies. That doesn't work very well in the public markets, right?”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's really hard. I guess two things. One is we do think of it relative to public equities. So if somebody's paying 11 times for an asset. Look at the public markets, somebody may be paying 18 times for that asset, so still on a relative basis, maybe you have a spread there. I think if you look at the numbers, the spreads are really, really narrowed as a whole. So you really have to look at the individual asset. And then I think you've got to do a ton of work on the underwriting. Like, what are you really going to do with this asset? And, you know, we still do find managers amazingly who have a different, they bring something to the table. They have a different angle. They see something in an asset that they can do or they've seen two other assets along the way that they think can merge here and it can really change the properties of those businesses. And so I still think that the governance model of private equity is superior because the owner of these assets can do those things that maybe they couldn't do in the public market. So you can merge those three companies together. You can cut people. You can end a business that doesn't make sense.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, you mentioned middle market buyouts and you mentioned earlier that in a lot of situations you're a price taker. How do you think about Evaluating a private equity fund today, it could be mid-market or large fund, knowing that the pricing environment's higher, knowing the fees are higher.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think one thing we've done is gotten rid of the target for oil and gas, which doesn't mean we can't do it. We can. And we have some managers we really like that we think hit the hurdle, but they have to compete against the rest of the portfolio. And they have to go into the private asset class. And so you are really making the trade-off of do I want to be in this middle market buyout fund, which has its own risks versus an oil and gas fund that has these particular things and that forces you to look harder at like, what is the expected rate of return? What is the volatility around that expected rate of return out in the future? So it doesn't mean we won't do it, but we don't want to be the frog in the boiling water and not know we're getting burned because we have this target. We think we have to have a frog that sits in this pot.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“These reserves could lose a lot of value. When you think about some of these managers, if you're investing in assets for 15 years, 15-year fund and you're holding the underlying asset at the end of 15 years, they're replacing reserves along the way. But then you get to the end of 15 years, somebody's going to buy that asset from them based on the next 15 years. So as you get closer to the end of the fund, that terminal value matters. And yet the terminal values is way out in the future. Feels like that uncertainty, if you will. I mean, we try to invest for 10 or 15 years, but we like the cone of uncertainty sort of narrow. And it feels like the cone of uncertainty 15 years out in this particular asset class has widened.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“So much volatility around the commodity price, you have all this factor risk in the commodity price. So even your best operators, can they really overcome a 60% commodity price fall? It's just really difficult. And I think we've had managers have done really well, but we've also had managers that have done very poorly. I think a lot of people have learned this lesson through the 2014 commodity price plummets that leverages pretty ugly when you have that much volatility in your operating business. So for all those reasons, but probably more importantly, if you look out, I'm not saying five years or even ten years, but if you look out 30 years, we wonder a lot about tail risk out there of rerating these assets, right? Because the longer we go without doing anything about climate change, the worse potential shift we could have right away. And if that happens.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“One of the things we've been thinking about really hard is the oil and gas world. And this is, it's an area that I came from. So obviously I've lived in that world for six years at Yale, and there are some great people there. And we still depend on fossil fuels. And yet, if you look at the industry as a whole, it's pretty structurally ugly, right? Because it's commodity business. There's all sorts of ways to destroy capital allocation decisions are hugely important.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“People aren't clear about what they're doing. They can't really articulate it for you. If it's a complex area, they can't put it in terms that you understand. Much jargon. Math, can't do math in their heads. Like”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I say one of the things I really learned from David is like the quality of the people. I don't know. He seemed to have a sixth sense for are these people you want to work with or not? To pretend I was wearing a wristband once in a while. What would David do? And somehow I can't even explain exactly what it is, but sometimes you're sitting in a meeting and you're like, would David ever invest with this person? You're like, no. Okay, that probably says I should. And what's an example of...”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it does, for sure. But on the other hand, we're less prone to making mistakes. Which are super costly. That's the best way to make money. Don't lose money. I think the more, if we look at 700 venture firms, we're pretty sure they won't all work out, but we're pretty sure we know who the top 20 are that we want to be with. I don't know that we can do that with litigation firms. I don't really know. We're always afraid of the risks that we can't perceive. So the more experience that you have in an area. The better from that standpoint, although the reason we probably have experience in it is because we're doing it a lot and everybody else is doing a lot and the returns may be driven down. Have a high confidence 12% return than a really not high confidence 16% return or 17% return?”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“There's a lot of stuff that we just said no at the beginning because we just have limited resources. So right off the bat, we said, look, we're not going to do any mining. We're not going to do any real estate outside of the US. We're not going to go to these parts of the world. It doesn't matter if that's in the index. We're just not doing it. But then when we come across something like reinsurance or Litigation funds, sort of like, is the return from this going to be so differentiated that we're willing to go and divert our resources to go learn about litigation funds and how is that going to help us in the rest of our portfolio where nobody's doing this? So it's appealing because it's different and it's supposedly beta zero. But on the other hand, I don't know that it's really going to help build our knowledge base in the endowment.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“You have six people You have a great capital base where $20 million investment. We've done a couple things that are a little bit off the beaten track that have worked out. But the other thing I think about with doing Is this going to compound our knowledge over time, or is this a one off where we're going to spend a lot of time underwriting this one little orphan thing? And it won't have any bearing on the rest of the portfolio. I think when you're all so small, you have to really think about that. Like, how are we going to compound knowledge? The people and in our investment experience.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“Paradox of the small endowment is that we have the capital base to do really interesting things, but we don't have the people.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“Real estate will be able to say this real estate manager is really interesting, but it's more like venture because we're really, we're not going to get any payout on the way. We're really depending on appreciation of the asset at the end versus this one this looks more like fixed income. We can really think about risk and return at the manager level. So that's been helpful. Over time, who knows? I mean, I can see why people move to the specialist model. If you have a lot of money to put to work. You want to invest with entrepreneurial firms, you need more of them. And so you really need to know what's going on, who's spinning out all the time. You need to be there day one. Specialist model works better that way.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, we're all generalists right now, even though people bring expertise in certain things. Anybody in the office, if you said, tell me about this real estate manager would be able to articulate the strategy of any manager in our portfolio. We've been trying hard to keep the manager count down. I think we're somewhere around 60 managers across the entire endowment, and there are five of us. So it's reasonable. We go through every manager together. And so when we have to re-underwrite something, there's a big discussion. Having said that, I've seen both the specialist model where people are in charge of an asset class and the generalist model now. And I think they both have pros and cons. They both have things that you lose along the way and things that you gain. I think what's great about the generalist model is everybody thinks about the comparative risk return of any investment. And that's super helpful. So somebody looking at”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“With experience. I look for those complementary skills. I also looked for somebody in emerging markets because I had no someone with China connections. So we hired somebody into that position. And then over time, we've hired more junior people and they have Kind of come up through the ranks, but it's hard because we're on campus in Middletown. So our analyst program, we don't expect people to stay around forever we think it's kind of a three-year program and then people go off to business school or they'll move to New York or something.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, when I first started, I felt like, okay, what am I bringing to the table? I have private equity experience, public market experience from my banking days, natural resources experience. Where am I really short? Absolute return, hedge funds, which I'd never spent any time with, real estate. So I was like, okay, as we hired, let's try to hire people that bring some knowledge air. And one of the first guys I hired, who's now at Edge Hell Partners had come from a consulting firm and those were the two areas that he focused on. So I felt really lucky. He was with us for three years before moving on. And he taught me a lot. And then the second thing is you just spent time in those areas. So I really tried to hire originally, you know, in this small shop like us, I couldn't do what Yale does so well, which is hire the undergrad, keep them around for five years. Like, I needed people now. So I had really no choice but to hire people.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“We ask why are you doing this? And we ask when we pick up the phone and do due diligence calls. You ask, why do you think this person is doing it? They made a ton of money at their startup. And I think part of it is just. It's less about trying to figure out why people are doing it, but once in a while you come across the person who, for some reason in the meeting, you just know they're super hungry and they're not doing it for the money. This is a passion. They love working with entrepreneurs. They love innovation. If you have enough dialogue in the meetings that you have that comes out.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“Exposure and everything's working right now. You really have to think about what is going to happen when the tide goes out, how big a problem is this portfolio, how willing are they going to be to work through it, how high quality is this portfolio that you can actually survive a downturn? All that stuff really matters.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“Venture has had this unbelievable tide rising that has made all boats rise. And we think about a lot is when the tide goes out, which it will inevitably, who is doing this for the right reasons and who is just who's going to be left standing and who's going to say this is too hard. Because it is really hard. I mean, it's hard when times are good. It's really hard when times are bad. And maybe this is one of the things that I learned in private equity because I joined, my firm was focused on internet and consumer, mostly consumer, but I joined to look at where internet meets consumer. And I joined them in September of 1999. So every investment we made went through a very difficult time in the next three years while I was there. And so I saw a lot of pain. So I know how bad it can be at the bottom of the market. So you're not investing with people for like, oh, I just want.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“That you're going to be on the third fund before you really even know. And that gets back to like, how are you going to size if you do decide to do some emerging manager? How do you size it so that you're not when you're three funds deep, you haven't committed 1% of the endowment to this manager who's unproven. So you really have to think about sizing if you're going to do it. So I'd say it's not impossible. We have taken a few bets there, but we're in a period of time where”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I think it's really hard. Again, here's a place where we've done some experimenting and tried to figure out how good can we be at identifying those emerging managers in venture. And one of the issues that you have there, there's two things that we've really wrestled with. One is there's a lot of them. If you look at my inbox, inboxes often go through these phases where you'll see, I remember there was a time when I was at Yale and I would get like 10 funds that were in agricultural businesses every day. I was like, I didn't even know there were this many funds doing this. But the theme du jour is definitely the small under $100 million venture fund. And there's just so many of them. They could be great. But we only are five people and we have to manage the entire portfolio. And so sifting through that to try to find the gem is really, really hard. I think the other thing that's very hard is because Venture has such a long feedback.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I mean, I think we're willing to pick up the phone and call people and try to figure out are we missing something here, particularly if we know other people have looked in past. But those answers can really vary. It could be like you're looking at a venture capitalist and you think it's great and you can't figure out why isn't so and so investing. You call them up and they're like, oh my God, I'm so over my skis and venture capital. I can't make another investment. So there are other reasons that people might not be side by side with you. But you do want to make sure.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it's really a balancing act, right? Because you don't want to be overly influenced by the thinking of other people. They could be right, but it could still be a poor fit for you. For all sorts of reasons. But on the other hand, if you find somebody you like and no other great investors are investing alongside you, I think you have to ask yourself, like, am I that much smarter than all these people at Yale who have been doing this for 20 years or at Princeton or at Stanford? Like, why aren't they here side by side with me or Williams or, you know, Boden? And then you really better go back to the drawing board and figure out like why you love this manager and nobody else has. And maybe you're right, but you better triple-check your work in those situations.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“Emerging is just hard, right? Because it's hard to find great managers in emerging markets. The return on time is so terrible. We've been going to China for years and years. We've been going to India. There was a period of time, four years or five years we went to Brazil a ton, and we ended up with no managers there. So it's just been a slog. I think that today we're seeing the quality of the manager in China, for example, we're seeing some really interesting managers, but if you go back eight years ago, I think they were fewer and farther between and we settled a couple times to get the exposure and to get some learning under our belt. And, you know, in retrospect, those didn't work out. I mean, it didn't obviously kill our returns. And maybe you have to take some punches to figure it out.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“Probably always will. But I think one of the things you have to figure out over time is what are you good at as a team? And I think we've made great choices in private equity and venture. Those have both really worked for us. I think we've been really good in real estate too. We've done a nice job on domestic equity. I feel like we've taken our punches in emerging markets and in oil and gas. I think over time we're more cautious there because we wonder like are we getting better or are we just bad at this? I think we have to figure it out over time.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“We believe in the illiquid model still. It's awfully hard to see how you're going to get the kind of returns we need without taking some risk on private equity and venture capital. And we were lucky enough to have some nice venture capital relationships. That is one thing I wouldn't do if I hadn't come from Yale and brought venture capital relationships with me or come from Silicon Valley where I'd had the network. It would be really hard to build it otherwise. I would be afraid of making a lot of mistakes if I didn't have that experience. But we did build a venture capital portfolio. So we have taken risk on the privates and venture. We have a midsize real estate portfolio. We have a smaller oil and gas portfolio, but it's really, that's not an area we've emphasized. We're sort of moving away from that. marketable and absolute return we have. But we have a much larger public equity portfolio than Yale does.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“We have a different risk profile. We have a different set of resources that we're six people. So there's only so much we can do. And our capital, because we're so underfunded, we have 3,000 students at Wesleyan. And when I came, it was a $500 million endowment for 3,000 students. Now it's a billion one for 3,000 students. Our size, we're one of the largest universities in the NESCAC. And we've gotten bigger, but we're still undersized versus some of our peers. So Capital's really precious. So preservation of capital is something we think about a lot.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, when I started, it was about 35% we set as a ceiling. Now it's up to 42%. But we've had to do that gradually over time. And at a billion, we've got more room to do that. So that was one of the things that was really different about the portfolio. The other thing that Yale does extremely well is find really talented people and put them in business. And I quickly realized like that's not going to be the model for us. We are not price negotiators. I spent a lot of time at Yale working on LPAs and negotiating terms. We were going to be a price taker. So it was sort of a take it or leave it decision when we found managers we liked rather than, I mean, and yes, we like to say we punch above our weight or people want to hear our opinion, but the reality is that the larger investors are setting the terms. So that was one big difference. And then over time, I think what we've had to think about is how early can we be with managers? Do we want to be a day one investor? Do we want to be a day two investor?”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I think the core tenets of being equity oriented and diversified. That was clear. I mean, we have a very high hurdle as well. We think we have to make seven and a half or eight percent nominal over long periods of time. And you can't really do that unless you're equity oriented. So those sort of things seemed obvious. We didn't have some of the same flexibility in our capital structure that Yale does. And what I mean by that is we had about $200 million of debt outstanding at the university when I came on a $500 million endowment pool. So we knew we could not generate liquidity by going back out to the capital market. So we had to generate all our liquidity internally. That means translated that we could never be as a liquid as Yale. So that was something we did a lot of modeling around to try to figure out what was a liquidity risk we could really take.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“Let's turn and focus on kind of the investment side of it. So you had a model or a structure in your mind from working at Yale, and now you're going to a much smaller pool of capital. What did you take? What did you leave behind?”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, it's hard to know even where to start. I would just say it was very much a startup kind of opportunity. You name it, we had to work on it. There was one person there with some institutional memory. There were a lot of Excel spreadsheets with our historical performance, none of which I was certain didn't have fat finger errors in them. And there was a portfolio with 26 managers in it. And there was an investment policy statement that had been written, I think, in 1982 and was completely like we weren't in adherence to it. And there was a spending policy that had been written in like 1961 that we weren't in adherence to either. So there was a lot of work to do. So we ended up having to do all those things, figure out the back office system, put a new policy portfolio together. We had to review the entire portfolio, decide. I mean, everything sort of went into red, yellow, green bucket and hire people. It was just, it was a lot of work. But very exciting.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“Years out in the future, if I were doing exactly what I was doing every day, maybe that the learning curve would run out. And so it seemed a little early, but on the other hand, I also thought an opportunity where I would have the same real psychic pull. I don't know what that would have been. So that's why I went”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source
“But there were a lot of reasons to do it too. Number one, I really cared. I'd grown up singing these Wesleyan fight songs. And so even though I didn't go there, I always loved the school. In fact, I probably would have gone there, but my brother was only 15 months older than me, and he was already there. And at the time I was looking at colleges, there was no campus on earth that could hold the best friends, of course. So anyway, it was very appealing from a psychic reward standpoint. It needed help. It was clearly undermanaged for a long time. And I believe in the mission of the school, there was a new president who I thought was really doing a great job. I wanted to work with him. So for all those reasons, it seemed like an appealing opportunity. When I looked at what was going on at Yale, I loved it. The people that are so smart, I always felt like the dumbest person in the room, which if you're the right type of person, that's a really appealing environment. I always felt like I was constantly learning. But I did see a time where three or four years.”
2019-12-02 · Capital Allocators · Anne Martin - Pulling the Oars as CIO of Wesleyan University (Capital Allocators, EP.114) · IDENTIFIED FROM THE TRANSCRIPT · source