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Christie Hamilton

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74
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2020-03-09
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2020-03-09
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1
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  1. “Fixed targets. We have the strategic asset allocation. It's funny because I say that we're all unique and we are. All of our institutions need different things, but our portfolio structure is typically very similar. So geared towards equities for long-term growth, fixed income, a smaller portion to fixed income, deflation hedge, even smaller portion to inflation hedging or real assets, typically real estate and energy. And then the net is cash and hedge funds in most instances.”

    2020-03-09 · Capital Allocators · Christie Hamilton – Tweeting on Allocation at Children's Health (Capital Allocators, EP.124) · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “Private equity would be private credits in the fixed income buckets. And it's actually really interesting because it makes us look and say, okay, well, Is private equity really the best place to be right now? It makes you have to think through again where your marginal dollar is best deployed and in a world where, not to say something too unpopular or crazy, but in a world where there is so much money going into private equity right now, I mean, obviously inflows of capital lead to price discovery, which collapses these kind of informational edges that a lot of people have built. I do think that there are a lot of groups that may be disappointed in the future. And that's not private equity's fault. It's just there's a lot of money there.”

    2020-03-09 · Capital Allocators · Christie Hamilton – Tweeting on Allocation at Children's Health (Capital Allocators, EP.124) · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “We look at the world in four asset classes, so global equity, global fixed income, real assets, diversifying strategies, which is the catch all for everything with a beta 0.3 or less, beta kind of becomes this catch-all for everything that doesn't really fit cleanly into the rest of the portfolio, mostly hedge funds. David Swinson would call it absolute return. And then in each of those asset classes, we then look across the liquidity spectrum. So from ultra liquid, and we have a couple of mutual funds, institutional share classes, but we have mutual funds all the way to privates.”

    2020-03-09 · Capital Allocators · Christie Hamilton – Tweeting on Allocation at Children's Health (Capital Allocators, EP.124) · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “A hospital, one of the things that we kind of go through in the enterprise review is we issue debt for capital projects. So that's actually really important because these assets back up in a lot of instances the debt issuance. And so we typically have more fixed income. We're also kind of new to the endowment scene. So we typically tend to be a little more conservative. We don't need to be Yale. So we target a beta of about 0.6. And from there, build a portfolio around it. So, I mean, it's difficult, right? Because 20% target to fixed income is all of that pure deflation hedging. It's not, I can tell you, because it would be nearly impossible to build a portfolio like that without destroying capital long term. Just have to be thoughtful of that. And so having kind of a broad mandate within there, but making sure that we're still true to the deflation hedging part.”

    2020-03-09 · Capital Allocators · Christie Hamilton – Tweeting on Allocation at Children's Health (Capital Allocators, EP.124) · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “If you sort of compare it to whatever the standards of the Cambridge Associate's average for endowments, what are the tweaks that you've done that are either catered specifically for the institution or are just based on views that you have that are different from the averages?”

    2020-03-09 · Capital Allocators · Christie Hamilton – Tweeting on Allocation at Children's Health (Capital Allocators, EP.124) · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “So strategy is a funny thing. We obviously have the endowment model, right? And within that, everyone thinks that the endowment model is privates, alternatives. In reality, it's making the best use of your capital, putting your, like, where is your marginal dollar best used? Is it in illiquid assets at this point? Is it in public equities? newsflash you'll probably guess wrong as we learned but ultimately understanding the goals of the institution and making sure that your portfolio reflects that so for example it's hard to generalize institutions because so many people talk about the endowment model and forget that it really isn't for everybody there are a lot of institutions that outsourcing it or indexing it is actually a really great option it's for a specific kind of institution it's for institutions that are trying to basically make a distribution a substantial distribution at that that supports operations and so the strategy is to follow the endowment model”

    2020-03-09 · Capital Allocators · Christie Hamilton – Tweeting on Allocation at Children's Health (Capital Allocators, EP.124) · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “Had recurring leukemia went into remission. And so before, I mean, fewer than 50% lived a couple of years beyond, and now 83%. And so it's like when you think about that, I know I get chills when I talk about it. I never verbalize it quite right to make it sound as impactful as it really is, but like those are people's kids. It's like future leaders of America. That's incredible. And so to be a small part of that and to be able to see and to hear just the great stuff that's going on with our nurses and our doctors and our volunteers is just a huge deal. I mean, it's a huge honor.”

    2020-03-09 · Capital Allocators · Christie Hamilton – Tweeting on Allocation at Children's Health (Capital Allocators, EP.124) · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “Our mission is simple, and our mission is amazing. It's to make life better for kids. That is the purpose of our fund, our distributions basically cover all sorts of programs for the kids. There's a payout to our research institute. It's incredible to get to work on behalf of this mission and to be truly a tiny part of it. And we actually look at all of our partners as allies in our mission. We were involved in the CART-T clinical a couple of years back for pediatric leukemia and in this kind of nationwide CAR T.”

    2020-03-09 · Capital Allocators · Christie Hamilton – Tweeting on Allocation at Children's Health (Capital Allocators, EP.124) · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “Really interesting because everybody wants to dive into manager selection first and foremost, right? Everyone thinks that that is my job. In reality, it's a major component of what our team does. Obviously, we do take a lot of meetings. It's important to understand what's going on. But ultimately, we like to start with strategy. And you can't talk about strategy without talking about purpose. So within that, I think it comes back to governance. And I have gotten raked over the coals a couple of times because people are like, why would you say that governance is the most important thing? And I'm like, guys, how can you build a portfolio without starting with governance? So it starts with an enterprise review, understanding what the institution needs. It starts with developing a purpose for that pool, right? Or for each individual pool depending on what kind of institution it is. Developing a philosophy or amending a philosophy that's in place, and then building a portfolio that marries the purpose with the actual strategy.”

    2020-03-09 · Capital Allocators · Christie Hamilton – Tweeting on Allocation at Children's Health (Capital Allocators, EP.124) · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “Don't necessarily worry so much about that or think about how it's perceived. I think it's more so just an extension of wanting to be transparent because I value transparency and wanting to be forthright and provide insights that have candor and that are thoughtful. And I think that that resonates with some people and those are the people that kind of gravitate to it and then others maybe not so much.”

    2020-03-09 · Capital Allocators · Christie Hamilton – Tweeting on Allocation at Children's Health (Capital Allocators, EP.124) · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “I don't think so. I think for the most part, if nothing else, people are really impressed by it. I mean, frankly, I'm kind of impressed by it. So thank you to everybody who follows me because I really appreciate your feedback and your thoughts and your insights. And frankly, you make me better. You make me a better thinker in real life. And so it's crazy to me. But when people see it, they're like, wow, it's a lot of followers.”

    2020-03-09 · Capital Allocators · Christie Hamilton – Tweeting on Allocation at Children's Health (Capital Allocators, EP.124) · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “And in the sense that a lot of people look at it as a risk for me. Which is something that I didn't expect because I look at it as okay, I'm obviously not going to say anything stupid or put my institution at risk, but they say, well, what if you tweet something and can't take it back? I'm like, what do you guys think I tweet? Oh my goodness. So I ended up disclosing it, the chairwoman of my board follows me, the head of our foundation follows me. I told my boss about it as he was being onboarded because I want people to feel really confident that they can trust me. Not speak for the institution by any stretch of the imagination, but to be able to be authentic and to provide that kind of education and to provide kind of a voice for people like us without impacting our institution negatively. And hopefully impacting it positively.”

    2020-03-09 · Capital Allocators · Christie Hamilton – Tweeting on Allocation at Children's Health (Capital Allocators, EP.124) · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “It's funny because other people in this industry have asked me, they say, what do you get out of it? Seems like you have a lot of downside and very limited upside. And I'm like, you have a great point there. I don't know. That's a joke because in reality, I enjoy the conversations. I think I learn just as much from people as I hope I probably learn more, frankly. It's been such an interesting platform because I kind of started thinking, oh, you know, I'll tweet some stuff and maybe people will like it. And at first I didn't really interact with people and I didn't understand Twitter. And then I realized like, oh, you actually have to comment on people's stuff. It's so much richer when we have these like really great dialogues and disagree with each other respectfully, right? So it's been interesting in that regard.”

    2020-03-09 · Capital Allocators · Christie Hamilton – Tweeting on Allocation at Children's Health (Capital Allocators, EP.124) · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “Yeah, I mean, absolutely, because we have a financial officer who integrates our group into his broader financial vision. We have an entire operating arm. We're a hospital. People are like, wow, it's so amazing you manage this money. And I'm like, this really tiny piece of this huge mission. And so working with people through that, helping them understand what we do, helping them understand the process, working with our foundation so that when people donate money, they feel good about what they're giving to and they understand that we have a process and that their money is very well kept, that their money is being managed according to a process and it's a good process.”

    2020-03-09 · Capital Allocators · Christie Hamilton – Tweeting on Allocation at Children's Health (Capital Allocators, EP.124) · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “Politics of it is kind of crazy. And I say that because I think that consultants a lot of times you interface with the board, you interface with executive management, but you come in once a quarter and you get to talk maybe once a month, but for the most part, the touch points are a lot more condensed and a lot more focused on the portfolio, whereas on an internal team you can get pulled into anything. And when I say politics, I don't necessarily mean it's bad stuff where people are having their little fiefdoms, but there's definitely an element of having to work on interpersonal skills and communicate things effectively, right? And to build consensus and you don't necessarily just get to walk in and say this is the house view because you have to build the house view effectively.”

    2020-03-09 · Capital Allocators · Christie Hamilton – Tweeting on Allocation at Children's Health (Capital Allocators, EP.124) · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “To allocating. It's so interesting when you start to build up knowledge in an area. It's hard to let it go. And especially when, I mean, I love what I do. I absolutely love my career. I love the access that I get to information and interesting people and interesting ideas. I saw a job posting actually of all places on indeed. And I'm like, I know Ryan Bailey, this is great and contacted him and got him to kind of switch the job around that he was trying to fill so that it would work for both of us. And I was really excited because I thought that I would return more on the consulting side, but it's just so fascinating to learn to go 100 feet deep on one client effectively.”

    2020-03-09 · Capital Allocators · Christie Hamilton – Tweeting on Allocation at Children's Health (Capital Allocators, EP.124) · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “Just the technology and being at the forefront of building companies that are doing interesting things, but it's just very different than what I expected. And it's interesting, I think it takes a special kind of person to really thrive in that environment and the ability to deal with ambiguity and to deal with people who thrive in ambiguity. And I don't know, I'm more of a puzzle solver. I like to construct things and solve problems, which there's a lot of that on the venture capital side, obviously, but there were a lot of other things that I just were my passion.”

    2020-03-09 · Capital Allocators · Christie Hamilton – Tweeting on Allocation at Children's Health (Capital Allocators, EP.124) · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “So I came here actually to UT Austin for business school thinking I'm going to be a venture. And by second year, after doing an internship, I'm like, I am not going to be a pincher.”

    2020-03-09 · Capital Allocators · Christie Hamilton – Tweeting on Allocation at Children's Health (Capital Allocators, EP.124) · IDENTIFIED FROM THE TRANSCRIPT · source

  19. “Got into business school. I felt like it was a good next step. I think people, they decided to either do CFA or business school. The people that I saw who did business school, I think, had more of a general education and a little bit more of a polish in some ways that I really wanted because I thought that I was going to return to consulting. And so that really spoke to me and I joke that I wanted to take two years off. But in reality, there were parts of my business knowledge that there were clear gaps. I could look at a financial statement but not necessarily rip it apart the way an accountant could. So I wanted to fill this in.”

    2020-03-09 · Capital Allocators · Christie Hamilton – Tweeting on Allocation at Children's Health (Capital Allocators, EP.124) · IDENTIFIED FROM THE TRANSCRIPT · source

  20. “Back then, we were all generalists. I had some private families, I had universities. It was a small office I worked at at the Dallas office. So I worked with the hedge fund specialist. I worked with the private investment specialists out of California and really got to taste everything. A lot of people think that you have to specialize now. And I actually think the opposite. How can you pick investments in one part of your portfolio without understanding what's going on in other parts? I think that's really important.”

    2020-03-09 · Capital Allocators · Christie Hamilton – Tweeting on Allocation at Children's Health (Capital Allocators, EP.124) · IDENTIFIED FROM THE TRANSCRIPT · source

  21. “I don't want to say meteorically, right? But if I may, I believe I was ahead of their standard benchmarks and I ended up as an associate consultant, which is the top tier you can get to without going to business school. I just wanted to learn everything. The caliber of my colleagues and the institutions that I got to work with was absolutely incredible. I could do random research projects and look back at historical data. I had access to everything. It was amazing.”

    2020-03-09 · Capital Allocators · Christie Hamilton – Tweeting on Allocation at Children's Health (Capital Allocators, EP.124) · IDENTIFIED FROM THE TRANSCRIPT · source

  22. “And then the next week, I was on an airplane to Boston. That was a very interesting experience because I didn't even know what endowment management was at the time. I thought that the entirety of markets was like hedge funds and retail traders, which now in hindsight is so ridiculous. But from that, it's actually fun because I started in September of 2008. Literally while sitting and training watched markets melt down and wondered if I was going to have a job truly. And Cambridge was just an absolutely wonderful company that kept everybody, the managing directors that year took a pay cut. And it was really what kicked off my career in endowment management.”

    2020-03-09 · Capital Allocators · Christie Hamilton – Tweeting on Allocation at Children's Health (Capital Allocators, EP.124) · IDENTIFIED FROM THE TRANSCRIPT · source

  23. “Oh, it's weird. I'm very non traditional in that regard. So I started off at fidelity as an options trader of all things. And it's really funny because the thing about doing options with retail clients is that it's your job to basically talk them out of options trades and to basically help them build hedging strategies or fulfill margin calls and stuff. So I went to Fidelity thinking I wanted to be a trader. 2006, it was the cool thing. And thank goodness that didn't work out, right? Because I learned while at Fidelity that trading is just very different from what I envisioned it when I was in college. So I think that I hold a gold star, which I'm a millennial, so I like my gold stars, for being probably the only person who fell into a position at Cambridge. So I was thinking about taking the CFA, actually level one, was in a class with a friend, and she just so happened to work at Cambridge. They had this kind of sudden departure. And two weeks later, I was hired.”

    2020-03-09 · Capital Allocators · Christie Hamilton – Tweeting on Allocation at Children's Health (Capital Allocators, EP.124) · IDENTIFIED FROM THE TRANSCRIPT · source

  24. “My guest on today's show is Christy Hamilton, the head of investments at the $2 billion Children's Health Medical Center of Dallas, Texas. She may be most well known for her wide following on Twitter, where she writes about institutional allocation under the handle ROI Christie. Our conversation covers Christie's career path, experience on Twitter, and the investment process at children's health, covering its mission, strategy, manager selection, opportunities, and risks. In our closing questions, you won't want to miss Christie's list of investment pet peeves and life lessons learned. Please enjoy my conversation with Christie Hamilton. Christy, great to see you”

    2020-03-09 · Capital Allocators · Christie Hamilton – Tweeting on Allocation at Children's Health (Capital Allocators, EP.124) · IDENTIFIED FROM THE TRANSCRIPT · source