YouSaid · the spoken record

Collette Chilton

lines on the record: 75
first: 2021-01-25
most recent: 2021-01-25
sittings or episodes: 1
sources: podcast

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“They love Williams, they want it to go well and us have good performance, and so it's really incredible. I mean, other people call me from time to time at similarly sized schools and they'll say, someone on my committee heard about your structure and they want us to do this. And sounds like a nightmare. And I said, you know, I love it. And it's super helpful when you have a small team and you're covering the world.”
2021-01-25 · Capital Allocators · Collette Chilton – Humility and Loyalty at Williams College (Capital Allocators, EP.174) · IDENTIFIED FROM THE TRANSCRIPT · source
“So we kept that structure in place, but those committees became advisory and they didn't actually vote on anything, but they helped us with the portfolio and then the investment committee is the fiduciary committee. It says standing committee of the board, and they actually vote on hiring managers and that kind of thing. And so one of my jobs at the beginning was to make that all work. And honestly, that is one of the most fun parts of my job. It's like I have 24 bosses. I love all of them. They all help us in different ways. And I tell people that that's the secret sauce of the Williams Investment Program is we have these alums who are on these committees and they love helping us and they don't have an axe to grind. They're not trying to sell us something or it's like you can call them and say, what do you think about this manager? And you get sort of a thumbs up, thumbs down unbiased.”
2021-01-25 · Capital Allocators · Collette Chilton – Humility and Loyalty at Williams College (Capital Allocators, EP.174) · IDENTIFIED FROM THE TRANSCRIPT · source
“So that structure was in place before we had the investment office. And so that's how they invested the portfolios. They'd have a marketable committee picking long equity managers. And they had a committee called the Special Strategies Committee, which was the inception of the hedge funds. And amazing people on that committee. So the chair of that committee was Bill Simon, is famous for almost being the Republican governor of California. He's a wonderful person and a dear friend. So he chaired that. And then people on the committee were like Andreas Halverson and Paul Singer and just, you know, very successful investors who like to get together and argue about what to put into the portfolio.”
2021-01-25 · Capital Allocators · Collette Chilton – Humility and Loyalty at Williams College (Capital Allocators, EP.174) · IDENTIFIED FROM THE TRANSCRIPT · source
“We had these amazing managers. And the other thing that was really fortuitous is the people who were on the investment committee and our advisory committees had all been involved for a long time. So there was this huge sense of stability. It's like, we're going to be okay. Don't worry about it. We got this, which is nice when you're new in a job and you go into a situation like that.”
2021-01-25 · Capital Allocators · Collette Chilton – Humility and Loyalty at Williams College (Capital Allocators, EP.174) · IDENTIFIED FROM THE TRANSCRIPT · source
“So I started in 2006. So we had that manager in the portfolio when we went into the financial crisis. And it was the only separately managed account we had. And it was basically large cap S&P 500 stocks. So it was amazing because we're sending money to the college like eight out of 12 months. And I'm barely have figured out where my office is, let alone the portfolio. And we have this incredible liquidity gift that we didn't even know was going to be important. And so that helped us get through the last financial crisis.”
2021-01-25 · Capital Allocators · Collette Chilton – Humility and Loyalty at Williams College (Capital Allocators, EP.174) · IDENTIFIED FROM THE TRANSCRIPT · source
“As far as the portfolio, we probably had too many managers. You know, the problem with having committees put portfolios together is they love putting stuff in, but they really don't like taking stuff out. And it's hard to agree on what to stop doing. And so, and there wasn't really what I would call a policy portfolio. You know, I came from this world in the corporate pension fund and public pension fund where we have a policy portfolio and you manage to a target and you have ranges around a target and that was important and liquidity was important and organizing things in that way which hadn't really been the way it was done and so fortunately we had one manager who was sort of like a balanced manager and it was a significant part of the endowment when I started.”
2021-01-25 · Capital Allocators · Collette Chilton – Humility and Loyalty at Williams College (Capital Allocators, EP.174) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, there's the structure of the portfolio and the structure of the team, right? And you kind of have to do all of that at the same time. And so the first person I hired was a guy who I had worked with at the state and Lucent, who came to be our CFO. And so that was a critical hire. His name is Brad Wakeman, amazing. He's, you know, still here. He's our CFO, COO today. And he just brought order from chaos. And so, and we had worked together for a long time. So we kind of knew like what we needed to do and how to chop the wood. And then we built the team out from there. And then we had an analyst at Cambridge who covered Williams, who was a Williams alum, and we hired her as our first analyst. And she's now managing director, Abigail Watley. And then I hired my assistant, Kristen Corrigan, who's still here today. So that was kind of the core at the beginning.”
2021-01-25 · Capital Allocators · Collette Chilton – Humility and Loyalty at Williams College (Capital Allocators, EP.174) · IDENTIFIED FROM THE TRANSCRIPT · source
“Something about venture said, you know, let's try a little venture. And so we did a little venture. And so this was like, I don't know, in the 70s or something. So we ended up with this incredible venture and private equity portfolio. Joe Rice's good friend was John Canning. So we were in like the earliest CDNR and Madison Dearborn funds. And that was true across the board in every asset class, just like something special because of those incredible alumni volunteers who put the portfolio together.”
2021-01-25 · Capital Allocators · Collette Chilton – Humility and Loyalty at Williams College (Capital Allocators, EP.174) · IDENTIFIED FROM THE TRANSCRIPT · source
“It was like the phone and the cube again. There was like nothing. And so part of the plan was to set the office up in Boston, but there was nothing, so I had to go work in Williamstown for the first six months, which was great, except that I had to leave my family every Monday morning and come back on Thursday night. But Williamstown's amazing. And the portfolio was incredible because the way that the college invested the money as they had committees of alumni volunteers all in the investment business. There are a lot of Williams people in the investment business. And they got Williams into funds that they liked. And so it started off with Joe Rice at CD&R and a couple other people of his era and they would sit around at the old Williams Club in New York and decide what to invest in. So they started off in stocks and bonds. And then one of the guys up here in Boston, Alan Fulkerson, who knew something.”
2021-01-25 · Capital Allocators · Collette Chilton – Humility and Loyalty at Williams College (Capital Allocators, EP.174) · IDENTIFIED FROM THE TRANSCRIPT · source
“And he's just an amazing guy and salesperson. I expected New England liberal arts college, bow tie, not at all, hilarious, cracking jokes, swearing, funny Wonderful guy, and he was the closer, I guess, because after that, I think that's when I said yes.”
2021-01-25 · Capital Allocators · Collette Chilton – Humility and Loyalty at Williams College (Capital Allocators, EP.174) · IDENTIFIED FROM THE TRANSCRIPT · source
“Team and back and forth, and he finally said, you know, colleges don't get taken over. So this is actually a more stable job. And I'm like, it's not a takeover. It's a merger. Blah, blah, blah. Anyway, so then I started meeting some of the Williams people and I got completely sucked in after having said no to the initial phone call.”
2021-01-25 · Capital Allocators · Collette Chilton – Humility and Loyalty at Williams College (Capital Allocators, EP.174) · IDENTIFIED FROM THE TRANSCRIPT · source
“It was quite a ride. So I was working at Lucent. I was living in Boston. We had moved, we had opened an office in Boston and was easier to hire people for that kind of work in Boston than in suburban New Jersey. And so my family, we all moved back to Boston rather than being in New Jersey. And Alcatel had announced a merger with Lucent, but it hadn't closed yet. And somebody from the Williams Investment Committee called me and said, Hey, we're going to start up an investment office, and how would you like to talk to us about it? He said, would you think about coming and starting the investment office at Williams? You started an investment operation at Lucent, obviously on a much bigger scale. You know, you have the playbook. You can do this. And I said, no, no, no. This is my team. I hired all these people. There were 25 of us. And, you know, you don't walk away from your.”
2021-01-25 · Capital Allocators · Collette Chilton – Humility and Loyalty at Williams College (Capital Allocators, EP.174) · IDENTIFIED FROM THE TRANSCRIPT · source
“Eight or nine years When I started at Lucent there were one hundred fifty thousand employees and when I left there were eight thousand employees.”
2021-01-25 · Capital Allocators · Collette Chilton – Humility and Loyalty at Williams College (Capital Allocators, EP.174) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, we had liabilities, and so despite those liabilities, we still had a lot of equity in our portfolio. The pension fund had two underlying groups of employees, one occupational, one management, and they both at different points in time were well overfunded their assets to their liabilities, which is unusual for corporate pension funds. So we actually suggested to the board of the company that they basically immunized the portfolio and lock in the gains after I left. One of them was in process when I was leaving and the other one I think got done after I left. But it didn't happen before various market corrections. But you actually have a number that you have to meet. It's different from an endowment or a foundation.”
2021-01-25 · Capital Allocators · Collette Chilton – Humility and Loyalty at Williams College (Capital Allocators, EP.174) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, part of this $75 billion was the defined contribution plan, which we invested in the separately managed accounts of the defined benefit plan. So of the defined benefit plan was probably $50 billion, but I don't remember the numbers because it's been a long time, but there was a lot of venture and private equity. The returns on the portfolio had been very good. So I started there in 1998. We're getting a lot of distributions off of our venture portfolio. I used to make the joke that Lucent was really a pension fund with a little bit of technology on the side, which is what drove the earnings of the company for that whole time. But nobody thought that joke was funny except for me, but it was actually pretty close to the truth.”
2021-01-25 · Capital Allocators · Collette Chilton – Humility and Loyalty at Williams College (Capital Allocators, EP.174) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, it was hard to figure that out because AT&T was still managing the money for Lucent. So it took a while for us to make that transfer. And AT&T was one of the first corporate pension funds to invest in venture capital and private equity. So you know it started off in family offices and endowments and foundations and then there were a small group of corporate pension funds like AT&T and GM and GE and they were early to those asset classes. So we actually had a great venture and private equity portfolio. And so that was the illiquid part, which was a nightmare to separate because we had to go through each agreement and negotiate with the GP when we were splitting it apart. And Lucent was bigger than AT&T and so we were also negotiating with our largest client because AT&T bought more lucent equipment than anybody else. It was just an interesting.”
2021-01-25 · Capital Allocators · Collette Chilton – Humility and Loyalty at Williams College (Capital Allocators, EP.174) · IDENTIFIED FROM THE TRANSCRIPT · source
“And so he kind of reeled me in. Goldman had done the IPO when Lucent spun out of ATT and he was very close to the treasurer. And it was just an amazing opportunity despite not being in the Bay Area. They had $75 billion in AUM. And it was like the last piece of the spinout from AT&T. And the treasurer was a 40-year-old woman. So in the AT&T world, that's unheard of. And she was amazing. And she convinced me to take this job and like literally nobody knew anything about what I was doing. And they're like, here's a phone and a cube and $75 billion go at it. It just felt like the opportunity of a lifetime and how could I pass it up?”
2021-01-25 · Capital Allocators · Collette Chilton – Humility and Loyalty at Williams College (Capital Allocators, EP.174) · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm from the Bay Area and we had two little girls and I was desperate to live closer to my parents to have more help. You know, both of us working full-time and two little girls. So I started looking for something in San Francisco. And there was a guy at Goldman back in the day named Tom Healy, who ran something called the Pension Services Group, and he covered pension funds very effectively. And he invited me to lunch one day and he said, oh, I know you're looking for something. I have the perfect job for you. There's this company that's spinning out of AT&T called Lucent. And I'm like, where is it? And he said, it's in New Jersey. Tom, New Jersey is not San Francisco.”
2021-01-25 · Capital Allocators · Collette Chilton – Humility and Loyalty at Williams College (Capital Allocators, EP.174) · IDENTIFIED FROM THE TRANSCRIPT · source
“So the pension funds up here are terribly underfunded and mismanaged. Each city and town has its own pension fund and so the state ones started doing well and so then the towns could invest with the state. So there was actually a client facing part of it. And the guy who did the client stuff was offered a car by a manager and he said that it was okay to take it because they had the name of the firm on the side of the car. So it wasn't actually that they were giving him a car. It was like they were giving him a pen or some other kind of swag because it had their name on it. So it was a joke in the office as long as it has a firm's name on it. It doesn't matter what they give you. There were certainly people who took full advantage of that opportunity.”
2021-01-25 · Capital Allocators · Collette Chilton – Humility and Loyalty at Williams College (Capital Allocators, EP.174) · IDENTIFIED FROM THE TRANSCRIPT · source
“And it's not a very glamorous part of this world and people are really their mission focus, the people who do those jobs. You've interviewed some of them, like my friend Chris Aylman, and it's an amazing bunch of people. Anyway, so that's different from the other two”
2021-01-25 · Capital Allocators · Collette Chilton – Humility and Loyalty at Williams College (Capital Allocators, EP.174) · IDENTIFIED FROM THE TRANSCRIPT · source
“Some of it's all the same, right? Across the three different public corporate pension funds and endowment, you know, we're looking for good managers and trying to find them. And the difference is that those pools of capital, you have liabilities and you have retirees that you are supporting. Whereas at Williams, we support over 50% of the operating budget. So it's incredibly important. But there, they're like people I knew who retired and were relying on what we did every day. That was amazing. You know, you really felt the importance of what you did. And the other difference at the state pension fund is you get paid nothing. So it really is public service. You're doing it for the greater good. And that was amazing. I love that part of it. But you also have to worry about your name showing up in the paper.”
2021-01-25 · Capital Allocators · Collette Chilton – Humility and Loyalty at Williams College (Capital Allocators, EP.174) · IDENTIFIED FROM THE TRANSCRIPT · source
“and there were all kinds of things that had been alleged to have been going on. So they were being investigated by everybody you could imagine. And so this guy, I knew, said, I know you don't know anything about investing, but this will be a great experience. You'll learn so much because it's bad here. And so that was there used to be two pension funds in Massachusetts that was called masters. And so I went to work at master's knowing nothing. I remember going to my first meeting in New York with this guy and he said, so you know the difference between growth and value, right? And I'm like, I don't know what any of this is. So it was purely out of necessity. I needed a job and he offered me a job. And I worked at the state pension fund for five years. And it was amazing.”
2021-01-25 · Capital Allocators · Collette Chilton – Humility and Loyalty at Williams College (Capital Allocators, EP.174) · IDENTIFIED FROM THE TRANSCRIPT · source
“It was purely out of necessity. I was working in investment banking. I was nine months and two weeks pregnant with my second daughter. And this was during the banking crisis in 1993. And the bank eliminated the group I was in. And I was the first person they walked into HR because I literally was almost 10 months pregnant. And I needed to have a job. We needed both of us to be working. And so I went around and looked for a job before my daughter was born. And then as soon as possible after my daughter was born, and a guy who I had done some transactions with, a lawyer was the general counsel for the state treasurer, who at that time was the sole trustee in Massachusetts, and the guy who was the state treasurer was a Republican who had come in after Bob Crane, who was a famous sole trustee and Democrat treasurer at Massachusetts.”
2021-01-25 · Capital Allocators · Collette Chilton – Humility and Loyalty at Williams College (Capital Allocators, EP.174) · IDENTIFIED FROM THE TRANSCRIPT · source
“Conversation covers Colette's career path and lessons learned before joining Williams. We then turn to her arrival at Williams in 2006 to a phone, a computer, and a legacy portfolio. Williams' governance structure leveraging alumni advisors, asset allocation, manager selection, manager monitoring, hedge funds, venture capital, and navigating around popular managers. Enjoy my conversation with Colette Chilton. Thank you so much for doing this.”
2021-01-25 · Capital Allocators · Collette Chilton – Humility and Loyalty at Williams College (Capital Allocators, EP.174) · IDENTIFIED FROM THE TRANSCRIPT · source
“My guest on today's show is Colette Chilton, the chief investment officer of Williams College, where she's overseen its three billion dollar portfolio since 2006. Colette is nothing short of a legend in the business. She sat in a CIO seat since the early 1990s at the helm of public pension mass prim and corporate pension lucent before joining Williams. Institutional investor bestowed its lifetime achievement award on Collette in 2019 and Barron's named her one of the 100 most influential women in finance in 2020.”
2021-01-25 · Capital Allocators · Collette Chilton – Humility and Loyalty at Williams College (Capital Allocators, EP.174) · IDENTIFIED FROM THE TRANSCRIPT · source