YouSaid · the spoken record

Donna Snider

lines on the record: 71
first: 2019-01-28
most recent: 2019-01-28
sittings or episodes: 1
sources: podcast

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“Right, right. I look back now and I think, whoa, I think that's what my parents said to me. It turned out to be true. Why didn't I listen? And so now I have this awareness that, oh my gosh, there are so many people who have had so many more life experiences than me that I can learn from them. I need to be learning from them. And they'll tell me, you know, this is what I did in a situation that I had. And I'm like, okay, I should listen to that. But here's all the reasons why this time is different. So I would say I'm still learning it, but listening to people with more experience than you is probably a good idea. Yeah.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think I might still be trying to learn this, but I'm at least aware that I should know it. I wish that I would have started listening to my elders earlier in life. And this might be now as like as a parent and trying to give advice to my kids”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, my dad was born during the Depression. My mom was born just after. Both of my grandfathers were tradespeople. I didn't have college education. Worked really hard. None of them had credit cards. Everything was paid for for cash. So there was like this, you work hard, you save, you save, you save. And my dad used to always say to me, if something sounds too good to be true, probably is. And I probably didn't really embrace that until I moved to the investor side of the world. Over the last 10 years, I think about that all the time as I'm listening to somebody pitch me an idea. There's no free lunch, there's no free money. Like, that sounds too good to be true. Let's figure out why. So he probably doesn't even know that I still, I think about that, but he used to always say that sounds too good to be true.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“This is a tough one because I think that, well, thanks to digital media, there's so much reading, right? So I try to read all the standards daily, Bridgewater and the journal and New York Times and all that good stuff. There's one thing that I read that takes about five seconds and I try not to miss it daily. When you log into Bloomberg, there is a quote on the first page. And that quote is sometimes so spot on that it may or may not have anything to do with investing, but it sets the tone for the day. I mean, that's what I do. I come in, I hang up my coat, I turn on my computer, and I log into Bloomberg and I look at the futures. And before I look at the futures, I read that quote, and sometimes it makes me laugh. Sometimes it's like a harsh reality of what the world is today. But I love that quote. And occasionally they get written down on a piece of paper and stuck up on my bulletin board. So maybe a little different than some others.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“Hopefully, I haven't used too many today buzzwords. Buzzword bingo management buzzword bingo. When you're sitting across from a manager and they're trying to explain their very fancy strategy using all these buzzwords that mean nothing. It's like, no, let's talk about this. I'm going to give you a dollar. You're going to turn it into more than a dollar and you need to tell me how you're going to do that and when you're going to give me more than a dollar back and what the range of potential outcomes are on that dollar.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“Jackson Hole is probably my favorite. I don't get to go there that often. Not everybody likes to ski the same way I do everywhere out west, everywhere that's not Michigan ice. How about that?”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't think this will be a surprise to anybody who knows me well. I am a huge skier. Wintertime is my favorite time of year. I was just emailing with somebody earlier today, trying to convince them to come on a ski trip with me. If money were no object, I would be a ski bum hands down.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“We have used co investments, and I'll put us in the moderately successful. It's certainly not the hey, we're going to see gross Jeanette shrink by half. We're not big enough to do it that way. I think that works for some of the big funds that are staffed that way, and that's the smart thing to do for somebody at our size. Questionable.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“Reducing fees. They have seemed to offer some different alternatives to allow investors to choose the fee structure that we think philosophically fits best with us. On the private side, I think a lot of people have been using co-investments to work down the gross to net spread. I think maybe that's moderately successful across the universe.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“We did an analysis Two years ago, I want to say, where our hedge fund analyst was tasked with pull all the financial documents of every one of our hedge funds and figure out what fees we paid. And we're going to go after the people that we paid the highest fees to. And then it turned out that the person we paid the highest fees to was also our highest net return. They said, well, that was an interesting exercise, wasn't it? Armed with that information, we could at least have a conversation with the manager to say, listen, explain to me where all these fees are going and is this the right amount. And so having the knowledge is helpful to have the conversation. And that's where it's got to start. We're not big enough to drive a fee discussion, but we do engage in conversation and we have seen some more flexibility, right? Managers are offering a couple different fee structures. You can do the one or 30. We've got one that's a zero and 30 that's kind of unique. We've got ones that are over a benchmark versus over an absolute, right? And so the fact that managers, while they might not always be.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“We got it wrong for the last 10 years is abandoning ship today the right idea, or are we just at the cusp of when it's going to actually start working? Hedge fund returns have been a bit disappointing. That one I don't think is a huge hot button for us because we've been ahead of the benchmarks, although low on an absolute number. It's not great, but it's not super painful. I think everybody's in agreement on where we are in the credit cycle. And potentially the role emerging markets plays long term, right? Are they going to be the growth driver that we all thought they were going to be? What is the right amount to have allocated to emerging long term? It's something that we debate a lot. I mean, we're overweight emerging. That's not a secret. All of our peers know that. I think a lot of our peers have a significant overweight. Now the question is, is it too much of an overweight? And what are the bumps going to be between, I think if you go to sleep today and wake up in 10 years, you'll be up into the right. What does the road there look like? It's a different question.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, there's a lot less. We're doing it a bit just with our index hedges. We know regionally where our exposure is. You can do some of the regional hedging. You can do a little bit of sector hedging. So you can do a little bit of that. It's imperfect. Timing is not perfect. Cash flows are never going to match up. And then you have to balance that with if we just sit here and don't contribute anything, don't commit to any new venture funds for the next 10 years, you're going to have massive vintage your risk. So going zero for the next 10 years is also not the right answer. Is that a hot button? I think everybody's in agreement.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“Is there anything you can do? I mean, the last time that happened, a lot of these things were public, and the venture capital firms held them. And so you could go out short the stocks and hedge. Now they're still in private hands.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“What to do about Paper Gaines and Venture is a hot button. I wouldn't say that there's differing opinions. I mean, we all see these paper gains and we know it needs to come down.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“Not demoralizing, it's just hard. Finding something differentiated where you feel so compelled that the price and the risk return opportunity is interesting. I've heard that story before. I've met ten other managers that look just like that. So the volatility that we've had recently, this year in the past couple months, is actually a bit exciting. We're finally going to see some differentiation. We're going to see some shakeout of people who rode the wave up for the past 10 years. There's going to be shakeout. There will be pain, right? There will be losses in places. But I think it will be a more interesting investment period going forward. Other challenges, you know, I think we're constantly driving to improve our operating metrics. We're always thinking about how can we travel better, smarter, cheaper, do more, right? Live within a budget. We're not experiencing massive growth in the portfolio. We also can't expect to grow our operating budget by a massive amount. So it's like, okay, how are we going to do more than we did last year on the same level?”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“Emerging markets have been a tough place to be. If you were talking investing, there's years where you look smart for overweighting emerging markets. There's years where you look less smart, where less smart time frame. We've been in a decent period for liquidity. I think when I first started managing liquidity was like a daily and weekly thing. I mean, that was all we really looked at. Finding new opportunities. I think we've kissed more frogs and said no to more things in the past two years. That's”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“And I think that in all of my diligence of managers and diligence and investment opportunities, I'm learning skill sets that will help me be a better business leader. If I'm sitting here interviewing a GP and saying, why did you invest in that company and how did you do an organizational turnaround? In a way, I'm collecting little data pieces that will inform me when I'm the GP of a fund and thinking about how am I going to drive value creation in this fund. And I think that's interesting. It's a step. It's different, but I think exciting. And hopefully I'll have an opportunity to do it.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“Managing team development, staff development, making the hard decisions, like there's going to be a lot of pulls. Speak on this panel, go to this conference, speak up about whatever the hot topic issue is in our world today. And it's going to probably like write a policy on this and do that, right? It's not going to be a lot of investing. It's not going to be source and diligence managers. It's not going to be run the spreadsheet, run the regression, figure out where there's spurious correlation. It's not going to be any of that stuff that I think is fun. And so I think about that. And do I want it or don't? Part of me is like, why couldn't we just go on forever in this shangri-la that we have? But while I enjoy what I'm doing now, I also feel like I want to make room for the people that I've mentored and I've trained. And so there's no growth for them if I also don't grow.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“For him to accept that kind of recommendation, growth from us to feel confident doing that. And our team needs to work together and earn each other's trust. I can't go recommend something that I know that any of my other colleagues would not agree with. So we all have to earn each other's trust in kind of collectively, because the first thing Rob's going to say is, does John agree? Does John agree? Does Sean agree? And if I haven't had those conversations, that reflects badly on me. So that's been number one growth. And so now when I look at what Rob is doing, because I love what I do. I love investing. I love the opportunity to look globally and say, I have a dollar of capital. Where should it go? That is phenomenally interesting. And I will tell people all the time, I've got the best job ever. So I think about that when I think when I moved to being a CIO or if I have the opportunity to move to being a CIO, that's not going to be my primary job. Managing boards, managing politics in an organization, managing a team.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“That is something that I think about all the time. And again, over the 10 years it's evolved. When I saw what Rob was doing when I first joined, it looked a lot like my job today. When I see what he's doing now, it looks very different. We've all gone through growth as he's gotten pulled into more and more things at the foundation and board seats and things that he's doing outside his day job of being the chief investment officer and investing our endowment. He's had to learn to trust his team to make decisions. He still has to sign the final paper, but he's had to learn to trust us and give us decision-making authority. We have had to learn to step up and say, Rob, this is my recommendation and this is why. It used to be more of a dialogue of here are my thoughts. Here's why I would. Here's why I wouldn't. Make the call. Now it's, I recommend this, and these are the three things why. Let me know if you disagree. And that's been growth on both sides.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“So let's project forward and let's just assume that for whatever reason you're the chief investment officer somewhere from what you see today, what are the differences in how you spend your time today from, say, how Rob spends his time?”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“I didn't hear any direct stories. Nobody's come to me and said that was the most awkward day, but I do know that there are people who don't have that same kind of dialogue with their CIO. And in a way, I mean, that list was admission that pretty much everybody on that list was talking to a recruiter because I believe that list was mostly put together by the recruiters. And so the recruiter probably didn't nominate you if they hadn't had at least one conversation with you. So that was clearly recognition that everybody on that list had been talking to recruiters. So if your boss was not aware of that, that could have been an uncomfortable day. And my guess is there were some uncomfortable days. I don't know specifically. That would be my guess. I'd bet on it.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“Good job, get back to work, you know, not meaningful. It was nice to get the recognition. I can't lie. It was great that two of us on the team were on the list. Our team is made up of more than two of us. I learned so much from everybody on our team, from the top to the bottom. And I don't think I'd be overstepping to say that Rob learns a lot from everybody on the team too, regardless of whether we're on the list or not. It was a bit of a high five around the room. It was great for the team to be recognized. And there was some joking, of course. We work in a foundation and that list got circulated and maybe some people said, what does this mean? Does this mean people are leaving or are they getting recruited away? And what I appreciate is that Rob is the type of manager where this wasn't news to him. So he didn't freak out. He was pretty excited. He was like, great job. It wasn't uncomfortable.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“We got introduced a while ago, and subsequent to that time, institutional investor came out with a ranking of what they called the not yet chief investment officers. And per institutional investor, you were the number one ranked not yet chief investment officer.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's kind of a free three or four percent. So then you're really concerned about okay, if all I can really make is 3%, what could I lose? And so that's where the sizing on those trades comes in.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“So our asset allocation is we have targets, but we also have ranges. So when we're sizing the positions, it's where are we with our funded managers versus where do we want to be in our range? So that's usually it. And then when we're doing the riskier trades or the, I like to call the asset allocation trades beta trades and the other ones alpha trades, right? And the benchmark for beta trades is don't do worse than the beta benchmark. And the alpha trades is don't lose money because negative alpha is not good, right? So the alpha trades is probably a little bit more work around the sizing and that's around what could we lose if it goes wrong how would you feel about this being a losing position? Those tend to be lower vol trades. So to get to the target return, you kind of have to size them up, but because you're not spending capital to do it, it's okay. And there's a lot of debate around what's your target return for your alpha trades. Well, it might only be three or four percent, but it doesn't cost you anything to put it on.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“Occasionally add risk outside of asset allocation. These are in some of the, I would say, hedge fund strategies, right? So like volatility trading, right? The implied versus realized risk premium, tons and tons of PhD dissertations have been written on this. And so we have a Gavaltrate on in the book. And we're not going to hire a manager to do that. We're going to put that on sized appropriately in the derivative book. And that's not asset allocation. That's a risk premium that we think makes sense to harvest, and we'll do that ourselves.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“Mostly rebalancing trades were with managers who have long locks or maybe annual liquidity or semi-annual liquidity. We think the manager adds alpha, but we don't like the underlying beta. So we will hedge the beta. We have a large emerging markets bet on. haven't really loved emerging markets in the last year and shorted emerging markets and replaced it with US. And that was just a total return swap on both sides. That will be an asset allocation or a rebalancing trade. Occasionally, there's interesting ways because of technical mispricings due to flows most of the time to get exposure to a market through the derivatives, to get exposure to usually it's a developed market. Usually it's the US or Europe. And you can structure like a long dated trade that we know we're going to have this exposure for the next 10 years and it's actually cheap via the derivatives market relative to a manager. So we'll put the trade on that way.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“We don't do single name trades. So, a lot of people say, oh, you know, you've got this exposure in your venture book. Aren't you just going to short that? Or no, we don't do any of that. Most of what we do is index-based. We do it for asset allocation purposes. That might be adding risk or taking risk off in either direction.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“Ultimately, Rob has to make the decision. That's his job as a CIO. There is a lot of healthy debate, a lot of opinions. He will always invest the time to do the diligence. He's not going to just sit around the room with us and listen to our opinions. He'll get on a plane. He'll go to the manager. We'll have the meeting. And sometimes all of us end up at the meeting. Sometimes just two people end up at the meeting. There's always a question of what's the alternative. You're just going to pull the plug and what are you going to do? What are you going to replace it with? Just firing somebody isn't always the answer. What are you going to do with it? So he's got to make those hard decisions.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“I imagine in that type of situation when it is difficult, there's the three senior members of the team, there's Rob, the CIO, you're not all going to have the same opinion. How does the decision get made”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's where it gets tougher, right? Because sometimes we're invested with pretty concentrated managers. So then you say it's a manager that I think is really good and this is what they're doing, but maybe they're underperforming even the small cap value index. And then you'd say, well, are they bad? Oh, well, they own six stocks and one stock really performed poorly. And they had it really heavily weighted. And that is the tough one. That is really tough. We knew it. We follow the manager. We meet with him a couple times a year, read their quarterly letters, monthly letters, whatever they're sending us, and how much of it is our fault for allowing the portfolio to get constructed this way and at what point do we need to trim back the exposure? And I would say some managers we've had to part with, that's difficult.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“All people. I would like to say that our team is all good people. And so breaking up with a manager is really hard to do. So because of the way we're structured, we do have the ability to address portfolio construction without having to part ways with a manager. So that's step one is when there is the realization Maya couple, right, that we did it wrong, we can add the exposure that we're seeking through derivatives. And so there's been some of that. But then there's also been reluctantly the hardcore look at the numbers and even if this manager is focused on small or mid cap value, let's look at the way small and mid-cap value indices have performed and let's measure them against what we've asked them to do.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“This is a great one. I'm not going to name names. I'm not going to name managers nor people on our team. It is a healthy and robust debate. And the question that we've wrestled with this year is, is it our mistake? Do we construct a portfolio wrong? Did we miss the opportunity over the last 10 years? Or is the manager not good at their job? We'll go around and around. And I think fundamentally, none of us have lost our long-term belief that value investing is a good way to invest. We will all admit that in our portfolio, we have a huge bias towards small cap value, and that has not been in favor for 10 years. So there is a piece of that that is on us that we missed. We didn't put large cap growth in the portfolio. We didn't.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“Similar, you maybe have money there for a long time, returns generally been good. Last couple years, value's been out of favor. Maybe they've underperformed. So, what's the core of the debate you're having today about?”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“We have our public equity, although some of them can short, they're predominantly long. The hedge fund bucket, which is probably where most people would have their long shorts, we call diversified strategies and we do our best to keep beta out of that portfolio so you would assume some of your market neutral long shorts would be in there. We have a belief that most market neutral long shorts are not market neutral, so they have been out of that portfolio. So that part of the portfolio is global macros, multistrats, some insurance linked strategies.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“I would love to have that discussion with you, but we have no long short in the portfolio, so we'll have to pick another one.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“So let's poke fun at one. So let's just take a long short equity manager that you've had in the portfolio for a while. That returns maybe historically have been good in the last couple years have been eh, like most of the long short equity universe. What is the debate?”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“Sometimes around portfolio fit, we generally know what we need and what we don't need, but people like some opportunities better than others. And then there's sometimes a debate too about like, what is the investment opportunity? Like, is it as great as you think it is? Is this really that cheap? And what is the range of potential outcomes? That was probably easier, right? Because there's numbers behind it. You can look at capital flows. You can discuss purchase price multiples. There's a lot of things you can do on that one. So that one doesn't, at the end of the day, become the debate. It's usually the people aspect”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“Preference for different style investing is numbers, but investing is with people. And we all tend to like people that are like ourselves. You kind of know there is healthy debate before we get to that final decision because you need to get people comfortable with that. And we all need to listen, I would say, to opinions from each other. I'm going to have biases. I know I'm going to have biases. So I need somebody else to come along with me. We'll often staff to senior people on a diligence project, right? Like we need somebody to be the good cop, somebody to be the bad cops, somebody to be the pros, somebody to be the con, dig through it. So the debate is often around personalities.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“A lot of healthy debate. Nobody on our team is shy. And that's actually something we look for in our analysts too. And typically our analysts will join us right out of school. So typically they're joining us in the summertime. And within a month or two, we have an investment committee meeting that we're all preparing for. And we end up going around asking everybody's opinion on something. And we always start with the newest person in the room and make them give an opinion. It's the most uninformed opinion in the room, but getting them to speak and speak before they hear anybody with more experience is really important. And so we will go around the room and everybody will vote yes or no. And why? And you have to speak up. And it is rare that we are uniform on our opinion. And the reasons sometimes you can predict the reasons just because we all know each other so well.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“Portfolio assuming things go well, why would you do it? And what does that mean? And we always kind of start with 1%. It's got to be a 1% position. For private funds, sometimes that's 1% over a couple funds. But for public funds where you can get out quickly if things aren't going well, you kind of got to start at 1%. Like the concept of just getting in $5 million for an almost $4 billion portfolio, it doesn't make sense, right? That's the art piece. So always yes, no, and how much.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“This year or not, we're always projecting what we think our asset allocation is going to be a year from now, two years from now, if things play out the way we want. So while we'd like to say it's science, it's a lot of art. Assuming we get to yes, sizing its next question. And then the way we think about sizing, and I think our committee has done a great job at pushing us to be more concentrated, we have a really diversified portfolio. Really diversified. And the question always is, have you diversified away your alpha and knowing the time is scarce? Why aren't you just concentrating more with the managers that you know are delivering the most alpha? And so why would you fund a manager in Eastern Europe when you never even traveled to Eastern Europe? Think about the demand on your time. Is that the best return on your time? So something like logistical things. And so if we have a manager that we get to yes on because we think it's right for the portfolio, if we can't get a meaningful amount of capital with that manager to make it worth our time and have a significant impact on the portfolio.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“There's always two questions. The first question is yes or no, and how much, right? So particularly in the private asset classes, the how much is always a question. I think a lot of us have the challenge in our venture portfolios right now with some great paper gains have probably taken a lot of us over our target allocations. And so the question is, are we going to continue to allocate, look at credit, and you say credit is extremely stretched? Why would we be putting a new dollar into credit? So the question is always yes or no, and then how will you fund it? Are we going to use cash to fund it? Are we going to redeem from another manager? What are our liquidity windows look like? We generally have liquidity planning meetings at least quarterly, if not more frequently. Elizabeth Goldsbury, who runs our risk and ops, has got an amazing team who keeps us posted on how tight things are getting. We always modeling what we think our distributions versus our capital calls are going to be. Are we tracking ahead or behind? Is this a source of capital?”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“Combination of the junior and senior people. We all have different skill sets, right? Some of us on the senior team like stories more. Some of us like numbers more. Same thing on the junior team. Some like a rigorous Excel analysis. Some like to look at a lot of industry research and map manager onto the industry research. So a variety of approaches. And that is done with us. We'll make sure we highlight it to Rob so he knows what direction we're going. Is the fee structure of this manager? These are the returns. This is the comp set. This is where they're falling out. They're going to get more in the micro details and be very much asset class specialists. And then we're going to see where it fits in the portfolio.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“The junior person raises it up to the senior person, and there's okay, checks the box on quality and something we would consider. There's more digging in. And then there's most of the time it's the three senior people spending time talking to each other and saying, how would you think about this? How does it compare to the other things you've seen? Another member of our team is phenomenally good in healthcare and he grew up in China, so he helps us a lot with our Chinese portfolio, right? And so coalescing to make sure that we're on the same page and saying, do I have the thesis right before we get Rob involved? And then at some point we know we've got to get Rob on board. And so you have a meeting with him.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“Hedge fund investments, why are we meeting with 20 hedge fund managers? So we're trying to be stewards of our time and spend time meeting with the right people. And then a name might bubble up for a while. I met this interesting manager, got an introduction from so-and-so, keep him on the watch list next time you're in San Francisco, meet with them. Next time you're in New York, meet with them. And so it will evolve like that. And then there will be some sort of catalyst. They're closing. They're not taking any more money. We've got to accelerate the timeline. And so then it becomes a bit more earnest, right? Like, okay, let's make sure we've got the data room. Let's go through deals. Do we know the history of the firm? What have they told us and what are they not telling us, right? Start talking to some of their investors, figure out where the skeletons are, what is the opportunity. It might be an amazing manager that we just don't need the exposure, right? So how do we think about that? How do we think about adding a manager that's doing something that we already have exposure to? Would we fire the other manager that we have? Do we have room for two? How would we fund this?”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“That too, I would say, has evolved the way it worked when I showed up 10 years ago different than the way it worked today. Rob was clearly more hands-on 10 years ago when he had just taken over from Ed when Ed retired. Rob would travel a lot with us, do a lot of initial meetings. At this point, Rob doesn't do really any initial meetings. Even at this point, the senior team is not always doing the initial meetings because we have a full staff of good analysts who do a ton of outbound calling and do a lot of filtering. So it's probably similar to most of our peers where I always say kissing a lot of frogs to find a prince, right? The analysts start kissing a lot of frogs. And they'll usually start it with a phone call, probably have a follow-up phone call, write a note, and we review every Monday ideas. And some of it is top-down portfolio construction. We're always reminding ourselves that we have a limited amount of time, right? So with our limited amount of time, we're going to focus our efforts if we're not looking for.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“And it becomes two way. It really does become two way. Unfortunately, they probably leave us. You know, if they're leaving around four or five years when they're getting really good, but it's fun to work with them. And I think makes us sharper and better on the senior team.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's evolutionary. We have found that the first year young talent is with us. You're feeding them and bringing them along. And then it goes through like really this S curve. Like it's amazing over the short window of time, they go from one level to another level. And then you can see a change. You can see a change in the way they're writing notes. You can see a change in the ideas they're delivering up. You can see a change in the way they're networking and they're sourcing ideas because they'll travel with us, particularly to annual meetings, right? And we'll introduce them to our peers on the senior teams. They'll network with the junior people on the junior teams. And you'll see this pretty dramatic shift in the ideas they're serving up. And so it's evolutionary. We obviously keep tons of lists and research databases around managers operating in different asset classes. We're all always reading the journal. We're reading institutional investor. We're reading all kinds of sources for ideas.”
2019-01-28 · Capital Allocators · Donna Snider – Inside the Investment Process at the Kresge Foundation (Capital Allocators, EP.84) · IDENTIFIED FROM THE TRANSCRIPT · source