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Ed Grefenstette

lines on the record: 109
first: 2025-03-24
most recent: 2025-03-24
sittings or episodes: 1
sources: podcast

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“I think anytime you go into your 60s, you're thinking about the future. And as I said earlier, how much gas you have in the tank. So I'll be focused on my succession planning at the Dietrich Foundation and then thinking about if there's anything else I want to try to accomplish professionally before I spend more time and regardless I want to spend more time with the grandkids. So that's probably how I'll spend the next five years just doing some planning and hopefully seeing the portfolio just be a rocket ship again.”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“So professionally, I wonder how any LP could agree to terms where there is an American waterfall. Okay. And for those who are uninitiated on this topic, an American waterfall pays the GP a carry on a deal-by-deal basis. Okay, imagine the absurdity of this in extreme case. Nine zeros in a row, nine complete wipeouts, and the tenth deal is a three X and the GP gets paid on the carry on the 3x. European waterfall is a total portfolio return. GP doesn't see any carry until the LP gets all of his money back. There are American waterfalls out there, and somehow some way LPs are committing to those funds. And that's a mystery to me. On the personal front, I have almost three granddaughter, and I can't understand how she can eat so many popsicles.”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think if I would go back to my 21 year old self in college and say, hey, when you're 58, you're going to be an asset allocator and you will have traveled the world many times over and you'll have all these exciting conversations with smart people investing in innovation and so forth.”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“First paid job was delivering newspapers and the penny saver. I think I was nine or ten. I was so excited because I got one of those metal change makers that you clip onto your belt that held nickels and dimes. And I just felt like the king of the world when I was able to go up and collect when it was due and all the responsibility went with counting the money and so forth. That was a good first job.”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“Since I was 12, I've been passionate about golf. I played in college. It remains a passion of mine. I have always said it's the one game that teaches you a lot about life. I think Bobby Jones called it a fickle mistress. You never know what you're going to get. But good bounces, bad bounces outside of your control, and all you can control is how you respond. So it's a lot like life.”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“Before our eyes, Modi and Modi's got a lot of faults for sure, but he's done a remarkable job in terms of the tech stack and the ID program that they've implemented. Urbanization Tech Leapfrog. India's exciting theme for us. So we have probably as much unfunded commitment there as we do in China. So we're excited about our relationships.”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“We also have been building our portfolio in India. India, Bill, and I had invested in back in 2010. It was a disappointing experience. I brought on one of my amazing directors in 2014. He joined us. I said, what do you know about India? He said, nothing. I said, you're perfect. I said, I have a bias. I want you to re-underwrite, throw chlorox on the whiteboard and start scratch. And he did, and he traveled and he met everyone that we thought was thoughtful in the space. And we've been rebuilding and building that portfolio. We're really excited about some of the managers we have there. India is, I think, on a really exciting trajectory. It's hard to compare India to China for many reasons. But the demographics are far superior. I think 50% of Indians are under 30 years old. I think it's 32% of Chinese. Capital markets are reforming and maturing.”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“We're really excited about some of the companies in our portfolio that are in the defense field. We have a nice exposure to Anderrel and we have a couple of others that we're really excited about. And Andur's not going to be the only winner in that space. We have some direct co-investments in that we're super excited about. I don't want to name names and jinx it.”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“Goes back to first principles. Bill even put in that statement of philosophy document hey, I want to see a force of personality and a work ethic that doesn't typically align with most foundations. He thought most foundations were sleepy. He wanted more of a Dietrich industry's sense of urgency because he always said, hey, the only reason why we succeeded is we were always three bad quarters away from bankruptcy. He always said, good lord, that gets you on your edge. I think that's necessary for a CIO in this position because you have a lot of responsibility and a lot of weight on the shoulders to maintain the boldness necessary to outperform over time and during tough periods articulate the reasoning and rationale behind the approach you're taking. So yeah, I'm thinking a lot about this.”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“Bill did throw out the 70 number. I'm 58 right now. 70 seems like a long way away. I think I'm going to think long and hard about that over the next five years and think about how much gas I got left in the tank because this isn't an easy enterprise traveling around as much as we do and really preparing for that successor. And you're right. When Bill was on the final stages, he looked me square in the eye and said, hey, your biggest job is going to be finding your successor. And I don't take that lightly, but we also got to make sure we have the board prepared and the new trustees all singing off the same sheet of music about what we're trying to accomplish and that way the successor will have a fighting chance to keep this thing going.”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, you still have some time left before you hit Bill's espoused 70 years old. So much of this model ends up being tied to you as the leader and Bill as the leader before. How have you thought about succession?”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, there's no question they're driving a lot of innovation. The question is at what price can you access that? As we sit here today, I can't tell you that it's a no-brainer to put more money into those companies versus maybe the vertical winners that are going to emerge as a result of, say, AI becoming more of a utility. I think Nvidia is a play on many different themes and theses. But ultimately, we're talking about Is the platform at issue? Is AI going to become a commodity layer? And will it become like AWS? People are just buying their share of time and the more interesting plays from this point forward might be the verticals that sit atop. That's the question we're wrestling with, but I'm not ready to back the truck up and go into the MAG 7 right now at these valuations.”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, it's an additional challenge. One of your first principles is innovation, and for sure the MAG 7 seemed to have captured a lot of the innovation economy. I have to imagine at some point in time you scratch your head and said, hmm, what would Bill say about these stocks that are innovating and capturing such share of that? How have you wrestled with that portion of the growth of the Mag7?”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“Eye on the horizon and go back to first principles. And our first principles are I think we're going to be rewarded if we maintain the fortitude.”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“And then that collapsed. And then it was Japan. And the next decade, Japan's the new normal. Nikkei exploded. And eight of the ten market cap companies in the world were Japanese companies. And Japanese stocks were at that time 45% of the MSCI world in the US was 33%. The next decade, of course, the tech bubble or the Nasdaq was up 15x or 10 years. Oh my gosh, that's a new normal. So you try to bring historical context around these periods of time where there's something shiny. Whereas if you look over long periods of time, we think our portfolio holds up pretty well through cycles. But the S&P is having its day. Now the US stocks are what sixty-five percent of MSI world. That's an enormous number. I'm not saying we're in a bubble, but I'm not saying we're not. I just think we have to keep.”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, we tried to be as transparent and clear as possible that we think that this is just another shiny object in front of us, the S&P 500. And you know this, and most of your listeners probably do. The amount of concentration today in the S&P 500 is extraordinary. If you take the top decile relative to the remainder public securities in the US, it's at 3x. It's the highest ratio market cap in 100 years. So you have really seven stocks that are driving a lot of the S&P 500. What we've tried to do is just remind our trustees, we're playing a long game here. And actually, in a recent presentation,”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“You mentioned earlier that this last couple years haven't been the best for the strategy on a relative basis. How do you continue to communicate with your trustees to make sure they have confidence in you? Sure, the 20-year numbers are good, but maybe 10 years from now, if this continues, it could be a tougher slog.”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“And at the time, secondary market was probably in total 10 billion, I think last year was 160 billion dollar global market for secondaries. So the secondaries continue to be deeper and deeper today. That unfunded as a percentage of NAV for us is about 19%. We don't have a lot of logs we're thrown on the fire right now, so we're being very careful and we're trying our best to keep our important relationships, but maybe adjusting the check size a little bit until we get the illiquidity down a little bit.”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“He did it. He went out and went to the secondary market and got rid of maybe $40 or $50 million of unfunded commitments and got paid. He took great pride in that and went back to the bankers, by the way, and had a lot of fun telling them, you guys have this AAA paper you can't push. And I was able to sell these secondary interests in illiquid assets. This is a deep market.”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“I should have mentioned in the global financial crisis, Bill, before I joined him, and where I joined 2010, but I remember if you looked at his unfunded commitments as a percentage of his NAV, he was hard charging, as I said, he had probably seventy, seventy five percent unfunded relative to NAV. In a portfolio that was only fifty percent liquid, by the way. Bill, what are you doing? And he had a line of credit. And he said, Ed, I'm going to the secondary market. It's time to throw some sandbags out of the hot air balloon to get over the mountains.”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“It sounds like you haven't been challenged on the liquidity side in these last couple years. Maybe it was a little different in 08, but you probably hadn't built up to as much privates as you have today. How do you think about managing through where you really don't control the assets and you have so much in illiquidity?”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“Still, going to find some inefficiencies. You're still going to find some returns that are impressive. The evidence of persistence, of high quality funds, and that premium, they're both under pressure. So this is not an easy game, but we think it's still worth playing.”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“The fees and carry structure is premium in some cases. We have a European GP we actually are underwriting right now. We really like the firm, but the way the waterfall is calculated and the fact that the GP is actually charging some fees to the portfolio companies, they need to generate 5.6x gross to hit a 3x net for the LPs. That's a non-starter. So yeah, there's more competition. There's more premium term funds out there. And that's putting a lot of pressure on the thesis that private equity will return over time. We just think you just have to be slow and patient. We have the benefit of being small. We're only 1.5 billion. We don't have to write 50, 75 million dollar checks. And I think if you swim around and look at the opportunities in smaller fund situations, you're”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“I'd love to ask you a bit about some of the challenges in continuing to outperform with the model that you have at Dietrich. The first that comes to mind is just the attractiveness of these private assets relative to how they were, say, when you came in the seed 18 years ago. How do you think about continuing to pursue the strategy in a market where the private assets are generally more expensive and more competitive than they were?”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“Think it's a good thing that there's more creativity in creating liquidity today, no question. I think we always look at each individual or circumstance independently. We always start by asking, why isn't this company being sold right now? What's preventing this company from being sold in a normal operations of the fund? And is there a reason to hold it? And is this GP the right GP to be holding this asset at this point? And you have to get into the specifics of the alignment and the incentives around it. The old joke, if you meet one foundation, you've met one foundation. Every organization has different features to it. Every SPV seems to have a nuance to it. And that's hard work on the LPs, and that's why LPs are, I think, stressed about it, because suddenly you have 10 of these a year, you have to underwrite. But we're not immediately adverse to it, but we would always like to see the option.”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“GPs are, aren't you? And look, offense to that question. But in truth, you think about the math. And a typical biofund might have 12 positions. If you look at all the data, maybe in most cases only three of those 12 outperform the total fund return. If that GP comes to you and says, Ted, I got a co-investment for you. What are the chances you're going to get one of those three out of the twelfth? Otherwise, you should give it incremental dollar to the fund and you have a total portfolio. Now, you normalize for fees. Maybe you get a little buffer in there. But the venture is even worse because of the power law and there's only a couple of companies that outperform the whole fund. I'm skeptical of those who have large co-investment programs who claim their outperforming the underlying fund managers because it's hard. And if they're doing a better job than their GPs, they should bring their GPs in and give them some instruction.”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“We certainly ask for that. And that's part of the appeal. I think I told you once about the story of a very, very large pension fund that I was on a panel with one time and co-investment came up and people were talking about performance, this very large not to be named pension fund. Representative said, well, we've done a thorough analysis and we've outperformed in our co-investment program all of the primary GP fund returns from which the co-investments came. Kind of looked at, well, that's interesting. Can I ask my panelists a question? And I said, well, that's pretty remarkable. I mean, if you normalize for, he was saying normalize for fees. I said, well, that tells me that you're doing something that maybe your GP should do. You're filtering somehow some way better than your.”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“I always remember the Groucho Marks line of I would never want to be a member of a club that would have me. That's the ultimate adverse selection joke. We always think about that. If we get a call from one of our GPs, we always ask, we know we're charming, but why are they really calling us? So the first question is always, is this, in fact, an average election situation? If not, we'll look hard at it. We have a couple of GPs where we have such a close relationship. We really feel like they are reaching out and giving us some preferred looks at some deals they're excited about where they've maxed out on their capacity. And so we have done some of those. So I think we did only a few through 2014 through 2018. We've done more as we've really tried to build closer relationships with some GPs. So I think we've done about 32 in the total portfolio. And it only amounts on a”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“Get this enthusiasm for a manager. Hey, we want to lean in, but it's good discipline, I think, to be biased toward equal weighting because there's a tendency to say, okay, well, I'm not quite sure about this one. Let's do a half of a bite on this one and see what happens. I think that's a very dangerous, slippery slope to get on. We have a saying that there's only so much beachfront property in the Dietrich portfolio. So it's either hell yes or no. We've been migrating toward that and I think that's the healthier approach to take, but it's tough because there's some stuff that you really, really like, but it's not a hell yes. So we try to keep warm and keep an eye on.”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think there's always a temptation to size based on conviction. I was talking to a friend who runs a prominent fund of funds and he said, yeah, we did all the math on this. And really at the end of the day, there should be equal weighting every. I said, yeah, but that's no fun.”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“A four or five X net return. Now, if you're talking about much smaller seed managers, that is really strategy dependent to some degree. What gives us pause, however, is when you have a manager maybe trying to jump from seed to series A, they don't have the reputational firepower to really lead those rounds. Or if they say we only want to lead the rounds, we really probe as to whether that's adverse selection. Maybe reputationally you only have the opportunity to lead in deals that the big dogs don't want. It's a very complex mosaic, and we look at the specific circumstances of every case to try to figure out, hey, should this be a strategy we should be comfortable with where they write one check, no reserves. We want to get as large a piece as we can, or do we see a skill set where they can say, hey, 30, 40% is going to be reserved.”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“Want to name names, but there's a very large prominent leading VC that is now raising two three four billion dollar funds. What we've liked about their philosophy and approach, which has kept us with this GP as they've gotten larger, is how they handle portfolio construction. This particular manager is willing to stick the neck out when they see a company they've backed in the seed in series A, they will lean in hard on the subsequent rounds to the point where at the end of portfolio construction they might have 40, 50 percent of the fund in three or four companies. That to us is exactly how a two or three or four billion dollar fund needs to be structured in order to hit.”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“You touched a little bit on the aspect of portfolio construction and mentioned the importance of reserves. What do you like to see, let's say, a venture manager and how they go about thinking about portfolio construction?”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“And that's usually a pretty big flag. But sometimes they say, you know what? We spent a lot of time thinking about this. And if we screw this up, we have great track record, but if we blow this going forward, it's probably going to be because of X, Y, or Z. That's an interesting response. And usually we then double click and say, well, what are you doing then to mitigate the risk of X or Y or Z? And how do you think about that? And how do you maintain awareness around those risks? Do you have it on the corner of your whiteboard in your office? And occasionally you say, hey, are we doing X, Y, or Z? Then it becomes a self-denying prophecy. So it gives you a little glimpse and decide of whether they occasionally step back, perhaps offsite, and really do self-assessment. Hey, we have to do this better, or we have to really avoid these mistakes that we know are within our control.”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“For externality risk off the table, it forces them to step back and look at where the real soft spots are in their execution sourcing exit strategy. Sometimes if you can believe it, Ted, the GPs refuse to accept the premise of the question. They will say, well, we've never failed. We've never had an underperforming fund or refuse to accept the premise.”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“This is like losing all my best stuff now if I go on air and tell people what we like to ask, but I'll share one. On this issue of self awareness, say a manager's coming in and raising fund three for three hundred million dollars target. At some point in the conversation we'll ask a question like assume the following Assume you raise the three hundred year targeting for this fund and assume you deploy it in the fashion you've just articulated and assume further there's no widespread economic calamity in the next five or seven years and assume we sit down have a cup of coffee in five or seven years and we look back at this fun three and assume we're all disappointed on a relative and absolute basis What will have been the most likely cause? Now this is not an overly complicated question, but it's often one they haven't thought about. When you take the economic”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“Valuation just to get the DPI up. That's a red flag, and everyone knows this. So we really try to drill down on how they're thinking about exits and whether that is aligned with our long-term expectations around returns.”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“Their investment sensibilities around that? Are they getting the right ownership in a venture case that makes sense? And are they managing their reserves properly? That's a big part of it. And then repeatability. This business is hard to discern skill from luck. I think if there's any silver lining to the last handful of years, it's probably this. We can go back now and look at the behavior of GPs in nineteen twenty and say how did you do? How are you thinking about valuations? How are you thinking about portfolio management? When everything was up and to the right, it's hard. But now you have at least some data. That's not insignificant. Even on the DPI front, today there's a lot of pressure, as we know, for GPs to improve that DPI number so they can raise fund x plus one. And we've often said that the GPs who are selling good assets probably at a low”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“It starts entirely with integrity. It has to be a situation where we are 100% comfortable and happy to be partnering with the people involved. If there's any issues around that, that's a non-starter pencil down, move on. Secondly, I think it's fair to say we would look for a level of self-awareness or authenticity in the GP. And that's hard to tease out sometimes. So as a result, when we're interviewing with a GP for the first time, we try to get them off the pitchbook as soon as possible. We try to ask questions that can give us a glimpse into whether there's really hubris at work here or whether there is some level of self-awareness. Because I think a little bit of fear is a good thing. If a GP doesn't have any fear about execution, I have a lot of fear. So there ought to be an edge around that. And there's some questions we ask to try to tease that out. We also get into portfolio construction.”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“Experience to the table. I think GPs who were with feel comfortable reaching out to us and having us as a sounding board when they run into either portfolio difficulties or personnel issues. So we try to be available and not a pest, but an available and helpful LP.”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“You're going to do whatever it takes. And he just had this ability. Once he got in in front of the GP, he would say, hey, this isn't about Bill Dietrich making more money. I'm not buying another yacht. This is about charitable good works. And can you find a million for us? Maybe he would squeeze his way in for a million or two. And he did that with Excel and ultimately became a significant relationship for us, for instance. So he had this incredible charm and personal appeal that was a big advantage. I think now part of our appeal is we've been at this a long time. Our team is very stable. We're totally committed to venture and other private asset classes. We have a great story to tell. Bill Dietrich was a remarkable philanthropist, and I think people really enjoy his drive to help Western Pennsylvania. So that's an appealing feature. And we try to be good partners. We bring a lot of experience.”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“Bill had a competitive advantage because he was one of the all time great salespeople. Personality wise he had this remarkable charm. It was a great storyteller. People just really enjoyed speaking with him, and when he found a GP that he wanted to get in early on in Dietrich portfolio, he would approach you with every ounce of energy finding other LPs that might be able to make a warm introduction. And I remember one time he said, Ed, when you get down to the wire, you got to fight like you're the third monkey going up the ramp into Noah's Ark.”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“In what's been for a while a very competitive market to access the best GPs, particularly in venture? How did Bill and then you go about trying to get allocations when you're not the biggest player in town and so many people want access to these great GPs?”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“And we invite about 64 either CIOs or heads of private equity from endowments and foundations and fund of funds. That's a great amount of fun. It's a couple of days. But there's also a good amount of gossip that goes on about GPs and who's in the market and what spicy off balance sheet information is out there about a GP. So that's part of our network as well. But really it's at this point interviewing maybe 300 GPs a year to get to only a couple we might add in as a new relationship.”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“So we've taken a couple of approaches. First, we travel quite a bit. I'm probably on the road 80, 100 days a year. The rest of my team have younger families, so I don't ask them to do that much. So traveling is important. And we try to meet with smart people on the ground, allocators, investors, and we try to build our own views. We also trade notes with like-minded investors. So we have a network that we're proud of, bunch of other endowments and foundations who sort of approach investing as we do. We actually Bill started a great idea 21 years ago, a golf outing just outside of Pittsburgh at Laurel Valley Golf Club called the Dietrich Private Equity Invitational. It is an oversubscribed event. So we have a hard cap on it that we're actually keeping the hard cap.”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“At the onset, you talked about the lesson from your father and also Bill about the importance of people in this business. How have you gone about sourcing and selecting managers to fill this portfolio?”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it's a time for don't just do something, sit there. That's probably the best advice right now with respect to China. But at some point, the valuations could get so compelling that we start to lean in again. And then I think the intrepid may be rewarded”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“numbers are all wrong, by the way, but they're directionally correct. But they would pivot always toward pragmatism away from strong ideology. Twenty two is very disappointing. We saw and she and the other Beijing policymakers really a disappointing tone deafness to what investors around the world were looking for in terms of guidance and predictability. They did some things with respect to every five-year Congress that we felt was reason for some alarm. So we put pencils down. We haven't stopped looking. We haven't stopped investing entirely in China. But our allocation pacing has changed dramatically. So I think there are many more unknowns today than there are knowns. And it's not just on the China side. It's how the US administration is going to handle capital flows and so forth.”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“China's hard to underwrite in the best of circumstances. Bill always said, you got to get out on a plane and go to do direct due diligence, especially in a place like China. He used to sum it up by saying, Ed, you can't shoot moose from the lodge. You got to get mud on your boots. So we would travel quite a bit from 2008, 9 all the way until 22. We felt like we had a very good sense of the risk parameters around investing in China. Our confidence was really in the fact that having studied the market and studied their political tendencies, whenever China faced a really hard period, they tend to pivot back toward pragmatism. They tended to pivot toward business led decision making and stimulus and policy reform and whatever it took to get the GDP growth back.”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source
“Chunk of that reduction of 3839% exposure down to twenty ish, ten percent of that, half of that reduction. And the rest was probably the rest of our portfolio outperforming the venture over the last five years.”
2025-03-24 · Capital Allocators · Ed Grefenstette – Bold Allocations at The Dietrich Foundation (EP.437) · IDENTIFIED FROM THE TRANSCRIPT · source