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Jenn Birmingham

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2023-09-04

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2023-09-04

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1. “Their views are on infrastructure is it a high significance, a high value aspect of their business? Do they understand it? Do they know who they need to put in place to actually get the job done? And so that is all discussed as well within that bullbear discussion. And the investment team typically participates in the operational due diligence as well. And I actually sit in on the investment diligence for our managers. So I can get an appreciation and others can too as to the strategy and then what you need to support that strategy.”

   2023-09-04 · Capital Allocators · Jenn Birmingham – Organizational Alpha at PRINCO (EP. 336) · IDENTIFIED FROM THE TRANSCRIPT · source

2. “So we induct ops DD. I would say obviously, but not everyone does it. And that is actually part and parcel of when I was talking about Andy's vision and the focus, as well as my vision being an integrated team. The integration actually starts with the investment diligence as well as the operational diligence. We talked a little bit about the internal operations of Princo, but there's also the external facing, which would be the folks who are the same people also conduct the operational diligence on our managers. And part of the Bull Bear is the operational due diligence. So we do our own pluses and minuses. Let's say it's emerging manager that doesn't have everything set up yet for infrastructure. We will list the risks, but we'll talk about what we can do to mitigate and how we see in terms of the people that we do interact with.”

   2023-09-04 · Capital Allocators · Jenn Birmingham – Organizational Alpha at PRINCO (EP. 336) · IDENTIFIED FROM THE TRANSCRIPT · source

3. “Exactly. Not only do we have the Bull Bear arguments, we have a bull and a bear in the entire team ask questions as it relates to that bull bear argument. So the bull will lead off with a key bull points and then people will ask questions and then the bear will lead off on the key bear points and then everyone will ask questions.”

   2023-09-04 · Capital Allocators · Jenn Birmingham – Organizational Alpha at PRINCO (EP. 336) · IDENTIFIED FROM THE TRANSCRIPT · source

4. “These are bull bear arguments that we come up with in the beginning, and then we modify as we go, and then also provide mitigance to the extent that if there are a bear point, we'll have a mitigant or not. The culmination of all of that work comes to a bull bear decision meeting. And that is just the Princo team. And we all vote. So we have this voting dynamic. To write, pound the table, two left, negative, or one and one. You have to vote, though. You can't abstain. And we always say everyone votes. Not all votes are treated equally, but everyone votes. And actually, Andy always withholds his vote, so he waits for everyone to give their honest view before he does. Although you can read the room, you probably know which way he's leaning.”

   2023-09-04 · Capital Allocators · Jenn Birmingham – Organizational Alpha at PRINCO (EP. 336) · IDENTIFIED FROM THE TRANSCRIPT · source

5. “No. The way we process information is that we prinko. We make the decisions on the investments. So we do diligence, those meetings on Mondays and Fridays. We bring the entire team along on diligence. So there's certain people that would be on a deal team and will work specifically on certain manager relationships. They bring all the diligence along, discuss the pros and cons in what we call a bull bear.”

   2023-09-04 · Capital Allocators · Jenn Birmingham – Organizational Alpha at PRINCO (EP. 336) · IDENTIFIED FROM THE TRANSCRIPT · source

6. “Liquidate investments that are at their low. That's not what you want to liquidate. And it might be great for the university to take out debt at this point so that we don't have to do that collaboration is super important. Also another living example is just how we look at liquidity in general. Jimateo, who is our VPF, sits on the board and the chairman of the Trustees Committee on Finance. So you have all of this integration already in our board. They really work well together to figure out the best liquidity posture for the university in general. In the end, what do we have together and what is optimal for the university?”

   2023-09-04 · Capital Allocators · Jenn Birmingham – Organizational Alpha at PRINCO (EP. 336) · IDENTIFIED FROM THE TRANSCRIPT · source

7. “The bored relationship is amazing. So one of the great parts of the governance is that the Kranko Board doesn't approve investments. Princo has the ability to invest without constraint as it relates to the board. And I think we report to the board. They know everything that we're doing and can obviously raise concerns, but there's no severe set approval process. And I think in that regard, they're able to be so super helpful to us in ways that you might see other boards maybe not so much a great example. I wasn't here to experience it, but I saw the results of it was how during the financial crisis, the board, the university, Andy and Princo all worked together to figure out holistically what is best for the universe.”

   2023-09-04 · Capital Allocators · Jenn Birmingham – Organizational Alpha at PRINCO (EP. 336) · IDENTIFIED FROM THE TRANSCRIPT · source

8. “I think certain fields will get back to what it used to be. I don't think everyone's going to now be hybrid. I don't think the new norm is remote work as much as it is now Andy always does this to me if you were going to make a bet that in five years it would be more or less remote what would you pick and I'd say less. There be none, I don't know, but I would take the other side.”

   2023-09-04 · Capital Allocators · Jenn Birmingham – Organizational Alpha at PRINCO (EP. 336) · IDENTIFIED FROM THE TRANSCRIPT · source

9. “People wanting to be remote more, but most of the senior people want people in the office, and it's that whole thing, I think, junior staff members, what they don't appreciate is that, yes, you've been productive, but do you want to catapult your career? Do you want to learn as much as possible? Do you want to be the best XYZ ever? That is going to require you to have some in-person interface. I think that there's that lack of appreciation, I think, so that some people are seeing they've been challenged by.”

   2023-09-04 · Capital Allocators · Jenn Birmingham – Organizational Alpha at PRINCO (EP. 336) · IDENTIFIED FROM THE TRANSCRIPT · source

10. “About 11 of the biggest endowments, and it's all of the people that hold positions like me and basically we have a day where we just talk about one of the five most important things going on in your organization. Each school hosts this, by the way. The host school will have maybe their auto come in and talk about hot topics and things to be focused in on. And then they'll also have whatever is like AI. They had a few vendors come in and talk about what they do in terms of offering that software. I find it's the side conversations you have with people about the risks that they're seeing or organizational challenges and just hearing how they're thinking through that. I have always found helpful. Or quite frankly, reinforcing that. I like the way we're doing it. And it can be that push and pull for reaffirmation.”

    2023-09-04 · Capital Allocators · Jenn Birmingham – Organizational Alpha at PRINCO (EP. 336) · IDENTIFIED FROM THE TRANSCRIPT · source

11. “Stretching myself to do things that make me uncomfortable like this. I sit on an external board. I think about our board and how helpful they have been and can be. And I just think about that for other organizations. And I just maybe want to train that muscle. There's also conferences that I attend on industry matters, AIMA. ILPA has them, things like that, but also I find really helpful every year. We have our ops peer conference and I think sharing our ideas and how people do things differently is also a way that might trigger us doing something different.”

    2023-09-04 · Capital Allocators · Jenn Birmingham – Organizational Alpha at PRINCO (EP. 336) · IDENTIFIED FROM THE TRANSCRIPT · source

12. “When I first started here, I think it might have been my first week. And I'm sitting, Andy is only a chair away from me and I'm working on my computer. And he's like, ah, that printer back there isn't working. I got to look at him and I'm like, just keep typing. I feel I'm still looking at me. Like, oh, you mean me? Because he would have done it before. So that's how hands-on we all have been again. If you think of something that's very entrepreneurial, like a startup or anything, you're doing everything. Everyone has had their hands in everything. But there does get a point in the growth of the team and the organization in terms of its maturity that for you to be better at what you do, you need to have the people to actually delegate that to.”

    2023-09-04 · Capital Allocators · Jenn Birmingham – Organizational Alpha at PRINCO (EP. 336) · IDENTIFIED FROM THE TRANSCRIPT · source

13. “I implemented the first document management. I didn't want to do that. So having a director of IT was a huge delegation for me because that's what he went to school for. I was an econ major. I knew what I needed and I knew how things should work, but he's the expert. Having people like that is so important to be able to lead my group in terms of you want really smart people around you. And so that's what I try to do. If he's an expert in that, I want him to do that. And if she's an expert in that, I want her to do that. That is pretty key to my success has been having those people who work with me be so great at what they do, to be honest, that has allowed me to delegate a lot. I probably still do more than I should, but I think I'm getting better. Andy has a little plaque on his monitor that says, who else should be?”

    2023-09-04 · Capital Allocators · Jenn Birmingham – Organizational Alpha at PRINCO (EP. 336) · IDENTIFIED FROM THE TRANSCRIPT · source

14. “Folks got so used to being remote and communicating via chat. What people didn't realize is that that was a necessity. We were forced into that communication and that type of structure. Whereas we worked so hard before COVID to make sure that our communication was open. Sure, Microsoft chat helped us a ton in terms of being able to talk to someone as if they were next to you, but it still wasn't the same. I think the hardest part is that we do have a very young team and a lot of these junior folks hadn't had the experience yet to fully appreciate how much you learn by just being next to someone and overhearing conversations, overhearing a reference call. I think that that has taken time. I think we're getting there, but I do think that has taken time too. Rebuild that appreciation for the in person.”

    2023-09-04 · Capital Allocators · Jenn Birmingham – Organizational Alpha at PRINCO (EP. 336) · IDENTIFIED FROM THE TRANSCRIPT · source

15. “Think having our teams be so integrated together is really our secret sauce. That was very important to Andy. He didn't want this operations team or tech team developing technology that, are we sure we want to use it? Is it the investment team up to speed on this? It had to be all bought in. So everything that we did from operations to technology to investments is integrated and understands what each other does. And so that's part of how I know what's going on is because we're all talking to each other. It's not like I have to get caught up. We have team meetings. So we have Monday meetings and Friday meetings. And the fact that everyone is invited to those is really important. That helps me stay on top of things.”

    2023-09-04 · Capital Allocators · Jenn Birmingham – Organizational Alpha at PRINCO (EP. 336) · IDENTIFIED FROM THE TRANSCRIPT · source

16. “The culture honestly is helpful with that because we are super collaborative, even in this swing space, we're open floor plan. We have offices that folks can duck out into, but generally speaking, everyone is on the open floor. Overhearing conversations is a big part of our learning and culture. Someone hearing something and then interrupting our buddy in is actually what we want people to do. It's purposeful and that was part of the negative aspects of COVID from our viewpoint among many other negative aspects was the fact that we didn't have that overhearing. We didn't have that, oh, wait a second, John and Andy are talking about this hedge that they're going to put on operationally. I need to understand how we're going to do that. So I'll just scooch my chair over and sit there and listen so that I know what the plan is. And I think that happens really frequently.”

    2023-09-04 · Capital Allocators · Jenn Birmingham – Organizational Alpha at PRINCO (EP. 336) · IDENTIFIED FROM THE TRANSCRIPT · source

17. “Ops team. We are 12 and hiring one, so we'll be at our 18 in total. The tech team is completely transformed as well. Was lucky enough to get a director of IT who actually was in the admissions department and was interested in doing more investment technology. He joined us. He hired desktop person and then for the first time hired two of our interns actually this past year. So that was a big change. And there's been huge changes on the technology front as it relates to our internal operations as well.”

    2023-09-04 · Capital Allocators · Jenn Birmingham – Organizational Alpha at PRINCO (EP. 336) · IDENTIFIED FROM THE TRANSCRIPT · source

18. “When a decision is made, do you want to move on or do you want to do something different? So some analysts go on to grad school, some move. So it's a lot of different reasons that folks turn over, but then some stay. So that's why it has a healthy turnover.”

    2023-09-04 · Capital Allocators · Jenn Birmingham – Organizational Alpha at PRINCO (EP. 336) · IDENTIFIED FROM THE TRANSCRIPT · source

19. “So obscene tech were not built out yet. So we had two folks in operations and we had two I would call desktop support in tech. They were using a consultant to make sure things were functioning. Servers were on the fifth floor, which was scary. There was just a lot of technology that needed to be addressed from that team's perspective and then also on the op side. There was just so much more to do. The folks that were there were doing a great job, but it was spare bones just trying to get things done and managed on a cash flow side. The investment team really has hovered over the years between 18 and 25. We expand a little bit now and then, but because of the analyst program and how it's designed, it's a two-year term. And at the end of the two years, that's”

    2023-09-04 · Capital Allocators · Jenn Birmingham – Organizational Alpha at PRINCO (EP. 336) · IDENTIFIED FROM THE TRANSCRIPT · source

20. “See how we work and then take your experience and apply it, but first figure out why we're quirky and how we're quirky and figure out how to make that better and don't just squash it. It was really important that I learned all of the cycles and the ebbs and flows of workflow, of decision making, and just how people work together, Toy2 is very much so about getting a lot of things done quickly. It was a mindset change for me that I had to make.”

    2023-09-04 · Capital Allocators · Jenn Birmingham – Organizational Alpha at PRINCO (EP. 336) · IDENTIFIED FROM THE TRANSCRIPT · source

21. “like a university like Princeton, you could not draft a better job spec. This ticked every single box for me. That was the main difference, but there are many, many other differences in terms of how we work at Deutsche. This is what we got to do. Go get it done. Whereas when I came here, it was, whoa, let's talk about it. Let's be thoughtful about the path we're going to take. Let's talk through those. Let's talk about the risks. Go to the pros and cons, and let's talk about it a lot. I think we've grown a bit since I started, but in the beginning it was every decision. And so that was very different for me to absorb and work because I was hired to do this blank sheet. I'm very excited. And Andy said to me, put the guns back in the holster. Stop, pause.”

    2023-09-04 · Capital Allocators · Jenn Birmingham – Organizational Alpha at PRINCO (EP. 336) · IDENTIFIED FROM THE TRANSCRIPT · source

22. “Very different in a good way, but it was also a tough transition. There's a lot of frenetic energy on Wall Street and at the end of the day, you do have to pause, particularly if you're being introspective. And what am I working for? I had at the time three small children. And when I was working at Deutsche, I didn't see them much. That made you think, if I'm going to be spending all this time away from my family, I want it to be something very meaningful. And so that's why I vowed that I wasn't going to leave unless it was for something very different and something where I could actually do that. Being one of 10, education was huge in my family. My mom said, that's how doors are going to open for you. So make sure that becomes a key part of your life. Having the opportunity to use the skill sets I had gained over the years to do something for a mission.”

    2023-09-04 · Capital Allocators · Jenn Birmingham – Organizational Alpha at PRINCO (EP. 336) · IDENTIFIED FROM THE TRANSCRIPT · source

23. “I think it was entrepreneurial side of me as well as this position in that it was a blank paper Hey, this is unwritten, you're going to chart the course and actually at Deutsche it was the same thing when I first joined them. They had just bought Scudder investments and was starting the retail business in the US. That was intriguing to me, something new, something that we could build. And so this had the same feeling of that, but it incorporated a ton of my skills and experiences and put it into one role. I did accounting. I did a little finance. We did investing, did operations. So this brought it all together for me.”

    2023-09-04 · Capital Allocators · Jenn Birmingham – Organizational Alpha at PRINCO (EP. 336) · IDENTIFIED FROM THE TRANSCRIPT · source

24. “It was. It was a new position created post global financial crisis by a bunch of our peers. Pranko was a new position and basically taking on the responsibilities of operations, finance, HR, legal. Everything basically non-direct investment related. I spoke with him and then that was December 2009 met with the entire organization as well as people at the university over a course of a few months and started here in Audi of 2010.”

    2023-09-04 · Capital Allocators · Jenn Birmingham – Organizational Alpha at PRINCO (EP. 336) · IDENTIFIED FROM THE TRANSCRIPT · source

25. “And at the time, we had Americas from a legal entity perspective. You need a chief financial officer for that. But then we also had global product responsibilities, depending on management at the time, how they viewed the business. We had other responsibilities. And so that was the physician I walked into. So I did that until 2010. And basically, that's when I had met this recruiter. And he had through the years talked about all these banking roles. I didn't leave Deutsche because I was unhappy. I loved the team I worked with. My boss was great. I had tons of responsibility. I learned a ton, had become friendly with a recruiter who actually recruited people for my team at Deutsche. His name's Jeff came to me and he said, I've got something totally different. So we sat down and had a conversation about what”

    2023-09-04 · Capital Allocators · Jenn Birmingham – Organizational Alpha at PRINCO (EP. 336) · IDENTIFIED FROM THE TRANSCRIPT · source

26. “I was very lucky, had come from Deutsche Assembly Management, where I was there for about eight and a half years. I had started in what was called Global NIS, so global reporting for mostly financial management and information systems. I gradually worked my way up, and then there was a lot of transition with the CFOs within asset management. And I thought I was going to leave. I had a long chat with the global CEO. He said, don't leave. We can do something different. How about working in the hedge fund space and working with strategy? And so I said, yeah, that sounds great. Something different. So I went and worked in the hedge fund space, Pam Kiernan, who's at Tusigma Now, was my direct boss and ended up being a mentor for me in life. Had a great experience there was only there for a year-ish in that position when I was offered the CFO position of the Americas for Asset Management.”

    2023-09-04 · Capital Allocators · Jenn Birmingham – Organizational Alpha at PRINCO (EP. 336) · IDENTIFIED FROM THE TRANSCRIPT · source

27. “Today's show is the most popular episode from our new podcast, Investment Management Operations. Host Scott McDonald interviews Jen Birmingham, Managing Director at the Princeton University Investment Company. Jen exudes the concept of organizational alpha, how operations can integrate, provide leverage, and add value to investment results. In particular, her descriptions of collaboration and decision-making at Princo offer an insider's look at one of the top endowment performers for decades. Jen often refers to the leadership of Andy Golden, Princo's longtime chief investment officer. His first appearance on capital allocators is replayed in the feed.”

    2023-09-04 · Capital Allocators · Jenn Birmingham – Organizational Alpha at PRINCO (EP. 336) · IDENTIFIED FROM THE TRANSCRIPT · source

28. “Opinions expressed by Ted and podcast guests are solely their own opinions and do not reflect the opinion of capital allocators or their firms. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of capital allocators or podcast guests may maintain positions in securities discussed on this podcast”

    2023-09-04 · Capital Allocators · Jenn Birmingham – Organizational Alpha at PRINCO (EP. 336) · IDENTIFIED FROM THE TRANSCRIPT · source