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John-Austin Saviano

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75

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2023-01-30

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2023-01-30

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1. “I think some allocators can overlook the opportunity here to have a very direct dialogue with someone like you who's running your firm and say, look, we have a transitional need to change the exposure in our portfolio. And we're also going to be establishing relationships with new firms. We would like to share ideas with you. We would like to have you sounding board and a resource as our team goes out, it meets with people, and you guys were fabulous. And we really appreciated that partnership that we were able to have and helped us move more quickly in building more direct relationships, particularly as we were very interested in working with younger, smaller firms. That was a really strategic effort on my coach. That was so in the wheelhouse of what you guys did and why it was such a good fit to add to our portfolio.”

   2023-01-30 · Capital Allocators · John-Austin Saviano – Emerging Managers and IC Governance (Capital Allocators, EP.294) · IDENTIFIED FROM THE TRANSCRIPT · source

2. “We met in this context years ago when I was starting at Birke and I knew of you and I knew of your phone. And when I started Berkeley, the portfolio we had needed a lot of work. It was a hand me down portfolio that I knew not where I wanted to be and have to re-architect it. That involved adding new relationships. It involved changing the way in which we did things. And in the shorter term, it meant changing some of the exposures. I looked at our relationship with protege as what's a way I can take a chunk of the portfolio, move it relatively briskly into something that's going to reduce the net exposure of the portfolio. That was sort of thing one that came out of it. But the reason of how did it serve kind of a larger purpose was really that we got the best of you and your team.”

   2023-01-30 · Capital Allocators · John-Austin Saviano – Emerging Managers and IC Governance (Capital Allocators, EP.294) · IDENTIFIED FROM THE TRANSCRIPT · source

3. “That'd be fun to dive in on one little aspect of what you did, and it was how we got to know each other years and years ago. You don't hear a lot about these end owner institutions working with fund of funds. And I'd love to hear your experience in how you addressed some of these asset classes where you didn't have exposure and then how you evolved that over time.”

   2023-01-30 · Capital Allocators · John-Austin Saviano – Emerging Managers and IC Governance (Capital Allocators, EP.294) · IDENTIFIED FROM THE TRANSCRIPT · source

4. “In a place like Cal, you're going to get thousands of opinions. And then just the nature of the breadth of the constituencies when you'd go and there were so many thousands of beneficiaries from the endowments that all want a bit of your time, that all have a stake in the success of what you're doing, making sure that they all are heard and that they all feel like they understand what you're doing. They're on board. Those things are part of being a part of a public university.”

   2023-01-30 · Capital Allocators · John-Austin Saviano – Emerging Managers and IC Governance (Capital Allocators, EP.294) · IDENTIFIED FROM THE TRANSCRIPT · source

5. “It will shock none of your listeners that Berkeley is a fairly raucous place. I don't know that there was any decision I could have made that wouldn't have had a real diversity of opinions within our constituent base. And sometimes those opinions are rather loud and sometimes it takes some time to engage with. That's something you don't get when you're in a private foundation, especially at more. We were so lucky we had our founders living. And so your constituent base is actually present. And if there was ambiguity or things like today, if you're asking questions about ESG, you can ask them.”

   2023-01-30 · Capital Allocators · John-Austin Saviano – Emerging Managers and IC Governance (Capital Allocators, EP.294) · IDENTIFIED FROM THE TRANSCRIPT · source

6. “I think the second was just extraordinary people trying to create an organization at Cal where we didn't have the resources we had or big private foundation pay very differently, offer a very different lifestyle. And I had to do what I could to attract and retain incredible people. And that meant running the fern a little differently, running the management company a little differently so that I could draw in people that were inspired by working for a place like Berkeley, but that also would give me enough years that I could get good results out of them. That normally we ran a journalist team and I really hired some people that had aspirations of being a CIO. They wanted the breadth of what I could give them. And that's one of the other things I had a child.”

   2023-01-30 · Capital Allocators · John-Austin Saviano – Emerging Managers and IC Governance (Capital Allocators, EP.294) · IDENTIFIED FROM THE TRANSCRIPT · source

7. “One of the things I took away really from the experience of both those places was just not being too rigid in terms of asset class names. One of the fundamental drivers of how we built the portfolio and how we operated at Berkeley was that how something behaves is far more important than what it's called. And so when you build an asset allocation, you describe the behaviors that you expect out of that asset and you build a portfolio, you diversify a portfolio of different behaviors rather than just say, oh, I've got high yield bonds and I've got La Loly equities. Well, you're really taking the same risks there. And so that was one learning I think that was really pretty fun to take with me.”

   2023-01-30 · Capital Allocators · John-Austin Saviano – Emerging Managers and IC Governance (Capital Allocators, EP.294) · IDENTIFIED FROM THE TRANSCRIPT · source

8. “Crisis. So the global financial crisis was ebbing, but the financial crisis at the university was really just getting underway. We had the challenges of governance. I mean, I had, you know, there are half a million alums from Berkeley. There's 40,000 students. There's just so many people that are involved and interested in what you're doing. And especially since we were the first in the UC system, that was also another part of the challenge was how do you do this in a way that gets all those folks on board with doing something that's new. And all of those things were just an incredible challenge to do, but a real honor to get to do the.”

   2023-01-30 · Capital Allocators · John-Austin Saviano – Emerging Managers and IC Governance (Capital Allocators, EP.294) · IDENTIFIED FROM THE TRANSCRIPT · source

9. “First of all, serving an institution like Berkeley, it's just the incredible purpose of the institution and the role that Berkeley plays. I'm a native California in California and the transformative nature of what Berkeley brings to its students. It's just every time you're on campus, every time you spend time with students, you just get charged out. I think most people that work for downtown institutions feel this. And it's been a public university. It's almost more urgent because you see so many different circumstances, so many different life stories represented in your student body. So that was one thing that was remarkable. Another thing that I point to was the chance that kind of take what I learned it more and what I'd learned at Cambridge and go through the puzzle, the challenge of trying to figure out what is the best of what I've learned? How do I apply that in a circumstance that is just so very different? I joined Cal in 2009 when the university was in the middle of financial.”

   2023-01-30 · Capital Allocators · John-Austin Saviano – Emerging Managers and IC Governance (Capital Allocators, EP.294) · IDENTIFIED FROM THE TRANSCRIPT · source

10. “Just a couple of years. I had the chance to work on that private side doing primary manager research, helping clients build portfolios. And in 2009, I caught word that Berkeley was going to be starting an investment office. And I just knew I had to throw my hat in the rain. And it was really the chance of a lifetime when you have a chance to go be captain of your own boat. That's a once-in-a-lifetime thing.”

    2023-01-30 · Capital Allocators · John-Austin Saviano – Emerging Managers and IC Governance (Capital Allocators, EP.294) · IDENTIFIED FROM THE TRANSCRIPT · source

11. “When you engage with a client, when you engage with a consulting relationship like Cambridge, you need to have the right batch of expectations early, the goal setting. What are we actually trying to do here? And although everyone wants to aspire to be top decile, the good committees, the good organizations recognize what they're going to be excellent at. If you've got a volunteer investment committee that's meeting on a quarterly basis and you've got a consultant who is there to drive great process and feed good ideas, that's going to help good results. And that's good. And being okay with that being good, Power Marks, everyone else would say, if you want to have truly differentiated results, you have to be doing something really quite different than what everyone else is doing. And in order to be built to do that, you have to have different resources. You have to have a different approach than a volunteer investment committee hired a consultant.”

    2023-01-30 · Capital Allocators · John-Austin Saviano – Emerging Managers and IC Governance (Capital Allocators, EP.294) · IDENTIFIED FROM THE TRANSCRIPT · source

12. “that conversation look like because in theory every client does want to be a top decibel always there's the old mantra of be like yale but even within that nobody wants to be told hey as long as you're not in the bottom you're fine”

    2023-01-30 · Capital Allocators · John-Austin Saviano – Emerging Managers and IC Governance (Capital Allocators, EP.294) · IDENTIFIED FROM THE TRANSCRIPT · source

13. “You're helping them really be good stewards of the capital because your focus is more on process of shooting the lights out with specific manager picks.”

    2023-01-30 · Capital Allocators · John-Austin Saviano – Emerging Managers and IC Governance (Capital Allocators, EP.294) · IDENTIFIED FROM THE TRANSCRIPT · source

14. “It's a really interesting question. Two anchors of my career or in one in a very large, incredibly resourced private foundation, the other working at UC Berkeley, incredibly volatile, exciting public university, and those very difference of conduct. In Cambridge, we had a lot of in between. We had a lot of smaller colleges where you have complicated constituencies, differences in resources. For each client at Cambridge, you tried to bring the best of the firm to their circumstance. So much of that was less about a specific alpha-driven strategy. It was much more about can we run a really good process? Can we get them a good plan that hangs together they can stay with? And can we fill that plan with really good ideas? And it's the natural thing of a consultant driven pool that you're not going to be top decile, which you're really trying to avoid is you're helping them avoid being bottom.”

    2023-01-30 · Capital Allocators · John-Austin Saviano – Emerging Managers and IC Governance (Capital Allocators, EP.294) · IDENTIFIED FROM THE TRANSCRIPT · source

15. “A couple things that you hear a lot, particularly singular pool of capital. One is that none of these pools have exactly the same mission or objective or alignment. But then at the same time, every one of these individual pools is trying to optimize for alpha. Everyone's trying to find the best managers. How did you see that play out at Cambridge when you had so many different pools and different people involved in those pools?”

    2023-01-30 · Capital Allocators · John-Austin Saviano – Emerging Managers and IC Governance (Capital Allocators, EP.294) · IDENTIFIED FROM THE TRANSCRIPT · source

16. “Well, some of the things that are fascinating about Cambridge, first of all, it's just the scale of the firm. There were hundreds of clients of all different types and having to have the agility to step out of a situation where you're talking with a multigenerational family to a small college where you're dealing directly with the wealth creator, to you're dealing with an investment committee of volunteers. They're just very different kinds of environments have to go. Things you take away from that are just the reach of the investment research at a place like Cambridge, where instead of being a part of a small team, they have a bench that is just unbelievable in terms of how many managers they cover, how many markets they cover, how many strategies they cover. Again, as someone who's loves to learn new things, you couldn't help but just revel in the breadth of what you could get there.”

    2023-01-30 · Capital Allocators · John-Austin Saviano – Emerging Managers and IC Governance (Capital Allocators, EP.294) · IDENTIFIED FROM THE TRANSCRIPT · source

17. “Research organization, this huge engine that is Cambridge Associates. And that was a really great chance to add to the skill sets that I built starting off as an allocator at Moore.”

    2023-01-30 · Capital Allocators · John-Austin Saviano – Emerging Managers and IC Governance (Capital Allocators, EP.294) · IDENTIFIED FROM THE TRANSCRIPT · source

18. “So, and more, I started off there as the senior junior guy, happens in endowed institutions, was time to step up after a few years and become the junior senior guy and have a piece of the portfolio. And over that time, we had hired a really great folks above me. All the seats were filled. And I recognized that if I wanted to keep growing, I would have to leave. And that was one of the hardest decisions to make, to leave just an extraordinary organization, extraordinary job, but to know that that's what it would take to continue to advance. And in retrospect, a couple of those folks, they're still there at Moore. I mean, it's that good of a job. People have been there for over 20 years, in some cases. I went to join Cambridge Associates and I worked on the private capital team. That experience was terrific because instead of focusing on one portfolio, you focus on many. Instead of working with just one investment committee, you work with many investment committees. And you're part of a large”

    2023-01-30 · Capital Allocators · John-Austin Saviano – Emerging Managers and IC Governance (Capital Allocators, EP.294) · IDENTIFIED FROM THE TRANSCRIPT · source

19. “So I started more as a generalist. You think about when we started, we had basically an all Intel stock portfolio. Those first years we sold these breathtaking blocks of shares over time and vividly remember like those early days, the stock going from 36 bucks to an intraday low 12.95 in my first six months on the job. So a lot of what you're doing is you're getting liquidity. We're liquidating a single stock position. And then we're establishing the core building blocks of an institutional portfolio. And so we were in that happy circumstance as an allocator that you're underweight everything. And you have billions of dollars liquidity and it's early 2000s and we need hedge funds. We need long-leaning managers. We need private relationships, especially with the provenance of the capital. Gordon Moore having such huge esteem in the valley. We were just a kid in the candy store. You got access to such incredible, talented firms. They were eager.”

    2023-01-30 · Capital Allocators · John-Austin Saviano – Emerging Managers and IC Governance (Capital Allocators, EP.294) · IDENTIFIED FROM THE TRANSCRIPT · source

20. “So many of these things in life often, I think there's been a happenstance that dot com era out here blew up and I worked for a small firm that had reserved its capital and decided that it wanted to reallocate capital away. It wasn't like a traditional fund structure. And they reallocated capital to other things. It was in early 2000s. I was a finance guy that was out of the job. I got incredibly lucky finding this role when more was launching. And they were looking for someone who had a diversity of skills to come in and help as an early employee. And they took a chance on me and I found out just a trait that I fell in love with.”

    2023-01-30 · Capital Allocators · John-Austin Saviano – Emerging Managers and IC Governance (Capital Allocators, EP.294) · IDENTIFIED FROM THE TRANSCRIPT · source

21. “Seeing those things. And I think those are things that have served me well when it goes down to spending time with a fund manager. You go to the assets. You go to the companies to get down to the fundamentals and you start there and you build your understanding up from there. So those are some of the things that I took away”

    2023-01-30 · Capital Allocators · John-Austin Saviano – Emerging Managers and IC Governance (Capital Allocators, EP.294) · IDENTIFIED FROM THE TRANSCRIPT · source

22. “Few things come to mind. One is I felt so lucky starting my career in credit because it's just so fundamental and especially how so many of my peers in the late 90s were focused on banking on companies that were a lot less real. I had the experience of working with companies that were building things and had real working capital needs and equipment leasing and fundamental things to business. So I learned a lot about, I think. Business fundamentals in underwriting creditors' lens. And then some of the other things I learned. You learn how to drop into a new situation. You learn how to evaluate different models and try to keep an open mind”

    2023-01-30 · Capital Allocators · John-Austin Saviano – Emerging Managers and IC Governance (Capital Allocators, EP.294) · IDENTIFIED FROM THE TRANSCRIPT · source

23. “So, in those early direct money management experiences that both sides, you got the credit lens, you got the venture lens, what are the things you learned in that period of time that you took through to being on the endowed side?”

    2023-01-30 · Capital Allocators · John-Austin Saviano – Emerging Managers and IC Governance (Capital Allocators, EP.294) · IDENTIFIED FROM THE TRANSCRIPT · source

24. “I started my career in the mid 90s in credit, learned the fundamentals of credit, working as a commercial lender and mid tier bank, and then I shift gears to sort of the opposite end of the risk spectrum and then went to work for a small venture firm at the peak of the dot-com craziness. So that was her, I started my career. But over the last 20 plus years, I've spent my career working with and for endowed institutions before any time or another. And my real break into that was starting the Moore Foundation. Warden Moore was a co founder of Intel, and he put up 175 million shares of stock to create new charitable foundation. And I was really lucky to be on the starting team there. So that's how I started working with endowments and really an institutional money manager.”

    2023-01-30 · Capital Allocators · John-Austin Saviano – Emerging Managers and IC Governance (Capital Allocators, EP.294) · IDENTIFIED FROM THE TRANSCRIPT · source

25. “My guest on today's show is John Austin Saviano, the founder of High Country Advisors, where he serves as a strategic advisor to both investment firms and the institutional pools of capital that back them. Before starting High Country in 2017, John Austin served as an allocator for nearly two decades at the Moore Foundation, Cambridge Associates, and as the first chief investment officer of the University of California Berkeley's endowment. Our conversation covers John Austin's career path from direct investing to allocation and insights gleaned across his roles. We then turn to his work at High Country, including lessons he shares with emerging managers to help them tell their story and navigate a difficult fundraising environment, and those he shares with allocators about governance and investment committees.”

    2023-01-30 · Capital Allocators · John-Austin Saviano – Emerging Managers and IC Governance (Capital Allocators, EP.294) · IDENTIFIED FROM THE TRANSCRIPT · source