YouSaid · the spoken record

Margaret Chen

lines on the record: 70
first: 2018-01-01
most recent: 2018-01-01
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Or ten again and have anxiety like I got to be good at that. And that's such a good feeling because when you actually improve, whether it's running or anything, you know, it really, it really makes you feel alive.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“I would say it's so important to learn something new. I have forced myself because I had to. When my kids were learning how to ice skate, I was like, I have from New Jersey, my parents from Taiwan, I've never learned how to ice skate. So I forced myself to learn how to ice skate. I did it for six years. Accomplishing the ability to skate well is great. In my 40s, I learned to cross country ski because my kids are doing it. My husband loves it. And I had resisted. I was like, and I love cold weather. But like being on skis, if you've never been on skis as an adult, it's the most challenging thing ever. And then now I basically am taking adult ballet. And so, and I'm also learning Mandarin. I can speak basic restaurant Mandarin, but I want to get better. And it's so humbling to learn something new. So I encourage everybody to pick one thing and you're going to feel like you're”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“Just slow down, you know, and we all run around doing so much. And it's not that we, that's not a good thing, it's that no one spends a time and smells of roses and go, you know what, that was really awesome. And just taking the time to do that, I think brings a measure of satisfaction and happiness to life, especially if something's particularly challenging to be able to do, that's okay. And also, you know, failing's okay. This is a culture where people do not, you know, feel very shamed for failing. And I think for me, I'm like, yeah, I failed lots of things and that's okay. I learned to pick myself up and just move on and say, you know what, there's always tomorrow.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“The most favorite thing I read is a New Yorker. I think the New Yorker by far gives me the best bang for my buck in terms of the time I have, the variety and diversification of stories, the excellent writing that I hardly see anymore, you know, and I used to love the Wall Street Journal in New York Times when they write these big, deep articles. They run a business too, and they just, you know, it's hard to be able to have the money to do that. And I think for me as I've gotten older, I'm very interested in people and sort of what other perspectives people bring. So I do love reading books about people and I love reading autobiographies. But the reality is also that I have to limit myself because I will literally stay at the four in the morning finishing a book. It's a bad quality.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“Could be self sufficient. My parents are, I think because they were immigrants and they came with very little, it was very important to them to tell their three daughters that to be self-sufficient and independent was very, very important. And they even said to the point, I remember our conversation, they're like, you can never depend on a guy. And they don't mean it in nonsense, but they meant in a financial sense.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“And I'm going to throw you the ball because after watching me a couple plates, you can see that I could run. So I did that. I caught the ball and then I knew enough to be like I have to run to the end zone. But I just started running the other way and then everyone's yelling. I was already in the end zone. So I learned football really fast. So that was.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“That is exactly what it was. That was my favorite sports moment was my own personal sports moment was Intermiddle Ping Pong at college. We wanted a ting cup for it. But actually, I will tell you actually what was, for me athletically, was because I was an immigrant, we loved baseball. I mean, I love the Yankees growing up, but I knew nothing about football. And so freshman year, like second week of school, I must have been in shorts and sneakers and some guy comes out to me and says, you know, we are so desperate for a woman to come out because it was Koey Touch Football and we're going to forfeit the game if we don't have another woman come out. And so, you know, I was in Schwartz and a sneaker, so I must look like I could run or something. And so I was like, and then I didn't have the heart to tell him I knew nothing about football, like literally nothing. I didn't know what End Zone was. So we get out there. I said, okay, fine. So I get out there. And he says, just go to your right and just run straight and then just turn around.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“Okay, so next year is a big year because I'm turning the big 50. So ten years, I think in some ways is like tomorrow. If I think back ten years, I would be like, oh my gosh, you know, it's like they got a long race to go. And now I think it's not that long. So I would say at different points in my career, I wondered, you know, is Cambridge the right place for me? But Cambridge has been tremendous in the sense of it's allowed me to have different careers at one place. And the older I get, the more I would not give up our clients and I wouldn't give up my colleagues. I mean, it's a tremendous group of individuals and institutions. And there's an aspect for me of giving back and serving. And this is my way of doing that. So it's not to say that I would or wouldn't be at Cambridge, but anything I do will have that element to it. And it's important to me.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“Room problem, but when you have five dominant voices in the room, sometimes they can't get along. So, you know, one of the challenges is those kinds of individuals. And the second is, I think that since in the 25 years, you know, I've been in the business, I would say civility and gratitude are things that I worry about because I don't think people are very civil and I think that people, they don't like it, they leave, you know, instead of sort of working out and saying, well, Ted, why do you think that? What is it that makes you think that? That's something that if what makes me worried because it leads to poor decision making, you know, from hiring an OSIO provider to deciding whether your performance is acceptable to just basically not serving the institution well if you're a trustee or even if you're a staff person when you come from one lens and one function”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think there are two challenges. One is making sure folks have enough experience to be really strong investors, but be open-minded enough to continue learning. Because I think that since we have graduated from college, wealth creation has been incredible. Almost seems too easy out there for institutions as well as individuals. And in some ways, I worry that that leads to sort of a yes culture. You know, so, you know, if I have the means and I'm giving and being philanthropic, which is a wonderful aspect of one's life, you also have the power. And, you know, we're talking about power all over today, you know, and workforce. And I think that if you always feel that and know and have that, and people treat you, that you're always right, it's actually very dangerous for investing. And so it's a variable of the dominant voice in the”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“Investment team understand and not only like we feel that we are part of those institutions like we may be say capital or Cambridge, but we feel that we are at that institution's investment office, just down the hall from the CFO or the president. That's what you want, you know, because then it really doesn't matter where you are. As long as you see them regularly. But I think that's, in some ways, we've come full circle, right? Because of the Will Strates.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's a good question, Ted. I think one of the things that has changed is when that model failed, it forced people to hire their own. The fact that, you know, David Swenson or Scott Moppass were hired in their twenties and early 30s, that won't happen today again. But that's what forced folks to say, you know what? We want our own CIO. We want to build our own team because we now, we will know what they're investing in. We will have some say in some control over what they're investing in, some provide some guidance. You know, today, in some ways because technology is so good and also because the outsourcing in our daily lives is just a fact of life. Folks are just much more comfortable with saying, you know what, I'm going to hire a specialist for X, Y, and Z, including my endowment. And as long as that communication mechanism and that information interchange and that you have confidence that you're a CIO”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“If you got back in the early 70s, I guess it was in Boston, endowment management and research was sort of this original OCIO business, I think they managed the Yale's endowment. And then when you went through that difficult period in the markets in the 70s and the purchasing power of these pools got crushed, that took what was an early OCIO model and turned it back into individual investment offices. Are there any lessons that you guys thought about as you were moving into that from the failure of the first wave of OCIO businesses to make sure that whatever happened then won't happen again this time around?”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“If we looked up five, ten years, I'd say we're in the early innings in the sense of there will be consolidation in the industry. And there will be a consolidation of models in terms of what clients want in terms of their OCIO provider. There's so many providers now the barriers to entry in some ways are still relatively low and they're getting higher. They're getting higher because you need the infrastructure, you need the resources, you need to invest in those.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“Sense this is where the sameness and different being different is there's always a tension there and we're comfortable living with that because I think that every institution is different and so if you're different you have to be you have to allow the investment teams to have that difference and again if you have the proper monitoring oversight you know that's fine we see all the managers in the portfolio so I can tell you where the overlap is and where it's not”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“So there are two levels on that too. So the research team will ultimately make a research decision on a manager. So they go through under regular due diligence. On a second level, the investment team could also decide for investment for that specific client need that the manager is not no longer appropriate for the portfolio. It could be for a variety of reasons. It could be your cutting real assets. And so, you know, that you have to figure out which manager to trim. It could be that you find a better fit for a risk return profile. It could be there are lots of legitimate reasons why that could be the case. And we do allow the teams to make individual decisions on managers. And the reason is because I don't think in investing there is a standard A to B. Managers, that is, again, you're hiring investment team and you can get the same return and get there differently. So I think in that”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“Research team come in, they have this CIO coming in. But what they tell us is this, but they tell us this look, they really appreciate it, it can be a lot of work relative to other competitors out there, but it's worth it because they know that we appreciate and understand what it is they do. And we have long-term investors and they have clients that have basically bought into what Cambridge offers and are there for the long term. And we have a 97% retention rate for the last five, you know, over the last five years. And I think the average tenure is something like 12 years. So these are institutions that are not going anywhere. They believe in long-term investing. They believe in diversification. They believe in, you know, the structure and the infrastructure that we provide them. And the managers appreciate that. So we might put them through their paces, but managers tell us that they appreciate it in the long run. It's like, it was worth it.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“We don't have every CIO, but you have an investment team member having met with the manager because what we do at Cambridge is we have a dedicated research manager research team and research group that's global, but we also have, it's a partnership model, so investment team members can go to any meeting. And so if you're investing in that manager, managers cycle through many of our offices, but we also on the road all the time. So there will be always an investment team person who has seen a manager. We won't invest in a manager that we have not seen. And so therefore you have almost a double check, right? Because you have all the proper due diligence that we've done on a manager, and that's done by the research team. And then on that, then the next question is, is it the right fit for the portfolio? For that institution, and that is what the institutional, that's what the investment team member has to decide.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“One of the things I was always curious about in a model where you have a deep research team that's separate from the CIO is how do you get conviction in individual decisions? Because I know when I sat in the seat, even if you had a small research team, you always wanted to be in front of the portfolio manager so you can use your own instinct and experience to say, yeah, this is someone I want to have in my portfolio. In a bigger organization, you have dedicated research teams. I just, from the outside, I imagine that that can't always happen. You can't have every CIO sitting with every portfolio manager.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“Concern, and you can talk through it, and by virtue of clearing your head and getting some comfort in uncertainty and that others are in the same boat that you are, really helps. And that really makes you more focused as an investor and helps you get better long-term returns.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“But they also have real conviction how they got to that decision so that they can own that decision and that they understand how it interacts in the whole portfolio. Because what we're trying to do is we're trying to earn a certain return for a client. So how the team works together, you know, the investment decisions they make, the process, how are you a corporate citizen? Are you sharing? One of the advantages working with Cambridge is that it's really lonely being a CIO. And so if you're a CIO at an institution, sort of no one's really going to want to talk to you until you're a secrets. But we have the CIOs get together every month. They talk about investment issues. They can talk about what they're hearing from their clients. And that's a real benefit because then all of a sudden you can say, ah, you know, I am struggling with the same thing, whether it's a manager, whether it's an issue, a question from a client, you know, whether it's a market.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“Investing is a long term approach, but you just have to buy into the philosophy. If you're buying to the philosophy, we've had clients where they were an index and then they wanted to decide they wanted to come to Cambridge and really appreciate a diversified portfolio. We've also had the other way. You're like, we built you this fantastic portfolio knowing that when they during us, they're going to be hitting the wrong time in the index. And we see it and that's the way to show. So we think it's really important to do the homework, you know, make sure they come on site and understand what approach and the process that we take. So the second thing is on the qualitative aspect of it, making sure that the teams have an underlying process that they can replicate. So regardless of whether it's the decision that they make, not only do they feel like they have conviction,”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, there's the qualitative factor, and there's a quantitative factor. So, the quantitative is fairly simple. We look at performance versus policy benchmark, and that's why we spend a lot of time working with our”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“Or this institution. So that's what we've worked very long with many, many managers. And the process works because it's fair, because it's transparent. And because, you know, Cambridge is not one large entity in that sense has a name. But aside from having the infrastructure, it has many underlying different children.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“So the mechanism is pretty straightforward, and that has to do with, you know, we ensure we're compliant too, but the manager decides. So that fund, the GP, decides who ultimately, as the manager does for any client outside of Cambridge or in Cambridge, who gets access, which institution gets access. It would be a complete conflict of interest if we had to pick and choose amongst our clients. It's like saying who's your favorite child? You can't do that. But what you can do is saying your child's applying to school and you say, okay, you know, the school has to decide how to make that composition amongst their LPs. What is that right composition? Having said that, I will say that I think we have really good access because people want to be with our clients and because we are not a one-size-fits-all kind of OCIO shop or then basically we are not looked at as one entity. You're looking at and you say, well, what about this endowment? What can this endowment bring?”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“What happens in a particular example, let's say there's a new call to hedge fund, it doesn't matter, long only fund, private equity fund, that you've known as an organization because they came out of a place you'd supported for you, you know the person, you want to get behind them. But there's limited capacity. And you have CA, capital management, the OCIO business, you have lots of consulting clients. Is there a conflict or is there a mechanism? And what's the mechanism to decide who gets access to something that has limited capacity?”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“We are not averse to that, you know, in the sense of anything that can either enhance the return of the portfolio in any way and on a risk adjusted basis. So whether it be through reducing fees, whether it be through synthetic exposure, whether it be just execution, all of that is on the table. It also depends on the client too. There's some clients that really have issues with more new strategies. So we work with what we have. But I would say there's no, you know, we don't have a, can't have this kind of thing.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“As we've had this proliferation, particularly in the public markets, of ways of accessing exposures for less. So the whole ETF movement, the factor movement, have you thought about incorporating more of those sort of low-cost direct approaches in your portfolios in a way that you may not have in the past if it was just, hey, we're going to just go find the best managers we can for our clients?”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“Doing the manager research, and we because we have that 45 plus year history, you know, we know the analyst that was at X fund and the five, seven years now, if that person wants to start a fund, we know where that pedigree comes from. And that's a big advantage.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“Very, very large, much larger funds. Those sovereign wealth funds, I mean, they're multi billions of dollars. That's a completely different way of investing. So in some ways, then you have to go, well, the competition then is amongst either, you know, if you were mid-sized and you wanted to do privates, you know, or if you're smaller, the access is a little bit harder. You have to do it through some vehicle. What we have found in doing our research is that there are people innovating and starting businesses every day. So if you look at sort of the top performing private funds, they may not be the same as they are 20 years from now. Well, they won't be the same, you know, 20 from now and 20 years previous. And so there's always this, I don't subscribe to the fixed pool. I do think that there's always a growth and dynamic innovation in terms of investing. So if there's a need, there's going to be demand. And I think that one of the things that Cambridge does best is actually”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, let me just say, I think having multiple kinds is a gift because it's like the whole going to college again. The lessons you can learn very quickly from having multiple clients, the learning curve is amazing. You can immediately see so we can spot sort of trends or we can spot best practices much faster because you see many, many clients. So there's a real advantage doing that. From an investing standpoint, I would argue that that is not actually size as itself or, and I think you're asking a question about access, is not an issue in the sense that our belief is that there's not a fixed number of managers out there. So if there were a fixed number of high quality managers out there, yes, everyone would be competing for the same. But if you're a very large pension, you are not playing the same space as a $500 million, $215 million endowment because your dollars that you have to put to work on a percentage basis are so much bigger. So you might be in.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“What are the challenges that you face in having multiple clients where you want to put the best portfolios for their clients together and yet the more assets you're managing? Similar problem. Like the larger you get, the more your investible universe can shrink.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“Let's say you go to Asia, you go to Latin America, you go to Europe. The world actually is different. If you ever pick up a paper and you say, you read the front page, you think you were in another, literally, you know, you're like, wow, things are very different outside the US. And so in the US, we have a luxury of being very stable. This is where the political science background comes in. We're very stable. We have a lot of wealth creation. We've had a lot of innovation. And we'll continue to do that. But the rest of the world, they become more like the US in many, many ways. And so I think folks would say, yeah, you could do that. That's perfectly fine to be just in the S&P and say you have cash-fixed income. But just like we wouldn't think that we'd be having an iPhone that has more power than the mainframe computer in the 70s, things change and you have to adapt to that. And so as a business, for our clients, we're in the business of adapting and evolving. And you have to.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“Of course, it's right now. Of course the Well, I think there are a couple ways to answer that. One is that the stocks in the Save the S&P are multinational companies, right? So they're not just US companies. They happen to be U.S. domiciled, but much of their revenue can come from abroad. Sure. Even better. Even better, right? Another reason to stick to the US. Exactly. And second, we're US dollar investors. So that's another reason. Even better. Even better, right? But the reality is when you go, if anyone has spent any time abroad,”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, we have an equity bias. There's no question about that. We also, the core beliefs are we are diversified. We do believe in diversification. And it's been a very challenging environment to invest in the last eight years or so. But we've lived through it before, before the tech crisis. It was the same thing as one sector. So in our lifetimes, it's been challenging to be a diversified investor. But there's no question that being protective of the whole institution and the endowment requires some diversification. So we can argue about how much diversification, but as a concept, it is something that we truly believe.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“What's the right risk tolerance? What is the right ass allocation? What are the right managers? But from a monitoring oversight, it's really important for us, and this is why I see every portfolio, I see every trade, and you look through it and you can see actually, you know, we do have that core consistency in terms of the institution and the infrastructure.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“Every aspect, and this is one of those where I think institutions want to be different and yet it's very hard to be different. You look at the numbers that come out every fiscal year as to how everyone's performed and it's you're comparing yourself against your peers, but that's not how you're investing. You're investing against your own benchmark for a reason. And we tell our children that. We tell our children to be yourself and you sort of can. So that's the tension that I think exists out there. And for us, the monitoring and oversight is really important because we may have multiple teams, but we share the same builder, the investment philosophy and investment approach, the process by which we ensure all of our investment teams execute their decisions is all the same. So the infrastructure, the institution is all the same. So then it's a matter of, okay, what are the”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, we do it differently than others, so we have investment teams that are focused by types of clients they work with. It's focused on geography and then just capacity. So we have multiple, and there's a matchmaking that goes on because we're talking about investments. We're talking about matching skill sets and expertise to an institution. And that's my job. So I always tell prospective clients, you have to buy the institution first. Like you have to be able to say, you know, say capital as my OCIO provider is the right fit for me. The criteria that we've just talked about, you want resources, stability, experience, investment team, you need a whole investment office. If those are all your criteria, then you're in the right place and you can say, okay, who would be the right fit for me? And it's so interesting because I deal with this concept of sameness versus being different.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“To allow folks and to acknowledge and call it out and say, look, now it's not a partnership where, yes, you and the investment committee still has the vote, but the performance is on us. If we own it, we have to own it. And that's where the change is. So is it different? I would say the mechanism of making the recommendations is not different, but actually making managing the portfolio underwriting the managers and ultimately execution and having that monitoring and oversight is what we can provide to clients that are very different.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think intellectually, there is not much difference in the sense that when you're putting a recommendation forth, it needs to be the best recommendation you can make. And for all the thought process that you've gone through, the difference really is in execution. So when you have to own that decision, the performance is on you. That is different, right? So 25 years ago, there was a partnership. It was a partnership with the committee and everyone had to own it together. But really, in terms of the actual ownership, the investment committee owned the decisions. And over time, probably because of how the investment committees evolved, how these institutions evolve, all the wealth creations happened, the onus shifted to Cambridge Associates. And that has continued to happen. And so because of that, we recognize that that was really important. And so in order to do that, you have to have the infrastructure to do that. You have to have and be able.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“There was no one really high problem. And what are the other challenges? There's always this question of, oh, you're a consultant, you're effectively recommending managers. I sit on an investment committee, effectively run by Cambridge Associates. How different is it from when you are structuring the portfolio, making the recommendations of managers to you are now the decision maker?”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes. Every client has its own portfolio. It's customized to that client's needs. And we spend a lot, a lot of time working with clients to understand what is going on at that institution. So the whole enterprise, because oftentimes if you, you know, if there's that covenants out there and you don't know about that, you'd invest differently. Or if there's, you know, for universities, you know, there's a lot of fossil fuel issues out there. If you're not aware of what's going on out there, so those are the kinds of things that when we started investing, that wasn't really talking about.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“Full investment office, not just an investment team, because in some ways that's the easiest part, but you have to have what I call the institution, and you have to have the infrastructure. You want to know that who you hire is going to be around.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“It was very simple. The way I thought about it was if I were starting an investment office, what would I want? And so there's what I ought to call three flavors. So if you think of yourself as a builder, let's say you're building a house, right? There's the, everyone has the same house. You're building the exact same house. There's no difference. Everyone's got the white pig fence. And so that to me is more of a product kind of thing, right? There are those that you're in the same neighborhood, but you might have different kinds of houses. So you say you'll have your colonial or split level. And so that might be the asset class sleeves combination, right? So you're creating a portfolio like that. The way I thought was most important and most appropriate for an institution was that I'd want to know what does that institution need? What is it that I as an institution need from my portfolio? That's unique to me. And so we are able to provide them with a”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“On the OCIO business that you run today, there are a lot of different structures that people can use. You can have one pool, everyone invests in the same pool. You can have asset class pools. You can have customized portfolios for each client. And you can have some combination of all of those. How did you guys approach it and how has that evolved?”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“Our very first client said, You know, can you just do this for us? Because we got tired of, they got tired of hiring people that left or they couldn't keep their investment committees. They termed out or it was hard to recruit folks. So that's how it got started. And then 2005, we had our first total portfolio, a very large foundation. And that's where the business has evolved. And it's filled a really important place when investments have gotten more complex and investing has gotten more complex.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“And that's how Cambridge got started. Jim Bailey and Hunter Lewis had the foresight to first hire very good people. And Jim will tell you he was one of the early ones to hire all the women that no one was hiring in the 70s. But that skill set is very important. Now, the world has changed significantly, and we as a firm have also evolved. And the structure of having investment committees that are sort of permanent investment committee members, as it were, the field folks that stay on for a long time with institution, and a staff that really stays on for a long time, I mean, you don't get the scalp small passes of the world. You don't get the Andy Goldens. You don't get the David Swenson's, like they're the outliers now, whereas they used to be the norm. And so the need for consolants has changed, and our clients started asking us to evolve into an investment office and to be their outsource investment office. And that's how we actually got started in the business, because in”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, consulting in some fields today feels like a dirty word, like derivatives, but consulting is really important, I think, as a, for the right kind of client, consulting is having a consultant is really important. And that client is the client that has a strong core in terms of an investment committee and a staff and needs resources, and whether it's manager information, whether it's ideas, whether it's best practices, whether it's benchmarking. I mean, you have to get those someplace because in itself, you know, if you were just, if you just had, say, an investment staff and an investment committee, I mean, you have a volunteer group and you have a staff that could be very high quality, but they're going to turn over. I mean, just by definition. And that's the career path. And so there's not, they're not the resources and there's not the institutional history. And so there's the real place for that.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“And let's talk a little bit about the consulting business. What is it? Cambridge when I, in my early years, was the place that everybody went in the Endowment Foundation world. And still is a great brand in the business. How does the consulting model work?”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“How to really develop people, I learned how to be a manager. And those are skill sets that I think it makes me a little bit sad because when I look around at trustees today, there's so many of even our peers who earn so much wealth at a very young age instead of going through the training program and going through the apprentice, everyone says yes to you because you have been so successful so early. And this is the plus and the downside of our technological change.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source