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

“And it allowed me to build a business, so I should probably say that my parents, because they came here as immigrants, built businesses. So my dad came here with nothing from Taiwan. And when he got here, he had no money. So he went and was a dishwasher in San Francisco and paid back loans for family members who lent him money to get here. So he ended up going to University of Kansas. So I'm a Jayhawks fan. And then at Columbia and getting a PhD and in engineering. But he ultimately started his own engineering company when I was in high school. So watching this, we were about to go to college in a couple years we're like, do we have enough money to go to college? My twin sister and me. And then my mother started a gift shop herself when I was like, when I was about five. So I grew up in an environment where my parents were, you know, role models when you were a child started things. And so at Cambridge, you know, I started this business. And I learned how to develop teams. I learned”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm doing just fine. You did great. So I think that's a really important thing. And then the third is that you have to know where you're investing for. So are we investing for yield or are we investing for total return? And we invested for total return because we have a time horizon. So as long as you have the liquidity and could accommodate near-term liquidity, we could invest for total return. And so we did do that. But primarily, I mean, there's a lot of fixed income. And we try to ladder what we can early on.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, first, let me just say for an emotional aspect, you have to be comfortable that the dollar value is going down. You have to look at it and you have to be okay that, you know, maybe you had a billion dollars X years ago and now you have 500. And that has to be okay. That is really hard for people when everyone is conditioned from birth to think that the higher the number, the better, right? So that's the birthday. Yeah. And then the second thing is that you have to judge yourself differently. And I actually think even for our Cambridge clients, it's really hard to benchmark yourself against your own personal appropriate benchmark. Like folks say that we have a policy benchmark and that's what you should be benchmarking against yourself. But it's really hard because we live in a world where everyone's like, well, how did you do Ted? And what did you guys get in your portfolio?”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“These. And so if you took it your average nonprofit asset allocation very equity oriented, very diversified, what does it do to the structure of the pool in general if you know the spending needs are higher than a different type of pool?”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, that's a great question. So, the most important concept that I always wanted to make sure we protected against was the first phase, whatever that is, one, two, three, five, whatever the first phase is, is the absolute most important critical phase. Because if you don't get that right, then you don't get the other two-thirds or three-quarters of the decision right. It depends on the spending that's going to go out. It depends on what you think the expected needs are on the draw on the pool. So talk about thinking about 2008 or even an endowment. I mean, the liquidity and the credit quality is really, really important. I mean, that's the, you know, you have to constantly be vigilant about that because it's so easy to be like, well, the S&P is up 33. Why don't we have 80% of the S&P? But you also have to invest for growth, right? And so there is a balance there.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“That particular challenge is very different from how a perpetual pool or a Dowman Foundation pool, pension pool that's not perpetual, but very long dated, you have a pool that's winding down in 10 years, 20 years, 30 years. What are the differences in how you'd think about an asset allocation structure or yield versus total return in that type of a challenge?”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“horizon, there's some aspect of pensions because there are subminoacet liability, but in a very loose way, and some of them are highly taxable, like private clients. So I had a little bit of this, a little bit of that, and that was very important because it has allowed me to be very innovative and think about how to deal with these kinds of pools. So that, you know, I was basically the CIO and it was for these set of clients for many, many years. And that, I think, informed a lot of how I evolved as an investor. And it allowed me to think outside the box. I could look and say, well, what are the best practices out there and apply them in a way that was very unique?”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“Very early on, I was lucky enough to find a set of clients that really appealed to me. And it was a business that I built. So it was just, you know, serendipitous, but it actually suited my skill set. So I ended up with a client that was a liquidating pool. So instead of, you know, here's a pot of money and as an endowment, you want to grow into perpetuity. I had the set of clients where for whatever reason, for environmental reasons, settlement reasons, spend on reasons. And this is sort of ahead of their time, as we're talking 15 years ago, that they had a large pool of money and $35, 40 years from now, they're going to go down to zero. And how do you get them to zero when there's uncertain spending? Some of these are very highly taxable. Some of these have significant strengths on what they can invest in. And their capital preservation oriented. So there's some aspect of endowment oriented because they're long.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“At some point in time as you go through this broad and deep learning process, the business starts to grow and people get siloed. Where did you end up plugging in after you went through your four, six, eight years, whatever it was of education?”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I mean, the way I think is most important is if you have to understand and you have to appreciate who your audience is. I mean, it's so basic, but oftentimes folks know what works for them and they extrapolate that to everything else. That's the only way to do it. But really, if you turn it around and just say knowing Ted, you know, what is it that would appeal to Ted in terms of how I communicated this information? So some people are very visual. Some people are very literal. Some people are a combination. Some people are very analytical. Some people just want to have you talk about it and hear you have the conviction. And so you have to be able to really think through those kinds of things. And that seems very simple, but people have hired us to be independent thinkers and to provide them information with what we think should be best for the portfolio. Half the battle is being able to get yourself heard.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“For several years, what I did. And I was very happy doing that. You know, that's a, they're paying me to really, you know, of course I came in with skills that were very helpful for the clients in the sense of, you know, the management consulting is actually excellent for process and being able to take an institution or a group of people through a decision. So advocating for a recommendation, those are really important skills because you can have the most fabulous ideas, but if no one buys into it, it doesn't matter.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I mean, it's very different. It was very different in the late 90s. The investing world was very different. When I started at Cambridge, the path was you worked with, let's say, 10 colleagues who were more senior than you, and it really was an apprentice model. I mean, this doesn't happen anymore because the world has changed so differently. Technology has changed things, and investments have changed. But back then, you could work with 10 people and you work with a multitude of different kinds of clients. So the learning curve, it was like entering college again. It was so steep, you know, and you could learn one day you can be dealing with currency, the next day you could be dealing with this very large multinational endowment. The next day you could be working on specifically writing something about doing due diligence for a manager. I mean, it was just like being bombarded. And so it was incredibly exciting and really just learning from other people, learning from our clients.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“So 20 years at Cambridge and a lot's changed and you're learning for the business of consulting, the OCIO business, which we'll talk about, why don't you touch a little bit on your path within Cambridge? So how did you start? And let's evolve that to where we are today.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I remember two of them, and one whose name I no longer remember. One was Troy Murray, who was a very, very long time employee at Cambridge Associates and a wonderful person and also a Yale grad. And so I had been president of Yale Clover, Boston, and known for eight years and had no idea what he did. This is like a young person singing. Like, yeah, he's my friend. I have no idea what he did. Another person was Heidi Pearlson from Atomist Furners, and who work at Cambridge, but she had interned at Cooper's Library Consulting, which is where I was working. And so through that, she had said, you know, what about Cambridge Associates? And so in that one day, and I was like, what is this firm? So I called them up and they basically were kind enough to interview me. They put me through 14 interviews, then told me, Troy called me from London and said, you know, everyone really enjoyed you, but you'd be a high-risk hire, which is very nice of them to say. And I said, I basically made a case for why you should give me a chance.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“And he was my thesis advisor, and so he did the envisioning information and he really was very instrumental because I love the fact of data with design. And he basically said, why don't you go to the Kennedy school? Now, this is 19, so this, I graduated in 1990, and so we came out right on the verge of a recession, and it was really hard to get a job. And I was like, well, I was doing the student government thing. I could get a job, or I could do something else, like go to law school, go work, or, and he said, why don't you think about the Kennedy school? And I was like, what's the Kennedy school? Or what's the public policy school? And it was actually, for me, I'm very interdisciplinary. And it was a very good match of public versus private partnership. And that's what really attracted me to it. And so I went and I was one of the very youngest ones in the class. So there was a plus and a minus to that. The minus was that all your bad habits in college, in terms of studying and stuff, carried over. So you didn't have a break. And the plus was that”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes. The plan was to go into government of some sort, right? And so I, after doing the Yale College Council, which was a student government, and I was the second campus-wide elected president and the first woman to be elected, I thought, what am I going to do? And it was a full-time job. So I actually had reduced my course load to do this. And Edward Tufte, who many people may know, but he started business advisor.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“Clearly, there isn't. And that's exactly right investing isn't art, and you have to have judgment and wisdom and experience. And political science is the same thing. You can't predict people and institutions.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“Do statistics? How do you do regressions? Like all those things of trying to think about why people vote the way they do, for example, or how do institutions evolve into really high functioning democracies. You know, like those kinds of things are really helpful when you're dealing with investments.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, so a completely serendipitous. And actually, I would say this is probably the best liberal arts story around because I grew up with parents who immigrated to the US who had no idea what a market was, you know, in terms of like the stock market, the bond market. And so what Yale for me was, we should say that we knew each other in college, but Yale for me was such an eye-opener. I mean, you got to a place where, talk about the world as your oyster, there was so much to learn and see. And I actually didn't actually take an investments class or even an economics class till sophomore year. And then that sort of like opened my eyes. But my real interest at the time was political science. I was really interested in comparative politics. I was interested in so many things that ultimately actually gave me the skill set to be a very good investor. So for example, analytical skills in political science are really important. How do you do research?”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source
“My guest on today's show is Margaret Chen, the head of CA Capital Management, Cambridge Associates twenty billion dollars outsourced chief investment officer business, or OCIO, as you'll hear. She spent twenty years at Cambridge Associates, which was her first and only stop in the investment business after getting started in the working world as a management consultant at Cooper's and Librant. Our conversation covers Margaret's career path, her evolution from a consultant to a principal, the value proposition of an OCIO, measuring performance, and the tension between being the same and being different for clients. Margaret has the ear of almost everyone in our field and brings incredible perspective to addressing the key issues allocators face. Enjoy my conversation with Margaret Chen.”
2018-01-01 · Capital Allocators · Margaret Chen – Leadership and Outsourcing the Investment Office (Capital Allocators, EP.35) · IDENTIFIED FROM THE TRANSCRIPT · source