YouSaid · the spoken record

Tilly Franklin

lines on the record: 91
first: 2024-01-22
most recent: 2024-01-22
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

“Well, hopefully, I won't have to, but let's see. But thank you so much, Ted. It's been an absolute pleasure. I really enjoy our conversation.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“One would be that it doesn't really matter, if not quite sure, where you're going. I think I expended a tremendous amount of anxiety early on because I had this early career pivot from academia into something else. I didn't have a particular career goal. There didn't seem to be a clear path. But looking back actually, all of those different experiences in consulting, in business, and direct investing and so on have been really foundational. But at the time, it all seemed a bit random. That's one thing I would definitely say to people earlier in their careers is just don't worry if you're not sure where your experience is going. Just get what you can from the experience because it's going to come back to benefit you one day.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think the one that sticks with me the most is something that I learned again from a colleague at APAC so quite some time ago which was to never make a decision until the last possible moment because you never know what further information is going to come to light and that was something that I really struggled with because I'm an extreme J on the Myers-Briggs type indicator so what that means for this you don't know is I love to make a decision move on take action get stuff done but over time I have really internalized that so now I'm probably incredibly frustrating some of my colleagues who are looking to make a decision in execution I'll say well maybe we can just have one more meeting or maybe we can just defer for a couple of weeks just let the information percolate a bit more anyway hopefully that's for the best they might disagree”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“into my first allocator job, and he's now, of course, the CEO of Stanford Management Company. And I really would say that Rob taught me more than 100% of what I know about endowment investing, and I'm really fortunate to still be in contact with him today.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“The first would be a gentleman called Peter Englander who was the chief investment officer at Apex, and he had a really foundational impact on me because I think he was the one who gave me my first break in investing. I had a number of interviews at APAX, but I could tell that Peter was a real decision maker. And I could also tell that he was incredibly skeptical about me during that interview, somebody who came from background in English, working in the corporate sector and no investment experience and so on. But he had this unique balance of skepticism and ability to take risk that I learned from hugely, very sadly Peter actually passed away earlier this year, but I'd really just like to honor him as a legend within UK private equity investing. The other one would have to be Rob Wallace, who was the CEO of Alta when I joined, and again he was the person who hired me.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“One thing that I find quite frustrating is when people that I know make introductions without checking first, I really love meeting people and gain hugely from gathering insights from different conversations, but I'm also unfortunately really capacity constrained and I also try to be very polite. So I just hate it when I seem impolite by not being able to follow up with someone. So it's wonderful if people could just check first before making an introduction.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“One of them is that as a student I produced a play at the Edinburgh Fringe Festival. So that was something that was really fun. I'm sorry to say it was really bad. Perhaps as a result of that I learnt a valuable lesson which was one of my other early career ambitions was to be a theatre director and after that experience I realized that probably wasn't going to go so well.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“The hobby that I probably spend most time on is running, but I actually don't really enjoy it. So I'm not sure I say it was my favorite. But the way I think about it is if I run, I enjoy the rest of my life. Probably the thing that I most enjoy, but maybe have more constraints on my time is reading fiction. I got into studying English because I loved reading and I still really love it. So I read as much fiction as I possibly can.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“Introduce a reading week. We're part of a university, so let's have a reading week. Like students have, where we can actually pursue topics that are of interest to the team. I think that would be very rewarding for individual team members as well.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“The deal process and deal execution is so overwhelming. Time and again you've seen firms, you've tried to be thematic, try to implement thematic research, but then have that be overwhelmed by the deal process when a deal is coming to a head. And so one really interesting thing that we've seen is a small number of our managers on the illiquid side actually forming dedicated research teams that constantly do thematic research all the time and don't get pulled away by the deal process. And that's actually something that we're thinking about a lot because we're a really small team. We also want to be really thematic and proactive about how we begin to shape the portfolio going forward now that we have it approximately in the shape that we want. But again, it's difficult to do thematic long-term research when you have a 101 difference of day-to-day tasks to perform. So how can you sort of carve that activity out? We're thinking about, for example, whether we might”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“One of them is something we discussed earlier about decision making and the fact that effective decision making doesn't scale into larger groups. So that's something that I've seen happen over time and one of the wonderful things about being in this type of job for a long time is it takes a long time to see what works and what doesn't work actually seeing people have the courage to reduce the number of decision makers and seeing that being successful in a number of cases. I think another interesting thing that I've observed has been as the industry has become increasingly competitive, seeing increasing functional specialization within firms. And a particular example of that is a lot of private equity investing is by necessity had to become much more thematic because unless you have proactive investment theme and a thesis it's really really difficult to actually generate a proprietary idea but at the same time because”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“There are plenty of organizations actually already focusing on that. So here in the UK, there's a group called Level 20 that focuses on supporting and developing women in private equity, for example. There's also 100 women in finance, which is a more international, more broad-based organization, a number of others. Gain is really more focused on the entry point because I think One issue is because you always start off with a minority, it's less likely that women will influence the sort of culture and policies of their organizations because there's only 25% of them. And of course, it has its own network that is built up through supporting people and people giving back by going on the internship, getting a job, then participating in our educational events and so on. But at the moment, in the interest of trying to succeed at doing one thing rather than fail at trying to do everything.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“Now has a professional CEO and a staff of 10 people, it's also been focusing a lot on providing pathways for women to actually get into the industry so it now offers an annual internship program. I think last year there were about 200 places and what's been really really great to see is over half of the interns actually got hired either by the firm that they interned with or another investment firm. So it's been really wonderful to see how it's grown.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“People into the door in the first place. So part of that was just going out and interviewing groups of high school women and undergraduate women about what do they know about investment management? Was it something they were interested in? And what transpired was that they hadn't the faintest idea what it was and what it was about and why they should even be interested in it in the first place. And B, if by some miracle they were interested in it or had heard about it, there were no role models for them to see. What Gain tries to do is to get female investors in front of young women at a very early stage. So actually when they're still in high school and to give a very accessible talk about investing why it's important to society, why it underlies economic growth, why it's a really fun and fascinating career. So that was the initial inspiration for gain and it's been very successful that way reaching about 25,000 young women primarily in the UK. And then as the organization has evolved.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“was really founded based on some observations that I had in my prior role where at certain points I was responsible for graduate recruitment. And we had the very admirable aspiration to have 50-50 gender balance in our graduate recruitment, but over time when we actually looked at who we'd recruited, it was more like one in five of the analysts were female. So being sort of an analytical person, me and one of my colleagues went back and looked at all the applications that we'd ever had. And what we realized from that was that actually only 20% of the applications were from women. So we were actually hiring exactly in line with the application rate. But what we needed to do was get more young women to apply in the first place. So that was the light bulb moment when we thought, well, we need to do something to actually encourage these.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“Diversity is an area of particular interest to me as on a personal basis as a woman in investment management. We're a relatively small minority. I think in the UK, less than 25% of investment professionals are women. And then as you get to a more senior level, it shrinks to a smaller percentage. One of the things that I've done in that area is actually with a number of friends and colleagues from the broad industry here, we founded a charity called Gain, which stands for Girls Are Investors, which tries to encourage more young women to get into investment management as a career.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“In relation to our sustainable investment agenda, also the healthcare industry in China is very innovative, very rapidly developing. So I think the picture is very much more nuanced than we hear about from a sort of high level. And then I think in terms of the relationship between the US and China, there seem to be some shoots of optimism there, but I certainly wouldn't profess to be an expert in that area. So generally speaking, I think we are cautious but feeling more optimistic than we may have been, say a year ago. And I think a big part of that is actually just being able to travel to the region, which obviously wasn't possible until quite recently.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“Think about that probably more than any one single thing, other than perhaps thinking about the team. I recently been to China a couple of times, actually, for different events that were hosted by some of our fund managers. We had been feeling very concerned about the geopolitical risks in particular. I came out of those trips still feeling reasonably cautious, but definitely feeling very encouraged by the level of growth in certain sectors of the Chinese economy. I think when we look at the overarching stats, it seems to be a very gloomy picture, but there are quite a number of industries where China is really booming, particularly in the whole energy transition supply chain, which is an area that we think about a lot, partly as a business opportunity also.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“But then also potentially ancillary benefits of generating carbon offsets. And I think the opportunities in nature-based solutions is really fast-growing. So we're going to be spending time in 2024 trying to understand that in more detail.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“Hard to say because I don't tend to look at the portfolio from a very top-down perspective. I tend to look at it very bottom up. So I'm pretty excited about all the fund managers. Otherwise, they wouldn't be in the portfolio. I think in terms of sort of areas that we're investing or researching right now, like many other people we're interested in diversifying some of our emerging markets exposure. So we're currently actively looking at managers in Southeast Asian equities. I think that those markets are really growing. They're becoming deeper, much more investable from an institutional perspective. Completely different area that we're interested in is looking at nature-based solutions. So we've recently just got over the finish with a commitment to a agricultural forestry fund, which has benefits of underlying demand for its product.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“Definitely don't expect a new manager to necessarily be focused on these issues, the point of investment. I think many of our managers are quite small boutique type fund managers. I think what's really important to us is that the manager is receptive to these discussions and we think of it as being prepared to come on a journey with us. So we do start talking about this philosophy pretty early on in the discussions with a prospective manager. And it's not that difficult to see whether they have an interest in learning more about it or whether they don't at the end of the day. So that's the primary gate.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“Our manager's there on an individual basis to get those measurement numbers in place. And then I think the most difficult area is clearly in the hedge fund arena, because there still aren't agreed protocols for how emissions should be measured, for example, if you have long and short holdings, should you measure emissions on a net or grow space, that distilled TBD or for example, what are the emissions associated with a US treasury bill? So there's plenty of unanswered questions in that part of the portfolio, which we're actually working with some of our peers to try to bottom out. But in the meantime, yet we measure every year and we're tracking that over time. But of course, it could be quite volatile. It's not necessarily going to go on a straight line path because fund managers are coming into positions and out of positions over time. Because our portfolio is quite concentrated.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“Measurement is a really thorny area, as I'm sure you know. So we measure the emissions from the portfolio as best we can in the public equity portfolio. It's the most straightforward because we can buy a database and put our portfolio into the database and measure it that way. Within private equity, we are increasingly seeing our fund managers starting to measure emissions. Obviously, they would then have to do that themselves. There are many software and other tools and consultants that can assist. So in 2022, only one of our PE managers actually measured and reported emissions, whereas in 2023 there's going to be seven, so it's still less than half, but it's seven times increase. So that's really encouraging. On the real asset portfolio, we have a very concentrated portfolio. And some of those assets are actually directly held by us. So we've been able to work with”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“With your emissions. If you're, for example, going to use up less energy to achieve an area of activity, it's going to cost you less, or if you are going to recycle waste materials, you may need to purchase fewer raw materials or things like that, I think, increasingly. We believe, and I think we're seeing among many other investors, believe that the environmental and financial aspects of sustainability are coming into alignment.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“Probably the most important one, which we see again and again, is a realization that any asset owner can actually be a positive part of the transition. I think there's a real tendency to feel quite powerless in the face of this climate emergency. But I think one of the really central tenets of the course is don't let the great be the enemy of the good. Just because you're not 100% sure on how your portfolio company can get to net zero today, that doesn't mean that you can't take a step, for example, by if it's a software company, make sure that its data centers are powered by renewable energy, or if it's a transportation company replaced incremental vehicles with electric vehicles, or very simple, straightforward steps that can be taken. And then I think a related insight is that in some sectors, very often there is actually a win-win thinking about this concept of being efficient.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“Telling people to do that, of course, we couldn't tell them what to do anyway since their discretionary fund managers, but we're able to bring the academic resources of Cambridge University, which is one of the world's”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“Transition to net zero over the next several decades if life as we know it is going to continue. So essentially what that boils down to is we need to be able to produce the same unit of economic activity with fewer emissions over time. So when we think about our portfolio, it makes sense to us that a company that's a more efficient consumer of emissions, shall we say, within its business activity over time as a long-term investor is likely to be more valuable than its peers who are less efficient. And so on that basis we are very focused on engaging with all of our fund managers, not just a subset of them about how they in turn can work with portfolio company management to reduce emissions from their underlying holdings over time. And we're very fortunate in that it's not just us.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's been hugely important part of our work over the last four years. And I think the student community has really pushed us on in our thinking there. So the core element of our sustainable investment approach is an ambition that we've expressed to achieve net zero greenhouse gas emissions from the portfolio by 2038. That might sound like a slightly odd date, but it's basically been chosen because the university itself has an ambition to decarbonize its own operations by that date. And what does that mean? We look at sustainability across the entire portfolio. So there's not one carve out for impact investing or environmentally related investments. And our overarching thesis is that society as a whole has to make”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's a really interesting question because one thing that I saw a lot towards the end of my time at Alta was a subset of fund managers actually coming out with much longer duration vehicles. So instead of the classic 10-year life, we were seeing vehicles with a 12-year life, a 15-year life, or whatnot, or even in some cases a sort of evergreen structure. I think those are appealing. Frankly, very few private equity funds actually have a tenure life, as we all know. So let's stop pretending that's the case. But it obviously requires an even higher level of due diligence, alignment, confidence in the partnership, and so on.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“Tightly defined opportunity type that we've agreed. And then once we are invested in the assets, we can hold them for as long as we mutually decide is appropriate to the value creation plan.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“I perhaps shouldn't have put it quite in that way. It's primarily within real estate. So rather than us going out and selecting real estate assets, which we're completely ill-equipped to do, what we've set up in a number of areas are a fund of one structure where we're still working with an expert, third party manager, but we're just the only investor in that vehicle. And the rationale for that has really just been that we're very long term and we don't want the manager to be forced by a sort of fund structure or a very onerous fee structure to be forced to take on too much risk and then have to sell assets at the wrong time, which is something we really observed in real estate going through the financial crisis. So these are open-ended vehicles. The manager still has a relatively high level of discretion within a”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“Have about 60 active relationships with fund managers. Ideally, we might like it to be even more concentrated, but it's just difficult when you're trying to access a wide range of different strategies. And then particularly within an area like venture, you might struggle to get your target allocations and that kind of thing. So I think around 60 is a good number for us.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“During 2022, and then even though this year we've seen a significant rebound in public equity valuations, and particularly in tech, we haven't seen that same rebound flowing through at all into the private marks. It's too early to say what's going to happen in Q4, but even through Q3, we didn't see marks being reflated. So that gives me some comfort, but it's still something that we're watching really closely.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think we maybe need to differentiate between the different sub-asset classes. So I can't speak for the industry as a whole, but within our buyout portfolio, the valuation marks are lower than the Russell 2000. So that's the benchmark that we think is most analogous. I think within venture and growth equity, it's obviously just much harder to analyze. And of course one phenomenon is that people do observe different managers holding the same position to have it marked differently. Our portfolio is quite concentrated. So we didn't see that so much within our own portfolio. But the venture and growth equity marks, I think, are harder to get the same level of comfort with. I suppose what we do take comfort from is that they have significantly reduced.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“Of the common critiques of private equity currently are this idea that the markets are too high. How have you thought about the various incentives at play that lead to current private equity marks, the implication for denominator effect and allocations in the portfolio?”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“For uncapped returns over time, of course, not all of them are going to achieve extraordinarily high returns, but I don't want to use that illiquidity budget for a sort of potentially capped level of upside.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“For managers that seek to create value through leverage. So we actually looked at the leverage level of our underlying buyout portfolio and that analysis showed that the leverage in our buyout portfolio was actually lower than the leverage in the Russell 2000. So it's not focused on highly geared strategies. It's focused on very fundamentally driven strategies. And so I'm still excited about that. Bearing in mind we only have about 20 private equity management portfolios. So it's a small subset of the available universe. Private credit for me is less of an area that we're focused on. We do have some private credit exposure that was in the portfolio before I arrived and that's still rolling off and some of those investments have done well. But if we're going to use up what we think of as a illiquidity budget, I'd rather be in an asset that offered the potential.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm still a big fan of private equity. I feel that it has a very effective governance model. So for those fund managers that are actually able to work with and through their portfolio companies to build better businesses, they should still be able to do really well in any economic environment. We have had a lot of questions recently about people are coming out of PE and what does that mean for our asset allocation, which still includes plans to increase our exposure to private equity. But actually, I think if other people are coming out of the asset class, that should be a net benefit because perhaps it will become a little bit less competitive than it has been over the last decade or so. One important supporting fact in what I've just said is that we definitely aren't looking”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“Just over a third in dollar denominated investments, and then the other just under a third is other. And we have a policy of hedging back to 60% sterling exposures. We just arrived at that level based on a polyanorish piece of analysis that tried to figure out what was the best way to have an appropriate level of selling purchasing power without exposing ourselves to these large settlement liabilities over time.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“Staff, alums. So that has been very different for me. And I've actually found I really enjoy working on our stakeholder communications. Another thing that is maybe different is our currency situation. So we obviously were a British university, all of our liabilities are denominated in sterling, but our investment opportunity set is global. So we have to manage that in a sensible way, hedging back the majority of our assets to sterling, but without hedging to the extent that if there's a disconnect in currency movements, we would have an unmanageable settlement liability. So that's something that we spend quite a bit of time on, which is very important. We approximately have, this isn't exact at all, but approximately a third of the portfolio is in sterling related opportunities.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“Quite a lot of things actually, firstly, one thing that may be different about Cambridge relative to US endowment is that we actually have quite a large number of discrete investors. So Cambridge is a collegiate university. There are 31 different colleges within it. And each of them has their own endowment and they are completely independent in terms of whether they choose to invest those endowments with the central pool that we manage or do something completely different. So as of now, we have 21 individual investors. In addition to the portfolio management aspects of what we do, there's also an investor communications element to it. We also have a complex group of stakeholders, so not just those who actually oversee those capital pools, but of course many other constituents are also our stakeholders, students, faculty, professionals.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“Maybe although when I started at Alta the portfolio wasn't as established as it was when I left, so in some ways it feels a bit more like going back to the beginning rather than something completely different. But no, I don't think we would put something in the portfolio just to fill a role. Every manager in that portfolio is a high conviction manager. Remember that we weren't coming at it from a standing start. Almost all of us came from the allocator world, albeit in different guises. So we were fortunate that we brought a tremendous number of relationships with us and we've complemented those with new managers that we've met also over the last four years.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“Curious about the lens of time in manager selection decisions, meaning when you're at Alta, you had an established portfolio over time that had competition for capital. And then you're building at Cambridge the last couple of years into the asset classes. On the margin, is there a difference in the manager that you choose to put in the portfolio at Cambridge in terms of where that bar is as you're growing your exposure to an asset class compared to what it may have been at Alta when you already have a portfolio that you have conviction in?”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“Only really just getting to that point of more steady state in the portfolio because there has been quite a lot of evolution over the last few years, just given the change in our asset allocation. For me, it would really be that person's level of insight into their opportunity set and whether they bring something really different to their evaluation of a particular investment type. So it would be that insight combined with their sort of real passion and dedication to that. We will have very intense debates about these things among the team, given, as I said, one of my colleagues is very focused on roles. When we actually evaluate managers, we have two different axes, role and conviction. Whereas if it were up to me, I probably be more inclined to fill up the portfolio with managers where I had high conviction, which is a really fun and interesting, I think, way.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“When you result in what's ultimately a concentrated portfolio somewhere along the way, you have to make that incremental decision about this person or this team you'd like to back compared to the next one that you almost would like to back. When you come out of that meeting, let's say it's someone you're down the road with, that's a new manager, and the spark goes off that instinctively through your research, this is someone you really want to partner with for the long term. What are the things that caused you to feel that way on the margin?”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, an ability to reflect on those things is really important. And I think where possible, trying to meet the individuals outside of a business context to actually get to know them as people as well is important to us.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's really hard. I'm not sure that I have a magic answer to that. It's really about just spending time with people in different contexts asking different people in the organization the same question or asking the same question in different ways, having different members of our own team meet in different contexts. I do really think it's important to understand in some detail the motivations of the key people, their investment philosophies, and in particular what shaped their investment philosophy over time in discussing that, of course, you can evaluate how they have evolved in their thinking, how they've learned from what's gone well, but also critically how they've learned from their mistakes. I think we all learn a lot more from what's gone wrong than from things that go well. So I think”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“To the fact that we were all working remotely by comparison to some others who were doing exactly the same thing that they had done before. But I think what's really important is that evolution has to be done in a considered way, right, rather than just randomly experimenting with different things. Of course, we need to experiment with things. That's the only way we can change, but it needs to be done in a considered way. probably for the most part in a more incremental way when you're talking about investing large sums of capital.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“That is so important because it absolutely has to evolve. I think, again, a big red flag is somebody who almost religiously sticks to the process over time, even when market conditions have changed. So I think that was actually something that we saw a lot during COVID. A number of our managers really retooled their processes to be able to take advantage of the volatility in prices perhaps people who had invested previously in more traditional industries suddenly really realized that the virtual world was upon us and accelerated way and started thinking much more about the implications of technology on their underlying positions. I think the portfolio actually really bifurcated quite a bit at that time into people who were really racing to adapt their process to these different types of criteria.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source
“Really is what you just said, the discipline. I think people can have really different investment processes, but what's really important is whether they actually stick to it. So what is a real red flag for us is if we see things just creeping into the portfolio because a particular opportunity just happened to pop up. I think what's also really interesting is trying to bottom out when something's gone wrong why was that? And I think if it was an investment where the manager followed their process in a very disciplined way, but then maybe an exogenous event occurred or something completely unforeseen hit them in that position. That's one thing. But if something went wrong just because it was a departure from the usual process, that again would be a really big red flag for us. But I think probably the number of different investment processes that we see in the portfolio is as numerous as.”
2024-01-22 · Capital Allocators · Tilly Franklin – Endowment Model at Cambridge University (EP.363) · IDENTIFIED FROM THE TRANSCRIPT · source