YouSaid · the spoken record

Tim Recker

lines on the record: 100
first: 2019-05-20
most recent: 2019-05-20
sittings or episodes: 1
sources: podcast

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“Investment principles, or that we're a conviction based investor with a long term horizon, we believe that relationships really matter with our partners. We are intellectually curious and we value independent thinking, that independent thinking goes back to sort of challenging underlying deals. We're flexible and nimble, and that we align our interests with others and our managers. That's a pretty basic set. I mean, I don't think there's anything really special there, but it's how you implement them. I think we have a belief of intentional simplicity in our portfolio. I think a lot of people are doing a lot of complex things to try and figure out how to make money. I sometimes wonder if we're not doing enough, even how we construct our managers, where they're located, like we basically have zeroed out private equity in Europe. Going back to your question earlier about mismatches, I don't care. I'm not that worried about, I don't have to be everywhere for private equity. I have European exposure through my public equities, et cetera. I have a highly concentrated portfolio even on the privates. I think the best in class.”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“If you look at our investment philosophy or thesis, definitely being opportunistic and flexible is something that we want to do. I believe during financial crises or sort of periods of dislocation, those opportunities exist and they're outsized opportunities. But the speed of which you have to act to take advantage of them is important. And that time to react is shrinking and it's been compressing my entire career. It's the point that unless you sort of have your game plan in advance, it's sometimes difficult to even do a traditional manager search, et cetera, and implement it. So you have to be very swift. I think we have the team to be able to do that. Then the real question is, do you have the dry powder? And so we definitely think about portfolio construction and ways of liquidity pools that we have that we can go and access to then take advantage of those opportunities.”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“We have probably in all candor, I think, in being intellectually honest and trying to like what have you done well and what have you not done well, we've probably not done as a good job as we can on rebalancing. And so something that's on our list of things to think more about and how do we do that part of it is with such a concentrated manager and a large portion of those are actually hard closed. So even moving money around within our existing manager base is difficult. When I go to them, they say, well, the waitlist is even closed. And you're like, okay, I'll put you in the waitlist, but it's eight years until you might, you know, based on the current path. So it's difficult to rebalance with our, and so we've talked about do we use a smaller sleeve of passive as a tool to sort of help rebalance, et cetera. So I think we've got more work to do to be more effective on the rebalancing. I think as we look back over the last couple of years, I think that's an area for improvement for us.”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“We have that, and we have an example of some, you can call them, or they have public equity manager, are they a hedge fund where they are more than 100% gross long? They have the right to chart. They rarely actually chart. But because of their risk profile and the fact they can go 150% long or something like that, they feel more like a hedge fund than what we consider or public equity and you have to lock up. Where do you put that? Does that go on public equities? Does that go in the multistrat? And we sort of came up with a set of parameters with our committee to agree on how we would sort of do that. But at the end of the day, they're willing to give us a fair amount of latitude. And what we really poured on is the whole portfolio and showing what our equity risk is across the entire portfolio, what our liquidity risk is across the entire portfolio, not focusing it on the asset class. The asset class just gives you a sense for what you own, but I would argue going forward, I actually question how valuable the asset classes really are. If you have a great implementation, it's just really thinking about it.”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“First and foremost, we try to have a very broad asset allocation structure with a lot of flexibility. So we talk about, in order for us to generate turns going forward, having a very prescriptive asset allocation structure, we don't think is an advantage. So we only have four asset classes. Three of them are 30% and one's 10. So fixed income is 10%. And even though we're actually sitting lower than that, and then we have public equities, we have private investments, and we have, we call it multi-strategy. So think about a combination of absolute return and our opportunistic sort of hedge funds. It's not exclusively hedge funds, but each one has a clear role in the portfolio.”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“Or across the whole fandom. And my goal is to get that to 90. So that level of concentration, there's no way your 50th idea is as good as your first idea. But for some reason, it seems like endowments and foundations tend to like 100 managers no matter what. And every private program that I walked into, there was a legacy program. They all seemed to like 100 managers. And I just don't understand that. You can't generate returns. It just goes back to my GE days. You can't generate alpha with 100 managers. So I think that the governance structure here really supports us. And we even talk about it in a lower return opportunity set in a more challenging environment. It's gotten much harder than it had, you know, every decade, it seems like it's harder and harder. How do you continue to generate returns? And we believe that concentration is certainly one of the ways to do that. Now, it creates a lot of short-term volatility.”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“We can pursue much smaller managers. I think the other part is because of the governance, we also pursue concentration. We actually write down our investment principles and talk about what our beliefs are. And then we marry that with our competitive advantages as institution. And that was what informed our manager selection process. And I think at the end of the day, what comes out of all that is that we have the ability to build a portfolio best in breed managers, best in class. And so we have a lot of mismatches in the portfolio. So we have completely zeroed out a whole bunch of things that most people would be completely scared of because it creates a lot of short-term volatility. And our governance structure is supportive of that volatility. We believe the best way to generate long-term alpha is to pick high conviction managers. And so 25 managers make up 80% of the assets across all asset classes.”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“Organization wants our competitive advantage. And one of the things for Irvine is at $2.4 billion, there's so many more things that we can do because of our size and our good governance and the flexibility that we are provided. And it changes how we implement the portfolio.”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so we have, let's call it a bar belt strategy on venture where we have a reasonable number of managers that most people would love to have access to and you couldn't access today. But we also have consistently gone out to find the next great managers. And so that's why I call it a barbell. So if someone is on fund six or seven and they're sort of a good manager but not a great manager, they don't really have a role in our portfolio, but we'll either go with someone that's a long established, high performing firm or someone that's relatively emerging and has a potential to be a high performing manager. One thing that was interesting across all my experiences is I've been forced to look at each organization and figure out what the competitive advantages are for each organization. And I don't apply my own philosophy the same in every organization, I think. Some people that I see in their careers, they come in and start, they do the same thing everywhere. And that has certainly not been the case for me. It's been for...”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“Let's dive in a little on venture. So you came into an existing portfolio and we're sitting in San Francisco, you're near the hub in Silicon Valley. How much of that portfolio is a long-standing asset defined by best of breed managers that you couldn't put fresh capital into today, but you can continue your relationships with them?”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“The more we can delineate that, the better. And I believe that our committee will be supportive of venture is out of favor for some period of time that we will continue to stick with that if we have the right managers. Now, I believe over 20, 30-year period, ventures continue to be a great asset class. I believe in innovation. I just believe you can have five to ten year windows where it doesn't perform.”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“26% of the entity. You know, we've historically had top decile returns in our portfolio over many decades. And that's one component, not the only component. And I think a lot of my peers will look at our weighting and sort of be very concerned. And I was reasonably concerned when I came in and saw that. But as you get comfortable with it and you understand it works if you have the right governance structure. It does not work if you don't have the right governance structure. And so we spend a lot of time articulating with the investment committee about how we evaluate that, how we're aligned, how my career is aligned to that. You can basically have a situation where ventures out of favor and misaligned with my career. And we all know that you can only have so many years underperformance. And otherwise, you won't be in the seat. And so just having an honest dialogue around that mismatch. And I think being able to sort of delineate that we're going to measure the selection versus the tilt. The tilt is the institutional decision. The selection is the team's decision. And obviously.”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“Do it because everybody else is not willing to do it because does that not create the opportunity? And it doesn't mean it's an opportunity, but if there is an opportunity and others aren't willing to pursue it because of other government constraints, et cetera, then I think that is a good example. And so for us, venture is a large allocation in our portfolio.”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“Great returns. But I saw how other organizations ran and some of the challenges that they had. And then at Regents, it's a public university. It's a very large government body. It's a lot of different campuses. It's a very complex governance structure. And so that just taught me how difficult it can be to have good governance in that type of organization. Where at Irvine, what I really am thankful for is that we're 2.4 billion dollars. It's a relatively small organization. We have 55 employees in total. We have a board of 12 to 15 people, depending on the year. And so it's just very streamlined. And then the investment committee is highly sophisticated. And their ability to sort of manage the investment portfolio in a thoughtful way is great. And I think a lot of times my committee, when we talk about different things, they will say there's things that we're doing that maybe are non-conformist to the rest of the industry. A lot of times our response is, well, isn't that why we should?”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's interesting some GE obviously the governance was simply the CFO and our CEO of the business unit you were working for and they are ultimately accountable for the profit and loss of that business and so it was just very streamlined, straightforward. I think everyone was highly aligned on what the objectives were and so it was pretty crisp. At Michigan it's a sole fiduciary state which is very interesting. There's only four in the United States for the state plans and so that means the state treasurer is basically the fiduciary makes all the decisions I would say generally speaking that has proven to be not a traditionally great model but in Michigan the time I was there I think Michigan has historically bucked that trend and has done well and the treasure of the time was a deputy treasurer back in the 80s when they had done some I'll call it other investing that didn't go so well and he just saw that you really needed to have a pure investment focus and he was really supportive of doing that and allowed the system to generate”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“They were actually asking me a lot of non investment questions as well as investment questions just to ramp my understanding of organizational behavior, my understanding of change management, my understanding of a lot of different things. People management philosophies, et cetera, and just the horizon they asked about co-investments, obviously given my track record at regents, and just how crisp the process was. I mean, the beginning of the process, it was clear, this is how the process is going to go. Here's the dates, lock it all on your calendar, and it was exactly that. And there was no deviation.”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“In today's context, I'd put it as my investment committee and just who am I accountable for? What questions do they ask of me? Do they take a long-term perspective? How they think about the portfolio and the risks they want to take, et cetera? And generally speaking, I would say the Endowments Foundations historically have had stronger governance than other institutional asset classes. But I would argue Irvine, even within that universe, has very strong governance. And it was very obvious, even just from the interview process and how it was run, and it was just a very tight ship. The questions they were asking were very interesting to me because it was clear to me that this was a well-run organization.”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, first was just good governance, I think, working for different organizations and seeing how governance works. GE had excellent governance at the time that I was there.”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“All right, let's circle over to your seat today. You've had these different experiences. I suspect we'll dive back in on private equity, but what formed kind of the core of your beliefs when now you're taking a CIO role”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“So we started that program, gosh, that's been 13, 14 years ago now. So at the time, there were not a lot of people doing combustments today. That's very different. We actually started it with it as more of an ancillary strategy and quickly evolved into a Combass first model. So we actually told our managers, if you cannot generate COMVEST when there's not a role in the portfolio for you, unless you can for buyout funds, unless you can generate a two and a half net fund return to us. And so that's a pretty high bar. We generally think of buyouts as doing a two net. And so they had to consistently do two and a half net to have a roll without generating co-investment. And so we really realign the portfolio to create that deal flow. And so we actually spent a fair amount of time, I would say it's at least 30 to 40 percent of the time was allocated to co-investments, which was aligned with how much capital was allocated to co-investments.”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“Returns. Not that we would always do it, but we want to always see a few ways to see ourselves there. And if we could do that, if we could build a portfolio of those options, if enough of them hit, it would sort of work out. And I think the end result is actually a lot more of those options hit than we probably underwrote to. And so there's some luck in terms of the number, but there wasn't luck in terms of the strategy and designing a portfolio that had that asymmetric structure and opportunity.”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“Now, we very much believed in our ability to add value through selection. And keep in mind, I also have a strong view on privates around sector specialists. And so most of our managers were all sector specialists. And they ran more than one vertical, some of them might have had, say, two verticals instead of one, more times than not, they were better at one vertical than the other. And so we actually pre-assigned all our managers where we would invest and where we wouldn't. And we would tell them, actually, that this is where we want to invest with you. And I think that really helped because we basically were trying to do deals where it was clearly in their power alley of expertise. But even within that, then applying our framework and selection, and we did about one in 10 deals that were shown to us. And I think that really allowed us to develop a portfolio of interesting deals. And we were looking for something very specific, which was something that has more asymmetric in the return profile. We were really looking for the possibility for outsiders.”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“How'd you consider your time allocation of what you're describing is effectively a deep dive deal by deal? And I know a lot of other people in the seat will take more of a framework that has to do with their sense of is it a good deal for that manager rather than trying to re-underwrite the company?”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“Individual deals, and you have to boil it down to what are the four or five things that matter, and what are the four or five things that can really go wrong? And yes, there's lots of other things, but those are the things that you really have to understand.”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“Bavarian for co investment, obviously you're utilizing all of the various third-party research, whether it's the consulting firms or the quality of earnings, et cetera. We measured how much time we used from the management team. One of the things I think we try not to use more than one or two hours of the private equity firm's time because we want them doing deals, not spending their time with other investors, et cetera. So we would try to be highly efficient. So we had our own DDQ. Some of my team took the lead on running that process. She developed a DDQ, which we didn't use in our manager search. We very much believed in customizing it to the situation. Whereas in co-investments, there was such a strong set of recurring set of issues. We had DDQs that we had for different sectors, et cetera. And we kind of followed that. But then you have to just sit down. And even before you start the process and say, what's different here? At the end of the day, there's a lot of noise on.”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“Basically, it's no different than our managers. You really have to build your own hypothesis and you have to push your diligence and you have to constantly try to prove it wrong. And I think a lot of people try to basically prove themselves right. And I think we do the opposite. We build a hypothesis and try and prove it wrong. And it's only after we basically do a lot of diligence and keep working at it and like, well, I can't find anything else wrong with it. Maybe it actually might be a good investment.”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“And when you're wrong, you also have to have humility. And even in that conversation, you're never about who's right or wrong. It's in a dialogue and a conversation and just forming an opinion and then tracking that you build your own hypothesis around the companies.”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“I certainly didn't have that when I started my career. And I think only through time and through demonstrated skill can you build that confidence, at least for me. We ran a co-investment program at Regents for 10 years. And what we found through that experience and through just the engagement that we had with managers, generally speaking, we actually were bright more than the managers were in terms of our analysis. And I don't think it's a function that we were smarter or better than they were. I think they don't know their own bias. And we actually know them better than themselves sometimes just because we see so many different firms. At least it wasn't just me, it was a whole team of mine that was looking at things. And we really had an outstanding track record on co-investments that I think was a function of our ability to pick from a highly curated subset, to be sure. But that with just even the ones we weren't co-investing with when we would go to toe-to-toe with them and debate whether we thought it was a good investment or not, certainly more than 50% of the time we were right.”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“When you know that the managers know a lot more about if it's private equity and deals, public equity of stocks, then you really will. How do you create a knowledge base so that you feel comfortable going toe-to-toe with them?”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think that the CIO was Marie Bergren and her just raw ability to understand the entire portfolio, the intellectual aptitude that she had to know every manager and cross a large portfolio. This was not a small portfolio. It's $10 some billion dollars. She knew every detail and she knew the underlying holdings of a lot of our managers. And so just that gave me a greater appreciation for how to understand the portfolio. And she really taught me not to look at managers in terms of just their own track records, et cetera, but to really look at the underlying companies and that really form your own opinion and be sort of intellectually independent of the managers and don't view them as superior to us.”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“There, my wife was really interested in moving to the West Coast. I was fortunate to join the University of California Regents and spent about 10 years there, initially started running their private equity portfolio. And that expanded into created a real assets program, which was not realistic. We had a real estate team, but more natural resources. And so I started a real assets program for the regents. And then also did some strategic investing.”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think she put it, if I remember correctly, was when as fair as four years, if it's less than three years, I think she used some pretty harsh language about she would basically go out of her way to make my life miserable. And if it was more than four years, then she felt like it would be a wonderful benefit to the retirement system. And it was literally almost exactly four years. And to me, you live by your word. You do exactly that. And it was a great experience for me where I had an opportunity to really learn a lot by running an amazing program. And I like to think I benefited the program in terms of things I was able to do.”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“So I was very fortunate against Jacqueline Johnson, who was the CIO, and she knew that I wasn't going to be up lifelong employee of the Michigan Retirement System. We had an agreement of exactly how long I would stay. And so it was really above board. She basically made it clear to me that what she thought was a fair deal, what the minimum was, and if the state was longer than the fair deal, that she would be really excited.”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“It was definitely a culture shock. I think I was fortunate to work with a lot of great colleagues. I think let's first recognize it's a public pension plan. So there's a whole sort of cultural system around that. Within that universe, the Michigan Tire System, I would say, is actually pretty thoughtful and actually more differentiated than most. It actually doesn't behave as much like a typical public pension plan. It's actually fairly progressive. But you do have civil service rules. And so just dealing from the investment side, it actually wasn't actually an issue. Whereas an issue was the administrative side and the HR rules, the travel rules, it was bizarre.”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“The overall pension system, I think, was around $40 billion. I don't remember exactly, but alternatives was about $13 billion, mostly private equity. So it was about almost a 20% allocation. So almost like an endowment style allocation back then, and keep in mind this is 20 years ago. So again, seems obvious today, but they were very smart and ahead of the curve and historically has had excellent performance. But they were first fund investors with Excel ventures, with Blackstone, with Berkshire Partners. Just a long list of firms that were excellent firms. They were there in Fund One.”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“Time to stay in one role at that point. And so I was thinking about different roles. And so I actually left GE to go run alternatives for the Michigan Retirement System, which at the time was the fifth largest alternatives provider globally, which today there's so much more dollars and alternatives. But at the time, was truly really dominant player in that space. It was a great opportunity to then just learn from an organization that had a great program versus learning from a great company.”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“One interesting thing is a GE. I was at a young age and being an expat, being exposed a lot of very senior executives and just seeing the demand that it had on your personal life was challenging. And I just see the experiences and how much I guess carnage there was, you kind of made up a decision like, wow, do I really want to do that? And so actually that black and white component to it really helped me to make a decision that at some point I wanted to step out of GE and to do something else, to have more balance, but also I'm a very driven person. And without that, I probably would have just kept going and been sort of boiled like a frog, if you will. But what happened is that this is late 90s, keep in mind this, it seems obvious today, but probably was not obvious then. GE did a study about future CIOs and they concluded that alternatives was the proper background for future CIOs. And so for me, I'd been in that job at GE that was considered a long.”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“I was there probably, let me think, I was in GE Capital for four or five years and she was really great at changing the role. I was still responsible for that portfolio. But then GE Capital was merging different investment units together. And so I worked across other GE asset management components. At one point, GE brought all their investment units together into one place in Connecticut. And I was able to then work with a lot of my peers in other areas as well, but still being responsible for that portfolio.”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it's just pure luck. That's GE. I always joke they keep giving you opportunity until you're about ready to drown as long as you can breathe a little bit. They'll keep piling on. And so, you know, I fortunately was able to deliver and perform and just had great opportunities as a result. And it was just a wonderful experience. But I also, I couldn't have done it without the support of Gail Snyder, who is my mentor at GE. She was really fantastic.”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“Has a property and casualty portfolio, you have to have a fair amount of fixed income. It was all mostly published with a little bit of privates, but fixed income was a large portion. But then we had about 25% of the portfolio was in public equities because we had surplus. And within the equity portfolio, that's where the bulk of the managers were. And we had managers like Leg Mason with Bill Miller at the time who had 13 years straight of beating the S&P 500. And at the time, he had 35 stocks. Today's context, maybe not as concentrated as some of our managers here at Irvine, but at that time was certainly considered concentrated. So then I was also formative. Most of the managers were not, I would say, run of the mill managers. It was really about differentiating and performance.”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“Months, I just fell in love with investing. And in GE, at that time, if you were a high performer, the pace of growth, if they put you on was so high, my view was like, why leave? And so I switched to the executive program at University of North Carolina and continued to work for GE and investments and was just very fortunate. What part of the investment world was that? So it was a $5 billion insurance portfolio, property and casualty portfolio. And it was just the CIO.”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“Entrepreneurial spirit of the country, this speed of change. I mean, I literally was in Beijing when there were very few cars and it was literally bicycles. There were probably only a handful of skyscrapers. And so to see that change and the pace of change relative to other cities and other countries was fascinating. I think they're all interesting countries and for different reasons. But China has always stood out as a bit of a differentiator versus its peers. How did you get back to the States? So interestingly enough, I met my wife in Hong Kong. We work for GE together and we wanted to go to business school. And so we both applied to business school and we were accepted to go to business school at Duke. And so I took a job with GE Capital in investments just to basically get close to Duke. It was in Raleigh, North Carolina. And that's how we came back to the States. But within a matter of maybe two or three months,”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“About 70 people, and I led the restructuring across the region to reduce that. And so at a young age, to have to go into Japan, for instance, and to basically close an office in an environment of lifetime employment was fascinating. I also worked in China, India, Philippines, Thailand, et cetera. And so I just provided a broad perspective. The second is I didn't realize it until now, but until later in my career, but to have an experience of working in emerging markets at a relatively young age and basically for 20 plus years to be tracking China and India and other markets closely to better appreciate their cultures and the differences and the nuances has really been a formative experience for me in my career. It's a lot of countries to be hopping around at a young age. What do you remember sort of key experiences that you took out of it? I think just the dynamism of China, it was just even back then it was just so obvious.”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“Tim, great to be here with you. Great. Thank you for having me. Well, why don't we just start with your background? Just take it from wherever you want. We'll go from there. Sure. Well, after graduating undergrad, I joined General Electric back when GE was at the time the most valuable company in the world and a great place to work. And I joined the financial management program. It's a two-year training program in finance. And so from there, I did a year in GE appliances. I was fortunate to get an international assignment and went to Hong Kong for three years. And it was in 96. I thought it was to go pursue growth and to find out I landed right in the smack of the middle financial crisis, which ended up being a phenomenal experience. What did that mean to you and the role you were in? Well, there's two pieces to it. The first was just to deal with when I showed up, there were 250 people in the organization, the business unit for GE that I was working for, about 25 or 30 of them were expats. And when I left, there were three expats and probably.”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“My guest on today's show is Tim Recker, the chief investment officer of the $2.4 billion Irvine Foundation. Tim joined Irvine in 2016 after spending a decade in private equity in real assets for the University of California regents, four years overseeing alternatives at the Michigan Retirement System, and his early years at GE Asset Management. Our conversation covers Tim's career path, the culture and structure at GE and Michigan Retirement, and co-investments at UC Regents. We then turn to the intricacies of managing a highly concentrated portfolio of managers at Irvine, including effective governance, flexibility, team structure, due diligence, and decision making. We close with Tim's perspectives on hedge funds, real estate, and fixed income, and the trade-offs in preparing for a downturn. Please enjoy my conversation with Tim Reck”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“Hello, I'm Ted Sides, and this is Capital Allocators. This show is an open exploration of the people and process behind capital allocation through conversations with leaders in the money game, we learn how these holders of the keys to the kingdom allocate their time and their capital. You can keep up to date by visiting capital allocators podcast.com.”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
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2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
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2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
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2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source
“Capital allocators is brought to you by AlphaCents. Here's something for you. Most AI tools today are very good at sounding right. But can you actually trace it back to a filing, transcript, or specific passage that drove the answer? Or are you just trusting the confidence of the output? For allocators, that's not a minor concern. A missed filing, incorrect source, or context that gets lost somewhere in a retrieval chain aren't edge cases. They're how decisions go wrong. AlphaSense is the AI platform built specifically for this. They own the content over 500 million curated documents from broker research and expert transcripts to filings and earnings calls. And they own the retrieval layer on top of it. That means every answer can link back”
2019-05-20 · Capital Allocators · Tim Recker - Concentration at the James Irvine Foundation (Capital Allocators, EP.100) · IDENTIFIED FROM THE TRANSCRIPT · source