YouSaid · the spoken record

Tom Lenehan

lines on the record: 89
first: 2022-04-18
most recent: 2022-04-18
sittings or episodes: 1
sources: podcast

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“Next, get to the micro, don't be overly consumed. If you're in a dead end job, if you're not where you want to be, that's okay. Just keep on trucking. I think of like the batting gauge example since we're in baseball season. Keep swinging. The pitches are going to come. Most of the times they're going to be out of the strike zone. It doesn't matter. You're going to whiff a couple times. Keep on swinging. If you hit 3 out of 10,”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh wow, I love when other people get this question. I would you could phrase like what advice would you give yourself kind of 10 years ago? I guess I would say don't be overly consumed with a path to success, whatever that means, like meaning one path. There's multiple ways to skin a cat. I think back to Berkshire Partners, every annual meeting whenever you're at it, they always say we look for companies and investments that have multiple ways to win. There's multiple ways to succeed in this world. There isn't one prescribed path. And if you're hitting a dead end somewhere, that's okay. Retool, rethink about what you want to do. And if you have a general idea on the macro sense of where you want the direction of your life to go in terms of do you want to do you want to have a family? Do you want to have a spouse? Do you want to have a career in a certain geography? What have you? The big pieces are in place.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“I would say right now, I think it's very timely. My daughter, who's in eighth grade, we just got her a copy of Animal Farm from George Orwell. And I'm actually in.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, for us to get a little bit with them means somebody else has to give up a little bit against their will, if nothing else. So that was one that was very helpful to get across the finish line.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“Thing as a partnership that is so refreshing. I'd like to say it's so commonplace and it's so not. It's so not. And we try to really find that in every one of our groups. But that was not easy. We spoke with them for several years. And when we loved the story, love what we do, they don't increase their fund sizes. Every one of their existing LPs wants five times more than what they have.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, again, I hate to use names, but Greylock is, we love all of our managers. Greylock was proof to us that, again, when we talk about rebuilding the venture strategy, our thesis, a piece of that thesis worked. We weren't sure if it would work. We had no clue. But we never had spoken as an institution. We'd never spoken to Greylock. And there's plenty of groups that we didn't speak with. We kind of scratched our head like, that's on everybody's list in terms of a top organization. And there's a lot of reasons why. And it's not just because of their financial returns. I would say that's looking at the endgame and not looking at how they got there. We look at how they got there and they do meetings twice. They used to do meetings four times a year. And the level of transparency and the level of disclosure and how they think of the world as a partnership, not only with their portfolio company CEOs, their own team members, their own LPs. They think of it the whole”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“Let's let the person kind of ride out to the end of the program, which was fine. But what it did to our culture, and again, you're looking around, there's only kind of five other people. And one of these does not look like the other. And when we had kind of within six months, the first six months, I said, here's where you are, here's where we think the trajectory needs to be. Here's how we think you can get there. Here's the resources we can provide to help you get there. We noticed instantly there was an improvement and then it kind of flattened out again. And so it never got to the point where we needed it to be and let it ride out for the full two years. Not saying that, you know, it's not the end of the world, but what it says to me is how important it is to hire right.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“Would say this may not be exactly what you're thinking, but we made a mistake on hiring on one of our junior folks. And it wasn't devastating, but it just, in terms of, we're a small team. We're six investment professionals in our kind of corner part of Founders Hall. And that's not a very big team. So everybody, and you also subscribe to the philosopher.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“Wow, there's been several. And I would say, I'll answer that directly. I would say that in general, I think what's most important when you're going to make mistakes all the time when you make them learn from them. Try not to make the same mistake twice. It may look different the next time around and say, oh no, this is wholly different, but try to, you know, our business, a lot of is pattern recognition and just looking at things and seeing patterns and using the history, it's very much investing, I think, is a learning field. The longer you're in it, the better you should do because you're going to see more. You're going to be more experienced. The caveat that comes with that is if and only if you're learning from your mistakes. The thing that you're not going to make mistakes is crazy. But what do you learn from them? And how do things that look similar, you can say, okay, given what we did before, this may not be the right way to go. Let's go this direction because this seemed to work before. So just recognizing that all those things happened.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“Absolutely. All the time. Really? Like today? That's the crux where you have to look in the mirror. I mean, for us, we know what the answer is. It's not easy. You got to take everything into consideration, say, well, are the returns a certain way? Was it a bad vintage? Was it just was it a bad employee? Is this exactly the wrong time to get out the bus with them? And one of the research that I did at Common Fund that I participated in, we found out that even the top quartile best managers of all time will have at least a fund in their history that is not top quartile. So returns are persistent for sure in the long haul and in the overall body of the record, but it may not be for each individual fund, which is, again, the folly of market timing for us to think, okay, this is the one that will work. That one won't. There's so many things that go into that you really can't underwrite. You have to just say, no, no, that's, you know, stick with your best manner.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“There's an element of court before you know you want to date somebody. I'm going down a terrible path in terms of an analogy, but you don't know yet if you want to marry that person, meaning, you know, actually make a commitment to them and they make a commitment to you because you don't know. You don't have the data. And that data is incredibly prized. It's not publicly available. It's not remotely publicly available, sometimes even privately available. They just won't give you the information. If we, at the end of the day, I think you have to stick to your under end criteria and stick to your diligence process that will save you at the end of the day. But it does mean you have to find, you have to be creative in terms of how do you get the information that you need to make the decision. I can tell you with complete confidence our committee won't let things slide by, if you will. They won't let us get complacent. Quite the opposite. They keep us on our toes, which is a wonderful, wonderful place to be.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“Certainly had known about some of these groups from my time at Common Fund. Rockefeller is an unbelievable brand, but most folks had never heard of us outside the science world. So we put together a pitchbook going borrowing from my analyst days and said, we got to market ourselves. Don't take anything for granted. Rockefeller is a gigantic name, but folks will confuse us with the foundation, with Rockefeller Brothers, with a lot of the different entities that are out there. And most folks have never heard of what we do outside, certainly in the IT space. They're just not in our world. So we had to pitch on what we are, who we do. And we talked to all the usual suspects and we got some. Everybody said yes. Not everybody, you know, shocking. Not everybody, you know, they have a surplus of organizations as amazing as ours, and they can pick and choose who they want to be with. And so we continue to knock on their doors and maybe we'll make inroads someday, but we didn't make road inroads with some. So that was prong number one was talk to the incumbents.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“Healthcare VC exposure. I think we had nine incumbent managers fund families. That was the bulk of our venture exposure. And at the time, I think it was over 10% of our total NAV of the entire endowment was in venture. And of that, over half of it was healthcare, BC. Now, a student of venture capital going back 20, 30 years would say you can have IT and healthcare and IT won. There are times when healthcare does fine. And in the last couple years, it's actually done great. But for the most part, on the whole, IT has done better. So when we thought about how do we resuscitate our venture program, we broke it down into parts. We said, number one, why don't we try to get access to this kind of a leak group? We know who they are. Why don't we call them? And so the cold calling that I did at Vista and other places that helped training, you give it away, you can nothing to lose. No, it wasn't complete cold call.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“Perfectly fine, kind of where they are. They don't need to grow, but they'll continue to just make great investments every now and then. As it relates to Rockefeller, when we faced that, we looked at our venture program and we were, because of who we are as a medical research institute, we had a lot of”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think it's an age old question. I think the debate will, it's going on for a long time. It'll continue. It will never get old. I think it's true to the nth degree with the caveat. And the caveat is that that's not all the returns, that you can still generate great venture returns if the firms are small enough and if they're going early stage enough and they get meaningful ownership positions in some of the better companies. Certainly it favors the incumbents because when you have a brand pick your favorite, you know, I think everybody, I think everyone, I would agree with you. I think everybody knows who the top five firms are, the top ten firms are for the most part. But then there's a whole, they don't invest in every great company. And there are groups that you may never have heard of before. You might have heard of their companies. You may not have heard of who the top venture capitalists in terms of ownership was or maybe they only ownership position and you'll be like, wow, I never heard of that group. And maybe they're the next great group. Or you can say, no, they're.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“And that premium is getting smaller. And what do we do in the long haul? And so one of the things we did most recently at this, getting back to your racial question about the February meeting, we increased our allocation of privates incrementally. So we went from, you know, originally it was 15% that noticed that 20% last several years and now we increased it to 22%. Not wholesale shifts, but until you look at the long haul, and I always love looking at the Yale report and they have several years with a asset allocation. So you look at the current year and you say, well, that's not much different from last year. Well, look at what it was five years ago. Look at what it was ten years ago. It's actually dramatically different in terms of what they've done with their domestic equity book and shrinking that and reincreasing the foreign equity exposure. So when you're around forever, that actually is a pretty big shift from 15 to 22 where we are today and from fixed income of eight down to five and currently at two. So any given meeting, any given year, it's not wholesale changes.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think the key is, again, what we inherited and what we've been able to build with the committee is you want to have that goodwill with the committee for the times when you really need it. And you don't get that overnight. It is part of a long-term process and a trust that is built up every day, every meeting, every decision. And you keep them informed. And you ask their advice. We don't have all the answers. They don't have all the answers. And I don't say we muddle through it together hardly, but we make sure that everybody dissents. Everybody has an obligation to speak up. And there's different debates. And those are some of the most fun meetings to be at because you have all these terrific brains in the room and they don't all agree with each other. Sometimes most of the time they do. Most of the time they agree on lots of different things, including the premiums. We have a lot of private folks in the room that believe fundamentally there's premiums you can have for giving up liquidity. But they all believe it's getting tougher.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“Work with the investment committee and your team to sort of recognize that these are the decisions we're making. These are the bets we're making relative to what our spoused policy target is that we set, say, last February.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“But it's one of those great unknowns, or say lesser known aspects of asset allocation and policy targets that were all forced with market timing decisions. So exactly what you're talking about in fixed income. Oh, our target's five. We didn't want to be at five because we knew that rates were going to go up at some point in time. So we're under. That was the wrong decision. Now we really don't want to be at five for the example, but that's effectively a market timing decision. It is. How do you?”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“Long ago, you know, a year, two years ago, where that was a real risk. It's certainly happening in other parts of the world, but there's a real risk in the United States that we'd actually be facing huge deflation. And we had nothing in the portfolio that would do well in that environment. We've maintained around a 2% of effective allocation to fixed income in terms of against our 5% target. But it's incredibly short duration. We've been staring at this shift in Federal Reserve policy, thinking it was going to come years ago and it never did. And now it's starting to happen, but in a very muted way, now we sure don't want to get up to 5% or have anything with duration. But in our business, we realize that we try not to keep score too much because you can think that we're right. But if it's not timely, you're wrong.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“It does. It does. Having said that, we still want to try to apply some outside judgment and doesn't make sense for us to get the target. And other groups, you know, they're strict adherence to whatever the allocation target is, you get there and you take all of your own kind of personal alpha based on manager selection. And you're graded by how well you do kind of adherence of that. We're not that strict. I would say that we definitely believe that asset allocation plays a part, but we also are not wholly driven that we actually have to get to whatever targets we establish. Another one, we have a 5% target to fix income, so we reduced it from the apris that we had before. We've never gotten there. Amy is a fixed income person. It keeps her up at night. It pains her not to have that exposure at the levels that we're hoping for to combat other types of risks like the risk of deflation, which wasn't too bad.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“So you turn that around so you've said, okay, let's look at what the people, the managers we employ are actually doing. You do some research and find, wow, the private managers are doing even better than we thought. Does that then color your asset allocation?”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“SP 500, they're not, you know, most of our managers are not investing in Fortune 1000 companies. So taking a look at that and seeing, are we getting that? Is it appropriate? And is it appropriate that we should demand that? And second of all, are we getting that? And we were pleasantly surprised to see that not in all cases, but as a whole, we actually were getting more than that. And that's kind of what we were budgeting that we hope to get that. And we actually are doing better.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“Years ago, five years ago, in which case, as you know, the issue with just data, we're a very date of intensive business, but sometimes the track record system complete, either the managers went around that long or we've switched things around quite a bit. So there's a little bit of an exercise just to make sure that when you're looking, when you're backtesting and looking at data backwards for 20 years, there may be, it's like, you know, I think in Jurassic Park, there may be some gaps in the DNA sequence that you have to plug the frog DNA in to get it to be complete. But you do the best you can. And it comes up with some very interesting conclusions. And in some cases, we were like, wow, we actually kind of thought that we should be getting, I'll just use privates as an example. We should be getting kind of 400 to 500 basis points above the public market equivalent, whatever that is. It doesn't have to be S&P 500 just because that's kind of one of the main metrics we look at. Maybe it should be the Russell 2000 because most of what they're investing in, the asset clients, is even smaller than that.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“Are they doing exactly what we're modeling and we're projecting? And are they giving us, we don't have to be theoretical at all. We can actually look at actual data. Now, the issue that we have a little bit is that the manager lineup that we have today is drastically different from what we had.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, you know, I hate to use names, the risk of my own career, but Jim Simons is on our committee from Renaissance, and he is a life trustee of Rockefeller. He's been involved for, I think, 30 years, 30 plus years. So a terrific benefactor for what we do. It wasn't this past February, but two February ago, he said, you know, we don't invest in asset classes. We invest in people. So you're making assumptions in our asset allocation mix of asset classes. And what we think we could expect, what kind of premiums we should demand for giving up liquidity, we're happy to give up liquidity. That's one of the most valuable assets we have is our liquidity. And we couldn't make our targeted rates of return without sacrificing it. But how do we? How should we? And we invest in managers. They're the ones that do it. So whatever assumptions we have for the asset class, that's great. How are our managers doing?”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“So it's a great question. And I would say it's something that we continuously debate every February on a very regular basis. We make sure that we dedicate a portion of that meeting to talk specifically about asset allocation. It's just important to, and that meeting, we not only just go through where we are and where might we be, we go through our assumptions and retest those and re-underwrite those. Do they make sense in today's world?”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, when you come up with asset classes, there's always these questions of is that the is it a bucket that you're filling because of the character, the risk and reward characteristics, the way they correlate with other asset classes? And then you have the whole world of factor investing, which is, well, it doesn't matter what you call that bucket. What matters is what you own and how that's exposed to the markets. How have you debated back and forth the merits of asset classes, the names of your asset classes, the exposures underneath them, and use that to sort of drive really the engine, the managers doing what they do and hopefully adding value in the bucket they're in, but the engine is asset allocation.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“Favor, keep out of favor for a decade. And we kind of want folks that can make money at any time period, but there's a role in the portfolio, but it should be more muted. So on anywhere between 1% and 2% on the private side. So we might have the same number of managers on the private side, even though it's half the size of the publics, but they're a little more dispersed and diverse.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“Letting go managers as opposed to just trimming exposures across the board. One of the things that we're big believers are is that everybody having a meaningful impact on the endowment. So not having manager creep or having everybody having 1%. We want to have of all the public managers, roughly the book is today two-thirds public exposures, one-third private exposures between private equity venture, natural resources and real estate. Of the folks that are on the public side, we think between three and five percent per each manager of any makes sense. So that on average, that might give us 15 to 20 managers on the public side. On the private side, we want to have a little bit more diversification. We might have a little bit more sector specialty. So folks that might, you know, like a stone point who just does financial services or a vista that just does technology, we think it's okay to have groups like that, but we don't want them to have too much because if they're a sector that is out of...”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“Multi strategy And it can differ between folks that, again, there are credit specialists, so we divide that bucket into folks that are true multi-strat that are doing real estate in Japan as an example. They're doing activists, equity investing in the United States. They're doing credit in Spain, all different types of geographies, all different types of asset classes. But then there's also credit folks that can do multi-strategy within the credit spectrum, which is a big place. So that was a very small exposure, built that up to now where it is today about 20% of the overall book split roughly, not quite 50-50. There's probably 8% of that 20 that is in the credit side, 12% that's on what we call the true multi-strat in a multi-asset class side. And that was up from about, I think, single digits from where we inherited it. On the other side of the hedge fund slice, where that was 25%, we reduced that down to 12. And we're currently today at about 10. So a lot of that requires...”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“We had very little in the other types of hedge funds, which we've expanded over our tenure in what we've called absolute return managers. And those are folks that really have the ability to, they can dampen volatility, but they don't do it through necessarily through shorting equities. They do it by rotating amongst different asset classes. So they can do equities. They can do credit. They can do real estate.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“It started with the lowest hanging fruit was, wow, we have too much long short hedged equity. She kind of thinks of that as expensive equity. So in terms of what we're getting in terms of exposure. So this work, it does kind of, does it blend into other things? And so I was just thinking of it strictly as asset allocation and targeting buckets. We think of exposures as well. So that's giving us a lot more equity beta, even though it's more muted because they have the hedge feature and component to hopefully monitor and manage the volatility. So it's not quite as volatile. At the end of the day, at least that group of hedge funds are folks that are giving us equity beta.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“There was fifteen percent dedicated to private equity and venture capital. There was virtually No investments in natural resources. There was, I think it was a 15% allocation to real estate, and there was an 8% allocation to fixed income. And a couple percent in cash, and then the remainder was long-only equity.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's exactly right. And we meet five times a year. It's tough for two hours. And so it's really tough. And if you've sat on committees, as you know, you have, you have your day job and then you have other activities which certainly contribute to what you do in the broader sense. But when they take up 10 hours of your year, you're always thinking about them in different ways and you can tap into many times. But in terms of actually sitting down for the meeting, it's 10 hours of the year. So you don't necessarily get everybody's absolute full attention 24 by 7, nor should you.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's right. So we have 10 members today members of the Vesant Committee. All different backgrounds. There are private equity people on there. There are public equity people. There are hedge fund folks. There are quantitative managers.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“From the spectrum to, I didn't know we had that much to why was that a bad thing? And so it was a lot of different answers. And so I think one of the first things she said was, well, we, meaning the investment office, we need to do a much better job of communicating.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, one of the big things that stood out was that as it relates to long short hedged equity funds, Rockefeller had a 25% allocation and was pretty much on target at that level. Amy will tell, this predated me, I didn't join for about five months after she started. She told me how, what she did the first time she was hired. She went around to every one of the trustee members on the committee and said, so why do we have 25%? Not trying to lead the witness, whether that was good or bad, just why are we there? And she had a myriad of answers.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's Primarily it started out originally with an asset allocation approach to it, and we looked at where Rockefeller was at the time back in 2011 and where we thought it needed to be to accomplish several goals, generate the returns that we needed, managing the risk within certain acceptable parameters, and then having liquidity.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“And how do you think about it in terms of an asset allocation approach, a factor approach, opportunistic investment? There's a lot of different mental models you could use to get into it. That's right. What's been the one that you've adopted?”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“On the endowment. And it just means that when we think about fundamentally, how do we allocate assets and where do we start? We can't think just about return. We have to think about liquidity because we pull off in round numbers of a $2 billion endowment. We pull off about $100 million a year, even more so, $25 million a quarter that we got to find something to redeem from to be able to fund that. In addition, we have to be around forever. And so we have to have some growth.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“So we're now today at 5.5%, which is still high, still aggressive, plus inflation. So whatever number you want to use 23%. Now, that's not dissimilar from anybody else, but what it does mean is that's, again, that's your long-term bogey is maintain the purchasing power of the endowment. And when you're 10 or 15% of the budget, not as big a deal when you have tuition dollars that flow in, not as big a deal when you have gifts from alumni, there's lots of different leverage you can pull. We don't have any of those. So we're unlike a traditional university. Nobody pays tuition. Quite the opposite. We actually, if you want to be technical, we have negative tuition. We actually pay people with their heavily recruited and their paid stipends to attend Rockefeller. We do have graduates, so we have alums. They go off and do wonderful things in the science world, but they almost think of Rockefeller like a job because they're paid and they're scientists. So they don't think of it as something you give back to, if you will. So we don't get that source of income either. So that puts additional strain.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, fundamentally, at the end of the day, we have to meet that spend rate obligation on an annual basis plus inflation.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's an interesting question, right? Because You look at this pool of capital with the time horizon of forever, as long as your governance structure is on board, short term risk shouldn't matter that much. Now we know it does after two thousand eight and it's hard to right-size budgets. So how do you take that and apply it specifically to Rockefeller that really does have this long time horizon when it comes to thinking about asset allocation or however you go about the approach?”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“We'll never heal everything or find cures for everything. So we've been out for 110 years. We want to be on forever. So people are grading us every June 30, you know, maybe end of August by the time the numbers start to roll in. How are your annual numbers? They matter for sure, and you know, certainly matters to our compensation committee and how we operate on a budget basis. But we're investing forever. So it's that delicate balance of short-term traction, but for long-term kind of fundamental building blocks. And everyone talks about, I call it the sweepstakes that come out with all the numbers. People don't ever ask you what was your risk. What was your standard deviation? How did you get there in terms of your allocation? What did you do to push the envelope or not?”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“So I think first and foremost we try to figure out what is our goal at the end of the day and what is our role on behalf of the organization and how do we fit in there. And that really, I think that has to be the starting point. So the endowment, we're a little bit unique, but certainly not unprecedented, where the endowment, earnings from the endowment support about a third of our operating budget every year. So not dissimilar from your alma mater at Yale. It's about, I think I just read the annual report. It's about 34%. Very similar to Rockefeller. So it's a huge and important piece of the overall puzzle. So that's going to have implications for liquidity as well as risk management. So you've been in this business a long time. Whenever folks talk about what are your returns, what are your returns? And we get measured. We are supposed to be investing forever. When people ask, what's your timeframe? Is it 20 years? Is it 50 years? Is it your career? It's forever. It's perpetuity. Certainly, I mean, most groups, but certainly with rock.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“Truly did when Amy was hired in 011, so she had been six years as the Andover CIO, and then Rockefeller called and asked they were really looking to take the program in a different direction. And what that meant was there were no sacred cows. So they were bringing somebody on board, and in this case it was Amy, to take a clear, clean look at everything and make a recommendation.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“We have $2 billion under management, which I think is a terrific size. It's not too small where there's certain things that are off limits and it's not too big where we feel that we have to do everything. I work hand in hand with my boss, Amy Falls, who is our chief investment officer. I met her in 2005 when I started a common fund. She started, she gave up a 16-year career at Morgan Stanley as a shelter that was the head of fixed income research. She had a calling, not dissimilar for mine, to become the first CIO at her alma mater at Andover, where she went to high school, Phillips Academy at Andover. The way I came across her was one of the first things that she did was invest in a common fund product. So she became one of our clients and came onto our advisory board. So a couple times a year, I would have interaction with her. And she really stood out in my mind as an advisory board member who gave advice. It seems like a novel, crazy idea, but she.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“And so today you sit as the deputy chief investment officer at Rockefeller University. Why don't you talk a little bit about How you go about even thinking about having a large pool of capital. managing it.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source
“Best of class money management across all different sectors, all different products for one set of clients. And it was all nonprofits. So they themselves were nonprofits serving other nonprofits. I thought, wow, what an interesting mission. And again, they had never thought about that world before and always been kind of a diehard capitalist. But I thought, wow, I could actually do what I do now from the LP side and actually back people like A Vista or groups that I applied to and they would never consider me as a principal investor like GTCR and HIG and Golden Gate, you know, bank capital, you name your favorite GP. But I could actually invest with them. And Common Fund had a stellar reputation primarily because their mission was so pure. And the better that they do as investors, the better everybody does, including a lot of these folks alums and medical organizations that they want to support and what have you. So that's what led me to cross.”
2022-04-18 · Capital Allocators · [REPLAY] Tom Lenehan – Perpetual Thinking at Rockefeller University (Capital Allocators, EP.04) · IDENTIFIED FROM THE TRANSCRIPT · source