How I Invest with David Weisburd - E100: CIO of $2.9 Billion University of Illinois Endowment

Episode Date: October 3, 2024

Travis Shore, CIO at University of Illinois Foundation sits down with David Weisburd to discuss how CIOs can adapt to the next big change in time, the critical mistakes made in mastering risk in uncertain markets, and identifying which strategy may save your endowment in the next crisis.

One of the things I love about our team is we love to argue. This team argues every day about lots of things. We have really strong relationships with one another. It's never personal, but we have strong intellectual disagreement around whether it's parts of the market, asset allocation, whether we should hire a manager, whether we should make a co-investment or a direct investment, what our growth assumptions are in something, even silly things like where our margin for being right or wrong might be like 50 to 48 or something, whether to hedge FX or something. But we debate those sorts of things deeply. We use a framework

called beta factors. Everything is either equity, credit, interest rates, cash, real estate, or commodities. Equity is just equity, public or private. Credit's just loans or packages of loans to operating businesses or projects. Real estate's just land and buildings on it. Cash is what it sounds like. Interest rates are just loans to government. And then commodities are basically things you could set on fire or drop on your foot.

So everything falls into that. What were your learnings in 2022? You joined University of Illinois two and a half years ago as a new CIO. Tell me about the history of the University of Illinois. So the University of Illinois Foundation, which is the entity that employs me, it's about a $2.9 billion endowment. We're in the loop in Chicago with a staff here, about 12 of us. And you came to University of Illinois,

you're at University of Florida, NYU, Vanderbilt. You've been at some great endowments. When you came two and a half years ago, what changes did you make and what did you keep the same? So you might imagine there's been meaningful turnover in the portfolio. We built a team and, you know, with the changes we turnover in the portfolio. We built a team. And, you know, with the changes we made inside the portfolio, it's been in public markets and private markets,

but our most immediate impact was certainly on the public market side. And, you know, through the lens of if you're an investor, you know, every investor needs a portfolio they can have confidence in in periods of stress. And to do that, you really need to have one you can call your own. So it needs to fit to where when things get difficult, you know what you own and you have confidence in it and you don't feel like you're a dog chasing your tail or you're panicking. So that was our immediate effort really in the first 18 months was to get the portfolio to where it was something we were comfortable with. What is your philosophy when it comes to endowment style investing? First, and a big point, I ask our team at the core to think like investors

and not like allocators. So the word allocator here is not one that we use. In fact, I start getting a little twitchy when it's used and people on the team know not to use it. So that is core to everything we do. We don't allocate capital to certain parts of the world or certain strategies. We don't fill buckets. Core to our approach is the idea that we are fundamentally investing in operating companies predominantly and at the right point in the capital structure to where we can compound capital over time in a way that supports a long-term high time horizon and a long-term entity. The endowment should persist the lifetime of everyone on this team.

A lot of your peers, especially those who have been CIOs for multiple decades, talk about this kind of herd behavior. People pile into asset classes oftentimes in the late stages of the cycle. What are your thoughts on that? Yeah, I think that's what makes markets right. I had an old board member, I'll leave him nameless even though I adore him, but he always said like, you know, you could, investors generally don't make money. And he was focused on mutual funds because none of them had the courage to buy at the bottom. It's manifestly true, at least in my belief, because that's why cycles happen. So it's sort of like which drives the other. I think you have to know yourself a little bit as an investor and what you'll be able to execute on and what you can.

Part of that's your temperament, your distribution, or your willingness to take risk. And I think I want to be on the right side of trends and things where there is capital formation over a reasonable period of time. The tricky thing is when do you sell them or when do you reduce them? So where we have those, I'm not dogmatic about rebalancing as an example. We will let things run, but we're always sort of itchy about staying too long and when to sell. You started at University of Florida in 2006, so you lived through the global financial crisis. How much does that inform your investing strategy today? Probably too much, honestly, David. It took me years to outgrow that. I joined

Florida in February of 2006, I believe. Brand new investment office, very young CIO. Our CIO there was Mike Smith, who I remain pretty close with today. And he was a great mentor. But he and I and some of the other folks on the team were all really young. And I think he was 32 when he was named CIO at University of Florida. We got there. So he started in like 05, I think. No, mid 04. And I started at the beginning of 06.

And 06 was sort of a normal year, a pretty good year. 07 was a weird year. Markets okay, like optically were really healthy, but you could feel lots of things going wrong under the surface. And asset prices behaved weirdly. We were positioned well for it. I was probably a little naive at the time. I'm like, wow, you know, we saw this like other people saw it too, but we got it right. We still lost money as everyone did. But, you know, coming out of that on the other side, one of the biggest reflections was that you have to be able to play both sides of the tape.

And this is where I use this phrase with our investment committee, our board, our stakeholders and our team. You have to be able to transition through a market cycle and do so in a way that allows you to play offense. And it was at Florida. That was really what I learned, David. One of the many things, but but vividly learned was the idea that coming out of a cycle, you need to be willing to take risk. And honestly, I think by 2011, maybe 2012, and I left UF at that point, but I realized coming out of that cycle in 2009, we had not taken enough risk. And, you know, I think one of the things I admire about venture and growth sorts of investors is their optimism. And they're always able to, like, see the upside. And, you know, if you spend too much time with, like, the value community and public equities and credit, like, you'll find everything in the world that can go wrong. And markets need both sides. As an investor in a place like an endowment, you need to be able to do both or at least

surround yourself with people that can. So when you look at venture investing, how much of it is which venture manager checks as many boxes versus which one has the biggest strengths? How much are you playing to a manager's strengths and weaknesses versus overall kind of broad skill set. The venture community uses the phrase like, you know, what's your superpower a lot. And that's really like the only area of where we work that I hear that. But I do think at least in that area of the world, it has some merit to it. For a university endowment that's $2.9 billion, how much space do you have to take these asymmetric extreme risks? How much could you invest in crypto plays and things like that

that have very binary outcomes? It gives us room to do it, but we have to be picky or selective. We don't, we're not of the scale to where I think it makes sense for us to do dozens of very small, highly like binary distribution sort of bets. So we don't really do crypto as an example, in part because I don't really fully understand it. Someone on my team understands it very well, but we've not done any. That's not to say we wouldn't, but we've not to this point. And because of the size of our team and the size of the pool, we just have to be targeted in where we pick them. So, you know, we've got a vertical on our

team. We refer to it as learning, research, and engagement. On the learning side, that person, Jeremy, on our team is focused around structuring, you know, our research and our flow and our learnings and having the team sort of be disciplined about theses and why we're looking at something, putting in the proper like check marks and coming back to things, told ourselves accountable what we said we needed to learn in order to proceed on something.

So when we do that, we'll go slow, but we'll go deep. It just means you can't go wide, maybe to your point. So like we're not gonna be doing 10 of those at a time or even five of those at a time because we don't have the bandwidth. We don't need to be everywhere doing lots of things, but the things we do, I want to do them really well and understand them as well as anyone. You mentioned you're very particular that you're not an allocator, you're an investor. What did you mean by that? Even just with the way we organize our team. So we have somebody who we informally refer to as our head of growth and somebody we informally refer to as our head of value. So our team at the senior

level is split up with head of operations, the head of growth, the head of value, and then the learning, research, and engagement person. You can think of growth really as things or sectors that or industries that are income statement focused or revenue focused and then values just areas that are more balance sheet focused. So you know then that translates into asset classes but also industries and verticals too. So you know obviously banks, industrials, cyclicals would fall under value, but also credit or real estate would fall under value. Whereas things like software, our head of growth actually used to be a software analyst and is an engineer by

background. Venture growth sorts of strategies regardless of the geography. Even like retail growth stories, anything income statement focused really falls under that part of the spectrum. So that one obviously with growth is more equity focused than not, whereas value is a little more broad. But at a high level those are just first-line accountability assignments. So everyone on the team is a generalist and is able to work on virtually anything, except for a few no-fly zones here and there. But virtually anything in the world. But they have first-line accountability for certain segments of the market.

How do you make sure that you're making the right decisions? What's your decision-making process? Yeah, we debate things in a way that can become borderline or absolutely beyond borderline frustrating for folks, including me. So one of the things I love about our team is we love to argue. This team argues every day about lots of things. And we have really strong relationships with one another. It's never personal, but we have strong intellectual disagreement around whether it's parts of the market, asset allocation, whether we should hire a manager, whether we should make a co-investment or a direct investment, what our growth assumptions are in something. Even silly things like where our margin for being right or wrong might be like 50 to 48 or something, whether it's like whether to hedge FX or something. But we debate those sorts of things deeply. Ultimately, somebody has to decide.

So that's me. But I rarely would decide without lots of debate going into that decision. Do you believe in the Jeff Bezos principle of the leader should speak last? I believe in it more than I don't. I will confess I sometimes have a hard time waiting to go last. I have a few pet peeves and I try to, I just can't, I want to outgrow some of them. I just, I've reconciled myself to the fact that like, with some of them I won't, but like one of my pet peeves is like, I just, I hate hearing inaccurate information presented

as fact in a discussion. When I hear it, I can't stay quiet. It drives me absolutely bonkers. That doesn't happen very often, but I'm very focused on making sure that the criteria in which we're debating to make a decision is the right criteria with the right information. And when that is happening and I'm just an observer, that's fantastic. I read something years ago and they're like, you should have thinking meetings or discussions and yet you should be very clear about when you're deciding. So we have a lot of meetings where we're thinking

or discussing, but we're not deciding. And I love those. Like, I'd rather take in the information than give it out. So it's really easy to remain quiet or observer. One of the things that I've really applied in my life is whenever everybody kind of gets their best opinion, having these small iterative meetings, allowing people to evolve their thinking, to think higher, to think more about their decision-making, come to a better solution. It also is less daunting when you're kind of coming across big tasks. I like that idea, actually, David. I should give that some more thought. You know, we're even two and a half years in. We're still thinking about what what our meeting cadence should be and like the types of meetings we have.

We've pivoted a little bit on these a couple of times over that period. Part of that's a reflection of where we were in our development. And part of it is just a recognition that the way we had things structured wasn't wasn't working the way we would like it to. So I have no doubt we'll change it again. That's an interesting idea. What we've tried to do to this point is we have standing meetings. So, like, we have a weekly team meeting. People travel.

It can get moved. We have a biweekly meeting that's a little bit deeper on investments. Sometimes that one will get moved or have to be moved around. But then we have some other meetings that are immovable. We have a monthly research meeting, which can run anywhere from two to four and a half hours. That meeting does not get moved. I've done that meeting from the other side of the globe at three in the morning or at

midnight. It doesn't get moved. If you can't make it, then you're, that's fine. If you have to miss it for something, but like, don't miss it because you're scheduling a meeting that you could have scheduled the next day. I just figured with some of those, especially the less frequent ones, like you, you just have to have them on there. You have to honor the fact that they're there and hold to the calendar, even if you miss people occasionally. So we're still working through some of those things. I'll have to. I'll have to think through more on the iterative meeting idea.

How do you know that you're building institutional knowledge? A couple of ways we can see it tangibly, and then other ways where we're really still trying to get better are more intangible. So we have a growing library of research here. It could be things like one of the things we've got a project going on now is just around studying carbon capture. We've done some things on sustainable aviation fuels. It could just be as simple as mapping a market. On the other side of that are the more intangible things about intellectual honesty and making sure we're making decisions. I keep a diary as an

example. Every time we have a transaction in the endowment, especially if it's something where it's direct and in liquid markets and you constantly ask yourself every day, why do I own this or why did I buy it or sell it? I keep a diary just in my iPad about why I'm doing everything. And then at an endowment level, one person on our team is responsible for trying to make sure that we're sort of ex ante. And really, this is just documenting our discussions. But ex ante, we're identifying exactly why we're doing this and what we believe and don't believe about it. So when things happen over the life cycle of an investment, we can be honest with ourselves about whether it was part of the thesis, thesis is broken, or it's just new information we need to form a view on. You guys are clearly first principles when it comes to investing. How much of your investing is around filling buckets versus kind of best ideas? Like how much flexibility do you have in

terms of different assets? We have wide ranges. So we use a framework called beta factors, which I'll give credit to my CIO at Vanderbilt, Anders. So everything in the world for us is either at a security level, so not a manager or a fund level. Everything is either equity, credit, interest rates, cash, real estate, or commodities. Equity is just equity, public or private. Credit is just loans or packages of loans to operating businesses for projects. Real estate's just land and buildings on it. Cash is what it sounds like.

Interest rates are just loans to government. And then commodities are basically things you could set on fire or drop on your foot. So everything falls into that. For three of those categories, there's a range, but the floor is zero. And then for equity, it's a pretty wide range. But in reality, the way we think about this is credit is the most tactical part of the endowment. So it could be 7% of the endowment at one point and 22% at another point based upon the credit cycle and the market cycle. And I stole this from Rich Bernstein, who said, I think he wrote this in one of his books,

but it's better to be late to credit, I'm sorry, early to credit and late to equity and that's stylistically how I think about it. Our equity exposure has been as low as 57% since I've been here and as high as I think 71 and credit's been as low as 11 maybe 10 and as high as 18 or 19. That could be an even wider distribution over time just we haven't had a full cycle since I've been here. Generally speaking equity is going to drive the return of the endowment so that is where we spend the most time day to day. It's just looking at industries, managers, and companies in public and private markets globally. How does endowment know what part of the market cycle it finds itself?

It's really hard. And I won't claim to have mastered it. What are some signs? What do you look for? And how do you try to probabilistically predict it? I I'll give you the two opposite ends of the spectrum here. One obvious end would be in 2007, eight, nine, where, you know, virtually all endowments had huge liquidity considerations. And, you know, there are rumors that some were even calling their GPs and saying not to call capital because we're not going to wire you the money. So that's the one end. That's bad. And then there's the other end who, you know, my boss, who's probably my greatest mentor, Bill Peterson from the Sloan Foundation, he jokingly, but I think only half jokingly,

says that we're right under this tombstone that he never took enough risk. So Bill would carry, you know, 15 15 to 20% fixed income in cash for long periods of time. And, you know, markets would grind higher. I mean, I remember we were doing that at Sloan in 2013. And I don't remember exactly, but like, I think the Russell was up like 40 something percent that year or something, something crazy. And we had meaningful cash and fixed income. And, you know, Bill was kind of banging himself in the head, just reconciling like all the liquidity we were carrying around. So that's the delicate portion of it. So I don't try to really do either of those. What I really try to do is just make sure

I can manage risk with liquidity because I don't, and this is the key part, I don't want to be a for-seller of assets at the tail end of a cycle. In my mind, if you can traverse the cycle to where you can play offense and meet your spend, we spend over 5% or distribute over 5% a year at the foundation. I've got to be able to do both. And then I also have to be able to meet capital calls if we get them. Our unfundeds are pretty low here, so that's pretty manageable. But those are the biggest requirements that would satisfy traversing a cycle or being able to invest the same way on the other side of it that you were going through it.

Speaking with Victor Mayer the other day from Pantheon, he runs their Evergreen Fund, among other roles. And he mentioned that one of the tricky parts is that when you have something like the global financial crisis, you not only have NAV go down, but you also have capital call risk and all these confounding factors basically almost overnight appear. And there's much more of a compounding to it than you would intuitively kind of be able to predict. It's totally true. And that's part of what I try to avoid. Since we do a decent number of co-investments and direct investments, that does limit the amount of unfunded commitments we have. Over time, it'll continue to do that. So that helps. You just have

a better understanding of the timing of illiquidity on your balance sheet because you've already made the investments. It's not an unfunded liability. So that definitely helps. And that's something more people are probably doing now than they were doing in the financial crisis in 2007, 8, 9. So that's probably one of the biggest differences, I think. And the other difference, I think, just generally, people learn their lesson that were, you know, you asked earlier about, you know, lessons learned going through that period and how much it would impact my investment philosophy. And I'd say broadly, I think anyone that worked in this sort of role through that period has seen that mistake and knows what it feels like. So it's one of those generational sort of learnings. I don't think we'll really see that at broad scale until people in that cohort begin to phase out. Congratulations, 10X Capital podcast listeners. We have officially cracked the top 10 rankings

in the United States for investing. Please help this podcast continue climbing up in the rankings by clicking the follow button above. This helps our podcast rank higher, which brings more revenue to the show and helps us bring in the very highest quality guests and to produce the very highest quality content. Thank you for your support. What were your learnings in 2022? I started with the foundation here in April, beginning of April, 2022.

So my earliest learning here was the playbook and plan I had written in call it October, November, December of 2021 was obsolete the day I walked in the door. That in some ways was terrifying. I'd spent months preparing to walk in the door with a strategy that I thought we'd be able to execute on pretty quickly. And it just wasn't realistic because a lot had changed since December of 21.

So in some ways it was good for us. We then venture in sort of growthy sorts of areas, direct investments and funds. We had some things available to us more quickly because capital became a little bit more scarce. So that I hadn't really planned for. The cycle turn kind of changed my priority mix or hierarchy is probably the best way of looking at it. So we shifted where we were going to work first. Are there any practical hedges or instruments that endowment can utilize in order to either stay long, extra long on a long bull market or hedge against a bear market? From our perspective, there's two things you can do. Number one, you can be conscious about liquidity and liquid markets and not sacrifice liquidity for unnecessary structure, just to wrap around

liquid assets. What I mean by that is you'll see funds that have rolling locks or long lockups or complicated sorts of exit mechanisms and just liquid public equities. We generally don't do those. The public markets book, I try to keep reasonably liquid, but there's a balance there. I will accept a little bit of illiquidity there if I think there's legitimate market structure reasons or other sorts of liquidity driven reasons to do so, but not just to access a group who has a high demand for their limited capacity and because of that you're going

to do a three year lock or something of that nature. So that's one thing. The second thing is you can use derivatives. So it's not a hedge but it helps you manage liquidity pretty well. So we think on the margin, we think a lot about asset allocation and the use of cash product versus derivatives and what helps us better be flexible in managing our liquidity. Those are the two biggest things. Not really outright hedges, done a little FX hedging here, but for the most part, we're just trying to be thoughtful about

the risks we're taking. We're not levered, so we're not really hedging a lot either. I'd rather undo the risk than wrap a hedge around it. Outside of the liquidity constraints, which is a 5% deployment per year, what other constraints do you have on your strategy? Not a lot, really. We have an asset allocation that's approved by our board, our investment policy committee, and we have an investment policy committee that asked us to have certain restrictions around the amount of derivatives we would hold on the balance sheet. But for the most part, we're pretty unconstrained. You know, our biggest constraint is really our bandwidth, and that's intentional. And then, you know, our ability to execute.

So the foundation's been great with resources. We are very well resourced with technology, with travel, and the office budget, the ability and the resources to hire. So I give the University of Illinois Foundation a lot of credit. I mean, they fully resourced this group. And a lot of the constraints you would typically have, you know, there were discussions, obviously, up front. If you want to do derivatives, what does it mean? What does it require?

We are in Chicago, after all, and it's a huge commodities and derivatives town. So, you know, there are stakeholders that had questions and rightfully so. But at this point, we really don't have, we don't have a lot of restrictions or things standing in our way. I had Dr. Ashby Monk, who runs the Stanford Long-Term Investing Initiative, and he said the most underrated part of endowment pension funds is their governance. That's the biggest kind of differentiation between returns. How much has governance played into the four endowments that you've been on? How much has investment committees affected a team's ability to maximize returns or maximize objectives?

Well, I tell you, it's those four groups could not be more different. So, I mean, in virtually any way. In a way, it's probably helped better prepare me. You know, when I was at Florida, as an example, like our CIO, Mike, did most of the board management. We were a small team. We were a new team. I had no idea at that point what it meant to manage a board. And Mike had some background as a consultant for a little while before that. So he was much better prepared to do that.

But even by the time I left Florida, like I had zero sort of knowledge or appreciation for what went into it. It really began when I got to Sloan and learning from Bill and then really, really kind of took off at Vanderbilt. So, you know, I'd say in that phase at Vanderbilt, one of the things I really learned was that was a tough committee, but a very fair committee. But, you know, there were folks on there that asked deep questions that made you think and you had to be prepared. So, you know, one of the takeaways is it helps make me a better investor, but I prepare incessantly for board meetings, not just to present to the board, but it helps me understand the portfolio even better and introduces another level of accountability. My question had a false promise, which is that investment committees detract from returns, but you're actually saying investment committees can actually improve decision-making, improve returns. I can say

this publicly because I know every investor says it privately and boards are not naive to this, but every person who reports to a board in virtually any kind of setting, not just investors at endowments or foundations or a pension or whatnot like it's like an old past time everyone complains about their board and if you're not yet you will so I just at some point in the last decade I just kind of accepted that as being part of the role and you know when I when I do that typically I just I look internally I'm like alright this is what it is like you can either accept it for what it is and be good at it or you you can complain about it. And you're, it's just a confession that you'll probably be terrible at it forever. So you're not going to change it.

And if you want to have a great relationship, if you want to have the great support from your governance structure, like you have to earn their confidence. And as long as you can keep their confidence and have a great working relationship, then you just have to perform in your role. But my biggest focus with this board and certainly the prior board was just initially earning and then maintaining their confidence. And numbers will be good at times. Numbers will not be so good at times. But as long as you have their confidence, again, surviving the cycle and the path, like you can get to the other side of that and you're still executing well and you still have their confidence, you'll be fine. Even if your numbers get better and you've lost their confidence, you have a problem

and you've created a problem for your team also. It's the alternate iterative game and you have to avoid the temptation to sacrifice political capital in the short term or relationship capital no matter how how much you believe in the investment yeah um i had another great board member and this one was at florida um we had somebody who uh it wasn't a board member was actually a university person and they were i'll just say difficult to work with at times. And, um, and I remember we were having a, a, a, just a small like chat after a board meeting. And I was lamenting like the difficulty I was going through and having, we were trying to set up this offshore structure. And I was like, this really shouldn't

be that difficult. And he just looked at me and goes, he's listening. He's listening, listening intently. And he goes, what else? I'm like, that's really it. He's like, well, what are you going to do? I'm like, we're just going to have to get it done. Like, we'll figure it out. And then he finally, he's like, well, that's exactly what you should do. But just keep in mind, they're only trying to help. And as long as you remember, they're only trying to help and you can work with them and you let them think that they've helped and hopefully they do help, then you guys will still have a great relationship. And I never forgot that.

You know, if you take relationships or dialogue and you engage with the presumption of good intent and people are not trying to do harm or they're just trying to help, then you'll generally find a way to work through it productively. Yeah, to put my master's psychology hat on, people are complex systems and they both have positive intent and negative intent. So you could align either with the positive intent or the negative intent.

You can find both in every interaction. You mentioned when we last spoke that you don't use targets for your growth venture and buyout funds. Why is that? We have a head of growth and head of value and they're constantly looking at interesting ideas. I don't wanna bias what we're looking at

simply because last year we didn't do enough of one thing and this year we need to do more of it because we're in danger of not hitting a target. So I focus more on trying to find the best ideas, having this intellectual debate about like what gets past those initial conversations and then it being sort of dual sided. You know, we're doing thesis driven work and industry work on one side and we're looking at companies and industries on the other side. And hopefully we meet in the middle with the right partners and an opportunity to maybe invest with those partners further.

And I think introducing targets to that just really muddies the waters. Do you think institutional investors are overly biased when it comes to doing re-ups? I think that's fair. You know, one of the things at least rumored David Swenson used to say was that they would get off the train one stop earlier, the bus one stop early. And they thought that was one of the things they had done well over the years. I don't think that's true of the industry, the LP industry at large, and I understand why. And, in fact, I think we're often – our team is probably guilty of overstaying our welcome sometimes, too. And I, just knowing how I'm wired, like I always ask my team, like, what else do you need to know?

Like, we know what this is. We can handicap the variables and discuss them, you know, fund one to fund two to fund three to fund four. Like, we know what all of them are and we know the variables. And if the alternative is we're going to do something else, we've got a diligence, it's probably earlier. What sort of margin error do we have to allow for the potential of better return or better outcome versus what we already know? I personally know myself well enough to know I'm biased to staying longer rather than, you know, back to what I said earlier, like I'll see everything that can go wrong with it. Thankfully, I have teammates who are wired differently and can see what can go right. So so that's why I enjoy having that as a team discussion and really engaging on it and beating up each other on it.

But I do think, by and large, LPs probably stay too long, and then the outgrowth of that is the terms get worse or the structure gets worse or provisions change here and there. And to the extent they don't stay, that's what kind of catalyzes that turnover is things tangibly changing. But when they haven't tangibly changed, I think the bias is definitely not to move on. What do you wish you knew before starting as CIO of University of Illinois Foundation? I was the deputy CIO the last couple of years at Vanderbilt.

And I have this phrase I use occasionally. It's, you know, every investment organization has one CIO, and that person is the one who has to make or wears the burden of the decisions. And I knew as a managing director and deputy CIO at a couple of different places, like the distinction between being someone who's advocating or supporting or advising on a decision, but not actually being the person who has to do it. And even with, I think, pretty good conscious awareness of the distinction, I think I still didn't fully appreciate the burden that comes with having to be the person who actually decides. And then the number of decisions you have to make about things, you know, the investment decisions are actually easier than a lot of the other decisions, you know, the organizational decisions or things around, like, how are you going to

approach stakeholder considerations or lots of other things that just come with the job. So as I asked in advance of taking the role, you know, a lot of people I'm close with that are CIOs, you know, what do you say about the role versus not being in the seat? And they're like, it's lonely. And it's the number one thing I heard from people is that it's lonely. And it can be. There are periods where you're stressed about performance

or you're stressed about decisions. And as I said, even with conscious awareness of that, I still underappreciated the magnitude of it. Is that because you have to, you can't complain to people, you have to be the one absorbing kind of all the stress or what makes it a lonely position? When you're one of many people who are not the CIO, it's very easy to create these dialogues or these conversations.

Like, I think we should do this. And when you have to actually decide, you don't have the freedom to say, well, I think we should do this. You have to actually choose. So you hear everyone, and not everyone's going to agree. I've intentionally built you know a team with with folks who are very opinionated so we're going to disagree and like you you have to live with your decisions. I can vent about the fact that I made the wrong decision but then I made it. That's really what it is. Those moments where you're just really not sure and like I

think this is like 55, 45, and you're trying to lay it and it's not clear, but you do have to decide and you have to live with the decision. Those are the hard points. Reflecting back, you've been at four endowments and a foundation. What is the best way to come to a decision for an asset allocator? There was a period probably, you know, eight years ago or something. I really put some time in to try to figure out like what the best structure would be. You know, I surveyed some asset managers and, you know, like people would vote. I'm like, oh, this voting idea is like pretty cool. Like are the weights voted? And like we tinkered with lots of that stuff with my prior

team. And I guess, you know, again, there's only one CIO in every organization. And so with this one, at least the way we've adopted it, anyone really can advocate for something. Ultimately, I have to decide. But like that, that discussing and advocating, as long as people can do it in a way that it's like they're informed, they're well read and studied, and they're trying to advocate for what they think the best outcome would be, or at least add value to the conversation, even if they don't quite know what they would choose to decide, we'll ultimately figure out the best decision. And if we don't, then we just won't do it. But if there's still some uncertainty, ultimately, then I have to decide. This has been a masterclass on endowment and foundation investing. Really appreciate you taking the time and I look forward to continuing the conversation.

You're too kind, David. Thank you. Thank you for having me. For more ideas on how to raise venture capital in this market, make sure to subscribe below.