Investing Billions - E33: Charmel Maynard, CIO of University of Miami on Building a Venture Book

Episode Date: January 16, 2024

Charmel Maynard, CIO of University of Miami, sits down with David Weisburd to discuss asset allocation, diversification strategies, and the process of assessing venture funds. The conversation also covers unique VC challenges, tracking emerging managers, and the importance of diversity in asset management. The Limited Partner podcast is part of the Turpentine podcast network. Learn more: turpentine.co -- X / Twitter: @charmelmaynard (Charmel) @dweisburd (David) -- NEWSLETTER: By popular demand, we’ve launched the Limited Partner newsletter, which offer’s this week’s venture capital and limited partner news in digestible news bites delivered straight to your email. To subscribe please visit: https://thelimitedpartner.beehiiv.com/subscribe The Limited Partner Podcast Newsletter is powered by Ikaria Labs, a full-service content marketing firm that partners with the top funds, fintechs, and financial services firms to grow their investor communities. To learn more, visit: https://ikarialabs.xyz/ -- Questions or topics you want us to discuss on The Limited Partner podcast? Email us at [e-mail] -- TIMESTAMPS (0:00) Introduction and Charmel's role as CIO of University of Miami (5:11) Asset allocation and diversification strategies in investment  (8:37) Charmel's first venture into venture capital and building relationships (15:05) Assessing venture funds: DPI, TVPI, and diligence process (20:06) Unique challenges and strategy considerations in venture capital (26:09) Tracking emerging managers and the myth of proprietary deal flow (28:10) Charmel's journey to CIO and the importance of diversity in asset management (34:23) The Limited Partner Podcast newsletter

Our job at the end of the day, David, is to know all the best investors in the market, right? And that can be overwhelming at some time, right? It's impossible to know everyone, but we certainly try. Think about it like a baseball scout who's scouting high school players, right? And they're getting drafted sometimes, or they may not come to the big leagues for several years, but you want to track them. to. Sharmell Maynard, it is a pleasure to have you on the Limited Partner Podcast. You are the CIO of the University of Miami, the U. So welcome to the Limited Partner Podcast. Hey, thank you for having me, David. I'm looking forward to it. So before we get started, I usually summarize people's bio for them, but you have one of the

most fascinating bios, including becoming the chief investment officer of a major university at the age of 32. So my question to you is, how did that happen? Well, you know, it just, you got to keep questionable photos of your bosses always around so you can twist their hands in the promotions. But I'm joking. So look, David, I was in the right place at the right time. I was very fortunate that a mentor for who I worked with before, JP Morgan, brought me down here and advocated for me. I think we all need advocates. We all need sponsors. And it just so happened that a year into me joining the University of Miami, he ended up resigning. And because he had advocated and pounded the table and said, hey, Sharmell is my heir, Sharmell is my heir, when he actually left at the age of 32, they promoted me. So I was very

fortunate that I had someone to sort of be my know, be my advocate, be my sponsor to our board, to our president, so on and so forth. But, you know, at that time, I didn't feel prepared. But given my background, given my mentality, I knew that I could dig in and I could get it done. Yeah, I think if you don't feel prepared for a position, I think you're not stretching enough. So kudos for stepping into the position. You mentioned the board and the trustees. Tell me about that relationship. How do you interact with your board and your trustees? Yeah, sure. And just one point that you just mentioned, I tell people that all the time. If you're not sweaty, if your palms aren't sweaty, if you're not sweating on any of your arms, you know, when you're presenting, whatever,

it just means you're too comfortable, right? I think, you know, even Michael, even Michael Jordan would be nervous before some of his games. So I completely agree with you on your question. We have three investment committees per year that is considered a subcommittee of our overall board of trustees committee. And then we have full board meetings as well. So we meet about three times a year. But that being said, I get questions all the time from my investments committee from board members. They're reading the journal, they're watching CNBC, they'll lob in, hey, what are you thinking about rates? Are you thinking about rates? Hey, what do you think about China? What are you guys doing with venture? What do you guys do with buyouts? So, you know,

even though we are long-term investors, and quite frankly, David, I don't look at a portfolio day in and day out, right? I look at long-term themes that could affect the long-term expected rate of return for the university. But that being said, it is also my job because I'm the face of the investment team with our board, with our investments committee that I have to be up on current themes as well. The right thing to say, I'm long-term investment. I don't look into the minutiae, but sometimes there is a reset in the market. Zerf was a big reset in the market. How do you balance your long-term perspective with reorganizing around a new normal? Yeah, I think it's constant reanalyzing based on new inputs, right? And the hardest part

of my job is to sit on my hands and not react. But that being said, I'd be abdicating my duty and a fiduciary duty as a CIO for safeguarding assets if I wasn't constantly inputting our risk model with what's going on in the world. So tell me about that process. So you have a, you know, once, once in a decade or once in a generational event, which seems to happen every couple of years now, you have something like COVID comes and what do you do? How do you analyze information? How do you triangulate information? What is your process for dealing with hyperchange? Yeah. I mean, for me, the first thing I do is I call really smart people that are way smarter than me. Right. So we really had a lot of conversations with our top managers who we really respected, who we think had a really good outlook on the economy, can make really good risk decisions and did this across all of our asset classes.

So we we called our best public equity, large cap domestic managers. We call our best fixed income high yield managers. We said, hey, what are you guys seeing? Are you afraid? Where are you doing? Are you changing your risk framework? Are you making trades? And really from there, with the consultation with our investment consultant, NEPC is who we use, really try to triangulate all that data and come to a conclusion. How do you even go from a first principles basis in terms of how you should be allocated? How's that decision making look like?

Yeah, sure. So we think about it based on the mission of the endowment. So very, very simply put, the mission of the endowment is twofold, to meet the spending needs of the university. So that's basically the spending distribution. So our spending distribution is 4 and a half percent per year. So every year we take four and a half percent off the corpus and we redistribute that into the university for operational use. And then the second one is to protect purchasing power. So protect against inflation, essentially.

So when you put those two things together, that really gives you a target return. And obviously that changes year in, year out based on investment and inflation assumptions. But generally speaking, let's call it, you know, 7% to 8%. And then from there, you really back into that asset allocation. So how do I get to that target return with the least amount of risk and least amount of volatility? And, you know, we work with our investment consultant. We do a lot of modeling ourselves, essentially Monte Carlo situation modeling to get you to this is where we think you should be. And then you tinker with it from there. And so for us, given our targets at the time, we are very equity beta heavy. We have about a 0.8 equity beta, but we believe that that's in the right

zone because we're a long-term portfolio. Obviously, there's a lot of correlation when you're 0.8 equity beta. How do you diversify? Yeah. So it's really on our fixed income portfolio as well as our hedge fund portfolio is where we try to have dampening effects, uncorrelated returns, as well as dampening effects. But really and truly, it's about the level of risk and volatility you can take. Our investments committee is comfortable with the potential volatility with having a 0.8 beta to the rest of the market, understanding and making the assumption that over time, again, 10, 15, 20 years, equities are going to go up into the right. Now, there will be a time where that may not be the case, but for now, that continues

to be our assumption. And I'm lucky that in various times of volatility where there's drawdowns, where things are going sideways, that they understand because of that 0.8 equity beta, things might look a little rocky for now, but over the long term, it should go up. You're consciously kind of making that trade-off in that you're going to get higher returns, but more volatility. That's exactly right. And there's one other factor, right? Different endowments have different, their endowment spending distribution represents different portions of the overall operating budget. So as you can imagine, the higher that percentage is, is in theory, the less volatility you want to be able to take, right? So for example, my alma mater, Amherst College, don't quote me,

is somewhere between 50 to 60% of the operating budget, right? So they may not want to take a 0.8 equity beta volatility or standard deviation possibility. Our contribution to the operating budget is about 1.5% because we are a large academic medical center. So we have roughly $5 billion of revenue and almost $4 billion of that, David, is related to our health system. So because of that, we're allowed to take a little bit more risk in the form of equity beta to hopefully achieve outsized return in the long term. So zeroing on venture capital. So you started looking at funds in 2018. You didn't make the first check till 2019. Tell me about that process to your first check. speaking, the University of Miami has been severely underweight private equity. And that's really just an institutional bias to being more in public equity as well as being more in hedge funds. When I joined the university almost eight years ago, when we redid our asset allocation framework and analysis, we were underperforming what our target return was going to be.

As you can imagine, one of the levers that the university can pull is because we don't need the liquidity, as you said, in five years to buy a yacht, we can afford to be a little bit more liquid in return for hopefully some sort of a liquidity premium. And so at that point, we went from roughly call it one and a half percent to call it 10% in terms of asset allocation target and private equity as a whole. When I say private equity, I'm really saying buyout, venture, private credit, so on and so forth. And the first thing that we attacked was private equity buyout, because with my background, I had a much better handle of that landscape in that space. Once we felt like we had gotten off on a good start there, that's when we turned to venture.

Historically speaking, we had no venture in our portfolio. So, you know, it took us, David, roughly a year to really get up to speed on the industry, you know, because we were essentially starting from scratch. So, you know, the process of getting to our first check was, you know, people from New York, when they go to different cities, they like to say, OK, well, compare this to New York for me. Like, where's the Soho in LA, right? Where is the East Village in Chicago? We did something similar. We said, well, who's the KKR in venture, right? Who's the Carlisle? Who's the GTCR? Who's the HIG? And try to map out the landscape. And because we were starting from scratch, we really wanted to have a really solid foundation of, for lack of a better term, blue chip companies, right? So, you know, who's the Andreessen Horowitz?

Who's the Bessemer? You know, who's the, you know, first round, so on and so forth of, you know, established blue chip investors who've been doing this for 20, 30 years. And let's start trying to get relationships with them. And, you know, quite frankly, it's not like buyout, right? You don't just call Sequoia and say, hey, can I please get on your fund, right? Either you're not getting in ever, or you have to really build that relationship. But, you know, we're lucky as you've heard me say this now several times, we're such long term investors, that we can be patient to try to get to the right

manager. So, you know, we were fortunate that, you know, it took us about a year, year and a half, year and three quarters before we wrote our first check. But from there, you know, once we knew the landscape, we were able to sort of, you know, target who we wanted to and start making those relationships. You've seen some of the top private equity venture capitalists in the entire planet move to Miami over the last couple of years. Mayor Suarez calls it the capital of capital. How much are you able to leverage any of those relationships when it comes to getting access? Look, we try to, right, David? We try to. I think it's a two-way street. I think managers who've moved here, Founders Fund,

Toma Bravo, Citadel, so on and so forth, the list goes on. They understand what philanthropy means to the city, right? And they are either big donors or they understand how important a university ecosystem is for them, right? Whether it's producing engineers, whether it's producing analysts, so on and so forth. So a lot of them were proactive and reached out to us, right? But I would say, in addition to managers moving to Miami, I think what COVID helped with was the taboo of a phone call becoming Zoom, right? So there was no longer a show of, hey, this is a lack of effort. If you jump on a Zoom with me or phone call, you didn't come to see me in SF to, hey, I could meet with all the partners in one week on Zoom. Right. And have them get to know me versus me having to fly out to SF, call it two to three times a year. So I think it was also us being able to build relationships virtually and then, you know, sort of stamping the relationship when they went when one of their partners or general partners are down here in Miami, that combination really

helped us accelerate our venture program with some of these blue chip, you know, capacity constraint managers, you know, over the last several years. Yeah, I think it's it's really hard to probably get them to Miami in the middle of the winter. It's a very tough. It's like pulling teeth. It's really hard to probably get them to Miami in the middle of the winter. It's a very tough ask. It's like pulling teeth. It's like pulling teeth. Hey, how about a Friday? No one wants to come on Friday. No one wants to come on Monday.

Art Basel. In the winter. Yeah. It's awful, man. I don't know what we have to do. I feel bad for your geographical limitations. My favorite time of the year, David, sorry to cut you off, is Art Basel, right? It's like you get these messages.

Hey, I'm in town from December 5th to December 7th, love to meet up. I'm like, no, you're in town for Art Basel, and you're looking at expensive hotel rooms. So how about we be transparent about it? But I'm joking, we're fortunate to be in a location where managers want to travel, where it's appealing to come down. So for us, we actually don't even have to travel that much because a lot of managers come to us. What quantitative factors do you look for when choosing a venture fund? Good question. For now, David, I'd say DPI is really important to us. I touched on that we're relatively new relative to our peers in the venture game. And so for us, we need to see a history of consistent returning of capital to your LPs, right? You know, TVPI is great.

You know, IRR is great. But at the end of the day, you know, we're investing over the long term to hopefully have the cash come back to us so we can redeploy it in new vintages and new managers. And understand different markets will yield different sort of DPIs. But that's why, you know, established managers who are on, you know, I don't want to say a fun number, but who have the history of returning capital, that's number one for us. And especially it's become even more important, you know, in a time period when everyone's IRR looks great, right? Everyone's TVPI looks great because of the valuation rocket ship that we were on the last several years. Obviously,

that's coming down a little bit. But every single fund I looked at had 40% IRRs, right? And, you know, that's obviously paper. So we need to see evidence of people actually liquidating or having liquidity events and return capital. DPI is the ultimate equalizer. You say TVPI is going down, not for some funds. You'll see the same asset being marked widely different from fund to fund. Look, AI has been keeping a little bit of those TVPI's higher, right? So if it wasn't blockchain and crypto, now it's AI. So we've been doing a lot of portfolio diligence when we're looking at re-ups, David, to really assess the ability of the manager to pick great companies. Like we understand you can't control valuations. You can't control the market going up or down. But what you can control is investing in solid companies. So, you know, we, we go through at least in the last, you know, several,

several months with the fine tooth comb, you know, what was revenue when you invested what's revenue now, or whatever that growth metric is to see if the company's actually growing at a nice clip. One of the hardest things to diligence is edge. How do you diligence edge when it comes to venture capitalists? It's very difficult. And I would say it's an art, not a science. But I'll try my best to give you some examples of what we do.

I think reference calls matter. So talking to founders, and I'm speaking specifically to venture, talking to founders, why did you select this manager to lead your term sheet? Did you have multiple term sheets? What was it about this manager that really made you go with them versus Sequoia or them versus Adresa and whoever it might be? But as we know, there's confirmation bias. So they're only going to give you the founders that are going to speak about them in the highest light. So a lot of it is triangulation, right? So it's trying to find, asking them, are there founders or companies that didn't select you for the term sheet? Can we talk to them and understand why they didn't select you?

And so that's one method that we try to do. It's, you know, the reference calls really matter. We talk to their peers, their competitors or whatever, you know, want to call it. Hey, who do you respect in the space? Because I think that's also a really good sign of, hey, you know, if your biggest competitor, you know, if, again, I'm just throwing out Sequoia, Sequoia, you know, it's saying, I don't really respect X, but I really respect benchmark, right? That's probably a good fact pattern for benchmark,

for diligence and benchmark, for example. So we try to do that as well. And then lastly, it's really talking to other LPs. So, you know, one of the things I really love about my job and being in higher education is everyone has the same mission, right? It's to help students, right? It's to help research, it's to help, you know, research on cancer and so on and so forth. So I feel really comfortable reaching out to a Scott Wilson at Wash Houston Lewis or Kim Liu at Columbia and say, hey, have you guys diligence at this firm? What do you think about them?

And everyone is super open kimono about, hey, this is what we thought. We invested. We didn't invest. And so I'm a big fan of not recreating the wheel. If someone just did this, why would I start all over? Let's start off with, hey, what does one of my peers think? And we do that a lot. But the difficulty I have, David, is really, okay, so you do that diligence. How do I then write that in a memo for my investments committee chair? right? How do I say, for example, I love Alexis Ohanian, right? I think he's such a smart individual, super, super sharp.

He's a great example of, you know, deal flow comes to him. He's built a phenomenal brand. He gets out there, he's founder friendly. But how do I write that to an investments committee chair and say, you know, this guy has phenomenal access to deals and he picks great deals. And how do you show that this will continue to happen? Right. Because things could be flash in the pan, like what's his moat? And so that's what we continue to try to, you know, try to work on is how do we then quantify that for people who might be reviewing our memos and for ourselves, quite frankly, because it's a very hard concept to put into words. How have you done that? It's difficult. I think we've tried to triangulate it back to the reference, right? So if we say that X person has great deal flow, we try to hopefully confirm that through talking to founders, right? So why

did this founder select, you know, X fund that might be smaller, maybe not a behemoth, like some of the large guys and confirm like, well, you know, it's because founders love them. They help them find a CTO. They help them find a CMO. They always are fond of tech, so on and so forth. They try to triangulate that deal flow thing is helpful. Or they proactively reached out to this fund because they heard they were really great at SaaS enterprise investing, right? And they had a lot that they could help them get from 10 to 100. Those sorts of things we try to help triangulate to be able to put a quantifiable number on it. Venture capital is so idiosyncratic from other asset classes. I think that's the biggest mistakes people make when they get in the space. They just assume it's like private equity.

How do you deal with a board that has only started investing in 2019? What challenges, what is the most challenging part about that? It's understanding that these things take a very long time, right? This is, you know, starting sometimes in some, some girls, you know, garage, right? And it's an idea and a concept before it becomes, you know, snowflake or whatever it might be like, this takes a long time and we need to be patient. I think because we started at sort of the the tail end of a you know somewhat golden era for for private equity try to understand that things are probably going to reset right and this is going to take some of these will take 10-15 years and you have to sort of look at the long term and that's on that's on me to communicate

right I need to constantly communicate, constantly educate the difference, like you said, between buyout and venture, right? They're just fundamental differences, right? Not as much leverage. You don't own the company, so you can't just swap out the CEO. Maybe if you're on the board, you might be able to do that. But a lot of them are not cash flowing, so you're not creating value through paying down the capital structure, so on and so forth. You're sometimes first movers. And so it's my job to effectively communicate that to our investments committee. And so far, we've done, I'd say, a decent job.

And they haven't pulled the plug yet, David, so I think we're doing an okay job. Yeah, I think one of the hardest things to communicate is the asymmetry of returns. You might have two funds that are 2.5x and then one that's 7x. And that's kind of par for the course. Exactly. And that's why we talked to our committee about how important manager selection is, because more than any other asset class, the dispersion of returns and venture are the most stark, right? The top quartile is way higher than call it median, right? And definitely the bottom quartile. So, you know, that's why we're extremely patient, why we target the managers that we want to target. And we take

our time because, you know, it could really have an outsized return difference if we're not patient and deliberate. So when it comes to patience, when you go into a VC and let's say they have a two or three year cycle until the next fund, are you implicitly committing to the next vintage, assuming that everything goes on strategy? How are you able to re-underwrite it in such a short amount of time? I touched on it briefly before is try and understand, have they picked good companies to date? To your point, if it's a more recent stage for those companies if you're seven, eight, nine years in and have those investment theses come to fruition.

So that's really for us what we focus on, especially in the last couple of years where funds have been coming back so often. We try not to look at the immediate fund, but really look at the old fund. In addition, we continue to do a lot of qualitative work. Is the brand still the brand? Do they still have the deal flow access that we were talking about before? Have they done anything unnatural or different to what their original strategy was, whether it's fund size, whether it's, yeah, we used to do C and A. Now we're going on to B and C.

Like, whoa, whoa, whoa, that's a completely different space. And if we can sort of check a lot of those boxes, i.e. staying on strategies, they did what they said they were going to do, and we think that they're picking decent companies. And in the past, the changes have come to fruition. That usually gives us some confidence to go ahead and re-up in the next one. Is there ever room for strategy drift? Obviously, going from C and A to B and C or going from following to leading is a tough one, but is there ever room for strategy drift? What are some examples of funds or what are some anonymous examples of funds that have drifted their strategy that you still remain bullish on? Yeah, no, I think that's a great question. The answer is yes, there's room for

strategy drift. I think it just needs to be deliberately and thoughtfully, right? So for example, like a 645, right? So 645, great fund run by Aaron and Nnamdi. They started off, call it on, on, on seed and, and a little bit of a, you know, co-leading, um, on, on the A side, but, you know, leading on the seed side. And they mapped out for us when we first started talking to them, like, Hey, our plan is to start leading series A deals as well. Um, you know, so you may see one or two deals that may be us leading series A at a larger check size. Don't be concerned, right?

This is us sort of, you know, testing out this strategy and proving to you that we can go do that. So then when they came for the next fund, we said, hey, here are the three to five deals that we did. This is why we're confident we can expand this into our new fund. And, you know, you're okay with that. So I think it's, you know, I think what I'm trying to say is communication is key, right? You don't want to just open up the book one day or open up your quarterly letter and say, whoa, whoa, whoa, this is supposed to be a seed fund. Why are there growth equity deals in here? Unless you've laid it out and say, hey, we have a pocket of capital

where we're opportunistically going to, you know, double down on some of our Series B winners. So you might see, you might see a more growth equity type investment in there. One of the issues with strategy drift, it goes back to what we were just talking about. It takes maybe seven, eight years to prove out a strategy. So even if you are right, you might still be heavily penalized by LPs and not be able to raise your next fund. So it's a bit of a tricky situation. You mentioned you like to track emerging managers over time. What timeframe are we talking about? And what data points are you looking along the trail of tracking emerging managers? Yeah, look, our job at the end of the

day, David, is to know all the best investors in the market, right? And that can be overwhelming at some time, right? It's impossible to know everyone, but we certainly try. You know, think about it like a baseball scout who's scouting high school players, right? And they're getting drafted sometimes, or they may not come to the big leagues for several years. But, you know, you want to track them. So we don't have a timeframe, quite frankly, David.

It could be 10 years. It could be three funds, four funds, whatever it is. But, you know, if we see interesting things or interesting strategies, so it could be someone who spun out of a larger firm, could be someone who's doing something really interesting that, you know, we hadn't looked at before, but we need a little bit more traction. It can be several things, you know, showing more of a track record of actually returning capital, having some liquidity events. You know, we will keep track and keep them in their database until they sort of, you know, check our boxes again. We're in no rush. But it's a little bit of art versus science. Do you believe proprietary deal flow exists? No, not at all. I think,

you know, I hate people saying the word proprietary because, you know, if we're proprietary, then why do I hear it 15 times a week? Look, I do think more than any asset class, I think venture is probably the closest to having, quote unquote, proprietary access. But I think at the end of the day, it's really about your network and your access. So it's about the fact that every, I don't say every, but 99% of strong founders are probably going to go to Sequoia's door to show them their deal. And that is somewhat proprietary access because they're getting probably a first look at it. fact that there's several other managers or investors in that deal would probably tell you that it's not proprietary because more than one people are invested in it. As I mentioned, you became the CIO at 32. You're obviously a person of color. You've had to deal with a lot of challenges from your background and getting into your position. How has that path gone and what advice would you have for other minorities

that are looking to really get into asset management and to achieve the kind of things that you've been able to achieve? Yeah. As I said before, David, I think I was in the right place and right time, right? I mean, if you had asked me 10 years ago when I'm an investment banker at J.P. Morgan, if I wanted to be a CIO, if I thought I'd be a CIO at a university, I would have said, you're crazy, right? You need to go get your head checked. So I think there are a couple of things. I think, you know, mentors matter. I am a big, big, big proponent for mentorship.

And I'm in the position that I'm in today due to my mentors, right? People who spent time with me, people who've given me advice. I am a first generation finance guy, born in Trinidad. None of my parents or family know what investment banking is or asset management, but I had people who sort of,

you know, pulled me up the ladder as I rose and for lack of a better term, you know, showed me the game, right? So I think for people like, for people like myself or, or, or people of color, I think being open to mentorship is, is, is, is huge. Right. And no, I think a lot of times what people do is they have a preconceived notion of what a mentor is going to look like to them. Right. So like, for me,

I thought my mentor was going to be, you know, six, four four former basketball player, black guy, like likes rap. Like I do. It's like, no, my mentor, who's been one of the most influential for me was, you know, a white guy from, from, from gross point, Michigan who likes Metallica. Right. But like, you know, it was the fact that, you know, I was open to receiving the help and the tutelage that, that, that I was able was able to end up in the position that I am ultimately now. So, you know, it's unfortunate that, you know, I'm one of four, one of five black CIOs in higher education. And I think we need to take an active stance on increasing that. But at the same time, I think getting the word out there, letting people know that the only route you could take is not just investment banking, a lawyer, a doctor, a private equity venture. Spreading the word is going to be really important. Pushing more people into asset

management and getting more diversity out there. I think it's a quantitative game as much as a qualitative game. You mentioned the Knight study, the Knight Foundation study. Tell me a little bit about that and how has that instructed the way that you go about investing? So the Knight Foundation in consultation and partnership with Harvard did a study about diverse asset managers and how they perform versus their peers. And what that study showed was that minority-owned managers perform the same, if not better, than their counterparts. So how does that then help us inform our asset allocation investing strategy? Just like we think about having a diverse asset allocation

or people think about having a diverse workforce. You know, we think we need to have a diverse set of managers that are from all different walks of life, whether it's race, gender, sexual orientation, so on and so forth, because we think ultimately that makes better investment decisions at the end of the day. What do you believe the source of that alpha is? I think it's about thinking about things differently, right?

You know, someone might come in, you know, if you know what you, you only know what you know, right? And that creates blind spots. So the more people that you can fill your profession with or your team with that may have different blind spots, hopefully when you come together in a collaborative manner, you're seeing as clearly as possible, right? So I think far too often we surround ourselves with people that look like us, people who have our backgrounds, people who think like us because it's comfortable.

But that's not my job. My job is not to do the comfortable things, to make the uncomfortable decisions. And at the end of the day, I have a fiduciary right, fiduciary duty, excuse me, to do what's best for the university. And, you know, there's a book by a friend of mine, a classmate from Amherst called The Privileged Poor, right? And he was really analyzing diversity statistics at large Ivy League institutions. And what he found was that those diverse statistics weren't really diverse, right? So I gave you an example. I was fortunate enough to go to New England prep school, private school. I went to private school pretty much my entire life, went to a New England liberal arts school at Amherst College and did investment banking.

If you had 10 of me at Amherst College, is that diverse, right? So what he was trying to show is that these schools were not actually hiring diverse people, right? They weren't hiring someone from Overtown, Miami, right? Or hiring someone from the Bronx in New York. It was homogenous diversity, which you weren't really getting that effect. So I say all that to say that we spend a lot of time making sure that we have different perspectives on our team, and we try to push our managers to make sure that their investment teams have different perspectives. And like I mentioned, that isn't just race, it's socioeconomic, it's where you're from, it's your sexual orientation, so on and so forth. Obviously, you may not be able to disclose all that, but I think ultimately that's going to help make the best investment decision. Well, Sharmell, I've really been looking forward to this conversation

and you were recommended by many people and look forward to meeting up either in Miami or New York and sitting down. Thank you. I give a lot of free basketball tickets away so that people say good things about me. But no, I really appreciate you reaching out. This was such a fun podcast to do, such a fun show to do. And David, I really appreciate it. Thank you, Sharmell. Thank you, Sharmell. Thank you. By popular demand, the Limited Partner Podcast has officially launched our newsletter powered by Icaria Labs, a full-service content marketing firm that's partnering with us on the newsletter.

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