Amy Falls – From Bonds to Boards to Leading Northwestern (Capital Allocators, EP.316)

28:00One was it really felt interesting to me to be able to teach and to go to a university which had students. Rockefeller has some students, but it's mostly postdocs and they all do science. And I really am not going to teach them much. But to come to a university and to be able to work with students was really fun. So I do teach a class and we have a bunch of interns that roll through the office. And that was very compelling. Also coming back to a part of the world where I grew up, I feel like it's a great spot. And I think the investment office has a good history. The university is on the move and has moved up dramatically in terms of its rankings, its research.

28:43So I feel there's an opportunity to help grow the spendable resource as the capacities of the university are growing. So I wouldn't say the university was in any kind of trouble, but more it's kind of surged, like a lot of the colleges in the US, has really become a preeminent institution and continues to need to catch up, I think, from a capital standpoint. So there was a sense of mission and the importance both for the region. I think the Midwest and Chicago is very important. Creating an intellectual triangle between University of Chicago, Northwestern, Illinois, and even you could go out to Michigan and others.

29:23There's a lot of intellectual property here. Just trying to help that bleed into the local economy, I think could be very useful. Now, that's way beyond my pay grade, but it's just you're part of it by being part of one of the universities here. So as you step into the seat and you have a longstanding team in place, how did you think about structuring the investment team? So the first thing I tried to do was really spend time with every member of the team and just understand what they thought, what they liked, what they were concerned about. I tried to do a lot of listening. It was very important to me to not break anything.

30:01I mean, this is going well. Will was a longstanding, respected, Will McLean, my predecessor, longstanding, well -respected CIO and member of the community. And he'd built a great team with a lot of longevity. So to some degree, you're sort of in a do no harm mode. That was important. And the team is incredibly devoted to the institution, which helped. But I also think fresh eyes, you always come at things with different perspective. And I had seen at both the Ford Foundation and Harvard Management Corporation, where I sit on the board, evolution in how people had thought about investing capital.

30:41And in particular at Harvard Management, I felt that the move towards a generalist model from a highly siloed model had some real benefits. Also, even at tiny Rockefeller with a much smaller team, there had been silos and there was a benefit in kind of blurring the lines. But I also felt that there was importance in sort of maintaining the depth of industry knowledge that these longstanding professionals had. So we've tried to craft, I would say, somewhat of a hybrid model where we're blurring the lines across asset classes. So we don't have someone who owns private equity, owns venture capital, but we're able to think more laterally, but still retain depth in certain areas.

31:24And that's been interesting. And I think an appropriate change that reflects also change in the way money is being managed. I think a lot of managers are starting to break out of the traditional categories. And I think it's very helpful to see opportunities across public and private markets and valuation. So I would say there's been a move towards blurring lines, not complete generalist model, but a more fluid model and a more collaborative model. How do you take that theory and apply it in practice? So that's been the biggest challenge is so how do you create accountability? It's really easy to know what to do when you own an asset class.

32:04Each person runs their little business and the CIO just makes sure that everybody's doing a good job running their business and sets the big picture. I think you lose some cross -thinking and cross -fertilization, even though there's a very collaborative team. It's different when people are partners on a project than when they're just listening to a partner describe their project. So the way we're trying to create a comparable kind of discipline is to actually assign managers. So everybody has a manager roster. it maps roughly to the old asset classes, but not entirely. And then each manager has a partner.

32:42So there's two people on every manager. And we have something like 105 active managers, 110, eight people who are dividing that. So it's really not that onerous. It's like 15 managers per person, plus trying to keep an eye on who might be better. So that's good in terms of your existing coverage, but who's responsible for finding the next new guy and how does that work? And that's also something we're really spending a lot of time thinking about. We get a lot of inbound, but it's also important to, I think, be on top of the great new talent that might be out there. So we've sort of created zones and there's partnership.

33:20And then we've sort of beginning to adopt a slot concept, like we're trying to have a more or less set number of managers. It won't be precise. And then always for every manager, we want to keep track of three or four alternatives. What does ownership of a manager relationship that's in the portfolio mean in terms of what's asked and deliverables of the people? Well, again, this is evolving, but the idea would be a regular review of every manager. It's interesting because one of the challenges is that private managers, you kind of do a deep dive re -up when the fund is re -upping. And the rest of the time you think, well, I can't really do anything until they come back to market.

34:00So there's this weird every two or three or last couple of years, every year, you basically do the due diligence on their timeframe. Public managers, there's a risk that you kind of just float along. You never get to the threshold of cutting anyone. So what we've tried to do is create a regular, like everybody gets reviewed once a year. And we have a framework now across publics and privates with sort of a scoring method. And it's sort of intended to say green light, yellow light, red light. And we're not fully implemented. I think it will be useful and interesting, but we'll see. We're going to take a quick break in the action to tell you about SRS Aquium.

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35:31Learn more at srsaquium .com. That's S -R -S -A -C -Q -U -I -O -M .com. And now, back to the show. Curious on the manager selection side, you went from having your portfolio at Andover to turning over a portfolio and ending with a portfolio at Rockefeller. That roster of managers could be different from the one you stepped into at Northwestern. How do you think about your own favorites compared to the Competition for Capital with the legacy portfolio you walked into at Northwestern? There were people in this portfolio that we didn't have at Rockefeller and maybe couldn't have had at Rockefeller.

36:15Now, I think that world is changing. So right now, I think access is less of an issue. So I didn't feel the need to bring in all my favorites, but rather just like, let's understand each player and how they fit. And if they've served the university for five, six, seven, 10 years and they're doing a great job, there's no reason to change. Change is costly. But I think there are managers I knew that maybe either weren't well known to this institution or where there was more of a relationship. So I've definitely brought some relationships over. and there's a few that I feel really strongly about where I thought, gosh, this would be a perfect fit in this portfolio.

36:56In some cases, it was more about sizing. So they may have had a relationship with a manager that I had high conviction in. I might say, gosh, we should be twice as big in this manager. So there's been some of that. But I would say in both the case of Rockefeller and here, it's a re -underwrite everything as unbiased an opinion as possible. How do you balance that longstanding desire from your fixed income days to look at the data and have an assessment, knowing that there's a lot of noise around whatever that data is, and the human side of having relationships and the value that those relationships bring to an investment portfolio?

37:36As someone who likes data, that's been the most important evolution is you have to look at the human side. And in lots of parts of the market, the data is easy to manipulate. Depending on how liquid, even not just private equity, but how do you mark a credit book is very important. Some people market mid -market, some people mark bid and ask. I think it's useful to start with the data because it helps point you to questions. But in things like private equity, I always say like, okay, I need to go through every company in the portfolio. How's it marked? Because if there are aggressive markers or conservative markers, only comparing the IRR doesn't really tell you the whole story.

38:18But the important thing about relationships is trust. And many, many managers will hit some kind of an air pocket because whatever they're doing hits an air pocket. it's inevitable almost that something will go bump or some investment goes astray or some person goes. So I think it's really important to invest with people that will do the right thing under pressure. How do you tease that out? I like reading all the letters because I think it's very important to try to see how people have handled failure. It's something I worry a lot about our kids these days that are not allowed to fail, but it's why I do think sports are valuable, but not if you're not allowed to fail.

38:56It's how people cope with setbacks, I think tells you a lot about them. I don't usually ask people a lot of personal questions, but I think if you look at how they handled a mistake, are they defensive? Do they hide it? Do they airbrush it out of history? That's not great. Are they good listeners? I really like meeting the young people in the organization if it's possible, because I think you get a feel. I definitely think you got to go to their offices. This idea that people come and sit in your conference room, that's fine. And I'm happy to host people here in Evanston. But I really like to walk around and sense what the vibe is.

39:36So in addition to reading everything you can historically, talking to people about mistakes, I'm really curious, what are some of the great Amy Falls frameworks that you've taken from one seat to the next that you're bringing into Northwestern that might not have been there? The notion of constructing a portfolio of managers and a slot discipline, one thing I noticed in many cases is that it's pretty rare that you get a memo recommending a manager that looks at the correlation of that manager with the existing roster. It's not just each manager on their own. It's what do they bring to this bucket?

40:17I think being very explicit in tying the asset class assumptions to the manager selection piece is important so that it all iterates out. I feel also this idea of liquidity and how you spend your liquidity. So I am a believer that people typically have better results if they don't have the pressure of monthly liquidity. But we have a 5 % spend rate here and it's 5%, it's not 5 % net two. So we have to be able to access capital. So I think understanding where are you getting the best bang for the liquidity give up is important. And that's something where there are certain areas and real estate might be one where it's a good asset class, but the public private gap in that high.

41:04It's just very important to think about how you use liquidity and also to make sure that liquidity is balanced across the portfolio. So one thing I've been working on here is we have some countries where we're all private. Then I'm like, okay, well, we're really stuck there. So I feel like understanding how to budget liquidity, understanding liquidity as an opportunity to rebalance in addition to payout. And if you don't have some way of rebalancing, then you're stuck with hedging, which is hard. I also have a thing that I think is super important and I think everyone probably has this, but we have a two -year forward cash planner.

41:41So I have a model that ties together what we think the draw will be from the private vehicles, what the spend is going to be, and then looks at every manager going forward two years as to what's our cash need likely to be, how do we stay balanced at our asset class targets, and who would we redeem from? and it looks out two years and I change it pretty much every month. So it's just a constant game plan revision so that you sort of know this is where I'm going to get money in six months and three months. It's flexible, but I feel like it's like flying the plane. So in addition to that need for liquidity, you just briefly mentioned earlier the importance and willingness to lock up capital.

42:22Yeah. How do you decide where you're going to lock it up? We want to lock it up where you're going to get the best return for locking it up. But I believe that's true pretty much across the board. We did an exercise a while ago that actually grew out of a criticism that Jim Simons made of the asset allocation work. And he said, this is so stupid. We don't invest in asset classes. We invest in managers and all that matters is their beta and their liquidity, which was kind of weird. Well, it is kind of true in some ways. So we ran an exercise looking at all of our managers divided not by asset class, but simply by the liquidity terms, not even including private equity, but just the public managers who had annual or longer locks, who had quarterly locks and who allowed monthly liquidity.

43:10And then we looked at 10 years of risk return data and we found that you could make an efficient frontier. And basically the curve for the longest lockup was higher and steeper. So I think that yields a pretty important insight, which is You want your least volatile stuff to be your most liquid stuff because it is your dry powder. And then you compromise liquidity where there's the most risk because you probably get the highest payout doing that. And the chances are you might want the liquidity or need it, but the thing is down 20%. You're not going to want to sell it. So I personally like to barbell.

43:49I'm not hugely adverse to cash and short -duration treasuries as a ballast to then drive into a lot more illiquid stuff. But I think it should be related to the risk profile too. Curious what you've learned about decision -making processes. I believe that decisions are best made having to make the argument. I actually am in favor of a lot of discussion. It's very inefficient and drives some people crazy. I have been offered in various situations, you know, you don't have to bring managers to the committee anymore. Just do what you think. I always say no, because I don't actually think I'm going to get to the right answer by myself.

44:34But having to argue it out to the committee and make the case and put the data together, that's important. And so I do like decisions. We have to make the case. However, that requires a lot of work. And I think it's helpful to have consistent ways of looking at the same types of things. So I like to have a set analytics that you're going to do for every single manager. It could be different between private equity and public or whatever, but it's always the same so that you don't end up just cherry picking data or cherry picking references. I think consistency of presentation with the need to argue the case or people don't have as much autonomy.

45:18I have to make, there's more of a group decision -making process. And that really does drive some people crazy because it takes a lot longer. But I think you get to better decisions that way. I'd love to turn to your thoughts across some asset classes and maybe start with fixed income where you first started your career. How are you thinking about it? What's interesting today? Well, fixing them is really interesting for the first time in a while. I do think the Fed is probably at the end of the tightening cycle, but it's been a very sharp, short move. I think it's going to result in bankruptcies and credit events.

45:54So I think there will be higher default rates, and I'm not sure that's fully reflected in corporate spreads. I think there's still shoes to fall in that space, opportunities will arise. If you can get short dated treasuries at four and a half, 5%, that's a really good thing. I think fixed income is interesting. I think cash is less painful, which is great because I love it. I think credit spreads are going to be a huge opportunity. And I'm very interested in the ways in which the lending markets have changed as the banks have kind of been eclipsed by fund vehicles. And I'm not even 100 % sure how that will play out in a bankruptcy cycle since we really haven't had one, but it's going to be an interesting space.

46:36Along those lines, have you thought about private credit space? There's a lot, I think, to like about that space other than that it was so popular. Anything that grows that fast makes me a little nervous, but I think there are some inherent benefits. We were talking about matching your funding liquidity with the liquidity of the assets. And I do think banks have had in some ways a bit of a mismatch. I mean, not the traditional bank with retail deposits because those are quite sticky, but there's something to be said about locked up capital for markets that are not liquid. It's kind of rational in that regard.

47:15And I think there is a healthy ability to do due diligence and you're certainly getting paid a lot more than probably the average loan officer did. So I think there are some things that are really positive. I think that clearly also there was an opportunity created by regulation of the banking system, which is maybe appropriate, right? The government says, we don't want to be on the hook for all this bad lending. So we're just not going to be. So we are now. You don't have any guarantees. And it may be that people aren't really thinking about losses in these funds and what they could look like.

47:47So I like the asset class. I think it's evolving. And I think that there's been so much growth. We're looking at it. We didn't have a lot of that in the portfolio. And I feel like we're at a point in the cycle where I think it could be making sense. So with the potential, as you mentioned, increased bankruptcies and talking about fixed income, how are you thinking about traditional private equity? We were underweight private equity. So we are using this moment to think about where is the best place to add. Obviously, there's an adjustment as the cost of capital goes up, leverage strategies get hurt.

48:27And then there has to either be more equity in deals and prices have to come down. So there's like an adjustment period. And that is what it is. I'm happy that we are in a position to be like adding capital gradually. Unfortunately, there are other parts of the portfolio that are not returning capital. And I'm not speaking about venture, but natural resources and real estate, which probably we would have expected would have returned a little bit more capital. That's been a little slower. I think that earnings growth is going to be critical. So when we think about the future, we think about potentially higher inflation, potentially higher interest rates.

49:06That probably means lower multiples, but it probably favors companies that can profitably grow earnings. And I think that's interesting. So within private equity, We really like the people that are good at growing earnings. And it might be interesting outside the US. I feel like there may be more opportunity for real corporate enhancements. We just did a Japanese private equity fund as an example. So I think back to basics in a world where money isn't free, you got to earn money. So I think companies that have good revenue growth and high profit margins that aren't dependent on enormous financing, that's where you want to be.

49:53I think at least that's a safe place to be. And I think a lot of private equity firms can be in that space. When you're looking at growth through that lens as one of the inputs in increasing your allocations, there's two different ways you can think about that. One is you're in businesses, sectors, big software that have natural growth, have been priced high, but have the growth. And the other is you just have GPs who seem to be very good at changing the inflection of a business's trajectory. How do you think about those two dimensions? I think you need to do both. I think we definitely have allocations to higher, like intrinsically higher growth sectors.

50:32I do think profitable growth is critical, but that's true for a lot of software businesses. There could be an opportunity for more operating efficiency, just drive change, kind of old -fashioned PE. It's tempting to think, surely all of that has happened. Surely everything that had to happen has happened. But I think free interest rates, actually a fair amount probably could be improved. And I think the middle market is probably more where that exists. But there are some interesting notions of just areas that were so hot and popular, like even in that software space. Like, okay, they were all about growth, but not profitability.

51:17So there could be people that are really good at saying, fine, we're going to slow the growth a tiny bit and ramp the profitability. Like that would be a very good strategy, I would think. So I'd love to get your thoughts on an asset class that it seems like nobody really talks about much anymore, which is public equity. Yeah. And we still like public equity. We actually have a lot of it relative to our peers. So the interesting thing to me about public equity is I really think thinking about outside the US, we've had a long period now where like just being global was a bad idea. I'm really interested in that.

51:52I think that statistically, you'd sort of think it would be time for a reversal. Valuation -wide, U .S. is on average more expensive. Dollar's been very strong and may not persist at that strength. So I think looking at public equity markets globally has not been profitable, but could be. And again, we're thinking about places like Japan. I don't know about emerging markets, spending a lot of time thinking about that. That's an area that I feel like it's really evolved into mostly country funds and very few global emerging markets players. And I think actually regional players, maybe even the sweet spot between trying to do everything and only doing China or India or Brazil.

52:40An adjustment has happened. I think that multiples are down. They're maybe not down enough, but they're down. And I think there will be some interesting opportunities if we do go and do, which I fear is true, that we're kind of going out of a unipolar world into some kind of multipolar world. That's one of the reasons I think inflation is going to be sticky. But I also think that it could be valuable to have more international diversification because I think you're going to have different zones of economic activity. And I'm not sure you want to be completely absent from one. I guess as you're thinking about that, the most obvious question is views on China.

53:16We have spent a lot of time on that. And I would say we actually did a full board meeting on it a year ago and really tried to boil it down into sort of economic and financial arguments and geopolitical arguments, which were much harder to make. At the end of the meeting, we decided to stay the course, which is we're not dramatically overweight China. We're not underweight China. We're sort of more or less at our targets and probably a little shifting in favor of public equity versus private equity and the idea that there being a bit more nimble. China is an important part of the global economy.

53:52I deeply regret that there is the lack of collaboration, cooperation, and most importantly, perhaps communication between our two countries. I think that is not good for any of us. But I think in my mind, there's still a lot of opportunity in China. So I think the valuations are much lower, and particularly in certain areas. So yes, I think clearly people are concerned about both corporate governance and too much regulation. That's sort of the micro concern, and the much bigger looming concern about tension between China and the United States. We've sort of defaulted to 8 % to 10 % of the portfolio, which is probably underweight relative to GDP, but probably about on when you look at market cap and percentage of total private equity.

54:43So I think we're kind of neutral, but we're not abandoning the field at this point. I'd love to take a step back from your work on a number of prestigious investment committees. What have you learned from being on the same side, but that share at the table that's impacted how you go about investing? I think really ensuring partnership between the committee and the staff. And that is a lot about how you communicate. There's a few things I would say I think are important. One is if you flood a committee with information, you won't get any feedback. If you come to committee meetings with every I dotted, every T crossed, very few people are going to say, gosh, I know you've done months of work here and you have a point of view.

55:32I happen to disagree with the point of view. As a board member, you kind of go, yeah, but it's not worth upsetting the person who's put so much work in. So one of the things we do when we do committee meetings, we have an on -deck section, which is these are some managers that we're just starting the process on. So if you have a thought, Let me know now. That's really intended to invite them into the conversation before it feels annoying to get into the conversation. So I think there are a lot of subtle ways that committees can either be shut down or encouraged to participate. And again, as I said, I prefer dialogue.

56:09I like to ask questions. I try to say, okay, what are the five things I really want the committee's point of view on before every meeting? There are committees that aren't run that way. There are committees that aren't healthy enough to be run that way. But what I would say is if you can foster partnership between a great committee and the staff, it's a wonderful thing. It's a very happy thing. And I think it really helps the institution. What are some of the other subtle ways that a committee can get shut down? The two I said are the most important. I mean, no information, obviously. And there are people who say like, I really don't think I want the committee in my knitting.

56:48So I'm going to keep them at bay. So that's one way. Excess information is another. And just you've already finished the thesis and you're asking them any questions. It's like that's a third. I think in another way that you can prevent shutdown is if you know someone is an expert in an area or has an opinion, I usually call them before the meeting. But I think there are committee member behaviors that can shut down dialogue too. And clearly, when you put your committee hat on, you can't be wearing your day job jersey. It's just so important because to build trust, these committees are all working on behalf of the institution.

57:31So for instance, if I go to a committee as a competitor, which I am in many cases, I mean, maybe they don't see it that way, but I have to put my Harvard jersey on when I'm at Harvard. And it's like, I'm never not wearing my Northwestern jersey, but I can't do anything harmful. I can't take an idea and go back to my staff. I can't end run and go to a manager that they're bringing and take capacity that they would have wanted. but you see people making arguments that clearly seem self -serving, that will shut down not just that person, but it can really shut down the whole committee. And then what do you do when you have a committee member who does that constantly?

58:10That's a problem. So then you either fix it or you stop involving the committee so much. And that's too bad because that's suboptimal. How about navigating a committee in the actual boardroom? Well, I think preparation is critical, but it doesn't always work. I mean, we had a funny, my first committee meeting here, there was a committee member who's actually subsequent since passed away, Howard Trenan, and he hated cash. And I love cash. And we didn't know each other and it was COVID. So we were like on Zoom. And we just were going to go down a rabbit hole of like, I don't want to do this. We shouldn't have cash.

58:43So if you're going to hit an impasse, you have to be like, okay, let's table this one and we'll come back to it. So an unforeseen impasse, that's really hard to manage. A predictable impasse, I know this person will have this point of view. You can kind of try to handicap before, but conversations go where they want to go. I think having a really strict agenda, like we have to get these five things done is important. We had a situation where we knew the diversity work we were doing was important, but we kept putting it at the end of the meeting and it kept getting shortchanged. And finally, one of the committee members, a woman said, you know, this is not okay.

59:19I was like, you're right. It's not okay. So we put it at the beginning because if it's important, let's let that take up all the time. I think trying to anticipate problems is probably the most important thing. So I have to touch on two things before we hit on the closing questions. You mentioned culling and weeding managers. And I know that that is an analogy for a particular activity you have outside of the office. So I would love to hear about your farm and how you think about that and how it impacts everything you do. One of the closing questions was, what do you like to do besides work? And I do love getting my hands dirty.

59:52I love plants. I love gardening. I loved it so much that my husband and I bought a farm that was in foreclosure, saved it from becoming a Walmart. And the farm is awesome. It's an organic farm in Maine, probably not the easiest place to farm. It's cold. And as someone said, the glaciers took most of the soil down to Long Island. So, you know, it's a tough place to farm, but it's really gratifying. And I do think there's a lot of analogies between stewardship of land and stewardship of financial assets. So I love my farm. I wish I had more time for it. That is the prize on the horizon to do more of that.

1:00:30But I still have a garden at home, grow a lot of vegetables. I think growing your own food is just incredibly gratifying. Is there anything that you've learned from the fundamentals of farming that become particularly germane to investing? Yes, so many things. And in some ways just a way of visualizing topics you already know. But we talked about definition of asset classes. And one of the funny stories, farming is not profitable. Very hard to make money farming. But one item, tomatoes are pretty good. So people will pay a lot for a good tomato and they're efficient to grow. So after our first summer, when we looked at where we had made money, we made most of our money in tomatoes.

1:01:13So we were like, let's just do more tomatoes. So we took all the greenhouses and we filled them with tomatoes because they're covered. They're not heated greenhouses, but high tunnels. We had all kind of tomatoes. We had cherry tomatoes, heirloom tomatoes, and yellow tomatoes. A lot of diversity in the tomatoes. Blight got in the greenhouse, they were all tomatoes. So I use that analogy to think about when we talk about a diversified portfolio, you got to be sure they're not all secretly tomatoes. And I think that understanding what does create that diversity, there's diversity in public large cap equities, but not that much.

1:01:51So you're going to have a diversified portfolio, but it's going to have a lot of inherent beta. A lot of times it's just creating a concrete analogy that is helpful to think about the nuance of a concept that you know, but you think, yeah, it's actually a tomato. It looks like it isn't, but it is. So I think it's been more that, although the issue of not being able to keep up with everything you plant. So I think that's another thing about it kind of has to do with weeding and culling and the notion of don't sow what you can't reap. because the amount of waste that happens because you just can't get to the crop, it's very hard.

1:02:28It all comes at one time. So just a lot about not setting yourself up for failure because you can't keep track of it or you don't have the resources to do what you think you can do. All right, Amy, I'm going to turn to a couple of closing questions. And for the first one, I'm going to say, what's your favorite hobby or activity outside of work, family, and farming? Oh, I like to play golf. I'm sad to say sports in general, a little tennis every now and then. I love hiking, love the outdoors. And sadly, I do do a fair amount of knitting and needlepoint. Why is that sad? I don't know. It feels very grandmotherly.

1:03:07What did you dream about doing when you were a kid? I think at one point I wanted to be a journalist. And I think at another point, I might have wanted to be in politics. Thankfully, I don't think I had the stomach for it, but who knew? What's your biggest investment pet peeve? My biggest investment pet peeve is arrogance. It takes many forms, but I find I try to always be polite and thoughtful. But when I feel like people are being arrogant, and particularly if they're being arrogant about a risk that I think they're not appreciating about what they're doing, that's when I become rude. And I'm usually ashamed of it, but it's just like I can't help myself.

1:03:45What's the biggest investment mistake that you learn from and will never make again? I think the biggest investment mistakes were usually around too much reliance on data and not enough focus on the caliber of the person. Sometimes the data is either not right. The biggest mistake I ever made was really being swamped by how good the numbers looked and not really understanding what was happening under the hood. to create those numbers. Which two people have had the biggest impact on your professional life? It's really hard to pick two, but it's really easy to say David Swenson had the biggest impact, but there have been many others.

1:04:24I feel Peter Natashie, all the Andover Investment Committee. I've had a lot of great mentors over the years. Barton Biggs, who I was a little afraid of, but boy, he made you think. Mostly men, Ted, I'm going to say one thing, because I do feel like it's really important. I think women need to have good mentors. And I think there will be a world where there's a 50 -50 chance that the mentor is a male or a female. But until we're in that world, it's very important for young women to be able to find mentors who don't look exactly like them. I think there's a difference between mentor and sponsor, like someone who really promoted you.

1:05:07And in that regard, I think, you know, someone like Peter Natas, you really brought me into a lot of conversations. David, who like opened the door to his office and said, come on in and learn from me. Those are people who really sponsor you, put your name up for jobs or whatever. That kind of active sponsorship really helps in a career. And I think sometimes you just got to be able to build those bridges across difference. And that's true for all kinds of diversity. What was the best advice you ever received and what was the context that came to you? I'm going to say this. It may not be the best advice really in life, but I think it's one of the best advice for what we do, which was don't invest in one -man bands.

1:05:47And I sort of feel like I would just broaden that out to just be careful about the Lone Ranger and yourself and your team and the managers. And again, it gets back to this view that I have that an iterative process results in better thinking than a shutdown process. And that actually came to me from Jack Meyer, another great investor. So when I was making this switch, I went and met a lot of people and said, what's your advice? What's your advice? What's your advice? I got all kinds of good advice. But that one kind of stuck in my head because it's about the value of collaborative teams and systems.

1:06:26And one thing I look at with managers is, are you set up to encourage people to challenge your thinking or to stifle people who challenge your thinking? I have to fight that in myself too. What teaching from your parents has most stayed with you? My parents had a remarkable commitment to hard work and doing the right thing. And they never said it. They lived it. They're still alive. They're 92. And my dad is my mom's full -time caretaker. And he never would talk about anything like that. But it's just they were both people who had a deep sense of what their responsibilities were to family. My father was a physician.

1:07:06If there was something that needed to be done, they just got up and did it. There was just never any complaining. So they were people who really worked hard and really cared. They lived that way. And so I often think myself, it's like, kids see what you do, not what you say. All right, Amy, last one. What life lesson have you learned that you wish you knew a lot earlier in life? Learning how to listen. I feel like I'm becoming better at that. I think there was a point in my life when it seemed important to be heard. And I'm starting to feel like, and this is maybe a natural part of maturing, but learning how to hold back and listen, I feel like is an evolution right now.

1:07:50that I kind of wish I'd known about earlier, just listen. Because sometimes I think the anxiety to be heard is just too great. Amy, thanks so much for sharing all of your insight. Thank you for taking the time. It's fun to talk to you. Thanks for listening to the show. If you like what you heard, hop on our website at capitalallocators .com, where you can access past shows, join our mailing list, and sign up for premium content. Have a good one, and see you next time. Thank you.